(b) If MMS approves a unit agreement on the OCS, or a revision to a unit, a person may file amended Forms MMS-2014 within the time period MMS prescribes, reallocating production among its affected leases. A person must file a request for refund or credit pursuant to this subpart only if, and to the extent that, there is a net reduction in the royalty that person previously paid for the leases committed to the unit as a result of the amendments. (c) A person may amend Form MMS2014 to adjust volume and royalty reports among OCS leases within a unit within the same sales month without filing a request for refund or credit pursuant to this subpart, except that a request for refund or credit must be filed to the extent that there is a net reduction in the royalty previously paid for the leases committed to the unit as a result of the amendments. (d) A person who pays more money than the total royalty due as reported on the Form MMS-2014 accompanying the payment, where all amounts reported on the Form MMS-2014 are correct, may submit a request for refund of the overpaid amounts. The request for refund is not subject to section 10's requirements unless the Form MMS2014 includes reports for only one OCS lease. Any overpayment subject to this paragraph may not be recovered by recoupment. (e) A person may reduce an estimate balance, established for any lease product pursuant to MMS instructions, by submitting a credit adjustment on a Form MMS-2014, or a request for refund, for all or part of the established estimate balance. A credit adjustment or request for refund to recover all or part of an estimate balance authorized by this paragraph is not subject to the requirements of section 10. (f)(1) If adjustment of an estimated oil transportation allowance or estimated gas transportation allowance pursuant to 30 CFR 206.105(e) and 206.157(e), respectively, results in an overpayment for any sales month because the estimated transportation costs were less than the actual costs, a person may submit a credit adjustment on a Form MMS-2014 to recoup, or may request a refund of, the overpayment. The credit adjustment or request for refund authorized by this paragraph is not subject to the requirements of section 10, and MMS approval is not required before reporting the credit adjustment. (2) If adjustment of an estimated gas processing allowance pursuant to 30 CFR 206.159(e) results in an overpayment for any sales month because the estimated processing costs were less than the actual costs, a person may submit a credit adjustment on a Form MMS-2014 to recoup, or may request a refund of, the overpayment. The credit adjustment or request for refund authorized by this paragraph is not subject to the requirements of section 10, and MMS approval is not required before reporting the credit adjustment. (3) If a person makes an error in the report of actual transportation or processing costs pursuant to paragraphs (f)(1) or (f)(2) of this section, any subsequent adjustment to the report that results in a credit is subject to section 10 and the requirements of this subpart. (g) If a person pays pursuant to an MMS order and challenges the obligation to pay in an administrative appeal or judicial action, and if the person is successful in a challenge to all or part of the MMS order to pay, section 10 does not apply to the refund or recoupment of the disputed payment or portion thereof. (h) MMS approval is not required for an adjustment by any person to the amount reported for a report month that results in a credit of not more than an amount established periodically by MMS and published in the FEDERAL REGISTER. However, no adjustment may be reported more than 2 years after the date MMS received the Form MMS-2014 including the excess payment. PART 232-INTEREST PAYMENTS [RESERVED] PART 233-ESCROW AND INVESTMENTS [RESERVED] PART 234-BONDING-PAYMENT LIABILITY [RESERVED] PART 241-PENALTIES Subpart A-General Provisions [Reserved] Sec. Subpart B-Penalties for Federal and Indian Oil and Gas Leases DEFINITIONS 241.50 What definitions apply to this subpart? PENALTIES AFTER A PERIOD TO CORRECT 241.51 What may MMS do if I violate a statute, regulation, order, or lease term relating to a Federal or Indian oil and gas lease? 241.52 What if I correct the violation? 241.53 What if I do not correct the violation? 241.54 How may I request a hearing on the record on a Notice of Noncompliance? 241.55 Does my request for a hearing on the record affect the penalties? 241.56 May request a hearing on the record regarding the amount of a civil penalty if I did not request a hearing on the Notice of Noncompliance? PENALTIES WITHOUT A PERIOD TO CORRECT 241.60 May I be subject to penalties without prior notice and an opportunity to correct? 241.61 How will MMS inform me of violations without a period to correct? 241.62 How may I request a hearing on the record on a Notice of Noncompliance regarding violations without a period to correct? 241.63 Does my request for a hearing on the record affect the penalties? 241.64 May I request a hearing on the record regarding the amount of a civil penalty if I did not request a hearing on the Notice of Noncompliance? CRIMINAL PENALTIES 241.80 May the United States criminally prosecute me for violations under Federal and Indian oil and gas leases? Subpart C-Federal and Indian Oil Subpart D-Federal and Indian Gas Subpart E-Solid Minerals, General Subpart F-Coal [Reserved] Subpart G-Other Solid Minerals Subpart H-Geothermal [Reserved] Subpart I-OCS Sulfur [Reserved] AUTHORITY: 25 U.S.C. 396 et seq.; 25 U.S.C. 396a et seq.; 25 U.S.C. 2101 et seq.; 30 U.S.C. 181 et seq.; 30 U.S.C. 351 et seq.; 30 U.S.C. 1001 et seq.; 30 U.S.C. 1701 et seq.; 43 U.S.C. 1301 et seq.; 43 U.S.C. 1331 et seq.; and 43 U.S.C. 1801 et seq. Subpart A-General Provisions [Reserved] Subpart B-Penalties for Federal and Indian Oil and Gas Leases SOURCE: 64 FR 26251, May 13, 1999, unless otherwise noted. DEFINITIONS § 241.50 What definitions apply to this subpart? The terms used in this subpart have the same meaning as in 30 U.S.C. 1702. PENALTIES AFTER A PERIOD TO CORRECT § 241.51 What may MMS do if I violate a statute, regulation, order, or lease term relating to a Federal or Indian oil and gas lease? (a) If we believe that you have not followed any requirement of a statute, regulation, order, or terms of a lease for any Federal or Indian oil or gas lease, we may send you a Notice of Noncompliance telling you what the violation is and what you need to do to correct it to avoid civil penalties under 30 U.S.C. 1719(a) and (b). (b) We will send the Notice to your address of record as shown in the following table: For notices of noncompliance to (1) A refiner or other party involved in disposition of Federal royalty taken in kind. (2) Any person required to report oil or gas removed from Federal or Indian leases to the RMP Production Accounting and Auditing System. (3) A lessee, designee, reporter or payor whose records are subject to audit. (4) A reporter reporting on the "Report of Sales and Royalty Remittance" (Form MMS-2014). (5) A lessee, designee, reporter or payor who remits rental and bonuses from nonproducing Federal leases. The addressee of record is The position title, department name and address, or individua! name and address in the executed royalty sale contract; or a different position title, department name and address, or individual name and address that the refiner or other party under the executed royalty sale contract identifies in writing for billing purposes; or an agent designated in writing to receive notices of noncompliance. The most recent position title, department name and address. or individual name and address that RMP has in its records for the reporter/payor; or an agent designated in writing to receive notices of noncompliance. The position title, department name and address, or individual name and address the lessee, designee, reporter or payor identifies in writing at the initiation of the audit; or the most recent addressee that the lessee, designee, reporter or payor specified in writing; or an agent designated in writing to receive notices of noncompliance. The most recent position title, department name and address, or individual name and address that the lessee, designee, reporter or payor identifies in writing; or an agent designated in writing to receive notices of noncompliance. The most recent position title, department name and address, or individual name and address maintained in RMP records; or an agent designated in writing to receive notices of noncompliance. And The refiner or other party must notify MMS in writing of all addressee changes. The reporter/payor must notify RMP, in writing, of any addressee changes. The lessee, designee, reporter or payor must notify MMS of any addressee changes. The lessee, designee, reporter or payor is responsible for notifying RMP in writing of any addressee changes. The lessee, designee, reporter or payor is responsible for notifying RMP in writing of any addressee changes. (c) We will serve Notices of Noncompliance by using registered mail or personal service. $241.52 What if I correct the violation? The matter will be closed if you correct all of the violations identified in the Notice of Noncompliance within 20 days after you receive the Notice (or within a longer time period specified in the Notice). $241.53 What if I do not correct the violation? (a) We may send you a Notice of Civil Penalty if you do not correct all of the violations identified in the Notice of Noncompliance within 20 days after you receive the Notice of Noncompliance (or within a longer time period specified in that Notice). The Notice of Civil Penalty will tell you how much penalty you must pay. The penalty may be up to $500 per day, beginning with the date of the Notice of Noncompliance, for each violation identified in the Notice of Noncompliance for as long as you do not correct the violations. (b) If you do not correct all of the violations identified in the Notice of Noncompliance within 40 days after you receive the Notice of Noncompliance (or 20 days following the expiration of a longer time period specified in that Notice), we may increase the penalty to up to $5,000 per day, beginning with the date of the Notice of Noncompliance, for each violation for as long as you do not correct the violations. § 241.54 How may I request a hearing on the record on a Notice of Noncompliance? You may request a hearing on the record on a Notice of Noncompliance by filing a request within 30 days of the date you received the Notice of Noncompliance with the Hearings Division (Departmental), Office of Hearings and Appeals, U.S. Department of the Interior, 4015 Wilson Boulevard, Arlington, Virginia 22203. You may do this regardless of whether you correct the violations identified in the Notice of Noncompliance. § 241.55 Does my request for a hearing on the record affect the penalties? (a) If you do not correct the violations identified in the Notice of Noncompliance, the penalties will continue to accrue even if you request a hearing on the record. (b) You may petition the Hearings Division (Departmental) of the Office of Hearings and Appeals, to stay the accrual of penalties pending the hearing on the record and a decision by the Administrative Law Judge under § 241.72. (1) You must file your petition within 45 calendar days of receiving the Notice of Noncompliance. (2) To stay the accrual of penalties, you must post a bond or other surety instrument using the same standards and requirements as prescribed in 30 CFR part 243, subpart B, or demonstrate financial solvency using the same standards and requirements as prescribed in 30 CFR part 243, subpart C, for the principal amount of any unpaid amounts due that are the subject of the Notice of Noncompliance, including interest thereon, plus the amount of any penalties accrued before the date a stay becomes effective. (3) The Hearings Division will grant or deny the petition under 43 CFR 4.21(b). § 241.56 May I request a hearing on the record regarding the amount of a civil penalty if I did not request a hearing on the Notice of Noncompliance? (a) You may request a hearing on the record to challenge only the amount of a civil penalty when you receive a Notice of Civil Penalty, if you did not previously request a hearing on the record under §241.54. If you did not request a hearing on the record on the Notice of Noncompliance under §241.54, you may not contest your underlying liability for civil penalties. (b) You must file your request within 10 days after you receive the Notice of Civil Penalty with the Hearings Division (Departmental), Office of Hearings and Appeals, U.S. Department of the Interior, 4015 Wilson Boulevard, Arlington, Virginia 22203. PENALTIES WITHOUT A PERIOD TO CORRECT § 241.60 May I be subject to penalties without prior notice and an opportunity to correct? The Federal Oil and Gas Royalty Management Act sets out several specific violations for which penalties accrue without an opportunity to first correct the violation. (a) Under 30 U.S.C. 1719(c), you may be subject to penalties of up to $10,000 per day per violation for each day the violation continues if you: (1) Knowingly or willfully fail to make any royalty payment by the date specified by statute, regulation, order or terms of the lease; (2) Fail or refuse to permit lawful entry, inspection, or audit; or (3) Knowingly or willfully fail or refuse to notify the Secretary, within 5 business days after any well begins production on a lease site or allocated to a lease site, or resumes production in the case of a well which has been off production for more than 90 days, of the date on which production has begun or resumed. (b) Under 30 U.S.C. 1719(d), you may be subject to civil penalties of up to $25,000 per day for each day each violation continues if you: (1) Knowingly or willfully prepare, maintain, or submit false, inaccurate, or misleading reports, notices, affidavits, records, data, or other written information; (2) Knowingly or willfully take or remove, transport, use or divert any oil or gas from any lease site without having valid legal authority to do so; or (3) Purchase, accept, sell, transport, or convey to another person, any oil or gas knowing or having reason to know that such oil or gas was stolen or unlawfully removed or diverted. § 241.61 How will MMS inform me of violations without a period to correct? We will inform you of violations without a period to correct by issuing a Notice of Noncompliance explaining what the violation is and how to correct it. We also will send you a Notice of Civil Penalty stating the amount of the penalty. The Notice of Noncompliance and Notice of Civil Penalty may be issued simultaneously. We will send the Notice of Noncompliance and the Notice of Civil Penalty to your address of record under §241.51(b) using the means of service specified under § 241.51(c). § 241.62 How may I request a hearing on the record on a Notice of Noncompliance regarding violations without a period to correct? You may request a hearing on the record of a Notice of Noncompliance regarding violations without a period to correct by filing a request within 30 days after you receive the Notice of Noncompliance with the Hearings Division (Departmental), Office of Hearings and Appeals, U.S. Department of the Interior, 4015 Wilson Boulevard, Arlington, Virginia 22203. You may do this regardless of whether you correct the violations identified in the Notice of Noncompliance. §241.63 Does my request for a hearing on the record affect the penalties? (a) If you do not correct the violations identified in the Notice of Noncompliance regarding violations without a period to correct, the penalties will continue to accrue even if you request a hearing on the record. (b) You may ask the Hearings Division (Departmental) to stay the accrual of penalties pending the hearing on the record and a decision by the Administrative Law Judge under § 241.72. (1) You must file your petition within 45 calendar days after you receive the Notice of Noncompliance. (2) To stay the accrual of penalties, you must post a bond or other surety instrument using the same standards and requirements as prescribed in 30 CFR part 243, subpart B, or demonstrate financial solvency using the same standards and requirements as prescribed in 30 CFR part 243, subpart C, for the principal amount of any unpaid amounts due that are the subject of the Notice of Noncompliance, including interest thereon, plus the amount of any penalties accrued before the date a stay becomes effective. (3) The Hearings Division will grant or deny the petition under 43 CFR 4.21(b). § 241.64 May I request a hearing on the record regarding the amount of a civil penalty if I did not request a hearing on the Notice of Noncompliance? (a) You may request a hearing on the record to challenge only the amount of a civil penalty when you receive a Notice of Civil Penalty regarding violations without a period to correct, if you did not previously request a hearing on the record under §241.62. If you did not request a hearing on the record on the Notice of Noncompliance under § 241.62, you may not contest your underlying liability for civil penalties. (b) You must file your request within 10 days after you receive Notice of Civil Penalty with the Hearings Division (Departmental), Office of Hearings and Appeals, U.S. Department of the Interior, 4015 Wilson Boulevard, Arlington, Virginia 22203. GENERAL PROVISIONS $241.70 How does MMS decide what the amount of the penalty should be? We determine the amount of the penalty by considering the severity of the violations, your history of compliance, and if you are a small business. § 241.71 Does the penalty affect whether I owe interest? (a) The penalties under this part are in addition to interest you may owe on any underlying underpayments or unpaid debt. (b) If you do not pay the penalty by the date required under $241.75(d), MMS will assess you late payment interest on the penalty amount at the same rate interest is assessed under 30 CFR 218.54. § 241.72 How will the Office of Hearings and Appeals conduct the hearing on the record? If you request a hearing on the record under §§ 241.54, 241.56, 241.62 or 241.64, the hearing will be conducted by a Departmental Administrative Law Judge from the Office of Hearings and |