0107 attach 1 30cfr.218

Minerals Management Service, Interior
Subpart D—Oil, Gas and Sulfur, Offshore
218.150 Royalties, net profit shares, and
rental payments.
218.151 Rental fees.
218.152 Fishermen’s Contingency Fund.
218.153 [Reserved]
218.154 Effect of suspensions on royalty and
rental.
218.155 Method of payment.
218.156 Definitions.

Subpart E—Solid Minerals—General
218.200 Payment of royalties, rentals, and
deferred bonuses.
218.201 Method of payment.
218.202 Late payment or underpayment
charges.
218.203 Recoupment of overpayments on Indian mineral leases.

Subpart F—Geothermal Resources
218.300 Payment of royalties, rentals, and
deferred bonuses.
218.301 Method of payment.
218.302 Late payment or underpayment
charges.

Subpart G—Indian Lands [Reserved]
AUTHORITY: 25 U.S.C. 396 et seq., 396a et seq.,
2101 et seq.; 30 U.S.C. 181 et seq., 351 et seq.,
1001 et seq., 1701 et seq.; 31 U.S.C. 3335; 43
U.S.C. 1301 et seq., 1331 et seq., and 1801 et seq.
SOURCE: 48 FR 35641, Aug. 5, 1983, unless
otherwise noted.

Subpart A—General Provisions
§ 218.10

Information collection.

The information collection requirements contained in this part have been
approved by OMB under 44 U.S.C. 3501
et seq. The forms, filing date, and approved OMB clearance numbers are
identified in 30 CFR 210.10.
[57 FR 41867, Sept. 14, 1992]

§ 218.40 Assessments for incorrect or
late reports and failure to report.
(a) An assessment of an amount not
to exceed $10 per day may be charged
for each report not received by MMS by
the designated due date.
(b) An assessment of an amount not
to exceed $10 may be charged for each
incorrectly completed report.
(c) For purposes of assessments discussed in this section, a report is defined as follows:

§ 218.41
(1) For coal and other solid mineral
leases, a report is each line on the
Solid Minerals Production and Royalty
Report, Form MMS–4430.
(2) For oil and gas and geothermal
leases, a report is each line on the Report of Sales and Royalty Remittance,
Form MMS–2014.
(d) An assessment under this section
shall not be shared with a State, Indian
tribe, or Indian allottee.
(e) The amount of the assessment to
be imposed pursuant to paragraphs (a)
and (b) of this section shall be established periodically by MMS. The assessment amount for each violation
will be based on MMS’s experience with
costs and improper reporting. The
MMS will publish a Notice of the assessment amount to be applied in the
FEDERAL REGISTER.
[49 FR 37346, Sept. 21, 1984. Redesignated and
amended at 51 FR 15767, Apr. 28, 1986; 52 FR
27546, July 22, 1987; 52 FR 37452, Oct. 7, 1987;
57 FR 52720, Nov. 5, 1992; 59 FR 38906, Aug. 1,
1994; 66 FR 45773, Aug. 30, 2001]

§ 218.41 Assessments for failure to submit payment of same amount as
Form MMS–2014 or bill document
or to provide adequate information.
(a) An assessment of an amount not
to exceed $250 may be charged when the
amount of a payment submitted by a
payor is not equivalent in amount to
the total of individual line items on
the associated Form MMS 2014 or bill
document, unless the difference in
amount has been authorized by MMS.
(b) An assessment of an amount not
to exceed $250 may be charged for each
payment submitted by a payor that
cannot be automatically applied by
AFS to the associated Form MMS–2014
or bill document because of inadequate
or erroneous information submitted by
the payor. For purposes of this section,
inadequate or erroneous information is
defined as:
(1) Absent or incorrect payor assigned document number, required to
be identified by the payor in Block 3a
on a Form MMS–2014, or the reuse of
the same payor assigned document
(‘‘3a’’) number in a subsequent reporting
period.
(2) Absent or incorrect bill document
invoice number (to include the four
character alpha prefix and the eight

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§ 218.42

30 CFR Ch. II (7–1–04 Edition)

digit number) or the payor-assigned 3a
number required to be identified by the
payor on the associated payment document, or the reuse of the same payor
assigned 3a number in a subsequent reporting period.
(3) Absent or incorrect name of the
administering Bureau of Indian Affairs
Agency/Area office and the word ‘‘allotted’’ or the tribe name on payment
documents remitted to MMS for an Indian tribe or allottee. If the payment is
made by EFT, the payor must identify
the tribe/allottee on the EFT message
by a pre-established five digit code.
(4) Absent or incorrect MMS assigned
payor code on a payment document.
(c) For purposes of this section, the
term ‘‘Form MMS–2014’’ includes submission of reports of royalty information by magnetic media. Magnetic
media submissions include submissions
by magnetic tape, magnetic cartridge,
or floppy diskette.
(d) For purposes of this section, a bill
document is defined as any Bill of Collection (Form DI–1040b) that has been
issued by MMS for assessments, latepayment interest charges, or other
amounts owed.
(e) For purposes of this section, a
payment document is defined as one of
the payment methods identified in
§ 218.51(a)(3).
(f) The amount of the assessment to
be imposed pursuant to paragraphs (a)
and (b) of this section shall be established periodically by MMS. The assessment amount will be based on
MMS’ experience with costs and improper reporting and/or payment as
specified in this section. The MMS will
publish a Notice in the FEDERAL REGISTER of the assessment amount to be
applied with the effective date.
[58 FR 45438, Aug. 30, 1993]

§ 218.42 Cross-lease netting in calculation of late-payment interest.
(a) Interest due from a payor on any
underpayment for any Federal mineral
lease or leases (onshore or offshore)
and on any Indian tribal mineral lease
or leases for any production month
shall not be reduced by offsetting
against that underpayment any overpayment made by the payor on any
other lease or leases, except as provided in paragraph (b) of this section.

Interest due from a payor or any underpayment on any Indian allotted
lease shall not be reduced by offsetting
against any overpayment on any other
Indian allotted lease under any circumstances.
(b) Royalties attributed to production from a lease or leases which
should have been attributed to production from a different lease or leases
may be offset to determine whether
and to what extent an underpayment
exists on which interest is due if the
following conditions are met:
(1) The error results from attributing
and reporting an equal volume of production, produced from a lease or
leases during a particular production
month, to a different lease or leases
from which it was not produced for the
same or another production month;
(2) The payor is the same for the
lease or leases to which production was
attributed and the lease or leases to
which it should have been attributed;
(3) The payor submits production reports, pipeline allocation reports, or
other similar documentary evidence
pertaining to the specific production
involved which verifies the correct production information;
(4) The lessor is the same for the
leases involved (in the case of Indian
tribal leases, the same tribe is the lessor); and
(5) The ultimate recipients of any
royalty or other lease revenues under
any applicable permanent indefinite
appropriations are the same for, and
receive the same percentage of revenue
from, the leases.
(c) If MMS assesses late-payment interest and the payor asserts that some
or all of the interest assessed is not
owed pursuant to the exception set
forth in paragraph (b) of this section,
the burden is on the payor to demonstrate that the exception applies in
the specific circumstances of the case.
(d) The exception set forth in paragraph (b) of this section shall not operate to relieve any payor of liability imposed by statute or regulation for erroneous reporting.
[57 FR 62206, Dec. 30, 1992]

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Minerals Management Service, Interior

Subpart B—Oil and Gas, General
SOURCE: 49 FR 37346, Sept. 21, 1984, unless
otherwise noted.

§ 218.50 Timing of payment.
(a) Royalty payments are due at the
end of the month following the month
during which the oil and gas is produced and sold except when the last
day of the month falls on a weekend or
holiday. In such cases, payments are
due on the first business day of the succeeding month. Rental payments are
due as specified by the lease terms.
(b) Payments made on a Bill for Collection (Form DI–1040b) are due as
specified by the Bill. Bills for Collection will be issued and payable as final
collection actions.
(c) All payments to MMS are due as
specified and are not deferred or suspended by reason of an appeal having
been filed unless such deferral or suspension is approved in writing by an
authorized MMS official.
§ 218.51 How to make payments.
(a) Definitions.
ACH—Automated Clearing House. A
type of EFT using the ACH network.
Courtesy Notice—An MMS-issued notice of rental or bonus due.
Deferred Bonus Payment—Lease bonus
paid in equal annual installments over
a specified number of years.
EFT—Electronic Funds Transfer. Any
paperless transfer of funds a bank initiates through an electronic terminal.
For MMS purposes, EFT is limited to
FEDWIRE and ACH transfers.
FEDWIRE—A type of EFT using the
Federal Reserve Wire network.
Invoice Document Identification—The
MMS-assigned invoice document identification (four alpha and eight numeric characters).
Payment—Any monies for royalty,
bonus, rental, late payment charge, assessment, penalty, or other money sent
to MMS.
Person—Any individual, firm, corporation, association, partnership, consortium, or joint venture (when established as a separate entity). The term
does not include Federal agencies.
Report—Form MMS–2014, Report of
Sales and Royalty Remittance.
RIK—Royalty in kind.

§ 218.51
(b) General Instructions. You must
make all payments to MMS electronically to the extent it is cost effective
and practical. If you pay money to
MMS or to an Indian tribe or allottee,
you must follow these procedures:
(1) If MMS instructs you to use EFT,
you must use EFT for all payments to
MMS and/or a tribe.
(2) Contact MMS before using EFT.
MMS will provide you with EFT payment instructions.
(3) Separate any payments on a Federal lease from any payments on an Indian lease.
(4) If you are not required to use
EFT, use one of the following types of
payment documents. MMS prefers that
you use these payment documents in
the order presented:
(i) Commercial check drawn on a solvent bank;
(ii) Certified check;
(iii) Cashier’s check;
(iv) Money order;
(v) Bank draft drawn on a solvent
bank; or
(vi) Federal Reserve check.
(5) You must include your payor code
on all payments.
(6) You must pay in U.S. dollars.
(c) How to complete a non-EFT payment. (1) Make any payment on a Federal lease payable to: ‘‘Department of
the
Interior-Minerals
Management
Service’’ or ‘‘DOI–MMS.’’
(2) For an Indian allottee payment,
send a separate payment for each Bureau of Indian Affairs (BIA) agency or
area office represented by the leases on
your report or invoice document. You
must include the name of the applicable BIA agency or area office on your
payment. Make your payment document payable to: ‘‘Department of the
Interior-Minerals Management Service
for BIA [Name] Agency (allotted)’’ or
‘‘DOI-MMS for BIA [Name] Agency (allotted).’’
(3) For an Indian tribal payment
other than a lockbox payment, send a
separate payment for each tribe represented by the leases on your report
or invoice document. You must include
the name of the Indian tribe on your
payment. Make it payable to: ‘‘Department of the Interior-Minerals Management Service for BIA [Name of Tribe]’’
or ‘‘DOI-MMS for BIA [Name of Tribe].’’

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§ 218.51

30 CFR Ch. II (7–1–04 Edition)

(4) For an Indian tribal lockbox payment, follow the instructions MMS
provides you on how to report and
make the lockbox payment. These instructions are specific to each tribe’s
lockbox written agreement with the
bank authorized to receive payments
on the tribe’s mineral leases. You will
receive these instructions from MMS
when you are required to use a tribal
lockbox for reports and payments.
(d) Where to send a non-EFT payment
when you use the U.S. Postal Service. (1)
For a payment to an Indian tribal
lockbox, send your payment to the appropriate tribal lockbox address.
(2) For a Federal nonproducing lease
rental or deferred bonus payment, send
it to:
Minerals Management Service, Minerals
Revenue Management, P.O. Box 5640, Denver, CO 80217–5640.

(3) For all other Federal and Indian
lease payments other than those going
to an Indian tribal lockbox, send them
to:
Minerals Management Service, Minerals
Revenue Management, P.O. Box 5810, Denver, CO 80217–5810.

(e) Where to send a non-EFT payment
when you use a courier or overnight delivery service. You should send this type of
payment to:
Minerals Management Service, Minerals
Revenue Management, Building 85, Denver
Federal Center, Room A–614, Denver, CO
80225–0165.

(f) How to prepare and what to include
on your payment document. (1) For Form
MMS–2014 payments, you must include
both your payor code (block 2) and
your payor-assigned document number
(block 3a).
(2) For invoice payments, including
RIK invoice payments, you must include both your payor code and invoice
document identification (four-letter
prefix and eight-digit number).
(3) For bonus payments:
(i) For one-fifth bonus payments for
offshore oil, gas, and sulphur leases,
follow the instructions in the Notice of
Lease Offering.
(ii) For payment of the four-fifths
bonus for an offshore lease, use EFT
and
follow
the
instructions
in
§ 218.155(c).

(iii) For the successful bidder’s bonus
in the competitive sale of a coal, geothermal, or offshore mineral (other
than oil, gas or sulfur) lease, follow the
instructions and terms of the Notice of
Competitive Lease Sale.
(iv) For installment payments of deferred bonuses, you must use EFT.
(4) If you are paying a lease rental
you must:
(i) See 30 CFR 218.155(c) for instructions on how to pay first-year rentals
of an offshore oil, gas, or sulfur lease;
(ii) See the Notice of Lease Offering
for instructions on how to pay firstyear rentals other than those covered
in paragraph (f)(4)(i) of this section.
(iii) Include the MMS Courtesy Notice, when provided, or write your
payor code and government-assigned
lease number on the payment document when paying a rental that is not
reported on Form MMS–2014 and not
paid by EFT.
(g) When is a payment to MMS due? (1)
All payments are due to MMS at the
time law, regulation, or lease terms require unless MMS approves a change
according to part 243 of this chapter. If
you file an appeal, and the requirement
to submit payment is suspended, the
original payment due date for purposes
such as calculating late payment interest is not changed.
(2) If you use the U.S. Postal Service,
courier, or overnight mail to send your
payment, it is due at the MMS addresses in paragraphs (d) and (e) of this section before 4 p.m. Mountain Time on
the due date, regardless of when you
sent it.
(3) If you use EFT to send your payment, it is due in the MMS account by
the payment due date. You are responsible for your actions or your bank’s
actions that cause a late or incorrect
payment. You will not be held responsible for mechanical or system failures
of EFT payments.
(h) What happens if payments are late
or overdue?
(1) If MMS receives your payment
late, MMS will impose a late-payment
interest charge under 30 CFR 218.54.
(2) If you do not pay an amount you
owe, MMS may assess civil penalties

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Minerals Management Service, Interior

§ 218.54

under part 241 of this chapter or other
applicable regulations.

ments to MMS, a new designation
under paragraph (a) of this section.
(d) MMS may require you to provide
notice when there is a change in the
percentage of your record title or operating rights ownership.

[62 FR 19498, Apr. 22, 1997, as amended at 66
FR 45773, Aug. 30, 2001; 67 FR 19112, Apr. 18,
2002]

§ 218.52 How does a lessee designate a
Designee?
(a) If you are a lessee under 30 U.S.C.
1701(7), and you want to designate a
person to make all or part of the payments due under a lease on your behalf
under 30 U.S.C. 1712(a), you must notify
MMS or the applicable delegated State
in writing of such designation. Your
notification for each lease must include the following:
(1) The AID number for the lease;
(2) The type of products you make
payments for e.g., oil, gas.
(3) The type of payments you are responsible for e.g., royalty, minimum
royalty, rental.
(4) Whether you are:
(i) A lessee of record (record title
owner) in the lease, and the percentage
of your record title ownership in the
lease; or
(ii) An operating rights owner (working interest owner) in the lease, and
the percentage of your operating rights
ownership in the lease;
(5) The name, address, Taxpayer
Identification Number (TIN), and
phone number of your Designee;
(6) The name, address, and phone
number of the individual to contact for
the person you named in paragraph
(a)(5) of this section;
(7) Your TIN;
(8) The date the designation is effective;
(9) The date the designation terminates, if applicable, and
(10) A copy of the written designation;
(b) The person you designate under
paragraph (a) of this section is your
Designee under 30 U.S.C. 1701(24) and 30
U.S.C. 1712(a).
(c) If you want to terminate a designation you made under paragraph (a)
of this section, you must provide to
MMS in writing before the termination:
(1) The date the designation is due to
terminate; and
(2) If you are not reporting and paying royalties and making other pay-

[62 FR 42066, Aug. 5, 1997]

§ 218.53 Recoupment of overpayments
on Indian mineral leases.
(a) Whenever an overpayment is
made under an Indian oil and gas lease,
a payor may recoup the overpayment
through a recoupment on Form MMS–
2014 against the current month’s royalties or other revenues owed on the
same lease. However, for any month a
payor may not recoup more than 50
percent of the royalties or other revenues owed in that month under an individual allotted lease or more than 100
percent of the royalties or other revenues owed in that month under a tribal
lease.
(b) With written permission authorized by tribal statute or resolution, a
payor may recoup an overpayment
against royalties or other revenues
owed in that month under other leases
for which that tribe is the lessor. A
copy of the tribe’s written permission
must be furnished to MMS pursuant to
instructions for reporting recoupments
in the MMS revenue reporter handbook. See part 210 of this chapter. Recouping overpayments on one allotted
lease from royalties paid to another allotted lease is specifically prohibited.
(c)
Overpayments
subject
to
recoupment under this section include
all payments made in excess of the required payment for royalty, rental,
bonus, or other amounts owed as specified by statute, regulation, order, or
terms of an Indian mineral lease.
(d) The MMS Director or his/her designee may order any payor to not recoup any amount for such reasonable
period of time as may be necessary for
MMS to review the nature and amount
of any claimed overpayment.
[60 FR 3087, Jan. 13, 1995, as amended at 67
FR 19112, Apr. 18, 2002]

§ 218.54

Late payments.

(a) An interest charge shall be assessed on unpaid and underpaid

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