Royalty Resiliency Act
This act modifies the process under which oil and gas leaseholders who have entered into certain joint drilling agreements (i.e., a communitization agreement or a unit agreement, except agreements containing Indian lands) to drill wells on leased land pay royalties to the Department of the Interior under the Federal Oil and Gas Royalty Management Act of 1982.
Under current law, Interior must issue a determination of allocations of royalty payments for oil and gas production under a joint agreement within 120 days of a request for determination. Generally, the first leaseholder to drill must pay any royalties due to Interior for all oil and gas production on the land subject to the agreement until Interior determines the royalty allocations of each leaseholder. If Interior fails to issue the determination by that deadline, then it must waive interest due on royalty obligations until the end of the month following the month in which the determination was made.
Under the act, a leaseholder must pay royalties on oil and gas production based on the lessee's proposed allocation of production under the joint agreement until Interior issues a determination of royalty allocations. After Interior issues the determination, then the lessee must correct, if necessary, the amount of royalties paid by the end of the third month following the month in which the lessee received the determination from Interior. Subject to the full and timely payment of monthly royalties in accordance with the agreement, Interior must waive interest due on royalty obligations until the end of the third month.
[118th Congress Public Law 81]
[From the U.S. Government Publishing Office]
[[Page 138 STAT. 1520]]
Public Law 118-81
118th Congress
An Act
To amend the Federal Oil and Gas Royalty Management Act of 1982 to
improve the management of royalties from oil and gas leases, and for
other purposes. <<NOTE: Sept. 20, 2024 - [H.R. 7377]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: Royalty
Resiliency Act.>>
SECTION 1. <<NOTE: 30 USC 1701 note.>> SHORT TITLE.
This Act may be cited as the ``Royalty Resiliency Act''.
SEC. 2. DETERMINATION OF ALLOCATIONS OF PRODUCTION FOR UNITS AND
COMMUNITIZATION AGREEMENTS.
Section 111(j) of the Federal Oil and Gas Royalty Management Act of
1982 (30 U.S.C. 1721(j)), as amended by the Federal Oil and Gas Royalty
Simplification and Fairness Act of 1996 (Public Law 104-185), is amended
to read as follows:
``(j) <<NOTE: Deadlines. Reports.>> The Secretary shall issue all
determinations of allocations of production for units and
communitization agreements within 120 days of a request for
determination. Until the Secretary issues the determination, the lessee
or its designee of a lease in a unit or communitization agreement shall
report and pay royalties on oil and gas production for each production
month in accordance with the terms of the proposed allocation of
production for the unit or communitization agreement. After the
Secretary issues the determination, the lessee or its designee shall, as
necessary, correct such reports and the amount of royalties paid on oil
and gas production under the unit or communitization agreement by not
later than the end of the third month following the month in which the
lessee or its designee receives the determination from the
Secretary. <<NOTE: Waiver.>> Subject to the full and timely monthly
payment of royalties to all parties in accordance with the terms of the
proposed allocation of production for the unit or communitization
agreement, the Secretary shall waive interest due on obligations subject
to the determination until the end of the third month following the
month in which the lessee or its designee receives the determination
from the Secretary. This subsection shall not apply to unit or
communization agreements containing Indian lands.''.
Approved September 20, 2024.
LEGISLATIVE HISTORY--H.R. 7377:
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HOUSE REPORTS: No. 118-562 (Comm. on Natural Resources).
CONGRESSIONAL RECORD, Vol. 170 (2024):
July 22, considered and passed House.
Sept. 11, considered and passed Senate.
<all>
Ordered to be Reported (Amended) by Unanimous Consent.
Reported (Amended) by the Committee on Natural Resources. H. Rept. 118-562.
Reported (Amended) by the Committee on Natural Resources. H. Rept. 118-562.
Placed on the Union Calendar, Calendar No. 464.
Mr. Westerman moved to suspend the rules and pass the bill, as amended.
Considered under suspension of the rules. (consideration: CR H4650-4651)
DEBATE - The House proceeded with forty minutes of debate on H.R. 7377.
Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H4650)
On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H4650)
Motion to reconsider laid on the table Agreed to without objection.
Received in the Senate, read twice.
Passed/agreed to in Senate: Passed Senate without amendment by Unanimous Consent.
Enacted as Public Law 118-81
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Passed Senate without amendment by Unanimous Consent. (consideration: CR S6003)
Message on Senate action sent to the House.
Presented to President.
Presented to President.
Signed by President.
Signed by President.
Became Public Law No: 118-81.
Became Public Law No: 118-81.