Debt Collection and Administrative Offset for Monies Due the Federal Government, 25881-25889 [2012-10361]

Agencies

• DEPARTMENT OF THE INTERIOR
• Office of Natural Resources Revenue

[Federal Register Volume 77, Number 85 (Wednesday, May 2, 2012)]
[Rules and Regulations]
[Pages 25881-25889]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-10361]


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DEPARTMENT OF THE INTERIOR

Office of Natural Resources Revenue

30 CFR Part 1218

[Docket No. ONRR-2011-0010]
RIN 1012-AA03


Debt Collection and Administrative Offset for Monies Due the 
Federal Government

AGENCY: Office of Natural Resources Revenue.

ACTION: Final rule.

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SUMMARY: The Office of Natural Resources Revenue (ONRR) is promulgating 
regulations to establish procedures governing collection of delinquent 
royalties, rentals, bonuses, and other amounts due under leases and 
other agreements for the production of oil, natural gas, coal, 
geothermal energy, other minerals, and renewable energy from Federal 
lands onshore, Indian tribal and allotted lands, and the Outer 
Continental Shelf. The regulations include provisions for 
administrative offset and clarify and implement the provisions of the 
Debt Collection Act of 1982 (DCA) and the Debt Collection Improvement 
Act of 1996 (DCIA).

DATES: Effective Date: June 1, 2012.

FOR FURTHER INFORMATION CONTACT: For comments or questions on 
procedural issues, contact Hyla Hurst, Regulatory Specialist, ONRR, 
telephone (303) 231-3495. For questions on technical issues, contact 
Sarah L. Inderbitzin, Office of Enforcement, ONRR, telephone (303) 231-
3748.

SUPPLEMENTARY INFORMATION: 

I. Background

    The ONRR is responsible for collecting, accounting for, and 
disbursing billions of dollars per year in bonus, rental, royalty, and 
other revenues derived from leases and other agreements for the 
production of oil, natural gas, coal, geothermal energy, other 
minerals, and renewable energy from Federal lands onshore, Indian 
tribal and allotted lands, and the Outer Continental Shelf. The ONRR 
also is responsible for enforcement of royalty and other payment 
obligations under applicable statutes, regulations, leases, agreements, 
and contracts.
    The ONRR undertakes current debt collection activities under the 
DCA (Pub. L. 97-365), as amended by the DCIA (Pub. L. 104-134, Title 
III, Ch. 10, 110 Stat. 1321-359--1321-380 (codified at 31 U.S.C. 3711, 
3716-18, and 3720A). The DCIA was enacted primarily to increase 
collection of nontax debts owed to the Federal Government. Among other 
provisions, the DCIA centralized the administrative collection of much 
delinquent nontax debt at the U.S. Department of the Treasury's 
Financial Management Service (Treasury) to increase the efficiency of 
collection efforts. Government agencies are required to transfer nontax 
debt that has been delinquent for 180 days to Treasury for further 
collection action, including administrative offset.
    This final rule (1) implements statutory provisions of the DCA, as 
amended by the DCIA, and (2) supplements the Government-wide debt 
collection standards promulgated by the Departments of the Treasury and 
Justice, known as the Federal Claims Collection Standards (FCCS) (31 
CFR parts 900-904), as necessary and appropriate for ONRR operations. 
The DCIA grants the Secretary discretionary authority in many aspects 
of debt collection, and this final rule defines the parameters of this 
authority. This final rule also makes some nonsubstantive technical or 
clarifying changes to the proposed rule.
    In the interim between development of the proposed rule and the 
final rule, the Secretary of the Interior separated the 
responsibilities previously performed by the former Minerals Management 
Service (MMS) and reassigned those responsibilities to three separate 
organizations. As part of this reorganization, the Secretary renamed 
MMS's Minerals Revenue Management (MRM) the Office of Natural Resources 
Revenue and directed that ONRR transition to the Office of Policy, 
Management and Budget, effective October 1, 2010. This change required 
the reorganization of title 30 of the Code of Federal Regulations. In a 
direct final rule (effective October 1, 2010), ONRR removed the royalty 
and other revenue reporting, payment, valuation, and appeal regulations 
from 30 CFR, chapter II, and recodified them in the new chapter XII. 
Thus, the 30 CFR citations in this final rule are to part 1218 rather 
than to part 218, as they were in the proposed rule. Neither these nor 
any of the plain language changes discussed below effect any 
substantive change in meaning.

II. Comments on the Proposed Rule

    The proposed rule was published on June 8, 2010 (75 FR 32343). We 
received comments on the proposed rule from one nonprofit organization 
and one trade association. We have analyzed these comments, which are 
discussed below:

A. General Comments

    General comments on the proposed rule fall into five categories: 
(1) Plain language, (2) Treasury fees, (3) Treasury offsets, (4) 
Chronology of collection efforts, and (5) Early resolution of bills and 
demands.
(1) Plain Language
    Public Comments: The nonprofit organization commented that the 
entire regulation should be rewritten in plain language.
    ONRR Response: In order to be consistent with other debt collection 
regulations, ONRR specifically adopted regulatory language implementing 
the DCA and DCIA that other agencies and

[[Page 25882]]

the Department of the Interior (Department) have already promulgated. 
See, e.g., Department of the Interior, National Indian Gaming 
Commission, debt collection regulations at 25 CFR part 513, and the 
Department of Health and Human Services debt collection regulations at 
45 CFR parts 30 and 33. In the proposed rule, ONRR used plain language 
where it was appropriate and did not change the substantive meaning of 
those regulations. Although we decline to rewrite the entire rule as 
the commenter suggested, we have used plain language in the final rule 
in instances where plain language is appropriate and does not change 
the substance of the rule. For example, in Sec.  1218.702(a), we 
replaced ``The ONRR will collect debts from you in accordance with the 
regulations in this subpart * * *.'' with ``The ONRR will collect debts 
from you under the regulations in this subpart * * *.''
(2) Treasury Fees
    Public Comments: The trade association commented that Treasury has 
sometimes duplicated offsets and collected the same debt twice. When 
this occurs, the commenter notes that, although ONRR refunds the 
duplicate payment to the company, companies cannot recover the 
duplicate fee Treasury charges. The commenter believes that this 
rulemaking should give Treasury authority to remit the duplicate fee 
charged.
    ONRR Response: Treasury currently charges a fee of $17.00 per 
offset (beginning October 1, 2010). Treasury, not ONRR, charges and 
keeps this fee. The ONRR does not have authority in this rulemaking to 
refund fees charged by Treasury or to address Treasury's processes. 
Thus, debtors need to make requests to Treasury for refunds of 
duplicate offset fees.
(3) Treasury Offsets
    Public Comments: The trade association commented that, because an 
ONRR debt referred to Treasury may be offset by another Federal 
Government overpayment or monies due the debtor, in some cases, it is 
difficult to know where the offset occurs. The commenter also believes 
that this may result in cascading debt collection notices due to 
differing accounting and reporting records of debtors and the Federal 
Government. The commenter is concerned that a company may believe that 
their records are reconciled while the Federal Government continues to 
impose fines and fees for unknown debts. The commenter observes that 
the proposed rule does not identify a system to reconcile records.
    ONRR Response: Treasury performs administrative offsets. The ONRR 
merely refers the debts to Treasury; Treasury does not provide us with 
the details of its offsets, and we do not have the authority to address 
Treasury's offset processes in this rulemaking. Thus, debtors need to 
work with Treasury regarding concerns about offsets and reconciling 
records.
(4) Chronology of Collection Efforts
    Public Comments: The trade association suggested that we add a 
description of the chronological order of ONRR's debt collection 
process to the final rule to help clarify that process.
    ONRR Response: The ONRR provided the chronological description of 
our internal debt referral process in the preamble to the proposed rule 
(75 FR 32343). However, we do not believe it is appropriate to codify 
such internal processes in the final rulemaking.
(5) Early Resolution of Bills and Demands
    The trade association observed that a company may receive a bill or 
demand for many reasons. The commenter stated examples such as the 
original invoice being misdirected or never received, or the original 
debt being for another company but the operating rights owner received 
the bill. The commenter notes that, after significant research, some 
bills are found to already have been paid. The commenter believes that 
better communication would ensure early resolution of debts. The 
commenter also believes that these items could be cleared earlier in 
the process if ONRR addressed information provided by industry in a 
timelier manner.
    ONRR Response: The ONRR issues bills and demands to lessees of 
record, operating rights holders, payors, and designees to collect 
royalties, rents, and other revenues due on Federal and Indian leases. 
The ONRR makes every effort to send bills and demands to the correct 
company and to resolve debts prior to referral to Treasury. However, it 
is the responsibility of the company who receives the bill or demand to 
either acknowledge the debt by timely payment or disagree with the debt 
by appealing the bill or demand within 30 days of its receipt of the 
bill or demand. In addition, before appealing, the company may contact 
ONRR to discuss the bill or demand. Nevertheless, contacting ONRR to 
discuss the bill or demand does not relieve the company of the 
requirement to file an appeal within 30 days under 30 CFR part 1290, if 
the bill or demand is not resolved prior to that date. The ONRR 
provides contact information on all bills and demands. In addition, 
contact information for ONRR's Financial Services program is available 
on our Web site at https://www.onrr.gov/fm/ContactInfo.htm.
    The ONRR also sends bills or demands to the lessee's or payor's 
address of record, which is obtained either from ONRR's system or from 
the Bureau of Land Management's (BLM) LR2000 system. It is the 
company's responsibility to keep ONRR and BLM informed of the company's 
current address and contacts so that ONRR does not misdirect mailed 
bills and demands. Companies must update their contact information on 
Form MMS-4444, Addressee of Record Designation for Service of Official 
Correspondence (we are in the process of updating our regulations to 
replace MMS in our form numbers with ONRR), available on the ONRR Web 
site, at https://www.onrr.gov/FM/Forms/default.htm. The company must 
contact the appropriate BLM office for BLM address changes.
    Public Comments: The trade association believes that debts referred 
to Treasury have sometimes been caused by ONRR errors, such as 
misapplying payments or generating duplicate interest bills. The 
commenter encourages ONRR to dedicate time and resources to the 
accuracy of its internal accounting.
    ONRR Response: The ONRR commits significant time and resources to 
reconcile payments with receivables in its system. However, when 
company accounts are deficient or when a company does not specify how 
the payment should be applied, payments are applied to receivables 
using the First-In First-Out method of accounting. This process is 
necessary because Treasury will not accept referrals until all payments 
have been applied to receivables, leaving only open receivables in an 
account.
    The ONRR acknowledges that we have issued some duplicate interest 
bills. However, we have initiated process improvements to prevent 
future occurrences.
    Public Comments: The trade association commented that limited 
detail provided on demand notices makes it difficult for companies to 
respond, resulting in escalation of collection efforts. The commenter 
believes that better information is needed to resolve collections in a 
timely manner. The commenter stated the belief that additional 
information exists in the Statement of Account system that could assist 
in resolving debt. The commenter recommended that companies be given 
access to the additional information from the

[[Page 25883]]

Statement of Account for timely bill resolution.
    ONRR Response: With each initial bill or order to pay, ONRR 
includes related reports with detailed information. When a company does 
not timely pay a bill or order, if the original bill or order did not 
contain language stating that ONRR may refer the bill or order to 
Treasury to collect, then ONRR sends a followup letter to the original 
recipient, as well as to each potentially liable lessee, with an 
attachment that reflects a roll-up of the original bill. It is the 
recipient's responsibility to contact ONRR to request lease-specific 
information provided on the original bill or demand. Through ONRR's 
Data Warehouse, found at https://dwportal.onrr.gov, companies can 
access their Statement of Account, showing the dates and balances of 
all open receivables for each company's account. However, the Statement 
of Account does not contain detailed information on the items listed in 
an original bill or demand. Nevertheless, companies can access detailed 
information in the Data Warehouse for Interest (INT) bills and Indian 
over-recoupment (IOR) bills. When ONRR issues an INT or IOR invoice, we 
place the invoice and associated invoice reports (three different 
reports for INT, and one for IOR) in each company's folder in the Data 
Warehouse.
    Public Comments: The trade association recommended that ONRR 
provide companies electronic notification of indebtedness by email to 
facilitate timely resolution of debts and decrease billing errors.
    ONRR Response: As stated above, all INT and IOR bills are placed in 
a company's folder in the Data Warehouse. When a company receives 
access to their folder in the Data Warehouse, the designated contact 
receives an email notification when an invoice is issued and placed in 
their folder (eInvoice). The purpose of eInvoice is to address company 
complaints about the large volumes of paper invoice reports sent with 
the bill and the difficulty of analyzing reports in that format. To 
address this concern, eInvoice gives companies the opportunity to 
download the reports that accompany INT and IOR bills in order to more 
efficiently analyze those reports. The FIN bills (financial term bills 
for rent and minimum royalty) and OTH bills (usually penalty bills or 
compliance bills) have no associated reports. Thus, ONRR sends paper 
FINs and OTHs because they do not have the volume issue we addressed 
for INT and IOR bills. For the same reason, ONRR does not 
electronically send the followup demands issued to other liable 
companies, when the original recipient of a bill or demand does not 
pay.

B. Specific Comments on 30 CFR Part 1218--Subpart J--Debt Collection 
and Administrative Offset

(1) 30 CFR 1218.700 What definitions apply to this subpart?

Definitions of ``BIA,'' ``BLM,'' and ``BOEMRE''

    We did not receive any comments regarding these definitions. 
However, in this final rule, we are removing references to specific 
leasing or regulatory agencies that were in the proposed rule in this 
definitions section and elsewhere. The Bureau of Indian Affairs (BIA) 
and BLM names remain the same. However, the Bureau of Ocean Energy 
Management, Regulation and Enforcement (BOEMRE) is now two separate 
bureaus, the Bureau of Ocean Energy Management (BOEM) and Bureau of 
Safety and Environmental Enforcement (BSEE).

Definition of ``Debtor''

    Public Comments: The nonprofit organization suggested defining the 
pronouns ``you'' in the regulatory texts and ``I'' in the headings to 
refer to the debtor.
    ONRR Response: The ONRR agrees that, for purposes of plain 
language, ``you'' can be defined as the ``debtor,'' and ONRR has made 
that change in the final rule. Therefore, in the final rule, ``you'' 
would be defined as the debtor in a new paragraph (u). However, we 
decline to also define ``I'' as the debtor because the term ``I'' is 
not used in the headings in this final rule.

Definition of ``Delinquent''

    Public Comments: The trade association suggested adding a 
definition of ``past due'' even though it appears to be covered by the 
definition of ``delinquent.'' The commenter believes that adding a 
definition for ``past due'' would support ONRR's stated goal of 
prescribing procedures specifically applicable to ONRR operations. As 
an alternative, the trade association suggested deleting ``past due.''
    ONRR Response: The commenter is correct that ``past due'' means the 
same as ``delinquent.'' Therefore, in Sec.  1218.700, ONRR has added a 
definition of ``past due'' stating that ``past due has the same meaning 
as `delinquent,' as defined above.'' We are also adding the term ``past 
due'' to the definition of ``delinquent.'' In addition, to make clear 
that debts are not delinquent unless ``legally enforceable,'' we added 
that term to the definition and added language to clarify that debts or 
claims are delinquent when not paid by the time prescribed by the 
applicable act, law, regulation, lease, order, demand, notice of 
noncompliance, and/or assessment of civil penalties, contract, 
decision, or any other agreement. In the final rule the term is defined 
as follows: ``Delinquent or past due refers to the status of a debt and 
means a debt that is legally enforceable and has not been paid within 
the time limit prescribed by the applicable act, law, regulation, 
lease, order, demand, notice of noncompliance, and/or assessment of 
civil penalties, contract, decision, or any other agreement.''

Definition of ``Legally Enforceable''

    Although we did not receive comments on this definition, we made a 
change to this term to make clear that we will refer debts or claims 
only for which there has been a final non-appealable agency 
determination that the debt, in the amount stated, is due. See 
discussion of the terms ``debt'' and ``claim'' below.
    The rule still states that we also will determine there are no 
legal bars to collection by offset such as debts subject to the 
Bankruptcy Code (Title 11 of the United States Code). For such debts, 
bankruptcy law will govern the debt collection process.

Definition of ``Lessee''

    Public Comments: The trade association commented that the 
definition of ``lessee'' under 30 CFR part 1218 in the proposed rule is 
broader than the definition of ``lessee'' in part 1290. The association 
believes that different definitions under the parts would create the 
potential for confusion, ambiguity, and inconsistent results. The 
commenter also believes that the definition in 30 CFR part 1218 expands 
the potential liability of a party's debts to include those of another 
owner in the same property. Finally, the commenter believes that the 
regulations regarding the underpayment or nonpayment of royalties by a 
responsible party should not deviate from definitions set forth in the 
Royalty Simplification and Fairness Act (RSFA), Public Law 104-185, 110 
Stat. 1700, as corrected by Public Law 104-200.
    ONRR Response: The ONRR intended the definition of ``lessee'' under 
this rulemaking to be broad because this rule applies to all mineral 
lessees, not just Federal oil and gas leases. As we stated in the 
preamble to the proposed rule, ``[t]he definition in subsection (o) is 
broader than the definition of `lessee' in 30 CFR part 1206 because it 
is intended

[[Page 25884]]

to apply to holders of leases and other contracts and agreements for 
any type of Federal and Indian minerals and resources'' (75 FR 32344). 
However, nothing in this rulemaking purports to change a lessee's 
liability for payments. Indeed, under proposed Sec.  1218.702(b), ONRR 
will transfer only ``legally enforceable'' delinquent debts (defined as 
a final, non-appealable agency determination that the debt, in the 
amount stated, is due, and there are no legal bars to collection by 
offset). If a person is not liable for the debt, then, by definition, 
it is not ``legally enforceable'' against that person. Finally, RSFA 
applies only to Federal oil and gas leases. Thus, the definition of 
``lessee'' in this part needs to be broader than RSFA because the rule 
also applies to debts on leases other than Federal oil and gas leases.

Definition of ``Other Agreement'' and ``Lease''

    Public Comments: The trade association noted that paragraph 
1218.702(b) refers to ``other agreements'' but does not provide a 
definition or illustration of agreements here or elsewhere in this 
subpart.
    ONRR Response: With respect to the use of the term ``other 
agreement'' in the definitions of ``delinquent debt'' and ``lessee,'' 
it means any ``agreement to pay the Department money, funds, or 
property,'' which is not necessarily tied to the extraction, 
development, or use of a mineral or other resource. For example, a gas 
storage agreement between BLM and a lessee would be an ``other 
agreement.'' Such agreements are distinguishable from leases that 
authorize exploration for and production of oil, natural gas, other 
minerals or geothermal resources, or production of renewable energy.
    To be clear, ONRR is adding the following definition of ``other 
agreement'' in a new paragraph (p) in Sec.  1218.700 in the final rule 
and making corresponding changes to the portions of the rule that refer 
to that term:
    (p) Other agreement means any agreement other than a lease, and 
includes, but is not limited to, any agreement between you and the 
Department to pay the Department money, funds, or property, regardless 
of form.
    For clarity, we have also added a definition of the term ``lease'' 
in the final rule as follows: ``Lease means any contract, profit-share 
arrangement, joint venture, or other agreement issued or approved by 
the United States under any statutory authority, including but not 
limited to a mineral leasing law, that authorizes exploration for and 
development or extraction of oil, gas, coal, any other mineral or 
geothermal resources, or power generation from renewable energy 
sources, on Federal or Indian tribal or allotted lands or the Outer 
Continental Shelf. Depending on the context, lease also may refer to 
the land area covered by that authorization.''

Definition of ``Debt'' and ``Claim''

    The ONRR received no public comment on the proposed definition of 
these terms. However, in preparing the final rule, we have concluded 
that further clarity in this definition is appropriate. We added to 
this definition that debts or claims must be ``legally enforceable.'' 
We added that term to the definition to make clear that only non-
appealable final decisions of the Department are referable debts or 
claims because when ONRR or the ONRR Director issues an order or 
decision that then is appealed or is appealable to a higher level 
within the Department, the lessee's or payor's ultimate liability has 
not been finally established within the Department. In these 
circumstances, referral to the Treasury Department for further 
collection action under the DCA and FCCS is not appropriate. As 
discussed above, ONRR also has made a corresponding change to the 
definition of ``legally enforceable'' in the final rule to refer to a 
final non-appealable agency determination that the debt is due.
    This revised definition also refers only to debts owed to or 
collectible by the United States, because lessees and royalty payors 
and holders of permits, easements, or rights-of-way for production of 
renewable energy do not owe money to states or other political 
subdivisions. We added ``collectible by'' to cover debts the Department 
collects on behalf of others, including, but not limited to, individual 
Indian mineral owners and Indian tribes.
(2) 30 CFR 1218.701 What is ONRR's authority to issue these 
regulations?
    We received no comments on this section. However, in the final 
rule, we have made clarifying technical revisions to paragraph (b) to 
make clear that the regulations adopted in this final rule will 
supplement and adapt the FCCS as necessary and appropriate to ONRR's 
particular enforcement circumstances and sphere of responsibility.
(3) 30 CFR 1218.702 What happens to delinquent debts you owe ONRR?
    We received no comments on paragraph (a). In the final rule, 
however, we are clarifying that ONRR will collect debts under these 
regulations ``in addition to other applicable statutory and regulatory 
authorities.'' For example, the Federal Oil and Gas Royalty Management 
Act of 1982, as amended, 30 U.S.C. 1701-1758 (FOGRMA), provides ONRR 
with extensive enforcement tools including, particularly, authority to 
assess civil penalties. See 30 U.S.C. 1719 and 1720a. The FCCS, at 31 
CFR 900.1(a), acknowledges the precedence of specific statutes and 
regulations that apply to a particular agency's activities.
    Public Comments: Paragraph (b) of this proposed section states that 
ONRR will refer debts to Treasury ``within 180 days from'' the date the 
debt became delinquent, which the trade association interprets to mean 
that ONRR could refer the debt much sooner than 180 days. The commenter 
believes this creates confusion when compared to paragraphs 
1218.703(a)(6) and (8), which describe situations in which enforced 
collection can be avoided. The commenter also believes it creates 
confusion when read with paragraph 1218.704(b), which says that 
penalties will not be assessed until the debt is 90 days old, and that 
they will be assessed at the time the debt is referred to Treasury. The 
commenter states that it is unclear if ONRR intends to refer debts to 
Treasury before they are 90 days old.
    ONRR Response: In instances where other collection and enforcement 
efforts have proven unsuccessful or may not be economical, ONRR may 
refer a debt to Treasury for further collection efforts. The final rule 
reflects the principle that ONRR's enforcement tools are not limited to 
the DCA, as amended by the DCIA, and the FCCS. The Treasury regulations 
implementing 31 U.S.C. 3711 give agencies discretion to voluntarily 
refer debts that are delinquent for less than 180 days [31 CFR 
285.5(d)(2) and 285.12(h)]. To be clear, the ONRR is retaining its 
discretion in this rulemaking to refer debts that are less than 180 
days delinquent.
    Our retention of that discretion does not conflict with Sec.  
1218.703(a)(6) and (8) of the proposed rule. Section 1218.702(b) deals 
with referral of delinquent debts whereas paragraph (a)(6) of Sec.  
1218.703 deals with how to avoid delinquency and late payment charges. 
In any event, we removed subparagraph Sec.  1218.703(a)(8) in the final 
rule, and, instead, revised subparagraph Sec.  1218.703(b)(1) to 
address the right to appeal a notice in the rare instance in which the 
recipient of an ONRR notice of an intent to refer a debt to Treasury 
has not had a previous opportunity to appeal the merits of the debt, as 
discussed below.

[[Page 25885]]

    We also do not agree that proposed Sec.  1218.702(b) created 
confusion with Sec.  1218.704(b). However, the point is moot because in 
this final rule we have decided to remove the provision in Sec.  
1218.704(b) that deals with the assessment of penalties on delinquent 
debts under the DCA as amended by the DCIA. Rather, we will assess 
penalties at our discretion under our existing authority at 30 U.S.C. 
1719.
(4) 30 CFR 1218.703 What notice will ONRR give you of our intent to 
refer a matter to the Department of the Treasury to collect a debt?
    We did not receive any comments regarding this section. However, as 
discussed above, we have eliminated proposed subparagraph (a)(8) from 
this final rule. Subparagraph (a)(8) in the proposed rule stated that 
the notice we would provide of our intent to refer a debt would include 
``[y]our opportunity for review under 30 CFR part 1290 or part 1241, if 
any. See paragraph (b) of this section.'' We removed this subparagraph 
because we added language to clarify that the notices ONRR issues under 
this section are not appealable unless the notice specifically gives 
the recipient appeal rights. This is because most debts we refer to 
Treasury will be ``legally enforceable,'' as discussed above, and, 
thus, would have already been subject to an appeal.
    However, in some instances, a party who is or may be secondarily 
liable for all or part of an obligation (such as a lessee of record 
under a Federal oil and gas lease who is not an operating rights 
holder, see 30 U.S.C. 1712(a)) may not have received notice of the 
original order to pay addressed to the operator or other royalty payor 
whose failure to pay resulted in the debt. The notice provided under 
paragraph (a) of this section informs the recipient that ONRR intends 
to refer a particular debt to Treasury, not that it has already done 
so. In instances such as those described here, if ONRR sends the notice 
of its intent to refer the debt to Treasury to a liable lessee who did 
not receive the original order (or decision on appeal or other notice 
or decision) that is the basis of the debt, ONRR would advise the 
lessee that it has a right to appeal under 30 CFR part 1290. If the 
lessee pursues an appeal, ONRR would not refer it to Treasury to 
collect against that lessee unless and until the appeal is resolved 
against that lessee. (In the meantime, however, ONRR could refer to 
Treasury to collect against the operating rights holder or other payor 
who originally received the order and is primarily liable for the 
debt.) Thus, we have revised Sec.  1218.703(b)(1) in the final rule to 
make clear that a notice is not appealable unless it specifically so 
states.
    The notice will inform the lessee or payor of the potential for 
collection by administrative offset and administrative costs that may 
be assessed against you under the DCA, as amended by the DCIA, and the 
FCCS.
(5) 30 CFR 1218.704 What is ONRR's policy on interest and 
administrative costs?
    Public Comments: The trade association noted that paragraph (b) of 
this section would impose penalties of 6 percent per year, but the 
existing regulation at 31 CFR 901.9(d) says penalties are ``not to 
exceed 6 percent.'' The trade association prefers the ``not to exceed'' 
language because the commenter believes it would give ONRR the 
flexibility to adjust penalties based on the specific situation. This 
commenter also suggested that, before ONRR assesses a $436 
administrative fee under paragraph (c) of this section, ONRR should use 
every means to resolve the debt and minimize notices of referral to 
Treasury.
    ONRR Response: Under the FCCS at 31 CFR 901.9(d), the 6-percent 
penalty described in the proposed rule will not be assessed under the 
DCIA because, under FOGRMA, at 30 U.S.C. 1719 and 1720a, penalties are 
``otherwise established * * * by statute.'' Accordingly, we have 
revised the rule to state that ONRR will use its existing civil penalty 
authorities and have rewritten proposed paragraph (b) of this section 
to state that ``ONRR will assess penalties under our authority in 30 
U.S.C. 1719 and 1720a, and implementing regulations at 30 CFR part 
1241.''
    In addition, we made certain changes to this section of the final 
rule for purposes of clarity. We added a new subparagraph (a)(2)(iii) 
to make clear that interest will accrue on civil penalties ONRR 
assesses under 30 CFR 1241.71.
    We also made revisions to proposed paragraph (c) regarding 
administrative costs. Unlike penalties and interest, we are collecting 
fees to recover our costs to refer a debt under the DCIA. In addition, 
we removed proposed paragraph (d), which provided that interest, 
penalties, and administrative costs ``will continue to accrue 
throughout any appeal process,'' and moved a revised portion of that 
paragraph regarding administrative costs to paragraph (c) for two 
reasons. First, in this final rule, we removed references to the 
accrual of interest and penalties because interest and penalties will 
continue to accrue under the applicable portions of 30 CFR chapter XII 
cited in this final rule. Second, we added language to make clear that 
administrative costs may be assessed during the pendency of an appeal 
if the notice you received gave you the right to appeal and you 
exercised that right. Further, we clarified in paragraph (c) that the 
administrative costs that will be assessed during any appeal process 
are the $436 in administrative costs ONRR will incur if your appeal is 
denied and ONRR must refer the delinquent debt to Treasury.
(6) 30 CFR 1218.705 What is ONRR's policy on revoking your ability to 
engage in Federal or Indian leasing, licensing, or granting of 
easements, permits, or rights-of-way?
    Public Comments: This section of the final rule provides that the 
ONRR Director may recommend to the agency with responsibility for 
issuing leases, rights-of-way, easements, permits, etc., that a person 
(or entity) may have its ability to engage in leasing either suspended 
or revoked if it ``inexcusably or willfully'' fails to pay. This 
section of the proposed rule stated that the former MMS could revoke a 
debtor's ability to engage in offshore leasing. However, ONRR is now a 
separate agency from the remainder of the former MMS [now the Bureau of 
Ocean Energy Management (BOEM) and Bureau of Safety and Environmental 
Enforcement (BSEE)], and ONRR has no authority over leasing either 
offshore or onshore.
    The trade association believes that ONRR should define or delete 
the word ``inexcusably'' in this section because it is subject to 
interpretation. In addition, the commenter believes that, because 
barring a lessee from engaging in Federal offshore leasing, licensing, 
etc., in the event of ``inexcusably or willfully'' failing to pay is 
such a ``harsh penalty,'' this section should clearly state the 
lessee's appeal rights. Further, the commenter believes that the lessee 
also should have the right to seek relief through the judicial appeals 
process. To accomplish this end, the commenter believes that an 
Assistant Secretary of the Department of Interior should decide whether 
to bar the debtor from leasing or other activities.
    Finally, the trade association states that, as written, the 
proposed rule provides that, when ONRR recommends to the leasing or 
regulatory agency that a debtor's lease be suspended, ONRR will 
recommend that the suspension ``should only last as long as the 
debtor's indebtedness.'' The commenter agrees with that limitation but 
believes the proposed rule does not apply that

[[Page 25886]]

limitation to Federal offshore leases. The commenter suggests adding 
that the suspension ``should only last as long as the debtor's 
indebtedness'' to the first sentence of Sec.  1218.705.
    ONRR Response: We are declining the commenter's suggestion that we 
should define ``inexcusably.'' Whether a particular failure to pay or 
series of failures to pay is sufficiently inexcusable as to warrant a 
recommendation of debarment from leasing depends on the particular 
circumstances, and it is difficult to formulate a single definition 
that would adequately anticipate all such situations. Each situation 
will have to be considered on a case-by-case basis.
    Moreover, we disagree with the commenter's suggestion that we add 
appeal rights regarding the Director's recommendation to the leasing or 
regulatory agency to revoke a lessee's ability to obtain a lease, 
license, etc. in this rulemaking. The Director's recommendation in this 
rulemaking constitutes only a recommendation to the leasing or 
regulatory agency with authority to actually revoke, not the actual 
revocation. Moreover, Sec.  1218.705 does not itself constitute 
debarment authority. The extent to which the leasing or regulatory 
agency possesses debarment authority is a function of the statutes and 
regulations those agencies administer, not of ONRR rules. However, if 
the leasing or regulatory agency refuses to issue a company a lease, 
permit, license, etc., based on ONRR's recommendation, then that 
decision may or may not be appealable under the particular bureau's 
regulations. Therefore, we are not adding appeal rights in this 
rulemaking for internal bureau-to-bureau communications.
    Furthermore, as discussed above, in this final rule, we are 
removing references to specific leasing or regulatory agencies that 
were in the proposed rule both in this section and the definitions 
section. Although the names of BIA and BLM remain the same, the former 
Bureau of Ocean Energy Management, Regulation and Enforcement is now 
two separate organizations--BOEM and BSEE. The intent of this rule is 
to make such referrals to the appropriate leasing or regulatory agency 
within the Department regardless of that entity's name.
    Finally, we also disagree with the commenter's suggestion that we 
should add the phrase ``should only last as long as the debtor's 
indebtedness'' to the first sentence of proposed Sec.  1218.705. That 
section, as rewritten in plain English in this final rule states that 
the Director may recommend that the leasing or issuing agency, under 
statutory or regulatory authority applicable to that agency, revoke 
your ability to engage in Federal or Indian leasing, licensing, or 
granting of easements, permits, or rights-of-way if you inexcusably or 
willfully fail to pay a debt. The Director will recommend that 
revocation of your ability to engage in Federal or Indian leasing, 
licensing, or granting of easements, permits, or rights-of-way should 
last only as long as your debt remains unpaid or unresolved.
    For clarity, we removed the word ``onshore'' in the first sentence 
to make it clear that the Director's recommendation may apply to any 
Federal or Indian leases. We are not adding the additional language to 
the first sentence because the second sentence of that section already 
contains the limitation the commenter suggests.

III. Procedural Matters

1. Summary Cost and Royalty Impact Data

    This is a technical rule formalizing and enhancing current ONRR 
debt collection practices and procedures consistent with the statutory 
mandates under the DCA and DCIA. The changes explained above will have 
no royalty impacts on industry, state and local governments, Indian 
tribes and individual Indian mineral owners, and the Federal 
Government. Industry will incur additional administrative costs under 
this rulemaking.
A. Industry
    (1) Royalty Impacts. None.
    (2) Administrative Costs. The ONRR will assess $436 for recovery of 
administrative costs for each referral of debt to Treasury. We 
calculated the $436 administrative costs based on our estimate of the 
average actual costs we incur to refer debts to Treasury.
    (3) Penalties. The ONRR will assess penalties under existing 
authority at 30 U.S.C. 1719 and 1720a and 30 CFR part 1241. This final 
rule therefore will have no impact on penalties.
B. State and Local Governments
    (1) Royalty Impacts. None.
    (2) Administrative Costs--State and Local Governments. The ONRR 
determined that this rule will have no administrative costs for state 
and local governments.
    (3) Penalties. None.
C. Indian Tribes and Individual Indian Mineral Owners
    (1) Royalty Impacts. None.
    (2) Administrative Costs. The ONRR determined that this rule will 
have no administrative costs to Indian tribes and individual Indian 
mineral owners.
    (3) Penalties. None.
D. Federal Government
    (1) Royalty Impacts. None.
    (2) Administrative Costs. The rule will have insignificant or no 
net administrative costs to the Federal Government. The final rule 
provides for a fee that we will recover from industry for 
administrative costs to the Government incurred as a result of 
collection activities.
    (3) Penalties. None.

2. Regulatory Planning and Review (Executive Orders 12866 and 13563)

    Executive Order 12866 provides that the Office of Information and 
Regulatory Affairs (OIRA) will review all significant rules. The Office 
of Information and Regulatory Affairs has determined that this rule is 
not significant.
    Executive Order 13563 reaffirms the principles of Executive Order 
12866 while calling for improvements in the Nation's regulatory system 
to promote predictability, to reduce uncertainty, and to use the best, 
most innovative, and least burdensome tools for achieving regulatory 
ends. Executive Order 13563 directs agencies to consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public where these approaches are relevant, feasible, 
and consistent with regulatory objectives. Executive Order 13563 
emphasizes further that regulations must be based on the best available 
science and that the rulemaking process must allow for public 
participation and an open exchange of ideas. We have developed this 
rule in a manner consistent with these requirements.

3. Regulatory Flexibility Act.

    The Department of the Interior certifies that this rule will not 
have a significant economic effect on a substantial number of small 
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
This rule will affect large and small entities but will not have a 
significant economic effect on either. Based on historical data, we 
estimate that the rule will affect approximately 85 small entities per 
year.

4. Small Business Regulatory Enforcement Fairness Act (SBREFA)

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule:
    a. Does not have an annual effect on the economy of $100 million or 
more.

[[Page 25887]]

This is a technical rule formalizing and enhancing current ONRR debt 
collection practices and procedures consistent with the statutory 
mandates under the DCA and DCIA. Industry will incur fees for 
administrative costs for failure to pay a delinquent debt to the 
Federal Government. Industry may avoid these administrative costs by 
accurately and timely paying debts owed to the Federal Government.
    b. Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, state, or local government 
agencies, or geographic regions.
    c. Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises.

5. Unfunded Mandates Reform Act

    This rule does not impose an unfunded mandate on state, local, or 
tribal governments, or the private sector of more than $100 million per 
year. This rule will not have a significant or unique effect on state, 
local, or tribal governments, or the private sector. A statement 
containing the information required by the Unfunded Mandates Reform Act 
(2 U.S.C. 1531 et seq.) is not required.
    This is a technical rule formalizing and enhancing current ONRR 
debt collection practices and procedures consistent with the statutory 
mandates under the DCA and DCIA. Under this rule, ONRR will impose fees 
to cover the administrative costs of recovering delinquent debts. 
Recovery of administrative costs is consistent with the DCA, DCIA, and 
31 U.S.C. 9701.

6. Takings (Executive Order 12630)

    Under the criteria in Executive Order 12630, this rule does not 
have any significant takings implications. This rule will apply to 
Federal and Indian leases only. It will not apply to private property. 
A takings implication assessment is not required.

7. Federalism (Executive Order 13132)

    Under the criteria in Executive Order 13132, this rule does not 
have sufficient federalism implications to warrant the preparation of a 
Federalism Assessment. This is a technical rule formalizing and 
enhancing current ONRR debt collection practices and procedures. A 
Federalism Assessment is not required.

8. Civil Justice Reform (Executive Order 12988)

    This rule complies with the requirements of Executive Order 12988. 
Specifically, this rule:
    a. Meets the criteria of section 3(a) requiring that all 
regulations be reviewed to eliminate errors and ambiguity and be 
written to minimize litigation; and
    b. Meets the criteria of section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

9. Consultation With Indian Tribes (Executive Order 13175)

    Under the criteria in Executive Order 13175, we have evaluated this 
rule and determined that it will have no potential effects on federally 
recognized Indian tribes.

10. Paperwork Reduction Act

    This rule does not contain information collection requirements, and 
a submission to OMB is not required under the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.).

11. National Environmental Policy Act

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. A detailed statement 
under the National Environmental Policy Act of 1969 (NEPA) is not 
required because this rule is categorically excluded under: ``(i) 
Policies, directives, regulations, and guidelines: that are of an 
administrative, financial, legal, technical, or procedural nature.'' 
See 43 CFR 46.210(i) and the DOI Departmental Manual, part 516, section 
15.4.D. We have also determined that this rule is not involved in any 
of the extraordinary circumstances listed in 43 CFR 46.215 that would 
require further analysis under NEPA. The procedural changes resulting 
from these amendments will have no consequences with respect to the 
physical environment. This rule will not alter in any material way 
natural resource exploration, production, or transportation.

12. Data Quality Act

    In developing this rule, we did not conduct or use a study, 
experiment, or survey requiring peer review under the Data Quality Act 
(Pub. L. 106-554), also known as the Information Quality Act. The 
Department of the Interior has issued guidance regarding the quality of 
information that it relies on for regulatory decisions. This guidance 
is available on DOI's Web site at https://www.doi.gov/ocio/iq.html.

13. Effects on the Energy Supply (Executive Order 13211)

    This rule is not a significant energy action under the definition 
in Executive Order 13211. A Statement of Energy Effects is not 
required.

List of Subjects in 30 CFR Part 1218

    Administrative offset, Administrative practice and procedure, 
Bonuses, Collections, Debt, Federal and Indian mineral leases, 
Royalties, Rentals.

    Dated: April 19, 2012.
Amy Holley,
Acting Assistant Secretary for Policy, Management and Budget.

    For the reasons stated in the preamble, the Office of Natural 
Resources Revenue amends 30 CFR part 1218 as set forth below:

PART 1218--COLLECTION OF ROYALTIES, RENTALS, BONUSES, AND OTHER 
MONIES DUE THE FEDERAL GOVERNMENT

0
1. Revise the authority citation for part 1218 to read as follows:

    Authority: 5 U.S.C. 301 et seq.; 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, 3711, 3716-18, 3720A, 9701; 43 
U.S.C. 1301 et seq., 1331 et seq., and 1801 et seq.

Subpart I--[Added and Reserved]

0
2. Add and reserve subpart I.
0
3. Add subpart J to read as follows:
Subpart J--Debt Collection and Administrative Offset
Sec.
1218.700 What definitions apply to the regulations in this subpart?
1218.701 What is ONRR's authority to issue these regulations?
1218.702 What happens to delinquent debts you owe ONRR?
1218.703 What notice will ONRR give you of our intent to refer a 
matter to Treasury to collect a debt?
1218.704 What is ONRR's policy on interest and administrative costs?
1218.705 What is ONRR's policy on recommending revocation of your 
ability to engage in Federal or Indian leasing, licensing, or 
granting of easements, permits, or rights-of-way?
1218.706 What debts may ONRR refer to Treasury to collect by 
administrative offset or tax refund offset?

Subpart J--Debt Collection and Administrative Offset


Sec.  1218.700  What definitions apply to the regulations in this 
subpart?

    As used in this subpart:
    Administrative offset means the withholding of funds payable by the 
United States (including funds payable by the United States on behalf 
of a state government) to any person, or the withholding of funds held 
by the United

[[Page 25888]]

States for any person, in order to satisfy a debt owed to the United 
States.
    Agency means a department, agency, court, court administrative 
office, or instrumentality in the executive, judicial, or legislative 
branch of government, including a government corporation.
    Day means calendar day. To count days, include the last day of the 
period unless it is a Saturday, Sunday, or Federal legal holiday.
    Debt and claim are synonymous and interchangeable. They refer to, 
among other things, royalties, rentals, and any other monies due to, or 
collectible by, the United States as well as fines, fees, assessments, 
penalties, and any other monies that have been determined to be legally 
enforceable and due to the United States from any person, organization, 
or entity, except another Federal agency. For the purposes of 
administrative offset under 31 U.S.C. 3716 and this subpart, the terms 
``debt'' and ``claims'' include money, funds, or property owed to, or 
collectible by, the United States.
    Debtor means a lessee, payor, or other person that owes a debt to 
the United States or ONRR, or from whom ONRR collects debts on behalf 
of the United States, the Department, or an Indian lessor.
    Delinquent or past due refers to the status of a debt and means a 
debt that is legally enforceable and has not been paid within the time 
limit prescribed by the applicable act, law, regulation, lease, order, 
demand, notice of noncompliance, and/or assessment of civil penalties, 
contract, decision, or any other agreement.
    Department means the Department of the Interior, and any of its 
bureaus or offices.
    Director means the Director of the Office of Natural Resources 
Revenue, or his or her designee.
    DOJ means the U.S. Department of Justice.
    FCCS means the Federal Claims Collection Standards, which are 
published at 31 CFR parts 900 through 904.
    FMS means the Financial Management Service, a bureau of the U.S. 
Department of the Treasury.
    Lease means any contract, profit-share arrangement, joint venture, 
or other agreement issued or approved by the United States under any 
statutory authority including, but not limited to, a mineral leasing 
law that authorizes exploration for and development or extraction of 
oil, gas, coal, any other mineral or geothermal resources, or power 
generation from renewable energy sources, on Federal or Indian tribal 
or allotted lands or the Outer Continental Shelf. Depending on the 
context, lease may also refer to the land area covered by that 
authorization.
    Legally enforceable means that there has been a final non-
appealable agency determination that the debt, in the amount stated, is 
due, and there are no legal bars to collection by offset.
    Lessee means any person to whom the United States or an Indian 
tribe or individual Indian mineral owner issues a Federal or Indian 
mineral or other resource lease, easement, right-of-way, or other 
agreement, an assignee of all or a part of the record title interest, 
or any person to whom operating rights have been assigned.
    ONRR means the Office of Natural Resources Revenue, an office of 
the Department.
    Other agreement means any agreement other than a lease and 
includes, but is not limited to, any agreement between you and the 
Department to pay the Department money, funds, or property, regardless 
of form.
    Past due has the same meaning as ``delinquent'' as defined above.
    Payor means any person who reports and pays royalties under a 
lease, regardless of whether that person is also a lessee.
    Person includes a natural person or persons, profit or nonprofit 
corporation, partnership, association, limited liability company, 
trust, estate, consortium, or other entity that owes a debt to the 
United States.
    Tax refund offset means the reduction of a tax refund by the amount 
of a past-due, legally enforceable debt.
    You and your refer to the debtor.


Sec.  1218.701  What is ONRR's authority to issue these regulations?

    (a) The ONRR is issuing the regulations in this subpart under the 
authority of the FCCS, the Debt Collection Act of 1982, and the Debt 
Collection Improvement Act of 1996, 31 U.S.C. 3711, 3716-3718, and 
3720A.
    (b) The regulations in this subpart adopt and supplement the FCCS 
as necessary.


Sec.  1218.702  What happens to delinquent debts you owe ONRR?

    (a) The ONRR will collect debts from you under the regulations in 
this subpart in addition to other applicable statutory and regulatory 
authorities.
    (b) The ONRR will transfer to the U.S. Department of the Treasury 
any past due, legally enforceable nontax debt that is delinquent within 
180 days from the date the debt becomes delinquent so that Treasury may 
take appropriate action to collect the debt or terminate the collection 
action under 26 U.S.C. 6402(d)(1) and (2); 31 U.S.C. 3711, 3716, and 
3720A; the FCCS; and 31 CFR 285.2 and 285.5.


Sec.  1218.703  What notice will ONRR give you of our intent to refer a 
matter to Treasury to collect a debt?

    (a) When the Director determines that you owe, or may owe, a 
legally enforceable debt to ONRR, the Director will send a written 
notice to you informing you that ONRR intends to refer the debt to 
Treasury. We will send the notice by facsimile or mail to the most 
current address known to us. The notice will inform you of the 
following:
    (1) The amount, nature, and basis of the debt.
    (2) The methods of offset that ONRR or Treasury may use.
    (3) Your opportunity to inspect and copy agency records related to 
the debt.
    (4) Your opportunity to enter into a written agreement with us to 
repay the debt.
    (5) Our policy concerning interest and administrative costs under 
Sec.  1218.704, including a statement that we will make such 
assessments against you unless we determine otherwise under the 
criteria of the FCCS and this part.
    (6) The date by which you must remit payment to avoid additional 
late charges and enforced collection.
    (7) The name, address, and telephone number of a contact person (or 
office) at ONRR who is available to discuss your debt.
    (b)(1) You may not appeal the notice issued under this section 
unless the notice specifically provides you with the opportunity for 
review under 30 CFR parts 1290 or 1241 because you did not previously 
receive a notice of the order, decision on appeal, or any other notice 
or decision that is the basis of the debt that ONRR intends to refer to 
Treasury, and for which you may be liable in whole or in part under 
applicable law. You may not dispute matters related to your delinquent 
debt that were the subject of a final order or appeal decision of which 
you were the recipient, or to which you were a party that is the basis 
of your delinquent debt.
    (2) This section applies whether or not you appealed the order, 
demand, notice of noncompliance, or assessment of civil penalties under 
30 CFR parts 1290 or 1241.


Sec.  1218.704  What is ONRR's policy on interest and administrative 
costs?

    (a) Interest. (1) The ONRR will assess interest on all delinquent 
debts as prescribed by applicable statutes and regulations.

[[Page 25889]]

    (i) Interest will accrue on debts involving Federal and Indian oil 
and gas leases under 30 CFR 1218.54, 1218.102, and 1218.150.
    (ii) Interest will accrue on debts involving Federal and Indian 
solid mineral and geothermal resource leases under 30 CFR 1218.202 and 
1218.302.
    (iii) Interest will accrue on civil penalties ONRR assesses under 
30 CFR part 1241.
    (2) Interest begins to accrue on all debts from the date that the 
payment was due unless otherwise specified by law or lease terms.
    (b) Penalties. The ONRR will assess penalties under our authority 
in 30 U.S.C. 1719 and 1720a, and implementing regulations at 30 CFR 
part 1241.
    (c) Administrative costs. The ONRR initially will assess $436 for 
administrative costs incurred as a result of your failure to pay a 
delinquent debt. We will publish a notice of any increase in 
administrative costs assessed under this section in the Federal 
Register. The ONRR also may assess $436 for administrative costs that 
continue to accrue during any appeal process if:
    (1) The notice we provide you under 30 CFR 1218.703 grants you the 
right to appeal and you exercise that right; and
    (2) Your appeal is denied and we refer the delinquent debt to 
Treasury under this subpart.
    (d) Allocation of payments. The ONRR will apply a partial or 
installment payment you make on a delinquent debt sent to Treasury, 
first to outstanding penalty assessments, second to administrative 
costs, third to accrued interest, and fourth to the outstanding debt 
principal.
    (e) Additional authority. The ONRR may assess interest, penalty 
charges, and administrative costs on debts that are not subject to 31 
U.S.C. 3717 to the extent authorized under common law or other 
applicable statutory or regulatory authority.
    (f) Waiver. The Director may decide to waive collection of all or 
part of the administrative costs under paragraph (c) of this section 
either in compromise of the delinquent debt or if the Director 
determines collection of this charge would be against equity and good 
conscience or not in the Government's best interest.
    (g) The ONRR's decision whether to collect or waive collection of 
administrative costs under paragraph (f) of this section is the final 
decision for the Department and is not subject to administrative 
review.


Sec.  1218.705  What is ONRR's policy on recommending revocation of 
your ability to engage in Federal or Indian leasing, licensing, or 
granting of easements, permits, or rights-of-way?

    The Director may recommend that the leasing or issuing agency, 
under statutory or regulatory authority applicable to that agency, 
revoke your ability to engage in Federal or Indian leasing, licensing, 
or granting of easements, permits, or rights-of-way if you inexcusably 
or willfully fail to pay a debt. The Director will recommend that any 
revocation of your ability to engage in Federal or Indian leasing, 
licensing, or granting of easements, permits, or rights-of-way should 
last only as long as your debt remains unpaid or unresolved.


Sec.  1218.706  What debts may ONRR refer to Treasury to collect by 
administrative offset or tax refund offset?

    (a) The ONRR may refer any past due, legally enforceable debt you 
owe to ONRR to Treasury to collect through administrative offset or tax 
refund offset at least 60 days after we give you notice under 30 CFR 
1218.703 if the debt:
    (1) Is at least $25.00 or another amount established by Treasury; 
and
    (2) Does not involve Federal oil and gas lease obligations for 
which offset is precluded under 30 U.S.C. 1724(b)(3).
    (b) The ONRR may refer debts reduced to judgment to Treasury for 
tax refund offset at any time.

[FR Doc. 2012-10361 Filed 5-1-12; 8:45 am]
BILLING CODE 4310-T2-P