How HR 7377 changes current law

Compared against current U.S. Code AI-generated reading aid — verify against the official bill.

The bill amends existing law to establish a deadline for the Secretary to issue determinations of allocations of production for units and communitization agreements and to waive interest on related obligations under certain conditions.

• 30 U.S.C. 1721

  (j) 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. 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 communitization agreements containing Indian lands.

  This addition establishes a requirement for timely issuance of production allocation determinations and provides a waiver for interest on unpaid obligations under certain conditions.