U.S. Code » Title 30 » Chapter CHAPTER 29— OIL AND GAS ROYALTY MANAGEMENT › Subchapter SUBCHAPTER I— FEDERAL ROYALTY MANAGEMENT AND ENFORCEMENT

30 U.S.C. § 1711

Duties of Secretary

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(a) Establishment of inspection, collection, and accounting and auditing system

The Secretary shall establish a comprehensive inspection, collection and fiscal and production accounting and auditing system to provide the capability to accurately determine oil and gas royalties, interest, fines, penalties, fees, deposits, and other payments owed, and to collect and account for such amounts in a timely manner.

(b) Annual inspection of lease sites; trainingThe Secretary shall—(1) establish procedures to ensure that authorized and properly identified representatives of the Secretary will inspect at least once annually each lease site producing or expected to produce significant quantities of oil or gas in any year or which has a history of noncompliance with applicable provisions of law or regulations; and(2) establish and maintain adequate programs providing for the training of all such authorized representatives in methods and techniques of inspection and accounting that will be used in the implementation of this chapter.(c) Audit and reconciliation of lease accounts; contracts with certified public accountants; availability of books, accounts, records, etc., necessary for audit(1) The Secretary shall audit and reconcile, to the extent practicable, all current and past lease accounts for leases of oil or gas and take appropriate actions to make additional collections or refunds as warranted. The Secretary shall conduct audits and reconciliations of lease accounts in conformity with the business practices and recordkeeping systems which were required of the lessee by the Secretary for the period covered by the audit. The Secretary shall give priority to auditing those lease accounts identified by a State or Indian tribe as having significant potential for underpayment. The Secretary may also audit accounts and records of selected lessees and operators.(2) The Secretary may enter into contracts or other appropriate arrangements with independent certified public accountants to undertake audits of accounts and records of any lessee or operator relating to the lease of oil or gas. Selection of such independent certified public accountants shall be by competitive bidding in accordance with chapters 1 to 11 of title 40 and division C (except sections 3302, 3307(e), 3501(b), 3509, 3906, 4710, and 4711) of subtitle I of title 41, except that the Secretary may not enter into a contract or other arrangement with any independent certified public accountant to audit any lessee or operator where such lessee or operator is a primary audit client of such certified public accountant.(3) All books, accounts, financial records, reports, files, and other papers of the Secretary, or used by the Secretary, which are reasonably necessary to facilitate the audits required under this section shall be made available to any person or governmental entity conducting audits under this chapter.(Pub. L. 97–451, title I, § 101, Jan. 12, 1983, 96 Stat. 2449.)Editorial NotesCodification

In subsec. (c)(2), “chapters 1 to 11 of title 40 and division C (except sections 3302, 3307(e), 3501(b), 3509, 3906, 4710, and 4711) of subtitle I of title 41” substituted for “the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 252)” on authority of Pub. L. 107–217, § 5(c), Aug. 21, 2002, 116 Stat. 1303, which Act enacted Title 40, Public Buildings, Property, and Works, and Pub. L. 111–350, § 6(c), Jan. 4, 2011, 124 Stat. 3854, which Act enacted Title 41, Public Contracts.

Notes of Decisions
Cited in 33 cases (2 in the last 5 years), 1985–2023 · leading case: Dep't of Transp. v. Ass'n of Am. Railroads, 135 S. Ct. 1225 (2015).
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Dep't of Transp. v. Ass'n of Am. Railroads, 135 S. Ct. 1225 (2015). · cites it 2× “84, 88 (2006) (characterizing a command to “ ‘audit and recon- cile, to the extent practicable, all current and past lease accounts’ ” as creating “duties” for the Secretary of the Interior (quoting 30 U. S. C. §1711 (c)(1))). The fact that private rail carriers sometimes may be…”
Chiang v. Kempthorne, 503 F. Supp. 2d 343 (D.D.C. 2007). · cites it 5× “at 641-42 (citing 30 U.S.C. § 1711 (c)(1)). These duties were assigned to the MMS.”
Kennard v. Comstock Resources, Inc., 363 F.3d 1039 (10th Cir. 2004). “” 30 U.S.C. § 1711 (a). As discussed above, Section 3729(a)(7) imposes liability for making “a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money .”
Oxy USA v. Doi, 32 F.4th 1032 (10th Cir. 2022). · cites it 2× “30 U.S.C. § 1711 (a). The Secretary of the Interior also is required to “audit and reconcile, to the extent practicable, all current and past lease accounts for 3 Appellate Case: 21-2011 Document: 010110678144 Date Filed: 05/02/2022 Page: 4 leases of oil or gas and take…”
OXY USA, Inc. v. Babbitt, 268 F.3d 1001 (10th Cir. 2001). · cites it 4× “” 30 U.S.C. § 1711 (c)(1). The administrative "order to pay” at issue resulted from MMS audits of OXY's California production and the MMS’ implementation of a new royalty computation method.”
Mobil Expl. & Producing U.S., Inc. v. Dep't of Interior, 180 F.3d 1192 (10th Cir. 1999). · cites it 2× “Consequently, on September 4, 1996, the MMS issued an administrative subpoena to Occidental to produce information pursuant to 30 U.S.C. §§ 1711 , 1713(a), and 1717(a) by September 30, 1996.”
California by & through Becerrav. U.S. Dep't of the Interior, 381 F. Supp. 3d 1153 (N.D. Cal. 2019). “" 30 U.S.C. § 1711 (a). The Secretary, in turn, assigned these duties to the Minerals Management Service ("MMS").”
Devon Energy Corp. v. Kempthorne, 551 F.3d 1030 (D.C. Cir. 2008). “30 U.S.C. § 1711 (a) (1982). The Mineral Leasing Act gives DOI the authority “to prescribe necessary and proper rules and regulations and to do any and all things necessary to carry out and accomplish the purposes of’ the Act.”
W & T Offshore, Inc. v. David Bernhardt, e, 946 F.3d 227 (5th Cir. 2019). “(stating that “a lessee who is required to make any royalty or other payment under a lease or under the mineral leasing laws, shall make such payments in the time and manner as may be specified by the Secretary”); 30 U.S.C. § 1711 (c)(1) (“The Secretary shall audit and…”
Oxy USA, Inc. v. Babbitt, 230 F.3d 1178 (10th Cir. 2000). · cites it 5× “” 30 U.S.C. § 1711 (a). In particular, the statute instructs the Secretary to “audit and reconcile, to the extent practicable; all current *1182 and past lease accounts for leases of oil or gas and take appropriate actions to make additional collections or refunds as warranted.”
Shoshone Indian Tribe of Wind River Reservation v. United States, 58 Fed. Cl. 77 (Fed. Cl. 2003). “” 30 U.S.C. § 1711 (a). The Congressional findings in section 1701 of FOGRMA support the court’s conclusion that fiduciary duties exist: “[I]t is essential that the Secretary initiate procedures to improve methods of accounting for [oil and gas] royalties and payments and to…”
Phillips Petroleum Co. v. Lujan, 963 F.2d 1380 (10th Cir. 1992). · cites it 4× “” 30 U.S.C. § 1711 (a). The FOGRMA further provides that the Secretary “shall audit and reconcile, to the extent practicable, all current and past lease accounts for leases of oil or gas and take appropriate actions to make additional collections or refunds as warranted, .”
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