§1721a Adjustments and Refunds

Summary

A lessee must correct or ask for a refund for any underpayment or overpayment within the six-year adjustment period that starts when the payment was due. Sending a royalty report that shows the error counts as telling the Secretary or the delegated State. When an adjustment is made, the lessee must also calculate and report any interest at the same time, unless doing that would cause a hardship. If there is a hardship, the Secretary or delegated State will calculate the interest and tell the lessee, unless the lessee chooses to do it. Changes after the six years can only happen if the Secretary or delegated State agrees in writing during an audit of the period involved. If an audit finds an overpayment, a credit or refund must be allowed. A refund request must be written, called a demand, name who should get the money, give enough information to find the overpayment, and explain why it was an overpayment. The Secretary will certify the refund amount to the Treasury, which will pay it from current receipts from sales, bonuses, royalties (including interest collected under this rule) and rentals under the Mineral Leasing Act and the Outer Continental Shelf Lands Act, except amounts due to a State or the Reclamation Fund. Any part already paid to a State or the Reclamation Fund will be taken from the next disbursement to them and put into miscellaneous receipts. Refunds must be paid or denied with reasons within 120 days of the Secretary getting the request. Refunds can be audited later, and the Secretary or delegated State cannot reduce a refund by any amount whose enforcement is barred under section 1724.