[Code of Federal Regulations]
[Title 25, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 25CFR225.37]

[Page 620-621]
 
                            TITLE 25--INDIANS
 
     CHAPTER I--BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR
 
PART 225_OIL AND GAS, GEOTHERMAL, AND SOLID MINERALS AGREEMENTS
--Table of Contents
 
                      Subpart B_Minerals Agreements
 
Sec. 225.37  Penalties.

    (a) In addition to or in lieu of cancellation under Sec. 225.36, 
violations of the terms and conditions of any minerals agreement, the 
regulations in this part, other applicable laws or regulations, or 
failure to comply with a notice of noncompliance or a cessation order 
issued by the Secretary may subject an operator to a penalty of not more 
than $1,000 per day for each day

[[Page 621]]

that such a violation or noncompliance continues beyond the time limits 
prescribed for corrective action.
    (b) A notice of a proposed penalty shall be served on the operator 
either personally or by certified mail to the operator at the operator's 
last known address. The date of service by certified mail shall be 
deemed to be the date received or five (5) working days after the date 
mailed, whichever is earlier.
    (c) The notice shall specify the nature of the violation and the 
proposed penalty, and shall specifically advise the operator of the 
operator's right to either request a hearing within thirty (30) days of 
receipt of the notice or pay the proposed penalty. Hearings shall be 
held before the Superintendent or Area Director whose findings shall be 
conclusive, unless an appeal is taken pursuant to 25 CFR part 2. If 
within thirty (30) days of receipt of the notice of proposed penalty the 
operator has not requested a hearing or paid the amount of the proposed 
penalty, a final notice of penalty shall be served.
    (d) If the person served with a notice of proposed penalty requests 
a hearing, penalties shall accrue each day the violations or 
noncompliance set forth in the notice continue beyond the time limits 
presented for corrective action. The Secretary may issue a written 
suspension of the requirement to correct the violations pending 
completion of the hearings provided by this section only upon a 
determination, at the discretion of the Secretary, that such a 
suspension will not be detrimental to the Indian mineral owner and upon 
submission and acceptance of a bond deemed adequate to indemnify the 
Indian mineral owner from loss or damage. The amount of the bond must be 
sufficient to cover the cost of correcting the violations set forth in 
the notice or any disputed amounts plus accrued penalties and interest.
    (e) Payment of penalties in full more than ten (10) days after a 
final decision imposing a penalty shall subject the operator to late 
payment charges. Late payment charges shall be calculated on the basis 
of a percentage assessment rate of the amount unpaid per month for each 
month or fraction thereof until payment is received by the Secretary. In 
the absence of a specific minerals agreement provision prescribing a 
different rate, the interest rate on late payments and underpayments 
shall be a rate applicable under section 6621(a)(2) of the Internal 
Revenue Code of 1954. Interest shall be charged only on the amount of 
payment not received and only for the number of days the payment is 
late.
    (f) None of the provisions of this section shall be interpreted as:
    (1) Replacing or superseding the independent authority of the 
Authorized Officer, the Director's Representative, or the MMS Official 
to impose penalties under applicable statutory or regulatory 
authorities;
    (2) Replacing, superseding, or replicating any penalty provision in 
the terms and conditions of a minerals agreement approved by the 
Secretary pursuant to this part; or
    (3) Authorizing the imposition of a penalty for violations of 
minerals agreement provisions for which the Authorized Officer, 
Director's Representative, or MMS Official has either statutory or 
regulatory authority to assess a penalty.