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Late Payment & Underpayment Interest Tables

The Federal Oil and Gas Royalty Simplification and Fairness Act of 1996 (RSFA), requires ONRR to pay interest on federal oil and gas royalty overpayments. The RSFA also allows royalty reporters to calculate interest on royalties and to report this interest on the Report of Sales and Royalty Remittance, Form ONRR-2014.

This reporting option applies solely to federal oil and gas leases and to reports for sales months January 1997 and later. Reporters may begin reporting interest on overpayments and underpayments on Form ONRR-2014 for the October 1997 report month.

Underpayment interest on solid mineral and geothermal leases is calculated as simple interest using the United States Treasury Current Value of Funds Rate. Underpayment interest on oil and gas leases is calculated as compound interest using the Internal Revenue Service underpayment rate for corporate tax payers. Overpayment interest on oil and gas leases is calculated as compound interest using the Federal short-term rate plus 1 percentage point.

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Rates Used to Calculate Interest

The following table contains the interest rates used to calculate underpayment and overpayment interest.

Late Payments and Underpayments Overpayments
Period End Indian
Oil & Gas
Leases
Federal and Indian
Solid Mineral
and Geothermal Leases *
Federal
Oil and Gas Leases
Federal
Oil and Gas
Leases

* Solid Mineral interest rates are calculated as simple interest based on the US Treasury Current Value of Funds Rate shown in this column.

** Effective December 5, 2015, ONRR is no longer authorized to pay overpayment interest. On this date, H.R. 22, "Fixing America's Surface Transportation Act," was signed into law. Any bills issued after this date do not contain overpayment interest regardless of the sales month/year. The "FAST" act amended the Federal Oil and Gas Royalty Management Act of 1982, eliminating overpayment interest.