Opinion for the Court filed by Circuit Judge SILBERMAN.
SILBERMAN, Circuit Judge:
Amax Land Company, a lessee of federally owned coal-containing land, challenges the legality of a regulation adopted by the Minerals Management Service (MMS) and a payment order issued pursuant thereto. The regulation assesses interest on late coal lease payments at a higher rate than the government can earn on investments of its short term operating cash, and was interpreted by MMS in the payment order to allow that higher rate to fluctuate from month to month and to authorize the assessment of compound interest (i.e., interest on interest). The district court concluded the regulation was ultra vires insofar as it established the higher rate, and set aside the regulation and the payment order. We disagree and hold that the general rulemaking provisions found in MMS' organic statutes countenance assessing the higher rate so long as that rate satisfies the criteria imposed by those general rulemaking provisions; we remand for the district court to make this determination. We agree, however, with the district court's conclusions on the questions of shifting interest rates and compound interest. The Debt Collection Act (DCA) plainly forbids the utilization of shifting interest rates, and its implementing regulations (the Federal Claims Collection Standards), while perhaps not as unambiguous on the matter of compound interest, are most sensibly interpreted to preclude that practice as well.
Under the Mineral Lands Leasing Act of 1920 (MLLA) and other statutes, MMS (a subdivision of the Department of the Interior) leases federal and Indian lands containing coal, oil, and other resources to private entities for exploration and extraction.
The agency's determination of that amount not surprisingly gives rise to disputes from time to time (mainly appeals to higher levels of the agency) between MMS and the lessee. If the dispute is resolved favorably to MMS after the due date, and if the lessee has timely remitted only a payment based on its own estimate of the coal's value, the lessee will be late on part of its royalty payment obligation—to fully compensate MMS and the states or Indians, the lessee would have to remit the late portion plus interest on that amount. On the other hand, if the lessee were to pay the full amount demanded by the agency prior to appeal and subsequently win the appeal (hence making an overpayment), the lessee would receive a refund only of the excess portion, not interest on that amount. That is because Congress has not expressly provided by statute or contract for recovery of interest against the
To address the typical underpayment situation, MMS in 1980 adopted regulations assessing interest on underpayments on leases of resource-containing lands at the current value of funds (CVF) rate. See 45 Fed.Reg. 84,762, 84,764 (1980) (interim regulations); 47 Fed.Reg. 22,524, 22,527 (1982) (final regulations). The CVF rate is a rate prescribed by the Treasury Department, by reference to prevailing market rates, for short-term investments of the federal government's operating cash. See 31 U.S.C. § 323 (1994). Consequently, an award based on the CVF rate compensates the government for its lost opportunity to make short-term investments due to the late payment of a debt.
In 1983, Congress imposed a higher rate by statute—but only for oil and gas leases, not geothermal or solid mineral leases (such as coal leases). See Federal Oil and Gas Royalty Management Act (FOGRMA), Pub.L. No. 97-451, Title I, § 111(a), 96 Stat. 2447, 2455 (1983) (codified at 30 U.S.C. § 1721(a) (1994)). (Congress explicitly deferred legislation on coal leases until MMS studied the matter and filed a report, see id. at § 303, 96 Stat. at 2461 (codified at 30 U.S.C.A. § 1752 note (1986)).) The rate chosen for oil and gas leases was the so-called "IRS rate" already in use for underpayment of taxes pursuant to 26 U.S.C. § 6621(a)(2) (1994): the marketable rate for treasury bonds of less than three years maturity, to be determined monthly, plus three percentage points. Roughly speaking, this rate tends to be 3% higher than the CVF rate. The agency adopted a new implementing regulation for oil and gas leases assessing interest at the IRS rate, see 49 Fed.Reg. 37,336, 37,346-47 (1984) (codified at 30 C.F.R. §§ 218.54, 218.55 (1999)), while continuing to assess interest on coal lease underpayments at the CVF rate.
By 1993, the agency came to view the CVF rate as an inadequate response to the underpayment problem on coal leases. Not only did the agency see that rate as insufficient to compensate it and the states or Indians for lost investment income on the late portion of the royalty payments on the leases, it believed the CVF rate actually caused underpayment in the first place because the lessee had an incentive to withhold payment, invest the amount withheld, and remit payment to MMS at a later date, pocketing the spread between the lessee's investment rate of return and the CVF rate. A higher rate was thought necessary, and following the model of its regulation on oil and gas leases, the agency settled on the IRS rate, which would "serve as an effective deterrent to discourage late and underpayments" and "fairly compensate the Federal Government ... States, Indian tribes and allottees, and other recipients ... for the lost time value of money." 59 Fed.Reg. 14,557, 14,557 (1994) (codified at 30 C.F.R. § 218.202(c)(d) (1999)). As authority, the agency invoked the general rulemaking provisions found in the several organic statutes it administers, particularly MLLA § 32, which provides that "[t]he Secretary of the Interior is authorized to prescribe necessary and proper rules and regulations and to do any and all things necessary to carry out and accomplish the purposes of this chapter." 30 U.S.C. § 189 (1994).
Amax Land Company is the successor-in-interest to a 1965 lease of certain federal coal-containing lands in Wyoming. Amax's troubles began in 1985 when the agency invoked its right under the lease to readjust the royalty rate from one based on the weight of the coal produced (17½ cents per ton) to one based on the value of the coal produced (12½% of the value of the coal produced by strip or auger methods and 8% of the value of coal produced by underground methods).
After an unsuccessful administrative appeal, Amax filed suit in the district court, seeking invalidation of the 1994 regulation and the payment order. See Amax Land Co. v. Quarterman, Civ. Act. No. 96-1839, 1998 WL 306582 (D.D.C. June 3, 1998). Amax contended that MMS lacked authority to assess the IRS rate of interest, to allow the rate to shift from month to month, and to charge compound interest. The district court agreed. The court first held that the regulation was ultra vires insofar as it adopted the IRS rate, reasoning that Congress' 1982 legislation imposing the IRS rate only on oil and gas lease underpayments, while deferring legislation on coal leases until MMS had studied the matter and proposed or requested new legislation (which never occurred), implies that Congress understood MMS to possess authority merely to assess the CVF rate on coal lease underpayments. The court concluded that although neither the MLLA nor FOGRMA expressly speaks to the issue of interest on late coal lease payments, the agency's reading of MLLA § 32 was unreasonable under step II of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-45, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). See Amax Land Co. 1998 WL 306582, at *6. The district court next turned to the question of MMS' authority to employ shifting rates and to assess compound interest, which the court thought answered by the Standards (regulations establishing uniform cash management practices for all federal agencies) promulgated under the
The agency urges us to defer under Chevron to its interpretation of the general rulemaking provisions of its organic statutes as providing ample authority to assess the IRS rate, to allow that rate to shift over time, and to assess compound interest. Amax responds that Congress' 1982 enactment concerning oil and gas leases, the common law of interest, or both, indicate Congress' unambiguous intent to limit the agency to a compensatory rate (which Amax assumes to be the CVF rate). Moreover, it is argued that the agency has departed from its earlier interpretation of its organic statutes without sufficient explanation, and—even apart from the alleged switch—that the agency's current approach is arbitrary and capricious. And Amax submits that the questions of shifting rates and compound interest are readily resolved, as the district court concluded, by reference to the Debt Collection Act and the implementing Standards.
We think Amax's common law argument-that the federal common law permits the government to recover no more than a compensatory rate (Amax argues the IRS rate is a punitive rate), and hence constrains the agency's otherwise broad authority under its organic statutes—can be disposed of handily. Assuming the common law imposes a restraint on an agency's statutory interpretation in a post-Chevron era, see Michigan Citizens for an Indep. Press v. Thornburgh, 868 F.2d 1285, 1292-93 (D.C.Cir.) (distinguishing canons that embody a policy choice and should not be employed by a reviewing court at Chevron step I or II from canons designed to discern Congress' intent that are appropriately used at Chevron step I), aff'd by an equally divided Court, 493 U.S. 38, 110 S.Ct. 398, 107 L.Ed.2d 277 (1989), and assuming the common law rule is as Amax describes it (the government characterizes the common law rule as applying only to a federal court's equitable powers, not to interest demands grounded in an administrative regulation), it is an anachronism to speak of the federal common law of interest since Congress' enactment of the DCA in 1982. That statute "changed the common law" by making mandatory the federal government's common law right to assess interest on private persons' overdue obligations to the government. United States v. Texas, 507 U.S. 529, 534 n. 4, 113 S.Ct. 1631, 123 L.Ed.2d 245 (1993). It also "speak[s] directly," United States v. Bestfoods, 524 U.S. 51, 118 S.Ct. 1876, 1885, 141 L.Ed.2d 43 (1998) (quoting Texas, 507 U.S. at 534, 113 S.Ct. 1631), to the question of setting an interest rate, thereby supplanting any guidance the common law may have provided on this point: "The head of an executive, judicial, or legislative agency shall charge a minimum annual rate of interest on an outstanding debt on a United States Government claim owed by a person that is equal to [the CVF rate]." 31 U.S.C. § 3717(a)(1) (Supp. II 1996) (emphasis added).
To be sure, MMS did not rely on the DCA when it published the regulation challenged here (perhaps because that could have negative consequences with respect to the agency's claimed exemption from the DCA regarding the compound interest and shifting rate issues, which we discuss below), and its response before us to Amax's common law argument likewise does not rely on the DCA. But the government does claim that the common law does not apply to it, and our reading of Texas and the DCA—which of course have been cited to us in other respects—convinces us that these authorities obviously support the government's claim. Whether or not a federal court should exercise its discretion to entertain a logically antecedent legal claim not made by a party, see United States Nat'l Bank v. Independent Ins. Agents of Am., Inc., 508 U.S. 439, 113 S.Ct. 2173, 124 L.Ed.2d 402 (1993), a court may certainly consider any legal authority that bears on an argument that is made, see Independent Ins. Agents of Am., Inc. v. Clarke, 955 F.2d 731, 743 (D.C.Cir.1992) (Silberman, J., dissenting) (discussing Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90, 111 S.Ct. 1711, 114 L.Ed.2d 152 (1991)), rev'd on other grounds, 508 U.S. 439, 113 S.Ct. 2173, 124 L.Ed.2d 402 (1993), especially when such legal authority has already been brought to the court's attention, cf. Carducci v. Regan, 714 F.2d 171, 177 (D.C.Cir.1983).
The FOGRMA statute, on which the district court relied, presents more difficult questions. Obviously if FOGRMA, properly construed, revealed a congressional intent that the agency not be authorized to charge the IRS rate it could not be thought "necessary and proper" under MLLA § 32 to do so. The government properly objects to the district court's conclusion that "FOGRMA ... makes it clear that Congress itself did not believe that the MLLA ever provided sufficient authority for the department to charge the IRS rate." (emphasis added). That assertion runs afoul of the principle that a later Congress' interpretation of what an earlier Congress intended carries no particular weight—when used for that purpose alone. A later Congress' views can be relevant, however, in interpreting the meaning of its own duly enacted legislation. See generally United States ex rel. Long v. SCS Bus. & Tech. Inst., Inc., 173 F.3d 870, 881 n. 15 (D.C.Cir.1999) (collecting cases). And this seems to be the nature of Amax's argument, i.e., that the FOGRMA Congress' understanding of the agency's interest authority under the MLLA illuminates what the FOGRMA Congress intended in restricting FOGRMA to oil and gas leases and deferring legislation on coal leases until the agency's completion of a report. If we agreed with Amax's interpretation of FOGRMA, that statute itself—wholly apart from the MLLA—would limit the agency's interest authority on coal leases.
We start with FOGRMA's text. Section 111(a) provides that "[i]n the case of oil and gas leases where royalty payments are not received by the Secretary on the date that such payments are due, or are less than the amount due, the Secretary shall charge interest on such late payments or underpayments at the [IRS rate]." 30 U.S.C. § 1721(a) (1994 & Supp. II 1996) (emphasis added). Here, and indeed throughout FOGRMA, Congress spoke only to oil and gas leases, notwithstanding that the original Senate bill would have extended to leases of all mineral resources. See S. REP. No. 97-512, at 11 (1982) (noting that Senate bill had been amended in committee to cover only oil and gas leases). Reading § 111 together with Congress'
Amax also directs us to the one provision of FOGRMA where Congress did address coal leases. That section provides:
§ 303(a), 96 Stat. at 2461 (codified at 30 U.S.C.A. § 1752 note (1986)). In Amax's view, this section expresses Congress' understanding (and therefore its intent) that MMS lacks the authority independently to adopt royalty management measures (including charging interest at the IRS rate) similar to those imposed by FOGRMA on the agency for oil and gas leases. Such authority on coal leases, we are told, could only come from Congress, and presumably only after the requested report on coal royalty management had been submitted pursuant to § 303. (The agency's 1984 report concluded that no such legislation was necessary. See U.S. DEPARTMENT OF THE INTERIOR, REPORT TO THE CONGRESS OF THE UNITED STATES ON THE ADEQUACY OF ROYALTY MANAGEMENT FOR SOLID MINERALS 18 (1984).)
Amax bolsters its textual arguments with an excerpt of legislative history. The House Report, in describing the pre-FOGRMA state of affairs, explained that "[t]he Federal royalty management system lacks adequate enforcement tools. Under the present system, the MMS has very limited authority to impose penalties (beyond ordinary interest charges) even for gross, repeated underpayments of royalties." H. R. REP. No. 97-859, at 18 (1982), reprinted in 1982 U.S.C.C.A.N. 4268, 4272. Equating "ordinary interest charges" with the compensatory CVF rate, appellee views this excerpt as quite supportive of its interpretation.
The government, for its part, observes that § 111(a) is phrased as a mandatory command—"the Secretary shall charge interest [at the IRS rate]," 30 U.S.C. § 1721(a) (emphasis added)—rather than as a grant of authority. Thus, Congress may have intended to require the IRS rate for oil and gas leases, while leaving to the agency's discretion which rate to impose for coal leases. The government responds similarly to appellee's reliance on the study-and-report provision in § 303, reading that section to mean that if the agency wanted mandatory royalty management measures imposed on it by Congress (including the IRS rate), it could submit such a request in the report. Accordingly, the study-and-report command does not imply anything regarding the agency's authority to impose such measures on itself by regulation.
Amax's § 111(a) argument, by itself, would be based on a use of the expressio unius est exclusio alterius canon in a context, where, as we have indicated before, it is rather tenuous. See Cheney R.R. Co. v. ICC, 902 F.2d 66, 69 (D.C.Cir.1990) ("[T]he contrast between Congress's mandate in one context with its silence in another suggests not a prohibition but simply a decision not to mandate any solution in the second context, i.e., to leave the question to agency discretion.") (emphasis in original); see also Shook v. District of Columbia Fin. Responsibility & Management Assistance Auth., 132 F.3d 775, 782 (D.C.Cir.1998). But the explicit mention of coal leases—the "alterius"—in the study-and-report command makes the negative implication somewhat stronger. And we agree that the legislative history is at least supportive. Still, we cannot say that Congress directly addressed the issue before us as the first step of Chevron requires. So we must defer to the agency's interpretation, if reasonable. We think that, particularly in light of § 304, the agency's interpretation passes that test, and therefore we disagree with the district court's conclusion.
Amax alternatively argues that MMS' present view of its rulemaking authority contradicts an earlier position taken by Interior's Board of Land Appeals (a body that reviews the MMS Director's adjudicatory decisions) in Shell Offshore, Inc., 115 I.B.L.A. 205 (1990). This contention, if true, would not of itself defeat Chevron deference, see Paralyzed Veterans of Am. v. D.C. Arena L.P., 117 F.3d 579, 586 (D.C.Cir.1997) (citing Chevron, 467 U.S. at 863, 104 S.Ct. 2778), cert. denied sub nom. Pollin v. Paralyzed Veterans of Am., ___ U.S. ___, 118 S.Ct. 1184, 140 L.Ed.2d 315 (1998), but would, under Motor Vehicle Mfrs. Ass'n of United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 46-57, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983), require the agency to provide a reasoned explanation for the changed interpretation, see Smiley v. Citibank, N.A., 517 U.S. 735, 742, 116 S.Ct. 1730, 135 L.Ed.2d 25 (1996); Arent v. Shalala, 70 F.3d 610, 616 n. 6 (D.C.Cir.1995) (citing Rust v. Sullivan, 500 U.S. 173, 186-87, 111 S.Ct. 1759, 114 L.Ed.2d 233 (1991)).
Shell Offshore, 115 I.B.L.A. at 212 (emphasis added) (citations and footnote omitted). That interpretation of the agency's interest authority may be dubious insofar it is grounded in general notions of "equity." (Agencies, of course, are totally creatures of statute.) But in any event, as the government points out, the Board of Land Appeals in Shell Offshore did not consider that MLLA § 32 or the other general rulemaking provisions might furnish the authority for the agency to assess the IRS rate. MMS' 1994 rulemaking, which expressly relied on those provisions, see 59 Fed.Reg. at 14,557-58, accordingly cannot be deemed a departure.
So it is that MLLA § 32 gives the agency the authority to reach the subject matter of interest. But not without limits: Section 32, it will be recalled, requires that any regulations adopted by MMS be "necessary and proper . . . to carry out and accomplish the purposes of this chapter." 30 U.S.C. § 189. Amax, supported by the National Mining Association as amicus curiae, contends that MMS' regulation is arbitrary and capricious, see 5 U.S.C. § 706(2)(A) (1994)—which is more or less the same as saying that the agency has ignored the "necessary and proper" command.
The district court saw no need to reach this issue given its resolution of the antecedent question of the agency's authority in favor of Amax. See Amax Land Co., 1998 WL 306582, at *3. That, of course, does not bar us from doing so: these are questions of law, which were presented to the district court, and we sit in the same posture as the district court in reviewing an administrative regulation or adjudication. See, e.g., Associated Builders & Contractors, Inc. v. Herman, 166 F.3d 1248, 1254 (D.C.Cir.1999); Marshall County Health Care Auth. v. Shalala, 988 F.2d 1221, 1225 (D.C.Cir.1993). Still, since the issue has not been fully briefed, and since both Amax (paradoxically) and MMS request us to remand to the district court for consideration of this issue, we will do so, notwithstanding the amicus' preference that we resolve it here and now. Cf. Narragansett Indian Tribe v. National Indian Gaming Comm'n, 158 F.3d 1335, 1338 (D.C.Cir.1998) (declining to consider an argument advanced by an amicus but not by any party).
Whether the benchmark rate is the CVF rate or the IRS rate, there remains the issue of MMS' authority to allow the rate to shift over time and to assess compound interest (i.e., interest on interest). The regulation itself is silent on these matters, but the agency interpreted it in the payment order issued to Amax as authorizing the assessment of compound interest (compounded daily), apparently reasoning that the regulation adopts the IRS rate set forth in 26 U.S.C. § 6621(a)(2), which contemplates shifting interest rates, see id. § 6621(b), and that an adjacent provision in the Internal Revenue Code provides that the rate shall be compounded daily, see id. § 6622(a).
Amax does not claim these are misinterpretations of the agency's own regulation, 30 C.F.R. § 218.202, but rather submits that the DCA and the implementing Standards place an external constraint on the agency's authority to assess compound interest or to employ shifting rates. The DCA provides, in relevant part,
31 U.S.C. § 3717 (emphasis added). MMS defends its authority to employ shifting rates by contending that § 3717(c)(2)'s apparently plain prohibition of shifting rates applies only when an agency chooses to impose the "minimum" CVF rate and not when an agency exerts its authority, drawn from these provisions or others, to assess a higher rate. Even aside from the fact that we owe no deference to MMS' interpretation of a statute it does not administer, see, e.g., Scheduled Airlines Traffic Offices v. Department of Defense, 87 F.3d 1356, 1361 (D.C.Cir.1996); OPM v. FLRA, 864 F.2d 165, 171 (D.C.Cir.1988); the DCA is unambiguous on this issue. 31 U.S.C. § 3717(a)(1) requires agencies to assess interest on overdue obligations and sets a floor on the rate chosen at the CVF rate. The ceiling is established by 5 U.S.C. § 706(2)(A): the agency may not choose an arbitrary or capricious rate. See also 4 C.F.R. § 102.13(c) ("An agency may set a higher rate if it reasonably determines that a higher rate is necessary to protect the United States."). Any rate within this spectrum is "the rate of interest charged under subsection (a)" for purposes of 31 U.S.C. § 3717(c), and hence must remain "fixed . . . for the duration of the indebtedness." We therefore firmly reject the government's argument.
As to compound interest, the DCA is silent but Amax invokes the Standards, which expressly disfavor the practice of charging compound interest.
4 C.F.R. § 102.13(c) (emphasis added). The government's response echos its unsuccessful attempt to evade the DCA's prohibition on shifting rates. We are told that the "interest should not be assessed on interest" command applies only in the case of "interest . . . required by this section," that the only interest required by § 102.13 is the CVF rate, and hence that the rule against compound interest does not apply when the agency imposes a rate higher than the CVF rate. We think that is a rather implausible reading of the regulation. How could the CVF rate be the only "required" rate when the second sentence contemplates a higher rate? The "interest ... required by this section" sensibly means either the CVF rate (as described in the first sentence) or a higher rate (as described in the second sentence). It may be that the government's reading, while weak, is nonetheless reasonable. But even assuming it is reasonable (we express no view), we owe no deference to MMS' interpretation of a regulation that it did not promulgate and does not administer, Martin v. OSHRC, 499 U.S. 144, 152-53, 111 S.Ct. 1171, 113 L.Ed.2d 117 (1991). Left to proceed de novo, we of course pick what we think is the best interpretation of the regulation.
The government, however, points to an introductory provision of the Standards that says: "The standards set forth in this chapter shall apply to the administrative handling of civil claims of the Federal Government for money or property but the failure of an agency to comply with any provision of this chapter shall not be available as a defense to any debtor." 4 C.F.R. § 101.8 (emphasis added). Unfortunately, this claim comes too late.
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That disposes of Amax's challenge to the regulation itself, but there is one last wrinkle concerning Amax's challenge to the payment order. Although we hold that the DCA and the Standards forbid the use of shifting interest rates or the assessment of compound interest, the DCA comes with two exemptions. The one invoked by the agency provides that 31 U.S.C. § 3717 does not apply "to a claim under a contract executed before October 25, 1982, that is in effect on October 25, 1982." 31 U.S.C. § 3717(g)(2); see also 4 C.F.R. § 102.13(i)(1)(ii) (identical exemption from operative subsections of 4 C.F.R. § 102.13). The parties disagree as to whether Amax's lease agreement is such a pre-1982 contract.
Amax is the successor-in-interest to a 1965 lease. Section 2(c) of the original lease required the lessee to remit royalties based on the weight of the coal produced (17½ cents per ton for the first 10 years and 20 cents per ton for the remainder of the first 20-year period), and § 3(d) reserved to MMS the right "reasonably to readjust and fix royalties payable hereunder and other terms and conditions at the end of 20 years from the date hereof and thereafter at the end of each succeeding 20-year period during the continuance of this lease. . . ." In 1985, the agency, invoking § 3(d), readjusted the lease terms to provide that "the royalty shall be 12½ percent of the value of the coal produced by strip or auger methods and 8 percent of the value of the coal produced by underground mining methods."
Amax insists that the 1985 read-justment of the royalty rate effected a novation of the 1965 lease agreement and a consummation of a new agreement going forward. The government responds that the 1985 readjustment was explicitly contemplated by the original 1965 lease, and therefore is properly characterized as an assertion of rights under the original contract, not a novation. Since Amax, as the party challenging the payment order, has not cited any authority in support of its view, we are inclined to agree with the government's characterization, see Carducci, 714 F.2d at 177, which seems the more reasonable one in any event. Accordingly, we hold that the DCA imposes no constraint on MMS vis-a-vis underpayments on this particular lease, and unless it is determined on remand that shifting rates or compound interest are not "necessary" within the meaning of MLLA § 32 as regards this particular lease, the payment order is valid. See 30 U.S.C. § 189 ("The Secretary of the Interior is authorized . . . to do any and all things necessary to carry
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For the foregoing reasons, we reverse the district court and uphold MMS' regulation, 30 C.F.R. § 218.202, except insofar as the agency has interpreted it to allow for shifting interest rates and compound interest. We remand the case for the district court to consider Amax's claim that the regulation, insofar as it adopts the IRS rate, is not "necessary and proper" within the meaning of MLLA § 32. And we uphold the payment order in all respects, subject to the possibility that Amax may demonstrate on remand that compound interest and shifting rates are not "necessary" within the meaning of MLLA § 32 as regards Amax's particular lease.