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H.R. 4761 (109th): Deep Ocean Energy Resources Act of 2006

The text of the bill below is as of Jun 26, 2006 (Reported by House Committee).


IB

Union Calendar No. 295

109th CONGRESS

2d Session

H. R. 4761

[Report No. 109–531]

IN THE HOUSE OF REPRESENTATIVES

February 15, 2006

(for himself, Mr. Baker, Mr. Boustany, and Mrs. Drake) introduced the following bill; which was referred to the Committee on Resources

June 26, 2006

Additional sponsors: Mr. Alexander, Mr. Brown of South Carolina, Mr. Fortuño, Mr. Wicker, Mr. Gibbons, Mr. Bonner, Mr. Pickering, Mr. Faleomavaega, Mr. Jefferson, Mr. McCrery, Mr. Bachus, Mr. Cole of Oklahoma, Mr. Cantor, Mr. Sam Johnson of Texas, Mr. Blunt, Mr. Herger, Mr. McCaul of Texas, Mr. Conaway, Mr. McHenry, Mr. Westmoreland, Mr. Wamp, Mr. Doolittle, Mr. Rogers of Alabama, Mr. Young of Alaska, Mr. Everett, Mr. Thornberry, Mr. Marchant, Mr. Brady of Texas, Mr. Wilson of South Carolina, Mr. Shuster, Mr. Cuellar, Mr. Bonilla, Mr. Poe, Mr. Gohmert, Mr. Burgess, Mr. Otter, Mr. Nunes, Mr. Goodlatte, Mr. Cramer, Mr. Davis of Alabama, Ms. Granger, Mr. Sessions, Mr. Souder, Mr. Gingrey, Mr. Gilchrest, Mr. Rogers of Michigan, Mr. Sullivan, Mr. Istook, Mr. Aderholt, Mr. Rehberg, Mr. Tom Davis of Virginia, Mr. Hall, Mr. Pearce, Mrs. Cubin, Mr. Porter, Mr. Simpson, Mr. Boren, Mr. Price of Georgia, Mr. Beauprez, Mr. Oxley, Mr. Peterson of Minnesota, Mr. Norwood, Mr. Deal of Georgia, Mr. Carter, Mr. Gene Green of Texas, Mr. Davis of Kentucky, Ms. Foxx, Ms. Pryce of Ohio, Mr. Taylor of Mississippi, Mr. Buyer, Mrs. Capito, Mr. Barrett of South Carolina, Mr. Paul, Ms. Hart, Mr. Smith of Texas, Mr. Melancon, Mr. Calvert, Mr. Goode, Mr. McHugh, Mr. Cannon, Mr. Burton of Indiana, Mr. Lucas, Mr. Radanovich, Mr. Ortiz, Mr. Hostettler, Mr. Manzullo, Mr. Fortenberry, Mr. Gillmor, Mr. Gary G. Miller of California, Mr. Bishop of Utah, Mr. Thompson of Mississippi, Mr. Boozman, Mrs. Schmidt, Mr. Osborne, Mr. Terry, Mr. Franks of Arizona, Mrs. Musgrave, Mr. Hayworth, Mr. Pence, Mr. Shadegg, Miss McMorris, Mr. Kline, Mr. Al Green of Texas, Mr. Flake, Mr. Ford, Mr. English of Pennsylvania, Mr. Culberson, Mr. Abercrombie, Mr. Murphy, and Mr. Graves

June 26, 2006

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

Strike out all after the enacting clause and insert the part printed in italic

For text of introduced bill, see copy of bill as introduced on February 15, 2006

A BILL

To provide for exploration, development, and production activities for mineral resources on the outer Continental Shelf, and for other purposes.

1.

Short title

This Act may be cited as the Deep Ocean Energy Resources Act of 2006.

2.

Policy

It is the policy of the United States that—

(1)

the United States is blessed with abundant energy resources on the outer Continental Shelf and has developed a comprehensive framework of environmental laws and regulations and fostered the development of state-of-the-art technology that allows for the responsible development of these resources for the benefit of its citizenry;

(2)

adjacent States are required by the circumstances to commit significant resources in support of exploration, development, and production activities for mineral resources on the outer Continental Shelf, and it is fair and proper for a portion of the receipts from such activities to be shared with Adjacent States and their local coastal governments;

(3)

the existing laws governing the leasing and production of the mineral resources of the outer Continental Shelf have reduced the production of mineral resources, have preempted Adjacent States from being sufficiently involved in the decisions regarding the allowance of mineral resource development, and have been harmful to the national interest;

(4)

the national interest is served by granting the Adjacent States more options related to whether or not mineral leasing should occur in the outer Continental Shelf within their Adjacent Zones;

(5)

it is not reasonably foreseeable that exploration of a leased tract located more than 25 miles seaward of the coastline, development and production of a natural gas discovery located more than 25 miles seaward of the coastline, or development and production of an oil discovery located more than 50 miles seaward of the coastline will adversely affect resources near the coastline;

(6)

transportation of oil from a leased tract might reasonably be foreseen, under limited circumstances, to have the potential to adversely affect resources near the coastline if the oil is within 50 miles of the coastline, but such potential to adversely affect such resources is likely no greater, and probably less, than the potential impacts from tanker transportation because tanker spills usually involve large releases of oil over a brief period of time; and

(7)

among other bodies of inland waters, the Great Lakes, Long Island Sound, Delaware Bay, Chesapeake Bay, Albemarle Sound, San Francisco Bay, and Puget Sound are not part of the outer Continental Shelf, and are not subject to leasing by the Federal Government for the exploration, development, and production of any mineral resources that might lie beneath them.

3.

Definitions under the outer continental shelf lands act

Section 2 of the Outer Continental Shelf Lands Act (43 U.S.C. 1331) is amended—

(1)

by amending paragraph (f) to read as follows:

(f)

The term affected State means the Adjacent State.

;

(2)

by striking the semicolon at the end of each of paragraphs (a) through (o) and inserting a period;

(3)

by striking ; and at the end of paragraph (p) and inserting a period;

(4)

by adding at the end the following:

(r)

The term Adjacent State means, with respect to any program, plan, lease sale, leased tract or other activity, proposed, conducted, or approved pursuant to the provisions of this Act, any State the laws of which are declared, pursuant to section 4(a)(2), to be the law of the United States for the portion of the outer Continental Shelf on which such program, plan, lease sale, leased tract or activity appertains or is, or is proposed to be, conducted. For purposes of this paragraph, the term State includes Puerto Rico and the other Territories of the United States.

(s)

The term Adjacent Zone means, with respect to any program, plan, lease sale, leased tract, or other activity, proposed, conducted, or approved pursuant to the provisions of this Act, the portion of the outer Continental Shelf for which the laws of a particular Adjacent State are declared, pursuant to section 4(a)(2), to be the law of the United States.

(t)

The term miles means statute miles.

(u)

The term coastline has the same meaning as the term coast line as defined in section 2(c) of the Submerged Lands Act (43 U.S.C. 1301(c)).

(v)

The term Neighboring State means a coastal State having a common boundary at the coastline with the Adjacent State.

; and

(5)

in paragraph (a), by inserting after control the following: or lying within the United States exclusive economic zone adjacent to the Territories of the United States.

4.

Determination of adjacent zones and planning areas

Section 4(a)(2)(A) of the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a)(2)(A)) is amended in the first sentence by striking , and the President and all that follows through the end of the sentence and inserting the following: . The lines extending seaward and defining each State’s Adjacent Zone, and each OCS Planning Area, are as indicated on the maps for each outer Continental Shelf region entitled Alaska OCS Region State Adjacent Zone and OCS Planning Areas, Pacific OCS Region State Adjacent Zones and OCS Planning Areas, Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning Areas, and Atlantic OCS Region State Adjacent Zones and OCS Planning Areas, all of which are dated September 2005 and on file in the Office of the Director, Minerals Management Service..

5.

Administration of leasing

Section 5 of the Outer Continental Shelf Lands Act (43 U.S.C. 1334) is amended by adding at the end the following:

(k)

Voluntary partial relinquishment of a lease

Any lessee of a producing lease may relinquish to the Secretary any portion of a lease that the lessee has no interest in producing and that the Secretary finds is geologically prospective. In return for any such relinquishment, the Secretary shall provide to the lessee a royalty incentive for the portion of the lease retained by the lessee, in accordance with regulations promulgated by the Secretary to carry out this subsection. The Secretary shall publish final regulations implementing this subsection within 365 days after the date of the enactment of the Deep Ocean Energy Resources Act of 2006.

(l)

Natural gas lease regulations

Not later than July 1, 2007, the Secretary shall publish a final regulation that shall—

(1)

establish procedures for entering into natural gas leases;

(2)

ensure that natural gas leases are only available for tracts on the outer Continental Shelf that are wholly within 100 miles of the coastline within an area withdrawn from disposition by leasing on the day after the date of enactment of the Deep Ocean Energy Resources Act of 2006;

(3)

provide that natural gas leases shall contain the same rights and obligations established for oil and gas leases, except as otherwise provided in the Deep Ocean Energy Resources Act of 2006;

(4)

provide that, in reviewing the adequacy of bids for natural gas leases, the value of any crude oil estimated to be contained within any tract shall be excluded;

(5)

provide that any crude oil produced from a well and reinjected into the leased tract shall not be subject to payment of royalty, and that the Secretary shall consider, in setting the royalty rates for a natural gas lease, the additional cost to the lessee of not producing any crude oil; and

(6)

provide that any Federal law that applies to an oil and gas lease on the outer Continental Shelf shall apply to a natural gas lease unless otherwise clearly inapplicable.

.

6.

Grant of leases by Secretary

Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337) is amended—

(1)

in subsection (a)(1) by inserting after the first sentence the following: Further, the Secretary may grant natural gas leases in a manner similar to the granting of oil and gas leases and under the various bidding systems available for oil and gas leases.;

(2)

by adding at the end of subsection (b) the following:

The Secretary may issue more than one lease for a given tract if each lease applies to a separate and distinct range of vertical depths, horizontal surface area, or a combination of the two. The Secretary may issue regulations that the Secretary determines are necessary to manage such leases consistent with the purposes of this Act.

;

(3)

by amending subsection (p)(2)(B) to read as follows:

(B)

The Secretary shall provide for the payment to coastal states, and their local coastal governments, of 75 percent of Federal receipts from projects authorized under this section located partially or completely within the area extending seaward of State submerged lands out to 4 marine leagues from the coastline, and the payment to coastal states of 50 percent of the receipts from projects completely located in the area more than 4 marine leagues from the coastline. Payments shall be based on a formula established by the Secretary by rulemaking no later than 180 days after the date of the enactment of the Deep Ocean Energy Resources Act of 2006 that provides for equitable distribution, based on proximity to the project, among coastal states that have coastline that is located within 200 miles of the geographic center of the project.

.

(4)

by adding at the end the following:

(q)

Natural Gas Leases

(1)

Right to produce natural gas

A lessee of a natural gas lease shall have the right to produce the natural gas from a field on a natural gas leased tract if the Secretary estimates that the discovered field has at least 40 percent of the economically recoverable Btu content of the field contained within natural gas and such natural gas is economical to produce.

(2)

Crude oil

A lessee of a natural gas lease may not produce crude oil from the lease.

(3)

Estimates of btu content

The Secretary shall make estimates of the natural gas Btu content of discovered fields on a natural gas lease only after the completion of at least one exploration well, the data from which has been tied to the results of a three-dimensional seismic survey of the field. The Secretary may not require the lessee to further delineate any discovered field prior to making such estimates.

(4)

Definition of natural gas

For purposes of a natural gas lease, natural gas means natural gas and all substances produced in association with gas, including, but not limited to, hydrocarbon liquids (other than crude oil) that are obtained by the condensation of hydrocarbon vapors and separate out in liquid form from the produced gas stream.

(r)

Removal of restrictions on joint bidding in certain areas of the outer continental shelf

Restrictions on joint bidders shall no longer apply to tracts located in the Alaska OCS Region. Such restrictions shall not apply to tracts in other OCS regions determined to be frontier tracts or otherwise high cost tracts under final regulations that shall be published by the Secretary by not later than 365 days after the date of the enactment of the Deep Ocean Energy Resources Act of 2006.

(s)

Royalty suspension provisions

The Secretary shall agree to a request by any lessee to amend any lease issued for Central and Western Gulf of Mexico tracts during the period of December 1, 1995, through December 31, 2000, to incorporate price thresholds applicable to royalty suspension provisions, or amend existing price thresholds, in the amount of $40.50 per barrel (2006 dollars) for oil and for natural gas of $6.75 per million Btu (2006 dollars). Any amended lease shall impose the new or revised price thresholds effective October 1, 2005. Existing lease provisions shall prevail through September 30, 2005. After the date of the enactment of the Deep Ocean Energy Resources Act of 2006, price thresholds shall apply to any royalty suspension volumes granted by the Secretary. Unless otherwise set by Secretary by regulation or for a particular lease sale, the price thresholds shall be $40.50 for oil (2006 dollars) and $6.75 for natural gas (2006 dollars).

(t)

Royalty rate for oil and gas or natural gas leases on the outer Continental Shelf

After the date of the enactment of the Deep Ocean Energy Resources Act of 2006, the base royalty rate for new oil and gas or natural gas leases on the outer Continental Shelf shall be the same for all leased tracts.

(u)

Conservation of resources fees

(1)

Not later than one year after the date of the enactment of the Deep Ocean Energy Resources Act of 2006, the Secretary by regulation shall establish a conservation of resources fee for producing leases that will apply to new and existing leases which shall be set at $9 per barrel for oil and $1.25 per million Btu for gas. This fee shall only apply to leases in production located in more than 200 meters of water for which royalties are not being paid when prices exceed $40.50 per barrel for oil and $6.75 per million Btu for natural gas in 2006, dollars. This fee shall apply to production from and after October 1, 2005, and shall be treated as offsetting receipts.

(2)

Not later than one year after the date of the enactment of the Deep Ocean Energy Resources Act of 2006, the Secretary by regulation shall establish a conservation of resources fee for nonproducing leases that will apply to new and existing leases which shall be set at not less than $1.00 nor more than $4.00 per acre per year. This fee shall apply from and after October 1, 2005, and shall be treated as offsetting receipts.

;

(5)

by striking subsection (a)(3)(A) and redesignating the subsequent subparagraphs as subparagraphs (A) and (B), respectively;

(6)

in subsection (a)(3)(A) (as so redesignated) by striking In the Western and all that follows through the Secretary the first place it appears and inserting The Secretary; and

(7)

effective October 1, 2006, in subsection (g)—

(A)

by striking all after (g), except paragraph (3);

(B)

by striking the last sentence of paragraph (3); and

(C)

by striking (3).

7.

Disposition of receipts

Section 9 of the Outer Continental Shelf Lands Act (43 U.S.C. 1338) is amended—

(1)

by designating the existing text as subsection (a);

(2)

in subsection (a) (as so designated) by inserting , if not paid as otherwise provided in this title after receipts; and

(3)

by adding the following:

(b)

Treatment of OCS Receipts From Tracts Completely Within 100 Miles of the Coastline

(1)

Deposit

The Secretary shall deposit into a separate account in the Treasury the portion of OCS Receipts for each fiscal year that will be shared under paragraphs (2), (3), and (4).

(2)

Phased-in receipts sharing

(A)

Beginning October 1, 2005, the Secretary shall share OCS Receipts derived from the following areas:

(i)

Lease tracts located on portions of the Gulf of Mexico OCS Region completely beyond 4 marine leagues from any coastline and completely within 100 miles of any coastline that are available for leasing under the 2002-2007 5-Year Oil and Gas Leasing Program in effect prior to the date of the enactment of the Deep Ocean Energy Resources Act of 2006.

(ii)

Lease tracts in production prior to October 1, 2005, completely beyond 4 marine leagues from any coastline and completely within 100 miles of any coastline located on portions of the OCS that were not available for leasing under the 2002-2007 5-Year OCS Oil and Gas Leasing Program in effect prior to the date of the enactment of the Deep Ocean Energy Resources Act of 2006.

(iii)

Lease tracts for which leases are issued prior to October 1, 2005, located in the Alaska OCS Region completely beyond 4 marine leagues from any coastline and completely within 100 miles of the coastline.

(B)

The Secretary shall share the following percentages of OCS Receipts from the leases described in subparagraph (A) derived during the fiscal year indicated:

(i)

For fiscal year 2006, 6.0 percent.

(ii)

For fiscal year 2007, 7.0 percent.

(iii)

For fiscal year 2008, 8.0 percent.

(iv)

For fiscal year 2009, 9.0 percent.

(v)

For fiscal year 2010, 12.0 percent.

(vi)

For fiscal year 2011, 15.0 percent.

(vii)

For fiscal year 2012, 18.0 percent.

(viii)

For fiscal year 2013, 21.0 percent.

(ix)

For fiscal year 2014, 24.0 percent.

(x)

For fiscal year 2015, 27.0 percent.

(xi)

For fiscal year 2016, 30.0 percent.

(xii)

For fiscal year 2017, 33.0 percent.

(xiii)

For fiscal year 2018, 36.0 percent.

(xiv)

For fiscal year 2019, 39.0 percent.

(xv)

For fiscal year 2020, 42.0 percent.

(xvi)

For fiscal year 2021, 45.0 percent.

(xvii)

For fiscal year 2022 and each subsequent fiscal year, 50.0 percent.

(C)

The provisions of this paragraph shall not apply to leases that could not have been issued but for section 5(k) of this Act or section 6(2) of the Deep Ocean Energy Resources Act of 2006.

(3)

Immediate receipts sharing

Beginning October 1, 2005, the Secretary shall share 50 percent of OCS Receipts derived from all leases located completely beyond 4 marine leagues from any coastline and completely within 100 miles of any coastline not included within the provisions of paragraph (2).

(4)

Receipts sharing from tracts within 4 marine leagues of any coastline

Beginning October 1, 2005, the Secretary shall share 75 percent of OCS Receipts derived from all leases located completely or partially within 4 marine leagues from any coastline.

(5)

Allocations

The Secretary shall allocate the OCS Receipts deposited into the separate account established by paragraph (1) that are shared under paragraphs (2), (3), and (4) as follows:

(A)

Bonus bids

Deposits derived from bonus bids from a leased tract, including interest thereon, shall be allocated at the end of each fiscal year as follows:

(i)

85 percent to the Adjacent State.

(ii)

5 percent into the Treasury, which shall be allocated to the account established by section 14 of the Deep Ocean Energy Resources Act of 2006.

(iii)

5 percent into the account established by section 23 of the Deep Ocean Energy Resources Act of 2006.

(iv)

5 percent into the account established by section 26 of the Deep Ocean Energy Resources Act of 2006.

(B)

Royalties

Deposits derived from royalties from a leased tract, including interest thereon, shall be allocated at the end of each fiscal year as follows:

(i)

85 percent to the Adjacent State and any other producing State or States with a leased tract within its Adjacent Zone within 100 miles of its coastline that generated royalties during the fiscal year, if the other producing or States have a coastline point within 300 miles of any portion of the leased tract, in which case the amount allocated for the leased tract shall be—

(I)

one-third to the Adjacent State; and

(II)

two-thirds to each producing State, including the Adjacent State, inversely proportional to the distance between the nearest point on the coastline of the producing State and the geographic center of the leased tract.

(ii)

5 percent into the Treasury, which shall be allocated to the account established by section 14 of the Deep Ocean Energy Resources Act of 2006.

(iii)

5 percent into the account established by section 23 of the Deep Ocean Energy Resources Act of 2006.

(iv)

5 percent into the account established by section 26 of the Deep Ocean Energy Resources Act of 2006.

(c)

Treatment of OCS Receipts From Tracts Partially or Completely Beyond 100 Miles of the Coastline

(1)

Deposit

The Secretary shall deposit into a separate account in the Treasury the portion of OCS Receipts for each fiscal year that will be shared under paragraphs (2) and (3).

(2)

Phased-in receipts sharing

(A)

Beginning October 1, 2005, the Secretary shall share OCS Receipts derived from the following areas:

(i)

Lease tracts located on portions of the Gulf of Mexico OCS Region partially or completely beyond 100 miles of any coastline that were available for leasing under the 2002-2007 5-Year Oil and Gas Leasing Program in effect prior to the date of enactment of the Deep Ocean Energy Resources Act of 2006.

(ii)

Lease tracts in production prior to October 1, 2005, partially or completely beyond 100 miles of any coastline located on portions of the OCS that were not available for leasing under the 2002-2007 5-Year OCS Oil and Gas Leasing Program in effect prior to the date of enactment of the Deep Ocean Energy Resources Act of 2006.

(iii)

Lease tracts for which leases are issued prior to October 1, 2005, located in the Alaska OCS Region partially or completely beyond 100 miles of the coastline.

(B)

The Secretary shall share the following percentages of OCS Receipts from the leases described in subparagraph (A) derived during the fiscal year indicated:

(i)

For fiscal year 2006, 6.0 percent.

(ii)

For fiscal year 2007, 7.0 percent.

(iii)

For fiscal year 2008, 8.0 percent.

(iv)

For fiscal year 2009, 9.0 percent.

(v)

For fiscal year 2010, 12.0 percent.

(vi)

For fiscal year 2011, 15.0 percent.

(vii)

For fiscal year 2012, 18.0 percent.

(viii)

For fiscal year 2013, 21.0 percent.

(ix)

For fiscal year 2014, 24.0 percent.

(x)

For fiscal year 2015, 27.0 percent.

(xi)

For fiscal year 2016, 30.0 percent.

(xii)

For fiscal year 2017, 33.0 percent.

(xiii)

For fiscal year 2018, 36.0 percent.

(xiv)

For fiscal year 2019, 39.0 percent.

(xv)

For fiscal year 2020, 42.0 percent.

(xvi)

For fiscal year 2021, 45.0 percent.

(xvii)

For fiscal year 2022 and each subsequent fiscal year, 50.0 percent.

(C)

The provisions of this paragraph shall not apply to leases that could not have been issued but for section 5(k) of this Act or section 6(2) of the Deep Ocean Energy Resources Act of 2006.

(3)

Immediate receipts sharing

Beginning October 1, 2005, the Secretary shall share 50 percent of OCS Receipts derived on and after October 1, 2005, from all leases located partially or completely beyond 100 miles of any coastline not included within the provisions of paragraph (2).

(4)

Allocations

The Secretary shall allocate the OCS Receipts deposited into the separate account established by paragraph (1) that are shared under paragraphs (2) and (3) as follows:

(A)

Bonus bids

Deposits derived from bonus bids from a leased tract, including interest thereon, shall be allocated at the end of each fiscal year as follows:

(i)

85 percent to the Adjacent State.

(ii)

5 percent into the Treasury, which shall be allocated to the account established by section 14 of the Deep Ocean Energy Resources Act of 2006.

(iii)

5 percent into the account established by section 23 of the Deep Ocean Energy Resources Act of 2006.

(iv)

5 percent into the account established by section 26 of the Deep Ocean Energy Resources Act of 2006.

(B)

Royalties

Deposits derived from royalties from a leased tract, including interest thereon, shall be allocated at the end of each fiscal year as follows:

(i)

85 percent to the Adjacent State and any other producing State or States with a leased tract within its Adjacent Zone partially or completely beyond 100 miles of its coastline that generated royalties during the fiscal year, if the other producing State or States have a coastline point within 300 miles of any portion of the leased tract, in which case the amount allocated for the leased tract shall be—

(I)

one-third to the Adjacent State; and

(II)

two-thirds to each producing State, including the Adjacent State, inversely proportional to the distance between the nearest point on the coastline of the producing State and the geographic center of the leased tract.

(ii)

5 percent into the account established by section 14 of the Deep Ocean Energy Resources Act of 2006.

(iii)

5 percent into the account established by section 23 of the Deep Ocean Energy Resources Act of 2006.

(iv)

5 percent into the account established by section 26 of the Deep Ocean Energy Resources Act of 2006.

(d)

Transmission of Allocations

(1)

In general

Not later than 90 days after the end of each fiscal year, the Secretary shall transmit—

(A)

to each State 60 percent of such State’s allocations under subsections (b)(5)(A)(i), (b)(5)(B)(i), (c)(4)(A)(i), and (c)(4)(B)(i) for the immediate prior fiscal year;

(B)

to coastal county-equivalent and municipal political subdivisions of such State a total of 40 percent of such State’s allocations under subsections (b)(5)(A)(i), (b)(5)(B)(i), (c)(4)(A)(i), and (c)(4)(B)(i), together with all accrued interest thereon; and

(C)

the remaining allocations under subsections (b)(5) and (c)(4), together with all accrued interest thereon.

(2)

Allocations to coastal county-equivalent political subdivisions

The Secretary shall make an initial allocation of the OCS Receipts to be shared under paragraph (1)(B) as follows:

(A)

25 percent shall be allocated to coastal county-equivalent political subdivisions that are completely more than 25 miles landward of the coastline and at least a part of which lies not more than 75 miles landward from the coastline, with the allocation among such coastal county-equivalent political subdivisions based on population.

(B)

75 percent shall be allocated to coastal county-equivalent political subdivisions that are completely or partially less than 25 miles landward of the coastline, with the allocation among such coastal county-equivalent political subdivisions to be further allocated as follows:

(i)

25 percent shall be allocated based on the ratio of such coastal county-equivalent political subdivision’s population to the coastal population of all coastal county-equivalent political subdivisions in the State.

(ii)

25 percent shall be allocated based on the ratio of such coastal county-equivalent political subdivision’s coastline miles to the coastline miles of all coastal county-equivalent political subdivisions in the State as calculated by the Secretary. In such calculations, coastal county-equivalent political subdivisions without a coastline shall be considered to have 50 percent of the average coastline miles of the coastal county-equivalent political subdivisions that do have coastlines.

(iii)

25 percent shall be allocated to all coastal county-equivalent political subdivisions having a coastline point within 300 miles of the leased tract for which OCS Receipts are being shared based on a formula that allocates the funds based on such coastal county-equivalent political subdivision’s relative distance from the leased tract.

(iv)

25 percent shall be allocated to all coastal county-equivalent political subdivisions having a coastline point within 300 miles of the leased tract for which OCS Receipts are being shared based on the relative level of outer Continental Shelf oil and gas activities in a coastal political subdivision compared to the level of outer Continental Shelf activities in all coastal political subdivisions in the State. The Secretary shall define the term outer Continental Shelf oil and gas activities for purposes of this subparagraph to include, but not be limited to, construction of vessels, drillships, and platforms involved in exploration, production, and development on the outer Continental Shelf; support and supply bases, ports, and related activities; offices of geologists, geophysicists, engineers, and other professionals involved in support of exploration, production, and development of oil and gas on the outer Continental Shelf; pipelines and other means of transporting oil and gas production from the outer Continental Shelf; and processing and refining of oil and gas production from the outer Continental Shelf. For purposes of this subparagraph, if a coastal county-equivalent political subdivision does not have a coastline, its coastal point shall be the point on the coastline closest to it.

(3)

Allocations to coastal municipal political subdivisions

The initial allocation to each coastal county-equivalent political subdivision under paragraph (2) shall be further allocated to the coastal county-equivalent political subdivision and any coastal municipal political subdivisions located partially or wholly within the boundaries of the coastal county-equivalent political subdivision as follows:

(A)

One-third shall be allocated to the coastal county-equivalent political subdivision.

(B)

Two-thirds shall be allocated on a per capita basis to the municipal political subdivisions and the county-equivalent political subdivision, with the allocation to the latter based upon its population not included within the boundaries of a municipal political subdivision.

(e)

Investment of deposits

Amounts deposited under this section shall be invested by the Secretary of the Treasury in securities backed by the full faith and credit of the United States having maturities suitable to the needs of the account in which they are deposited and yielding the highest reasonably available interest rates as determined by the Secretary of the Treasury.

(f)

Use of Funds

A recipient of funds under this section may use the funds for one or more of the following:

(1)

To reduce in-State college tuition at public institutions of higher learning and otherwise support public education, including career technical education.

(2)

To make transportation infrastructure improvements.

(3)

To reduce taxes.

(4)

To promote, fund, and provide for—

(A)

coastal or environmental restoration;

(B)

fish, wildlife, and marine life habitat enhancement;

(C)

waterways construction and maintenance;

(D)

levee construction and maintenance and shore protection; and

(E)

marine and oceanographic education and research.

(5)

To promote, fund, and provide for —

(A)

infrastructure associated with energy production activities conducted on the outer Continental Shelf;

(B)

energy demonstration projects;

(C)

supporting infrastructure for shore-based energy projects;

(D)

State geologic programs, including geologic mapping and data storage programs, and state geophysical data acquisition;

(E)

State seismic monitoring programs, including operation of monitoring stations;

(F)

development of oil and gas resources through enhanced recovery techniques;

(G)

alternative energy development, including bio fuels, coal-to-liquids, oil shale, tar sands, geothermal, geopressure, wind, waves, currents, hydro, and other renewable energy;

(H)

energy efficiency and conservation programs; and

(I)

front-end engineering and design for facilities that produce liquid fuels from hydrocarbons and other biological matter.

(6)

To promote, fund, and provide for—

(A)

historic preservation programs and projects;

(B)

natural disaster planning and response; and,

(C)

hurricane and natural disaster insurance programs.

(7)

For any other purpose as determined by State law.

(g)

No Accounting Required

No recipient of funds under this section shall be required to account to the Federal Government for the expenditure of such funds, except as otherwise may be required by law. However, States may enact legislation providing for accounting for and auditing of such expenditures. Further, funds allocated under this section to States and political subdivisions may be used as matching funds for other Federal programs.

(h)

Effect of Future Laws

Enactment of any future Federal statute that has the effect, as determined by the Secretary, of restricting any Federal agency from spending appropriated funds, or otherwise preventing it from fulfilling its pre-existing responsibilities as of the date of enactment of the statute, unless such responsibilities have been reassigned to another Federal agency by the statute with no prevention of performance, to issue any permit or other approval impacting on the OCS oil and gas leasing program, or any lease issued thereunder, or to implement any provision of this Act shall automatically prohibit any sharing of OCS Receipts under this section directly with the States, and their coastal political subdivisions, for the duration of the restriction. The Secretary shall make the determination of the existence of such restricting effects within 30 days of a petition by any outer Continental Shelf lessee or producing State.

(i)

Definitions

In this section:

(1)

Coastal county-equivalent political subdivision

The term coastal county-equivalent political subdivision means a political jurisdiction immediately below the level of State government, including a county, parish, borough in Alaska, independent municipality not part of a county, parish, or borough in Alaska, or other equivalent subdivision of a coastal State, that lies within the coastal zone.

(2)

Coastal municipal political subdivision

The term coastal municipal political subdivision means a municipality located within and part of a county, parish, borough in Alaska, or other equivalent subdivision of a State, all or part of which coastal municipal political subdivision lies within the coastal zone.

(3)

Coastal population

The term coastal population means the population of all coastal county-equivalent political subdivisions, as determined by the most recent official data of the Census Bureau.

(4)

Coastal zone

The term coastal zone means that portion of a coastal State, including the entire territory of any coastal county-equivalent political subdivision at least a part of which lies, within 75 miles landward from the coastline, or a greater distance as determined by State law enacted to implement this section.

(5)

Bonus bids

The term bonus bids means all funds received by the Secretary to issue an outer Continental Shelf minerals lease.

(6)

Royalties

The term royalties means all funds received by the Secretary from production of oil or natural gas, or the sale of production taken in-kind, from an outer Continental Shelf minerals lease.

(7)

Producing state

The term producing State means an Adjacent State having an Adjacent Zone containing leased tracts from which OCS Receipts were derived.

(8)

OCS receipts

The term OCS Receipts means bonus bids, royalties, and conservation of resources fees.

.

8.

Review of outer continental shelf exploration plans

Subsections (c) and (d) of section 11 of the Outer Continental Shelf Lands Act (43 U.S.C. 1340) are amended to read as follows:

(c)

Plan Review; Plan Provisions

(1)

Except as otherwise provided in this Act, prior to commencing exploration pursuant to any oil and gas lease issued or maintained under this Act, the holder thereof shall submit an exploration plan (hereinafter in this section referred to as a plan) to the Secretary for review which shall include all information and documentation required under paragraphs (2) and (3). The Secretary shall review the plan for completeness within 10 days of submission. If the Secretary finds that the plan is not complete, the Secretary shall notify the lessee with a detailed explanation and require such modifications of such plan as are necessary to achieve completeness. The Secretary shall have 10 days to review a modified plan for completeness. Such plan may apply to more than one lease held by a lessee in any one region of the outer Continental Shelf, or by a group of lessees acting under a unitization, pooling, or drilling agreement, and the lessee shall certify that such plan is consistent with the terms of the lease and is consistent with all statutory and regulatory requirements in effect on the date of issuance of the lease, and any regulations promulgated under this Act to the conservation of resources after the date of the lease issuances. The Secretary shall have 30 days from the date the plan is deemed complete to conduct a review of the plan. If the Secretary finds the plan is not consistent with the lease and all such statutory and regulatory requirements, the Secretary shall notify the lessee with a detailed explanation of such modifications of such plan as are necessary to achieve compliance. The Secretary shall have 30 days to review any modified plan submitted by the lessee. The lessee shall not take any action under the exploration plan within the 30-day review period, or thereafter until the plan has been modified to achieve compliance as so notified.

(2)

An exploration plan submitted under this subsection shall include, in the degree of detail which the Secretary may by regulation require—

(A)

a schedule of anticipated exploration activities to be undertaken;

(B)

a description of equipment to be used for such activities;

(C)

the general location of each well to be drilled; and

(D)

such other information deemed pertinent by the Secretary.

(3)

The Secretary may, by regulation, require that such plan be accompanied by a general statement of development and production intentions which shall be for planning purposes only and which shall not be binding on any party.

(d)

Plan Revisions; Conduct of Exploration Activities

(1)

If a significant revision of an exploration plan under this subsection is submitted to the Secretary, the process to be used for the review of such revision shall be the same as set forth in subsection (c) of this section.

(2)

All exploration activities pursuant to any lease shall be conducted in accordance with an exploration plan or a revised plan which has been submitted to and reviewed by the Secretary.

.

9.

Reservation of lands and rights

Section 12 of the Outer Continental Shelf Lands Act (43 U.S.C. 1341) is amended—

(1)

in subsection (a) by adding at the end the following: The President may partially or completely revise or revoke any prior withdrawal made by the President under the authority of this section. The President may not revise or revoke a withdrawal that was initiated by a petition from a State and approved by the Secretary of the Interior under subsection (h). A withdrawal by the President may be for a term not to exceed 10 years. When considering potential uses of the outer Continental Shelf, to the maximum extent possible, the President shall accommodate competing interests and potential uses.;

(2)

by adding at the end the following:

(g)

Availability for Leasing Within Certain Areas of the Outer Continental Shelf

(1)

Prohibition against leasing

(A)

Unavailable for leasing without state request

Except as otherwise provided in this subsection, from and after enactment of the Deep Ocean Energy Resources Act of 2006, the Secretary shall not offer for leasing for oil and gas, or natural gas, any area within 50 miles of the coastline that was withdrawn from disposition by leasing in the Atlantic OCS Region or the Pacific OCS Region, or the Gulf of Mexico OCS Region Eastern Planning Area, as depicted on the maps referred to in this subparagraph, under the Memorandum on Withdrawal of Certain Areas of the United States Outer Continental Shelf from Leasing Disposition, 34 Weekly Comp. Pres. Doc. 1111, dated June 12, 1998, or any area within 50 miles of the coastline not withdrawn under that Memorandum that is included within the Gulf of Mexico OCS Region Eastern Planning Area as indicated on the map entitled Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning Areas or the Florida Straits Planning Area as indicated on the map entitled Atlantic OCS Region State Adjacent Zones and OCS Planning Areas, both of which are dated September 2005 and on file in the Office of the Director, Minerals Management Service.

(B)

Areas between 50 and 100 miles from the coastline

Unless an Adjacent State petitions under subsection (h) within one year after the date of the enactment of the Deep Ocean Energy Resources Act of 2006 for natural gas leasing or by June 30, 2009, for oil and gas leasing, the Secretary shall offer for leasing any area more than 50 miles but less than 100 miles from the coastline that was withdrawn from disposition by leasing in the Atlantic OCS Region, the Pacific OCS Region, or the Gulf of Mexico OCS Region Eastern Planning Area, as depicted on the maps referred to in this subparagraph, under the Memorandum on Withdrawal of Certain Areas of the United States Outer Continental Shelf from Leasing Disposition, 34 Weekly Comp. Pres. Doc. 1111, dated June 12, 1998, or any area more than 50 miles but less than 100 miles of the coastline not withdrawn under that Memorandum that is included within the Gulf of Mexico OCS Region Eastern Planning Area as indicated on the map entitled Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning Areas or within the Florida Straits Planning Area as indicated on the map entitled Atlantic OCS Region State Adjacent Zones and OCS Planning Areas, both of which are dated September 2005 and on file in the Office of the Director, Minerals Management Service.

(2)

Revocation of withdrawal

The provisions of the Memorandum on Withdrawal of Certain Areas of the United States Outer Continental Shelf from Leasing Disposition, 34 Weekly Comp. Pres. Doc. 1111, dated June 12, 1998, are hereby revoked and are no longer in effect regarding any areas that are more than 100 miles from the coastline, nor for any areas that are less than 100 miles from the coastline and are included within the Gulf of Mexico OCS Region Central Planning Area as depicted on the map entitled Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning Areas dated September 2005 and on file in the Office of the Director, Minerals Management Service. The 2002-2007 5-Year Outer Continental Shelf Oil and Gas Leasing Program is hereby amended to include the areas added to the Gulf of Mexico OCS Region Central Planning Area by this Act to the extent that such areas were included within the original boundaries of proposed Lease Sale 181. The amendment to such leasing program includes a sale in such additional areas, which shall be held no later than June 30, 2007. The Final Environmental Impact Statement prepared for this area for Lease Sale 181 shall be deemed sufficient for all purposes for each lease sale in which such area is offered for lease during the 2002-2007 5-Year Outer Continental Shelf Oil and Gas Leasing Program without need for supplementation. Any tract only partially added to the Gulf of Mexico OCS Region Central Planning Area by this Act shall be eligible for leasing of the part of such tract that is included within the Gulf of Mexico OCS Region Central Planning Area, and the remainder of such tract that lies outside of the Gulf of Mexico OCS Region Central Planning Area may be developed and produced by the lessee of such partial tract using extended reach or similar drilling from a location on a leased area. Further, any area in the OCS withdrawn from leasing may be leased, and thereafter developed and produced by the lessee using extended reach or similar drilling from a location on a leased area located in an area available for leasing.

(3)

Petition for leasing

(A)

In general

The Governor of the State, upon concurrence of its legislature, may submit to the Secretary a petition requesting that the Secretary make available any area that is within the State’s Adjacent Zone, included within the provisions of paragraph (1), and that (i) is greater than 25 miles from any point on the coastline of a Neighboring State for the conduct of offshore leasing, pre-leasing, and related activities with respect to natural gas leasing; or (ii) is greater than 50 miles from any point on the coastline of a Neighboring State for the conduct of offshore leasing, pre-leasing, and related activities with respect to oil and gas leasing. The Adjacent State may also petition for leasing any other area within its Adjacent Zone if leasing is allowed in the similar area of the Adjacent Zone of the applicable Neighboring State, or if not allowed, if the Neighboring State, acting through its Governor, expresses its concurrence with the petition. The Secretary shall only consider such a petition upon making a finding that leasing is allowed in the similar area of the Adjacent Zone of the applicable Neighboring State or upon receipt of the concurrence of the Neighboring State. The date of receipt by the Secretary of such concurrence by the Neighboring State shall constitute the date of receipt of the petition for that area for which the concurrence applies. Except for any area described in the last sentence of paragraph (2), a petition for leasing any part of the Alabama Adjacent Zone that is a part of the Gulf of Mexico Eastern Planning Area, as indicated on the map entitled Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning Areas which is dated September 2005 and on file in the Office of the Director, Minerals Management Service, shall require the concurrence of both Alabama and Florida.

(B)

Limitations on leasing

In its petition, a State with an Adjacent Zone that contains leased tracts may condition new leasing for oil and gas, or natural gas for tracts within 25 miles of the coastline by—

(i)

requiring a net reduction in the number of production platforms;

(ii)

requiring a net increase in the average distance of production platforms from the coastline;

(iii)

limiting permanent surface occupancy on new leases to areas that are more than 10 miles from the coastline;

(iv)

limiting some tracts to being produced from shore or from platforms located on other tracts; or

(v)

other conditions that the Adjacent State may deem appropriate as long as the Secretary does not determine that production is made economically or technically impracticable or otherwise impossible.

(C)

Action by Secretary

Not later than 90 days after receipt of a petition under subparagraph (A), the Secretary shall approve the petition, unless the Secretary determines that leasing the area would probably cause serious harm or damage to the marine resources of the State’s Adjacent Zone. Prior to approving the petition, the Secretary shall complete an environmental assessment that documents the anticipated environmental effects of leasing in the area included within the scope of the petition.

(D)

Failure to act

If the Secretary fails to approve or deny a petition in accordance with subparagraph (C) the petition shall be considered to be approved 90 days after receipt of the petition.

(E)

Amendment of the 5-year leasing program

Notwithstanding section 18, within 180 days of the approval of a petition under subparagraph (C) or (D), after the expiration of the time limits in paragraph (1)(B), and within 180 days after the enactment of the Deep Ocean Energy Resources Act of 2006 for the areas made available for leasing under paragraph (2), the Secretary shall amend the current 5-Year Outer Continental Shelf Oil and Gas Leasing Program to include a lease sale or sales for at least 75 percent of the associated areas, unless there are, from the date of approval, expiration of such time limits, or enactment, as applicable, fewer than 12 months remaining in the current 5-Year Leasing Program in which case the Secretary shall include the associated areas within lease sales under the next 5-Year Leasing Program. For purposes of amending the 5-Year Program in accordance with this section, further consultations with States shall not be required. For purposes of this section, an environmental assessment performed under the provisions of the National Environmental Policy Act of 1969 to assess the effects of approving the petition shall be sufficient to amend the 5-Year Leasing Program.

(h)

Option to Petition for Extension of Withdrawal From Leasing Within Certain Areas of the Outer Continental Shelf

(1)

In general

The Governor of the State, upon the concurrence of its legislature, may submit to the Secretary petitions requesting that the Secretary extend for a period of time of up to 5 years for each petition the withdrawal from leasing for all or part of any area within the State’s Adjacent Zone located more than 50 miles, but less than 100 miles, from the coastline that is subject to subsection (g)(1)(B). A State may petition multiple times for any particular area but not more than once per calendar year for any particular area. A State must submit separate petitions, with separate votes by its legislature, for oil and gas leasing and for natural gas leasing. A petition of a State may request some areas to be withdrawn from all leasing and some areas to be withdrawn only from one type of leasing. Petitions for extending the withdrawal from leasing of any part of the Alabama Adjacent Zone that is more than 50 miles, but less than 100 miles, from the coastline that is a part of the Gulf of Mexico OCS Region Eastern Planning Area, as indicated on the map entitled Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning Areas which is dated September 2005 and on file in the Office of the Director, Minerals Management Service, may be made by either Alabama or Florida.

(2)

Action by Secretary

The Secretary shall perform an environmental assessment under the National Environmental Policy Act of 1969 to assess the effects of approving the petition under paragraph (1). Not later than 90 days after receipt of the petition, the Secretary shall approve the petition, unless the Secretary determines that extending the withdrawal from leasing would probably cause serious harm or damage to the marine resources of the State's Adjacent Zone. The Secretary shall not approve a petition from a State that extends the remaining period of a withdrawal of an area from leasing for a total of more than 10 years. However, the Secretary may approve petitions to extend the withdrawal from leasing of any area ad infinitum, subject only to the limitations contained in this subsection.

(3)

Failure to act

If the Secretary fails to approve or deny a petition in accordance with paragraph (2) the petition shall be considered to be approved 90 days after receipt of the petition.

(i)

Effect of Other Laws

Adoption by any Adjacent State of any constitutional provision, or enactment of any State statute, that has the effect, as determined by the Secretary, of restricting either the Governor or the Legislature, or both, from exercising full discretion related to subsection (g) or (h), or both, shall automatically (1) prohibit any sharing of OCS Receipts under this Act with the Adjacent State, and its coastal political subdivisions, and (2) prohibit the Adjacent State from exercising any authority under subsection (h), for the duration of the restriction. The Secretary shall make the determination of the existence of such restricting constitutional provision or State statute within 30 days of a petition by any outer Continental Shelf lessee or coastal State.

.

10.

Outer continental shelf leasing program

Section 18 of the Outer Continental Shelf Lands Act (43 U.S.C. 1344) is amended—

(1)

in subsection (a), by adding at the end of paragraph (3) the following: The Secretary shall, in each 5-year program, include lease sales that when viewed as a whole propose to offer for oil and gas or natural gas leasing at least 75 percent of the available unleased acreage within each OCS Planning Area. Available unleased acreage is that portion of the outer Continental Shelf that is not under lease at the time of the proposed lease sale, and has not otherwise been made unavailable for leasing by law.;

(2)

in subsection (c), by striking so much as precedes paragraph (3) and inserting the following:

(c)
(1)

During the preparation of any proposed leasing program under this section, the Secretary shall consider and analyze leasing throughout the entire Outer Continental Shelf without regard to any other law affecting such leasing. During this preparation the Secretary shall invite and consider suggestions from any interested Federal agency, including the Attorney General, in consultation with the Federal Trade Commission, and from the Governor of any coastal State. The Secretary may also invite or consider any suggestions from the executive of any local government in a coastal State that have been previously submitted to the Governor of such State, and from any other person. Further, the Secretary shall consult with the Secretary of Defense regarding military operational needs in the outer Continental Shelf. The Secretary shall work with the Secretary of Defense to resolve any conflicts that might arise regarding offering any area of the outer Continental Shelf for oil and gas or natural gas leasing. If the Secretaries are not able to resolve all such conflicts, any unresolved issues shall be elevated to the President for resolution.

(2)

After the consideration and analysis required by paragraph (1), including the consideration of the suggestions received from any interested Federal agency, the Federal Trade Commission, the Governor of any coastal State, any local government of a coastal State, and any other person, the Secretary shall publish in the Federal Register a proposed leasing program accompanied by a draft environmental impact statement prepared pursuant to the National Environmental Policy Act of 1969. After the publishing of the proposed leasing program and during the comment period provided for on the draft environmental impact statement, the Secretary shall submit a copy of the proposed program to the Governor of each affected State for review and comment. The Governor may solicit comments from those executives of local governments in the Governor’s State that the Governor, in the discretion of the Governor, determines will be affected by the proposed program. If any comment by such Governor is received by the Secretary at least 15 days prior to submission to the Congress pursuant to paragraph (3) and includes a request for any modification of such proposed program, the Secretary shall reply in writing, granting or denying such request in whole or in part, or granting such request in such modified form as the Secretary considers appropriate, and stating the Secretary’s reasons therefor. All such correspondence between the Secretary and the Governor of any affected State, together with any additional information and data relating thereto, shall accompany such proposed program when it is submitted to the Congress.

; and

(3)

by adding at the end the following:

(i)

Projection of State Adjacent Zone resources and State and local government shares of OCS receipts

Concurrent with the publication of the scoping notice at the beginning of the development of each 5-year outer Continental Shelf oil and gas leasing program, or as soon thereafter as possible, the Secretary shall—

(1)

provide to each Adjacent State a current estimate of proven and potential oil and gas resources located within the State’s Adjacent Zone; and

(2)

provide to each Adjacent State, and coastal political subdivisions thereof, a best-efforts projection of the OCS Receipts that the Secretary expects will be shared with each Adjacent State, and its coastal political subdivisions, using the assumption that the unleased tracts within the State’s Adjacent Zone are fully made available for leasing, including long-term projected OCS Receipts. In addition, the Secretary shall include a macroeconomic estimate of the impact of such leasing on the national economy and each State’s economy, including investment, jobs, revenues, personal income, and other categories.

.

11.

Coordination with adjacent states

Section 19 of the Outer Continental Shelf Lands Act (43 U.S.C. 1345) is amended—

(1)

in subsection (a) in the first sentence by inserting , for any tract located within the Adjacent State’s Adjacent Zone, after government; and

(2)

by adding the following:

(f)
(1)

No Federal agency may permit or otherwise approve, without the concurrence of the Adjacent State, the construction of a crude oil or petroleum products (or both) pipeline within the part of the Adjacent State’s Adjacent Zone that is withdrawn from oil and gas or natural gas leasing, except that such a pipeline may be approved, without such Adjacent State’s concurrence, to pass through such Adjacent Zone if at least 50 percent of the production projected to be carried by the pipeline within its first 10 years of operation is from areas of the Adjacent State's Adjacent Zone.

(2)

No State may prohibit the construction within its Adjacent Zone or its State waters of a natural gas pipeline that will transport natural gas produced from the outer Continental Shelf. However, an Adjacent State may prevent a proposed natural gas pipeline landing location if it proposes two alternate landing locations in the Adjacent State, acceptable to the Adjacent State, located within 50 miles on either side of the proposed landing location.

.

12.

Environmental studies

Section 20(d) of the Outer Continental Shelf Lands Act (43 U.S.C. 1346) is amended—

(1)

by inserting (1) after (d); and

(2)

by adding at the end the following:

(2)

For all programs, lease sales, leases, and actions under this Act, the following shall apply regarding the application of the National Environmental Policy Act of 1969:

(A)

Granting or directing lease suspensions and the conduct of all preliminary activities on outer Continental Shelf tracts, including seismic activities, are categorically excluded from the need to prepare either an environmental assessment or an environmental impact statement, and the Secretary shall not be required to analyze whether any exceptions to a categorical exclusion apply for activities conducted under the authority of this Act.

(B)

The environmental impact statement developed in support of each 5-year oil and gas leasing program provides the environmental analysis for all lease sales to be conducted under the program and such sales shall not be subject to further environmental analysis.

(C)

Exploration plans shall not be subject to any requirement to prepare an environmental impact statement, and the Secretary may find that exploration plans are eligible for categorical exclusion due to the impacts already being considered within an environmental impact statement or due to mitigation measures included within the plan.

(D)

Within each OCS Planning Area, after the preparation of the first development and production plan environmental impact statement for a leased tract within the Area, future development and production plans for leased tracts within the Area shall only require the preparation of an environmental assessment unless the most recent development and production plan environmental impact statement within the Area was finalized more than 10 years prior to the date of the approval of the plan, in which case an environmental impact statement shall be required.

.

13.

Review of outer continental shelf development and production plans

Section 25 of the Outer Continental Shelf Lands Act (43 U.S.C. 1351(a)) is amended to read as follows:

25.

Review of outer continental shelf development and production plans

(a)

Development and Production Plans; Submission to Secretary; Statement of Facilities and Operation; Submission to Governors of Affected States and Local Governments

(1)

Prior to development and production pursuant to an oil and gas lease issued on or after September 18, 1978, for any area of the outer Continental Shelf, or issued or maintained prior to September 18, 1978, for any area of the outer Continental Shelf, with respect to which no oil or gas has been discovered in paying quantities prior to September 18, 1978, the lessee shall submit a development and production plan (hereinafter in this section referred to as a plan) to the Secretary for review.

(2)

A plan shall be accompanied by a statement describing all facilities and operations, other than those on the outer Continental Shelf, proposed by the lessee and known by the lessee (whether or not owned or operated by such lessee) that will be constructed or utilized in the development and production of oil or gas from the lease area, including the location and site of such facilities and operations, the land, labor, material, and energy requirements associated with such facilities and operations, and all environmental and safety safeguards to be implemented.

(3)

Except for any privileged or proprietary information (as such term is defined in regulations issued by the Secretary), the Secretary, within 30 days after receipt of a plan and statement, shall—

(A)

submit such plan and statement to the Governor of any affected State, and upon request to the executive of any affected local government; and

(B)

make such plan and statement available to any appropriate interstate regional entity and the public.

(b)

Development and Production Activities in Accordance With Plan as Lease Requirement

After enactment of the Deep Ocean Energy Resources Act of 2006, no oil and gas lease may be issued pursuant to this Act in any region of the outer Continental Shelf, unless such lease requires that development and production activities be carried out in accordance with a plan that complies with the requirements of this section. This section shall also apply to leases that do not have an approved development and production plan as of the date of enactment of the Deep Ocean Energy Resources Act of 2006.

(c)

Scope and Contents of Plan

A plan may apply to more than one oil and gas lease, and shall set forth, in the degree of detail established by regulations issued by the Secretary—

(1)

the general work to be performed;

(2)

a description of all facilities and operations located on the outer Continental Shelf that are proposed by the lessee or known by the lessee (whether or not owned or operated by such lessee) to be directly related to the proposed development, including the location and size of such facilities and operations, and the land, labor, material, and energy requirements associated with such facilities and operations;

(3)

the environmental safeguards to be implemented on the outer Continental Shelf and how such safeguards are to be implemented;

(4)

all safety standards to be met and how such standards are to be met;

(5)

an expected rate of development and production and a time schedule for performance; and

(6)

such other relevant information as the Secretary may by regulation require.

(d)

Completeness Review of the Plan

(1)

Prior to commencing any activity under a development and production plan pursuant to any oil and gas lease issued or maintained under this Act, the lessee shall certify that the plan is consistent with the terms of the lease and that it is consistent with all statutory and regulatory requirements in effect on the date of issuance of the lease, and any regulations promulgated under this Act related to the conservation of resources after the date of lease issuance. The plan shall include all required information and documentation required under subsection (c).

(2)

The Secretary shall review the plan for completeness within 30 days of submission. If the Secretary finds that the plan is not complete, the Secretary shall notify the lessee with a detailed explanation of such modifications of such plan as are necessary to achieve completeness. The Secretary shall have 30 days to review a modified plan for completeness.

(e)

Review for Consistency of the Plan

(1)

After a determination that a plan is complete, the Secretary shall have 120 days to conduct a review of the plan, to ensure that it is consistent with the terms of the lease, and that it is consistent with all such statutory and regulatory requirements applicable to the lease. The review shall ensure that the plan is consistent with lease terms, and statutory and regulatory requirements applicable to the lease, related to national security or national defense, including any military operating stipulations or other restrictions. The Secretary shall seek the assistance of the Department of Defense in the conduct of the review of any plan prepared under this section for a lease containing military operating stipulations or other restrictions and shall accept the assistance of the Department of Defense in the conduct of the review of any plan prepared under this section for any other lease when the Secretary of Defense requests an opportunity to participate in the review. If the Secretary finds that the plan is not consistent, the Secretary shall notify the lessee with a detailed explanation of such modifications of such plan as are necessary to achieve consistency.

(2)

The Secretary shall have 120 days to review a modified plan.

(3)

The lessee shall not conduct any activities under the plan during any 120-day review period, or thereafter until the plan has been modified to achieve compliance as so notified.

(4)

After review by the Secretary provided for by this section, a lessee may operate pursuant to the plan without further review or approval by the Secretary.

(f)

Review of Revision of the Approved Plan

The lessee may submit to the Secretary any revision of a plan if the lessee determines that such revision will lead to greater recovery of oil and natural gas, improve the efficiency, safety, and environmental protection of the recovery operation, is the only means available to avoid substantial economic hardship to the lessee, or is otherwise not inconsistent with the provisions of this Act, to the extent such revision is consistent with protection of the human, marine, and coastal environments. The process to be used for the review of any such revision shall be the same as that set forth in subsections (d) and (e).

(g)

Cancellation of Lease on Failure to Submit Plan or Comply With a Plan

Whenever the owner of any lease fails to submit a plan in accordance with regulations issued under this section, or fails to comply with a plan, the lease may be canceled in accordance with section 5(c) and (d). Termination of a lease because of failure to comply with a plan, including required modifications or revisions, shall not entitle a lessee to any compensation.

(h)

Production and Transportation of Natural Gas; Submission of Plan to Federal Energy Regulatory Commission; Impact Statement

If any development and production plan submitted to the Secretary pursuant to this section provides for the production and transportation of natural gas, the lessee shall contemporaneously submit to the Federal Energy Regulatory Commission that portion of such plan that relates to the facilities for transportation of natural gas. The Secretary and the Federal Energy Regulatory Commission shall agree as to which of them shall prepare an environmental impact statement pursuant to the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) applicable to such portion of such plan, or conduct studies as to the effect on the environment of implementing it. Thereafter, the findings and recommendations by the agency preparing such environmental impact statement or conducting such studies pursuant to such agreement shall be adopted by the other agency, and such other agency shall not independently prepare another environmental impact statement or duplicate such studies with respect to such portion of such plan, but the Federal Energy Regulatory Commission, in connection with its review of an application for a certificate of public convenience and necessity applicable to such transportation facilities pursuant to section 7 of the Natural Gas Act (15 U.S.C. 717f), may prepare such environmental studies or statement relevant to certification of such transportation facilities as have not been covered by an environmental impact statement or studies prepared by the Secretary. The Secretary, in consultation with the Federal Energy Regulatory Commission, shall promulgate rules to implement this subsection, but the Federal Energy Regulatory Commission shall retain sole authority with respect to rules and procedures applicable to the filing of any application with the Commission and to all aspects of the Commission’s review of, and action on, any such application.

.

14.

Federal Energy Natural Resources Enhancement Fund Act of 2006

(a)

Findings

The Congress finds the following:

(1)

Energy and minerals exploration, development, and production on Federal onshore and offshore lands, including bio-based fuel, natural gas, minerals, oil, geothermal, and power from wind, waves, currents, and thermal energy, involves significant outlays of funds by Federal and State wildlife, fish, and natural resource management agencies for environmental studies, planning, development, monitoring, and management of wildlife, fish, air, water, and other natural resources.

(2)

State wildlife, fish, and natural resource management agencies are funded primarily through permit and license fees paid to the States by the general public to hunt and fish, and through Federal excise taxes on equipment used for these activities.

(3)

Funds generated from consumptive and recreational uses of wildlife, fish, and other natural resources currently are inadequate to address the natural resources related to energy and minerals development on Federal onshore and offshore lands.

(4)

Funds available to Federal agencies responsible for managing Federal onshore and offshore lands and Federal-trust wildlife and fish species and their habitats are inadequate to address the natural resources related to energy and minerals development on Federal onshore and offshore lands.

(5)

Receipts derived from sales, bonus bids, and royalties under the mineral leasing laws of the United States are paid to the Treasury through the Minerals Management Service of the Department of the Interior.

(6)

None of the receipts derived from sales, bonus bids, and royalties under the minerals leasing laws of the United States are paid to the Federal or State agencies to examine, monitor, and manage wildlife, fish, air, water, and other natural resources related to natural gas, oil, and mineral exploration and development.

(b)

Purposes

It is the purpose of this section to—

(1)

establish a fund for the monitoring and management of wildlife and fish, and their habitats, and air, water, and other natural resources related to energy and minerals development on Federal onshore and offshore lands;

(2)

make available receipts derived from sales, bonus bids, royalties, and fees from onshore and offshore gas, mineral, oil, and any additional form of energy and minerals development under the laws of the United States for the purposes of such fund;

(3)

distribute funds from such fund each fiscal year to the Secretary of the Interior and the States; and

(4)

use the distributed funds to secure the necessary trained workforce or contractual services to conduct environmental studies, planning, development, monitoring, and post-development management of wildlife and fish and their habitats and air, water, and other natural resources that may be related to bio-based fuel, gas, mineral, oil, wind, or other energy exploration, development, transportation, transmission, and associated activities on Federal onshore and offshore lands, including, but not limited to—

(A)

pertinent research, surveys, and environmental analyses conducted to identify any impacts on wildlife, fish, air, water, and other natural resources from energy and mineral exploration, development, production, and transportation or transmission;

(B)

projects to maintain, improve, or enhance wildlife and fish populations and their habitats or air, water, or other natural resources, including activities under the Endangered Species Act of 1973;

(C)

research, surveys, environmental analyses, and projects that assist in managing, including mitigating either onsite or offsite, or both, the impacts of energy and mineral activities on wildlife, fish, air, water, and other natural resources; and

(D)

projects to teach young people to live off the land.

(c)

Definitions

In this section:

(1)

Enhancement fund

The term Enhancement Fund means the Federal Energy Natural Resources Enhancement Fund established by subsection (d).

(2)

State

The term State means the Governor of the State.

(d)

Establishment and use of Federal Energy Natural Resources Enhancement Fund

(1)

Enhancement fund

There is established in the Treasury a separate account to be known as the Federal Energy Natural Resources Enhancement Fund.

(2)

Funding

The Secretary of the Treasury shall deposit in the Enhancement Fund—

(A)

such sums as are provided by sections 9(b)(5)(A)(ii), 9(b)(5)(B)(ii), 9(c)(4)(A)(ii), and 9(c)(4)(B)(ii) of the Outer Continental Shelf Lands Act, as amended by this Act;

(B)
(i)

during the period of October 1, 2006, through September 30, 2015, one percent of all sums paid into the Treasury under section 35 of the Mineral Leasing Act (30 U.S.C. 191), and

(ii)

beginning October 1, 2015, and thereafter, 2.5 percent of all sums paid into the Treasury under section 35 of the Mineral Leasing Act (30 U.S.C. 191); and

(C)
(i)

during the period of October 1, 2006, through September 30, 2015, one percent of all sums paid into the Treasury from receipts derived from bonus bids and royalties from other mineral leasing on public lands, and

(ii)

beginning October 1, 2015, and thereafter, 2.5 percent of all sums paid into the Treasury from receipts derived from bonus bids and royalties from other mineral leasing on public lands.

(3)

Investments

The Secretary of the Treasury shall invest the amounts deposited under paragraph (2) and all accrued interest on the amounts deposited under paragraph (2) only in interest bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States.

(4)

Payment to Secretary of the Interior

(A)

In general

Beginning with fiscal year 2007, and in each fiscal year thereafter, one-third of amounts deposited into the Enhancement Fund, together with the interest thereon, shall be available, without fiscal year limitations, to the Secretary of the Interior for use for the purposes described in (b)(4).

(B)

Withdrawals and transfer of funds

The Secretary of the Treasury shall withdraw such amounts from the Enhancement Fund as the Secretary of the Interior may request, subject to the limitation in (A), and transfer such amounts to the Secretary of the Interior to be used, at the discretion of the Secretary of the Interior, by the Minerals Management Service, the Bureau of Land Management, and the United States Fish and Wildlife Service for use for the purposes described in subsection (b)(4).

(5)

Payment to States

(A)

In general

Beginning with fiscal year 2007, and in each fiscal year thereafter, two-thirds of amounts deposited into the Enhancement Fund, together with the interest thereon, shall be available, without fiscal year limitations, to the States for use for the purposes described in (b)(4).

(B)

Withdrawals and transfer of funds

Within the first 90 days of each fiscal year, the Secretary of the Treasury shall withdraw amounts from the Enhancement Fund and transfer such amounts to the States based on the proportion of all receipts that were collected the previous fiscal year from Federal leases within the boundaries of each State and each State’s outer Continental Shelf Adjacent Zone as determined in accordance with section 4(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a)), as amended by this Act.

(C)

Use of payments by state

Each State shall use the payments made under subparagraph (B) only for carrying out projects and programs for the purposes described in (b)(4).

(D)

Encourage use of private funds by state

Each State shall use the payments made under subparagraph (B) to leverage private funds for carrying out projects for the purposes described in (b)(4).

(e)

Limitation on use

Amounts available under this section may not be used for the purchase of any interest in land.

(f)

Reports to Congress

(1)

In general

Beginning in fiscal year 2008 and continuing for each fiscal year thereafter, the Secretary of the Interior and each State receiving funds from the Enhancement Fund shall submit a report to the Committee on Energy and Natural Resources of the Senate and the Committee on Resources of the House of Representatives.

(2)

Required information

Reports submitted to the Congress by the Secretary of the Interior and States under this subsection shall include the following information regarding expenditures during the previous fiscal year:

(A)

A summary of pertinent scientific research and surveys conducted to identify impacts on wildlife, fish, and other natural resources from energy and mineral developments.

(B)

A summary of projects planned and completed to maintain, improve or enhance wildlife and fish populations and their habitats or other natural resources.

(C)

A list of additional actions that assist, or would assist, in managing, including mitigating either onsite or offsite, or both, the impacts of energy and mineral development on wildlife, fish, and other natural resources.

(D)

A summary of private (non-Federal) funds used to plan, conduct, and complete the plans and programs identified in paragraphs (2)(A) and (2)(B).

15.

Termination of effect of laws prohibiting the spending of appropriated funds for certain purposes

All provisions of existing Federal law prohibiting the spending of appropriated funds to conduct oil and natural gas leasing and preleasing activities, or to issue a lease to any person, for any area of the outer Continental Shelf shall have no force or effect.

16.

Outer Continental Shelf incompatible use

(a)

In general

No Federal agency may permit construction or operation (or both) of any facility, or designate or maintain a restricted transportation corridor or operating area on the Federal outer Continental Shelf or in State waters, that will be incompatible with, as determined by the Secretary of the Interior, oil and gas or natural gas leasing and substantially full exploration and production of tracts that are geologically prospective for oil or natural gas (or both).

(b)

Exceptions

Subsection (a) shall not apply to any facility, transportation corridor, or operating area the construction, operation, designation, or maintenance of which is or will be—

(1)

located in an area of the outer Continental Shelf that is unavailable for oil and gas or natural gas leasing by operation of law;

(2)

used for a military readiness activity (as defined in section 315(f) of Public Law 107–314; 16 U.S.C. 703 note); or

(3)

required in the national interest, as determined by the President.

17.

Repurchase of certain leases

(a)

Authority to Repurchase and Cancel Certain Leases

The Secretary of the Interior shall repurchase and cancel any Federal oil and gas, geothermal, coal, oil shale, tar sands, or other mineral lease, whether onshore or offshore, if the Secretary finds that such lease qualifies for repurchase and cancellation under the regulations authorized by this section.

(b)

Regulations

Not later than 365 days after the date of the enactment of this Act, the Secretary shall publish a final regulation stating the conditions under which a lease referred to in subsection (a) would qualify for repurchase and cancellation, and the process to be followed regarding repurchase and cancellation. Such regulation shall include, but not be limited to, the following:

(1)

The Secretary shall repurchase and cancel a lease after written request by the lessee upon a finding by the Secretary that—

(A)

a request by the lessee for a required permit or other approval complied with applicable law, except the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et seq.), and terms of the lease and such permit or other approval was denied;

(B)

a Federal agency failed to act on a request by the lessee for a required permit, other approval, or administrative appeal within a regulatory or statutory time-frame associated with the requested action, whether advisory or mandatory, or if none, within 180 days; or

(C)

a Federal agency attached a condition of approval, without agreement by the lessee, to a required permit or other approval if such condition of approval was not mandated by Federal statute or regulation in effect on the date of lease issuance, or was not specifically allowed under the terms of the lease.

(2)

A lessee shall not be required to exhaust administrative remedies regarding a permit request, administrative appeal, or other required request for approval for the purposes of this section.

(3)

The Secretary shall make a final agency decision on a request by a lessee under this section within 180 days of request.

(4)

Compensation to a lessee to repurchase and cancel a lease under this section shall be the amount that a lessee would receive in a restitution case for a material breach of contract.

(5)

Compensation shall be in the form of a check or electronic transfer from the Department of the Treasury from funds deposited into miscellaneous receipts under the authority of the same Act that authorized the issuance of the lease being repurchased.

(6)

Failure of the Secretary to make a final agency decision on a request by a lessee under this section within 180 days of request shall result in a 10 percent increase in the compensation due to the lessee if the lease is ultimately repurchased.

(c)

No Prejudice

This section shall not be interpreted to prejudice any other rights that the lessee would have in the absence of this section.

18.

Offsite environmental mitigation

Notwithstanding any other provision of law, any person conducting activities under the Mineral Leasing Act (30 U.S.C. 181 et seq.), the Geothermal Steam Act (30 U.S.C. 1001 et seq.), the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.), the Weeks Act (16 U.S.C. 552 et seq.), the General Mining Act of 1872 (30 U.S.C. 22 et seq.), the Materials Act of 1947 (30 U.S.C. 601 et seq.), or the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), may in satisfying any mitigation requirements associated with such activities propose mitigation measures on a site away from the area impacted and the Secretary of the Interior shall accept these proposed measures if the Secretary finds that they generally achieve the purposes for which mitigation measures appertained.

19.

Amendments to the Mineral Leasing Act

Section 17(g) of the Mineral Leasing Act (30 U.S.C. 226(g)) is amended to read as follows:

(g)

Regulation of Surface-Disturbing Activities

(1)

Regulation of surface-disturbing activities

The Secretary of the Interior, or for National Forest lands, the Secretary of Agriculture, shall regulate all surface-disturbing activities conducted pursuant to any lease issued under this Act, and shall determine reclamation and other actions as required in the interest of conservation of surface resources.

(2)

Submission of exploration plan; completion review; compliance review

(A)

Prior to beginning oil and gas exploration activities, a lessee shall submit an exploration plan to the Secretary of the Interior for review.

(B)

The Secretary shall review the plan for completeness within 10 days of submission.

(C)

In the event the exploration plan is determined to be incomplete, the Secretary shall notify the lessee in writing and specify the items or information needed to complete the exploration plan.

(D)

The Secretary shall have 10 days to review any modified exploration plan submitted by the lessee.

(E)

To be deemed complete, an exploration plan shall include, in the degree of detail to be determined by the Secretary by rule or regulation—

(i)

a drilling plan containing a description of the drilling program;

(ii)

the surface and projected completion zone location;

(iii)

pertinent geologic data;

(iv)

expected hazards, and proposed mitigation measures to address such hazards;

(v)

a schedule of anticipated exploration activities to be undertaken;

(vi)

a description of equipment to be used for such activities;

(vii)

a certification from the lessee stating that the exploration plan complies with all lease, regulatory and statutory requirements in effect on the date of the issuance of the lease and any regulations promulgated after the date of lease issuance related to the conservation of resources;

(viii)

evidence that the lessee has secured an adequate bond, surety, or other financial arrangement prior to commencement of any surface disturbing activity;

(ix)

a plan that details the complete and timely reclamation of the lease tract; and

(x)

such other relevant information as the Secretary may by regulation require.

(F)

Upon a determination that the exploration plan is complete, the Secretary shall have 30 days from the date the plan is deemed complete to conduct a review of the plan.

(G)

If the Secretary finds the exploration plan is not consistent with all statutory and regulatory requirements described in subparagraph (E)(vii), the Secretary shall notify the lessee with a detailed explanation of such modifications of the exploration plan as are necessary to achieve compliance.

(H)

The lessee shall not take any action under the exploration plan within a 30 day review period, or thereafter until the plan has been modified to achieve compliance as so notified.

(I)

After review by the Secretary provided by this subsection, a lessee may operate pursuant to the plan without further review or approval by the Secretary.

(3)

Plan revisions; conduct of exploration activities

(A)

If a significant revision of an exploration plan under this subsection is submitted to the Secretary, the process to be used for the review of such revision shall be the same as set forth in paragraph (1) of this subsection.

(B)

All exploration activities pursuant to any lease shall be conducted in accordance with an exploration plan that has been submitted to and reviewed by the Secretary or a revision of such plan.

(4)

Submission of development and production plan; completeness review; compliance review

(A)

Prior to beginning oil and gas development and production activities, a lessee shall submit a development and exploration plan to the Secretary of the Interior. Upon submission, such plans shall be subject to a review for completeness.

(B)

The Secretary shall review the plan for completeness within 30 days of submission.

(C)

In the event a development and production plan is determined to be incomplete, the Secretary shall notify the lessee in writing and specify the items or information needed to complete the plan.

(D)

The Secretary shall have 30 days to review for completeness any modified development and production plan submitted by the lessee.

(E)

To be deemed complete, a development and production plan shall include, in the degree of detail to be determined by the Secretary by rule or regulation—

(i)

a drilling plan containing a description of the drilling program;

(ii)

the surface and projected completion zone location;

(iii)

pertinent geologic data;

(iv)

expected hazards, and proposed mitigation measures to address such hazards;

(v)

a statement describing all facilities and operations proposed by the lessee and known by the lessee (whether or not owned or operated by such lessee) that shall be constructed or utilized in the development and production of oil or gas from the leases areas, including the location and site of such facilities and operations, the land, labor, material, and energy requirements associated with such facilities and operations;

(vi)

the general work to be performed;

(vii)

the environmental safeguards to be implemented in connection with the development and production and how such safeguards are to be implemented;

(viii)

all safety standards to be met and how such standards are to be met;

(ix)

an expected rate of development and production and a time schedule for performance;

(x)

a certification from the lessee stating that the development and production plan complies with all lease, regulatory, and statutory requirements in effect on the date of issuance of the lease, and any regulations promulgated after the date of lease issuance related to the conservation of resources;

(xi)

evidence that the lessee has secured an adequate bond, surety, or other financial arrangement prior to commencement of any surface disturbing activity;

(xii)

a plan that details the complete and timely reclamation of the lease tract; and

(xiii)

such other relevant information as the Secretary may by regulation require.

(F)

Upon a determination that the development and production plan is complete, the Secretary shall have 120 days from the date the plan is deemed complete to conduct a review of the plan.

(G)

If the Secretary finds the development and production plan is not consistent with all statutory and regulatory requirements described in subparagraph (E)(x), the Secretary shall notify the lessee with a detailed explanation of such modifications of the development and production plan as are necessary to achieve compliance.

(H)

The lessee shall not take any action under the development and production plan within a 120 day review period, or thereafter until the plan has been modified to achieve compliance as so notified.

(5)

Plan revisions; conduct of development and production activities

(A)

If a significant revision of a development and production plan under this subsection is submitted to the Secretary, the process to be used for the review of such revision shall be the same as set forth in paragraph (4) of this subsection.

(B)

All development and production activities pursuant to any lease shall be conducted in accordance with a development and production plan that has been submitted to and reviewed by the Secretary or a revision of such plan.

(6)

Cancellation of lease on failure to submit plan or comply with approved plan

Whenever the owner of any lease fails to submit a plan in accordance with regulations issued under this section, or fails to comply with a plan, the lease may be canceled in accordance with section 31. Termination of a lease because of failure to comply with a plan, including required modifications or revisions, shall not entitle a lessee to any compensation.

.

20.

Minerals management service

The bureau known as the Minerals Management Service in the Department of the Interior shall be known as the National Ocean Resources and Royalty Service.

21.

Authority to use decommissioned offshore oil and gas platforms and other facilities for artificial reef, scientific research, or other uses

(a)

Short title

This section may be cited as the Rigs to Reefs Act of 2006.

(b)

In general

The Outer Continental Shelf Lands Act (43 U.S.C. 1301 et seq.) is amended by inserting after section 9 the following:

10.

Use of decommissioned offshore oil and gas platforms and other facilities for artificial reef, scientific research, or other uses

(a)

In General

The Secretary shall issue regulations under which the Secretary may authorize use of an offshore oil and gas platform or other facility that is decommissioned from service for oil and gas purposes for an artificial reef, scientific research, or any other use authorized under section 8(p) or any other applicable Federal law.

(b)

Transfer Requirements

The Secretary shall not allow the transfer of a decommissioned offshore oil and gas platform or other facility to another person unless the Secretary is satisfied that the transferee is sufficiently bonded, endowed, or otherwise financially able to fulfill its obligations, including but not limited to—

(1)

ongoing maintenance of the platform or other facility;

(2)

any liability obligations that might arise;

(3)

removal of the platform or other facility if determined necessary by the Secretary; and

(4)

any other requirements and obligations that the Secretary may deem appropriate by regulation.

(c)

Plugging and Abandonment

The Secretary shall ensure that plugging and abandonment of wells is accomplished at an appropriate time.

(d)

Potential to Petition to Opt-Out of Regulations

An Adjacent State acting through a resolution of its legislature, with concurrence of its Governor, may preliminarily petition to opt-out of the application of regulations promulgated under this section to platforms and other facilities located in the area of its Adjacent Zone within 12 miles of the coastline. Upon receipt of the preliminary petition, the Secretary shall complete an environmental assessment that documents the anticipated environmental effects of approving the petition. The Secretary shall provide the environmental assessment to the State, which then has the choice of no action or confirming its petition by further action of its legislature, with the concurrence of its Governor. The Secretary is authorized to except such area from the application of such regulations, and shall approve any confirmed petition.

(e)

Limitation on Liability

A person that had used an offshore oil and gas platform or other facility for oil and gas purposes and that no longer has any ownership or control of the platform or other facility shall not be liable under Federal law for any costs or damages arising from such platform or other facility after the date the platform or other facility is used for any purpose under subsection (a), unless such costs or damages arise from—

(1)

use of the platform or other facility by the person for development or production of oil or gas; or

(2)

another act or omission of the person.

(f)

Other Leasing and Use not Affected

This section, and the use of any offshore oil and gas platform or other facility for any purpose under subsection (a), shall not affect—

(1)

the authority of the Secretary to lease any area under this Act; or

(2)

any activity otherwise authorized under this Act.

.

(c)

Deadline for Regulations

The Secretary of the Interior shall issue regulations under subsection (b) by not later than 180 days after the date of the enactment of this Act.

(d)

Study and Report on Effects of Removal of Platforms

Not later than one year after the date of enactment of this Act, the Secretary of the Interior, in consultation with other Federal agencies as the Secretary deems advisable, shall study and report to the Congress regarding how the removal of offshore oil and gas platforms and other facilities from the outer Continental Shelf would affect existing fish stocks and coral populations.

22.

Repeal of requirement to conduct comprehensive inventory of OCS oil and natural gas resources

The Energy Policy Act of 2005 (Public Law 109–58) is amended—

(1)

by repealing section 357 (119 Stat. 720; 42 U.S.C. 15912); and

(2)

in the table of contents in section 1(b), by striking the item relating to such section 357.

23.

Mining and petroleum schools

(a)

Federal Energy and Mineral Resources Professional Development Fund

(1)

Professional development fund

There is established in the Treasury a separate account to be known as the Federal Energy And Mineral Resources Professional Development Fund (in this section referred to as the Professional Development Fund).

(2)

Funding

The Secretary of the Treasury shall deposit in the Professional Development Fund—

(A)

such sums as are provided by sections 9(b)(5)(A)(iii), 9(b)(5)(B)(iii), 9(c)(4)(A)(iii), and 9(c)(4)(B)(iii) of the Outer Continental Shelf Lands Act, as amended by this Act;

(B)
(i)

during the period of October 1, 2006, through September 30, 2015, one percent of all sums paid into the Treasury under section 35 of the Mineral Leasing Act (30 U.S.C. 191), and

(ii)

beginning October 1, 2015, and thereafter, 2.5 percent of all sums paid into the Treasury under section 35 of the Mineral Leasing Act (30 U.S.C. 191);

(C)
(i)

during the period of October 1, 2006, through September 30, 2015, one percent of all sums paid into the Treasury from receipts derived from bonus bids and royalties from other mineral leasing on public lands, and

(ii)

beginning October 1, 2015, and thereafter, 2.5 percent of all sums paid into the Treasury from receipts derived from bonus bids and royalties from other mineral leasing on public lands;

(D)

donations received under paragraph (4);

(E)

amounts referred to in section 2325 of the Revised Statutes; and

(F)

funds received under section 10 of the Energy and Mineral Schools Reinvestment Act, as amended by this Act.

(3)

Investments

The Secretary of the Treasury shall invest the amounts deposited under paragraph (2) and all accrued interest on the amounts deposited under paragraph (2) only in interest bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States.

(4)

Donations

The Secretary of the Interior may solicit and accept donations of funds for deposit into the Professional Development Fund.

(5)

Availability to Secretary of the Interior

(A)

In general

Beginning with fiscal year 2007, and in each fiscal year thereafter, the amounts deposited into the Professional Development Fund, together with the interest thereon, shall be available, without fiscal year limitations, to the Secretary of the Interior for use to carry out the Energy and Mineral Schools Reinvestment Act.

(B)

Withdrawals and transfer of funds

The Secretary of the Treasury shall withdraw such amounts from the Professional Development Fund as the Secretary of the Interior may request and transfer such amounts to the Secretary of the Interior to be used, at the discretion of the Secretary to carry out the Energy and Mineral Schools Reinvestment Act.

(b)

Maintenance and Restoration of Existing and Historic Petroleum and Mining Engineering Programs

Public Law 98-409 (30 U.S.C. 1221 et seq.) is amended to read as follows:

1.

Short title

This Act may be cited as the Energy and Mineral Schools Reinvestment Act.

2.

Policy

It is the policy of the United States to maintain the human capital needed to preserve and foster the economic, energy, and mineral resources security of the United States. The petroleum and mining engineering programs and the applied geology and geophysics programs at State chartered schools, universities, and institutions that produce human capital are national assets and should be assisted with Federal funds to ensure their continued health and existence.

3.

Maintaining and restoring historic and existing petroleum and mining engineering education programs

(a)

Using the funds in the Federal Energy And Mineral Resources Professional Development Fund, the Secretary of the Interior (in this Act referred to as the Secretary) shall provide funds to each historic and existing State-chartered recognized petroleum or mining school to assist such schools, universities, and institutions in maintaining programs in petroleum, mining, and mineral engineering education and research. All funds shall be directed only to these programs and shall be subject to the conditions of this section. Such funds shall not be less than 33 percent of the annual outlay of funds under this Act.

(b)

In this Act the term historic and existing State-chartered recognized petroleum or mining school means a school, university, or educational institution with the presence of an engineering program meeting the specific program criteria, established by the member societies of ABET, Inc., for petroleum, mining, or mineral engineering and that is accredited on the date of enactment of the Deep Ocean Energy Resources Act of 2006 by ABET, Inc.

(c)

It shall be the duty of each school, university, or institution receiving funds under this section to provide for and enhance the training of undergraduate and graduate petroleum, mining, and mineral engineers through research, investigations, demonstrations, and experiments. All such work shall be carried out in a manner that will enhance undergraduate education.

(d)

Each school, university, or institution receiving funds under this Act shall maintain the program for which the funds are provided for 10 years after the date of the first receipt of such funds and take steps agreed to by the Secretary to increase the number of undergraduate students enrolled in and completing the programs of study in petroleum, mining, and mineral engineering.

(e)

The research, investigation, demonstration, experiment, and training authorized by this section may include development and production of conventional and non-conventional fuel resources, the production of metallic and non-metallic mineral resources including industrial mineral resources, and the production of stone, sand, and gravel. In all cases the work carried out with funds made available under this Act shall include a significant opportunity for participation by undergraduate students.

(f)

Research funded by this Act related to energy and mineral resource development and production may include studies of petroleum, mining, and mineral extraction and immediately related beneficiation technology; mineral economics, reclamation technology and practices for active operations, and the development of re-mining systems and technologies to facilitate reclamation that fosters the ultimate recovery of resources at abandoned petroleum, mining, and aggregate production sites.

(g)

Grants for basic science and engineering studies and research shall not require additional participation by funding partners. Grants for studies to demonstrate the proof of concept for science and engineering or the demonstration of feasibility and implementation shall include participation by industry and may include funding from other Federal agencies.

(h)
(1)

No funds made available under this section shall be applied to the acquisition by purchase or lease of any land or interests therein, or the rental, purchase, construction, preservation, or repair of any building.

(2)

Funding made available under this section may be used with the express approval of the Secretary for proposals that will provide for maintaining or upgrading of existing laboratories and laboratory equipment. Funding for such maintenance shall not be used for university overhead expenses.

(3)

Funding made available under this Act may be used for maintaining and upgrading mines and oil and gas drilling rigs owned by a school, university, or institution described in this section that are used for undergraduate and graduate training and worker safety training. All requests for funding such mines and oil and gas drilling rigs must demonstrate that they have been owned by the school, university, or institution for 5 years prior to the date of enactment of the Deep Ocean Energy Resources Act of 2006 and have been actively used for instructional or training purposes during that time.

(4)

Any funding made available under this section for research, investigation, demonstration, experiment, or training shall not be used for university overhead charges in excess of 10 percent of the amount authorized by the Secretary.

4.

Former and new petroleum and mining engineering programs

A school, university, or educational institution that formerly met the requirements of section 3(b) immediately before the date of the enactment of the Deep Ocean Energy Resources Act of 2006, or that seeks to establish a new program described in section 3(b), shall be eligible for funding under this Act only if it—

(1)

establishes a petroleum, mining, or mineral engineering program that meets the specific program criteria and is accredited as such by ABET, Inc.;

(2)

agrees to the conditions of subsections (c) through (h) of section 3 and the Secretary, as advised by the Committee established by section 11, determines that the program will strengthen and increase the number of nationally available, well- qualified faculty members in petroleum, mining, and mineral engineering; and

(3)

agrees to maintain the accredited program for 10 years after the date of the first receipt of funds under this Act.

5.

Funding of consortia of historic and existing schools

Where appropriate, the Secretary may make funds available to consortia of schools, universities, or institutions described in sections 3, 4, and 6, including those consortia that include schools, universities, or institutions that are ineligible for funds under this Act if those schools, universities, or institutions, respectively, have skills, programs, or facilities specifically identified as needed by the consortia to meet the necessary expenses for purposes of—

(1)

specific energy and mineral research projects of broad application that could not otherwise be undertaken, including the expenses of planning and coordinating regional petroleum, geothermal, mining, and mineral engineering or beneficiation projects by two or more schools; and

(2)

research into any aspects of petroleum, geothermal, mining, or mineral engineering or beneficiation problems, including but not limited to exploration, that are related to the mission of the Department of the Interior and that are considered by the Committee to be desirable.

6.

Support for schools with energy and mineral resource programs in petroleum and mineral exploration geology, petroleum geophysics, or mining geophysics

(a)

Twenty percent of the annual outlay of funds under this Act may be granted to schools, universities, and institutions other than those described in sections 3 and 4.

(b)

The Secretary, as advised by the Committee established by section 11, shall determine the eligibility of a college or university to receive funding under this Act using criteria that include—

(1)

the presence of a substantial program of undergraduate and graduate geoscience instruction and research in one or more of the following specialties: petroleum geology, geothermal geology, mineral exploration geology, economic geology, industrial minerals geology, mining geology, petroleum geophysics, mining geophysics, geological engineering, or geophysical engineering that has a demonstrated history of achievement;

(2)

evidence of institutional commitment for the purposes of this Act that includes a significant opportunity for participation by undergraduate students in research;

(3)

evidence that such school, university, or institution has or can obtain significant industrial cooperation in activities within the scope of this Act;

(4)

agreement by the school, university, or institution to maintain the programs for which the funding is sought for the 10-year period beginning on the date the school, university, or institution first receives such funds; and

(5)

requiring that such funding shall be for the purposes set forth in subsections (c) through (h) of section 3 and subject to the conditions set forth in section 3(h).

7.

Designation of funds for scholarships and fellowships

(a)

The Secretary shall utilize 19 percent of the annual outlay of funds under this Act for the purpose of providing merit-based scholarships for undergraduate education, graduate fellowships, and postdoctoral fellowships.

(b)

In order to receive a scholarship or a graduate fellowship, an individual student must be a lawful permanent resident of the United States or a United States citizen and must agree in writing to complete a course of studies and receive a degree in petroleum, mining, or mineral engineering, petroleum geology, geothermal geology, mining and economic geology, petroleum and mining geophysics, or mineral economics.

(c)

The regulations required by section 9 shall require that an individual, in order to retain a scholarship or graduate fellowship, must continue in one of the course of studies listed in subsection (b) of this section, must remain in good academic standing, as determined by the school, institution, or university and must allow for reinstatement of the scholarship or graduate fellowship by the Secretary, upon the recommendation of the school or institution. Such regulations may also provide for recovery of funds from an individual who fails to complete any of the courses of study listed in subsection (b) of this section after notice that such completion is a requirement of receipt funding under this Act.

8.

Funding criteria for institutions

(a)

Each application for funds under this Act shall state, among other things, the nature of the project to be undertaken; the period during which it will be pursued; the qualifications of the personnel who will direct and conduct it; the estimated costs; the importance of the project to the Nation, region, or States concerned; its relation to other known research projects theretofore pursued or being pursued; the extent to which the proposed project will maximize the opportunity for the training of undergraduate petroleum, mining, and mineral engineers; geologists and geophysicists; and the extent of participation by nongovernmental sources in the project.

(b)

No funds shall be made available under this Act except for a project approved by the Secretary. All funds shall be made available upon the basis of merit of the project, the need for the knowledge that it is expected to produce when completed, and the opportunity it provides for the undergraduate training of individuals as petroleum, mining, and mineral engineers, geologists, and geophysicists.

(c)

Funds available under this Act shall be paid at such times and in such amounts during each fiscal year as determined by the Secretary, and upon vouchers approved by the Secretary. Each school, university, or institution that receives funds under this Act shall—

(1)

establish its plan to provide for the training of individuals as petroleum, mining, and mineral engineers, geologists, and geophysicists under a curriculum appropriate to the field of mineral resources and mineral engineering and related fields;

(2)

establish policies and procedures that assure that Federal funds made available under this Act for any fiscal year will supplement and, to the extent practicable, increase the level of funds that would, in the absence of such Federal funds, be made available for purposes of this Act, and in no case supplant such funds; and

(3)

have an officer appointed by its governing authority who shall receive and account for all funds paid under this Act and shall make an annual report to the Secretary on or before the first day of September of each year, on work accomplished and the status of projects underway, together with a detailed statement of the amounts received under this Act during the preceding fiscal year, and of its disbursements on schedules prescribed by the Secretary.

(d)

If any of the funds received by the authorized receiving officer of a program under this Act are found by the Secretary to have been improperly diminished, lost, or misapplied, such funds shall be recovered by the Secretary.

(e)

Schools, universities, and institutions receiving funds under this Act are authorized and encouraged to plan and conduct programs under this Act in cooperation with each other and with such other agencies, business enterprises and individuals.

9.

Duties of Secretary

(a)

The Secretary, acting through the Assistant Secretary for Land and Minerals Management, shall administer this Act and shall prescribe such rules and regulations as may be necessary to carry out its provisions not later than 1 year after the enactment of the Deep Ocean Energy Resources Act of 2006.

(b)
(1)

There is established in the Department of the Interior, under the supervision of the Assistant Secretary for Land and Minerals Management, an office to be known as the Office of Petroleum and Mining Schools (hereafter in this Act referred to as the Office) to administer the provisions of this Act. There shall be a Director of the Office who shall be a member of the Senior Executive Service. The position of the Director shall be allocated from among the existing Senior Executive Service positions at the Department of the Interior and shall be a career reserved position as defined in section 3132(a)(8) of title 5, United States Code.

(2)

The Director is authorized to appoint a Deputy Director and to employ such officers and employees as may be necessary to enable the Office to carry out its functions, not to exceed fifteen. Such appointments shall be made from existing positions at the Department of the Interior, and shall be subject to the provisions of title 5, United States Code, governing appointments in the competitive service. Such positions shall be paid in accordance with the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates.

(3)

In carrying out his or her functions, the Director shall assist and advise the Secretary and the Committee established by section 11 of this Act by

(A)

providing professional and administrative staff support for the Committee including recordkeeping and maintaining minutes of all Committee and subcommittee meetings;

(B)

coordinating the activities of the Committee with Federal agencies and departments, and the schools, universities, and institutions to which funds are provided under this Act;

(C)

maintaining accurate records of funds disbursed for all scholarships, fellowships, research grants, and grants for career technical education purposes;

(D)

preparing any regulations required to implement this Act;

(E)

conducting site visits at schools, universities, and institutions receiving funding under this Act; and

(F)

serving as a central repository for reports and clearing house for public information on research funded by this Act.

(4)

The Director or an employee of the Office shall be present at each meeting of the Committee established by section 11 or a subcommittee of such Committee.

(5)

The Director is authorized to contract with public or private agencies, institutions, and organizations and with individuals without regard to section 3324(a) and (b) of title 31, United States Code, and section 5 of title 41, United States Code, in carrying out his or her functions.

(6)

As needed the Director shall ascertain whether the requirements of this Act have been met by schools, universities, institutions, and individuals, including the payment of any revenues derived from patents into the fund created by section 23(a) of this Act as required by section 10(d).

(c)

The Secretary, acting through the Office of Petroleum and Mining Schools, shall furnish such advice and assistance as will best promote the purposes of this Act, shall participate in coordinating research, investigations, demonstrations, and experiments initiated under this Act, shall indicate to schools, universities, and institutions receiving funds under this Act such lines of inquiry that seem most important, and shall encourage and assist in the establishment and maintenance of cooperation between such schools, universities, and institutions, other research organizations, the Department of the Interior, and other Federal agencies.

(d)

The Secretary shall establish procedures—

(1)

to ensure that each employee and contractor of the Office established by this section and each member of the committee established by section 11 of this Act shall disclose to the Secretary any financial interests in or financial relationships with schools, universities, institutions or individuals receiving funds, scholarships or fellowships under this Act;

(2)

to require any employee, contractor, or member of the committee with a financial relationship disclosed under paragraph (1) to recuse themselves from—

(A)

any recommendation or decision regarding the awarding of funds, scholarships or fellowships; or

(B)

any review, report, analysis or investigation regarding compliance with the provisions of this Act by a school, university, institution or any individual.

(e)

On or before the first day of July of each year beginning after the date of enactment of this sentence, schools, universities, and institutions receiving funds under this Act shall certify compliance with this Act and upon request of the Director of the office established by this section provide documentation of such compliance.

(f)

An individual granted a scholarship or fellowship with funds provided under this Act shall through their respective school, university, or institution, advise the Director of the office established by this Act of progress towards completion of the course of studies and upon the awarding of the degree within 30 days after the award.

(g)

The regulations required by this section shall include a preference for veterans and service members who have received or will receive either the Afghanistan Campaign Medal or the Iraq Campaign Medal as authorized by Public Law 108–234, and Executive Order 13363.

10.

Coordination

(a)

Nothing in this Act shall be construed to impair or modify the legal relationship existing between any of the schools, universities, and institutions under whose direction a program is established with funds provided under this Act and the government of the State in which it is located. Nothing in this Act shall in any way be construed to authorize Federal control or direction of education at any school, university, or institution.

(b)

The programs authorized by this Act are intended to enhance the Nation’s petroleum, mining, and mineral engineering education programs and to enhance educational programs in petroleum and mining exploration and to increase the number of individuals enrolled in and completing these programs. To achieve this intent, the Secretary and the Committee established by section 11 shall receive the continuing advice and cooperation of all agencies of the Federal Government concerned with the identification, exploration, and development of energy and mineral resources.

(c)

Nothing in this Act is intended to give or shall be construed as giving the Secretary any authority over mining and mineral resources research conducted by any agency of the Federal Government, or as repealing or diminishing existing authorities or responsibilities of any agency of the Federal Government to plan and conduct, contract for, or assist in research in its area of responsibility and concern with regard to mining and mineral resources.

(d)

The schools, universities, and institutions receiving funding under this Act shall make detailed reports to the Office of Petroleum and Mining Schools on projects completed, in progress, or planned with funds provided under this Act. All such reports shall available to the public on not less than an annual basis through the Office of Petroleum and Mining Schools. All uses, products, processes, patents, and other developments resulting from any research, demonstration, or experiment funded in whole or in part under this Act shall be made available promptly to the general public, subject to exception or limitation, if any, as the Secretary may find necessary in the interest of national security. Schools, universities, and institutions receiving patents for inventions funded in whole or in part under this Act shall be governed by the applicable Federal law, except that one percent of gross annual revenues due to the holders of the patents that are derived from such patents shall be paid by the holders of the patents to the Federal Energy and Mineral Resources Professional Development Fund established by section 23(a) of the Deep Ocean Energy Resources Act of 2006.

11.

Committee on Petroleum, Mining, and Mineral Engineering and Energy and Mineral Resource Education

(a)

The Secretary shall appoint a Committee on Petroleum, Mining, and Mineral Engineering and Energy and Mineral Resource Education composed of—

(1)

the Assistant Secretary of the Interior responsible for land and minerals management and not more than 16 other persons who are knowledgeable in the fields of mining and mineral resources research, including 2 university administrators one of whom shall be from historic and existing petroleum and mining schools; a community, technical, or tribal college administrator; a career technical education educator; 6 representatives equally distributed from the petroleum, mining, and aggregate industries; a working miner; a working oilfield worker; a representative of the Interstate Oil and Gas Compact Commission; a representative from the Interstate Mining Compact Commission; a representative from the Western Governors Association; a representative of the State geologists, and a representative of a State mining and reclamation agency. In making these 16 appointments, the Secretary shall consult with interested groups.

(2)

The Assistant Secretary for Land and Minerals Management, in the capacity of the Chairman of the Committee, may have present during meetings of the Committee representatives of Federal agencies with responsibility for energy and minerals resources management, energy and mineral resource investigations, energy and mineral commodity information, international trade in energy and mineral commodities, mining safety regulation and mine safety research, and research into the development, production, and utilization of energy and mineral commodities. These representatives shall serve as technical advisors to the committee and shall have no voting responsibilities.

(b)

The Committee shall consult with, and make recommendations to, the Secretary on all matters relating to funding energy and mineral resources research, the awarding of scholarships and fellowships and allocation of funding made under this Act. The Secretary shall consult with and carefully consider recommendations of the Committee in such matters.

(c)

Committee members, other than officers or employees of Federal, State, or local governments, shall be, for each day (including traveltime) during which they are performing Committee business, paid at a rate fixed by the Secretary but not in excess of the daily equivalent of the maximum rate of pay for level IV of the Executive Schedule under section 5136 of title 5, United States Code, and shall be fully reimbursed for travel, subsistence, and related expenses.

(d)

The Committee shall be chaired by the Assistant Secretary of the Interior responsible for land and minerals management. There shall also be elected a Vice Chairman by the Committee from among the members referred to in this section. The Vice Chairman shall perform such duties as are determined to be appropriate by the committee, except that the Chairman of the Committee must personally preside at all meetings of the full Committee. The Committee may organize itself into such subcommittees as the Committee may deem appropriate.

(e)

Following completion of the report required by section 385 of the Energy Policy Act of 2005, the Committee shall consider the recommendations of the report, ongoing efforts in the schools, universities, and institutions receiving funding under this Act, the Federal and State Governments, and the private sector, and shall formulate and recommend to the Secretary a national plan for a program utilizing the fiscal resources provided under this Act. The Committee shall submit such plan to the Secretary for approval. Upon approval, the plan shall guide the Secretary and the Committee in their actions under this Act.

(f)

Section 10 of the Federal Advisory Committee Act (5 U.S.C. App. 2) shall not apply to the Committee.

12.

Career technical education

(a)

Up to 25 percent of the annual outlay of funds under this Act may be granted to schools or institutions including, but not limited to, colleges, universities, community colleges, tribal colleges, technical institutes, and secondary schools, other than those described in sections 3, 4, 5, and 6.

(b)

The Secretary, as advised by the Committee established under section 11, shall determine the eligibility of a school or institution to receive funding under this section using criteria that include—

(1)

the presence of a State-approved program in mining engineering technology, petroleum engineering technology, industrial engineering technology, or industrial technology that—

(A)

is focused on technology and its use in energy and mineral production and related maintenance, operational safety, or energy infrastructure protection and security;

(B)

prepares students for advanced or supervisory roles in the mining industry or the petroleum industry; and

(C)

grants either an associate's degree or a baccalaureate degree in one of the subjects listed in subparagraph (A);

(2)

the presence of a program, including a secondary school vocational education program or career academy, that provides training for individuals entering the petroleum, coal mining, or mineral mining industries; or

(3)

the presence of a State-approved program of career technical education at a secondary school, offered cooperatively with a community college in one of the industrial sectors of—

(A)

agriculture, forestry, or fisheries;

(B)

utilities;

(C)

construction;

(D)

manufacturing; and

(E)

transportation and warehousing.

(c)

Schools or institutions receiving funds under this section must show evidence of an institutional commitment for the purposes of career technical education and provide evidence that the school or institution has received or will receive industry cooperation in the form of equipment, employee time, or donations of funds to support the activities that are within the scope of this section.

(d)

Schools or institutions receiving funds under this section must agree to maintain the programs for which the funding is sought for a period of 10 years beginning on the date the school or institution receives such funds, unless the Secretary finds that a shorter period of time is appropriate for the local labor market or is required by State authorities.

(e)

Schools or institutions receiving funds under this section may combine these funds with State funds, and other Federal funds where allowed by law, to carry out programs described in this section, however the use of the funds received under this section must be reported to the Secretary not less than annually.

13.

Department of the Interior workforce enhancement

(a)

Physical science, engineering and technology scholarship program

(1)

From the funds made available to carry out this section, the Secretary shall use 30 percent of that amount to provide financial assistance for education in physical sciences, engineering, and engineering or industrial technology and disciplines that, as determined by the Secretary, are critical to the functions of the Department of the Interior and are needed in the Department of the Interior workforce.

(2)

The Secretary of the Interior may award a scholarship in accordance with this section to a person who—

(A)

is a citizen of the United States;

(B)

is pursuing an undergraduate or advanced degree in a critical skill or discipline described in paragraph (1) at an institution of higher education; and

(C)

enters into a service agreement with the Secretary of the Interior as described in subsection (e).

(3)

The amount of the financial assistance provided under a scholarship awarded to a person under this subsection shall be the amount determined by the Secretary of the Interior as being necessary to pay all educational expenses incurred by that person, including tuition, fees, cost of books, laboratory expenses, and expenses of room and board. The expenses paid, however, shall be limited to those educational expenses normally incurred by students at the institution of higher education involved.

(b)

Scholarship program for students attending minority serving higher education institutions

(1)

From the funds made available to carry out this section, the Secretary shall use 25 percent of that amount to award scholarships in accordance with this section to persons who—

(A)

are enrolled in a Minority Serving Higher Education Institutions.

(B)

are citizens of the United States;

(C)

are pursuing an undergraduate or advanced degree in agriculture, engineering, engineering or industrial technology, or physical sciences, or other discipline that is found by the Secretary to be critical to the functions of the Department of the Interior and are needed in the Department of the Interior workforce; and

(D)

enter into a service agreement with the Secretary of the Interior as described in subsection (e).

(2)

The amount of the financial assistance provided under a scholarship awarded to a person under this subsection shall be the amount determined by the Secretary of the Interior as being necessary to pay all educational expenses incurred by that person, including tuition, fees, cost of books, laboratory expenses, and expenses of room and board. The expenses paid, however, shall be limited to those educational expenses normally incurred by students at the institution of higher education involved.

(c)

Education partnerships with minority serving higher education institutions

(1)

The Secretary shall require the director of each Bureau and Office, to foster the participation of Minority Serving Higher Education Institutions in any regulatory activity, land management activity, science activity, engineering or industrial technology activity, or engineering activity carried out by the Department of the Interior.

(2)

From the funds made available to carry out this section, the Secretary shall use 25 percent of that amount to support activities at Minority Serving Higher Education Institutions by—

(A)

funding faculty and students in these institutions in collaborative research projects that are directly related to the Departmental or Bureau missions;

(B)

allowing equipment transfer to Minority Serving Higher Education Institutions as a part of a collaborative research program directly related to a Departmental or Bureau mission;

(C)

allowing faculty and students at these Minority Serving Higher Education Institutions to participate Departmental and Bureau training activities;

(D)

funding paid internships in Departmental and Bureau facilities for students at Minority Serving Higher Education Institutions;

(E)

assigning Departmental and Bureau personnel to positions located at Minority Serving Higher Educational Institutions to serve as mentors to students interested in a science, technology or engineering disciplines related to the mission of the Department or the Bureaus.

(d)

Kindergarten through grade twelve science education enhancement program

(1)

From the funds made available to carry out this section, the Secretary shall use 20 percent of that amount to support activities designed to enhance the knowledge and expertise of teachers of basic sciences, mathematics, engineering and technology in Kindergarten through Grade Twelve programs.

(2)

The Secretary is authorized to—

(A)

support competitive events for students under the supervision of teachers that are designed to encourage student interest and knowledge in science, engineering, technology and mathematics;

(B)

support competitively-awarded, peer-reviewed programs to promote professional development for mathematics, science, engineering and technology teachers who teach in grades from kindergarten through grade 12;

(C)

support summer internships at Department facilities, for mathematics, science, engineering and technology teachers who teach in grades from kindergarten through grade 12; and

(D)

sponsor and assist in sponsoring educational and teacher training activities in subject areas identified as critical skills.

(e)

Service agreement for recipients of assistance

(1)

To receive financial assistance under subsection (a) and subsection (b) of this section—

(A)

in the case of an employee of the Department of the Interior, the employee shall enter into a written agreement to continue in the employment of the department for the period of obligated service determined under paragraph (2); and

(B)

in the case of a person not an employee of the Department of the Interior, the person shall enter into a written agreement to accept and continue employment in the Department of the Interior for the period of obligated service determined under paragraph (2).

(2)

For the purposes of this section, the period of obligated service for a recipient of a scholarship under this section shall be the period determined by the Secretary of the Interior as being appropriate to obtain adequate service in exchange for the financial assistance provided under the scholarship. In no event may the period of service required of a recipient be less than the total period of pursuit of a degree that is covered by the scholarship. The period of obligated service is in addition to any other period for which the recipient is obligated to serve in the civil service of the United States.

(3)

An agreement entered into under this subsection by a person pursuing an academic degree shall include any terms and conditions that the Secretary of the Interior determines necessary to protect the interests of the United States or otherwise appropriate for carrying out this section.

(f)

Refund for period of unserved obligated service

(1)

A person who voluntarily terminates service before the end of the period of obligated service required under an agreement entered into under subsection (e) shall refund to the United States an amount determined by the Secretary of the Interior as being appropriate to obtain adequate service in exchange for financial assistance.

(2)

An obligation to reimburse the United States imposed under paragraph (1) is for all purposes a debt owed to the United States.

(3)

The Secretary of the Interior may waive, in whole or in part, a refund required under paragraph (1) if the Secretary determines that recovery would be against equity and good conscience or would be contrary to the best interests of the United States.

(4)

A discharge in bankruptcy under title 11, United States Code, that is entered less than five years after the termination of an agreement under this section does not discharge the person signing such agreement from a debt arising under such agreement or under this subsection.

(g)

Relationship to other programs

The Secretary of the Interior shall coordinate the provision of financial assistance under the authority of this section with the provision of financial assistance under the authorities provided in this Act in order to maximize the benefits derived by the Department of Interior from the exercise of all such authorities.

(h)

Report

Not later than September 1 of each year, the Secretary of the Interior shall submit to the Committee on Resources of the House of Representatives and the Committee on Energy and Natural Resources of the Senate a report on the status of the assistance program carried out under this section. The report shall describe the programs within the Department designed to recruit and retain a workforce on a short-term basis and on a long-term basis.

(i)

Definitions

As used in this section:

(1)

The term Minority Serving Higher Education Institutions means a Hispanic-serving institution, historically Black college or university, Alaska Native-serving institution, or tribal college.

(2)

The term Hispanic-serving institution has the meaning given the term in section 502(a) of the Higher Education Act of 1965 (20 U.S.C. 1101a(a)).

(3)

The term historically Black college or university has the meaning given the term part B institution in section 322 of the Higher Education Act of 1965 (20 U.S.C. 1061).

(4)

The term tribal college has the meaning given the term tribally controlled college or university in section 2(a) of the Tribally Controlled College Assistance Act of 1978 (25 U.S.C. 1801(a)).

(5)

The term institution of higher education has the meaning given such term in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001).

(6)

The term Alaska Native-serving institution has the meaning given the term in section 317 of the Higher Education Act of 1965 (20 U.S.C. 1059d).

(j)

Funding

The Secretary shall spend 3 percent of the annual outlay under this Act to implement this section not to exceed $10,000,000.

.

24.

Onshore and offshore mineral lease fees

Except as otherwise provided in this Act, the Department of the Interior is prohibited from charging fees applicable to actions on Federal onshore and offshore oil and gas, coal, geothermal, and other mineral leases, including transportation of any production from such leases, if such fees were not established in final regulations prior to the date of issuance of the lease.

25.

OCS regional headquarters

The headquarters for the Gulf of Mexico Region shall permanently be located within the State of Louisiana within 25 miles of the center of Jackson Square, New Orleans, Louisiana. Further, not later than July 1, 2008, the Secretary of the Interior shall establish the headquarters for the Atlantic OCS Region and the headquarters for the Pacific OCS Region within a State bordering the Atlantic OCS Region and a State bordering the Pacific OCS Region, respectively, from among the States bordering those Regions, that petitions by no later than January 1, 2008, for leasing, for oil and gas or natural gas, covering at least 40 percent of the area of its Adjacent Zone within 100 miles of the coastline. Such Atlantic and Pacific OCS Regions headquarters shall be located within 25 miles of the coastline and each MMS OCS regional headquarters shall be the permanent duty station for all Minerals Management Service personnel that on a daily basis spend on average 60 percent or more of their time in performance of duties in support of the activities of the respective Region, except that the Minerals Management Service may house regional inspection staff in other locations. Each OCS Region shall each be led by a Regional Director who shall be an employee within the Senior Executive Service.

26.

National GEO Fund Act of 2006

(a)

Short title

This section may be cited as the National Geo Fund Act of 2006.

(b)

Purposes

The purpose of this section is to—

(1)

establish a fund to provide funding for the management of geologic programs, geologic mapping, geophysical and other seismic studies, seismic monitoring programs, and the preservation and use of geologic and geophysical data, geothermal and geopressure energy resource management, unconventional energy resources management, and renewable energy management associated with ocean wave, current, and thermal resources;

(2)

make available receipts derived from sales, bonus bids, royalties, and fees from onshore and offshore gas, minerals, oil, and any additional form of energy exploration and development under the laws of the United States for the purposes of the such fund;

(3)

distribute funds from such fund each fiscal year to the Secretary of the Interior and the States; and

(4)

use the distributed funds to manage activities conducted under this section, and to secure the necessary trained workforce, contractual services, and other support, including maintenance and capital investments, to perform the functions and activities described in paragraph (1).

(c)

Definitions

In this section:

(1)

Geo Fund

The term Geo Fund means the National Geo Fund established by subsection (d).

(2)

State

The term State means the agency of a State designated by its Governor or State law to perform the functions and activities described in subsection (b)(1).

(d)

Establishment and use of the Geo Fund

(1)

Geo fund

There is established in the Treasury a separate account to be known as the National Geo Fund.

(2)

Funding

The Secretary of the Treasury shall deposit in the Geo Fund—

(A)

such sums as are provided by sections 9(b)(5)(A)(iv), 9(b)(5)(B)(iv), 9(c)(4)(A)(iv), and 9(c)(4)(B)(iv) of the Outer Continental Shelf Lands Act, as amended by this Act;

(B)
(i)

during the period of October 1, 2006, through September 30, 2015, one percent of all sums paid into the Treasury under section 35 of the Mineral Leasing Act (30 U.S.C. 191), and

(ii)

beginning October 1, 2015, and thereafter, 2.5 percent of all sums paid into the Treasury under section 35 of the Mineral Leasing Act (30 U.S.C. 191);

(C)
(i)

during the period of October 1, 2006, through September 30, 2015, one percent of all sums paid into the Treasury from receipts derived from bonus bids and royalties from other mineral leasing on public lands, and

(ii)

beginning October 1, 2015, and thereafter, 2.5 percent of all sums paid into the Treasury from receipts derived from bonus bids and royalties from other mineral leasing on public lands; and

(D)

$65,000,000 from outer Continental Shelf bonus bids, royalties, and conservation of resources fees received in fiscal year 2007, and $50,000,000 from outer Continental Shelf bonus bids, royalties, and conservation of resources fees received in each of fiscal years 2008, 2009, 2010, 2011, 2012, and 2013, 75 percent of which shall be used to implement subsection (g) and all of which shall remain available until expended.

(3)

Investments

The Secretary of the Treasury shall invest the amounts deposited under paragraph (2) and all accrued interest on the amounts deposited under paragraph (2) only in interest bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States.

(4)

Availability to Secretary of the Interior

(A)

In general

Beginning with fiscal year 2007, and in each fiscal year thereafter, one-third of amounts deposited into the Geo Fund, unless otherwise specified herein, together with the interest thereon, shall be available, without fiscal year limitations, to the Secretary of the Interior for use for the purposes described in subsection (b)(4).

(B)

Withdrawals and transfer of funds

The Secretary of the Treasury shall withdraw such amounts from the Geo Fund as the Secretary of the Interior may request, subject to the limitation in subparagraph (A), and transfer such amounts to the Secretary of the Interior to be used, at the discretion of the Secretary of the Interior, by the Minerals Management Service, the Bureau of Land Management, and the United States Geological Survey for the purposes described in subsection (b)(4). No funds distributed from the Geo Fund may be used to purchase an interest in land.

(5)

Payment to States

(A)

In general

Beginning with fiscal year 2007, and in each fiscal year thereafter, two-thirds of amounts deposited into the Geo Fund, unless otherwise specified herein, together with the interest thereon, shall be available, without fiscal year limitations, to the States for use for the purposes described in subsection (b)(4).

(B)

Withdrawals and transfer of funds

Within the first 90 days of each fiscal year, the Secretary of the Treasury shall withdraw amounts from the Geo Fund and transfer such amounts to the States based on a formula devised by the Secretary of the Interior based on the relative needs of the States and the needs of the Nation.

(C)

Use of payments by States

Each State shall use the payments made under subparagraph (B) only for carrying out projects and programs for the purposes described in subsection (b)(4). No funds distributed from the Geo Fund may be used to purchase an interest in land.

(D)

Encouragement of use of private funds by States

Each State shall use the payments made under subparagraph (B) to leverage private funds for carrying out projects for the purposes described in subsection (b)(4).

(E)

Report to Congress

Beginning in fiscal year 2008 and continuing for each fiscal year thereafter, the Secretary of the Interior and each State receiving funds from the Geo Fund shall submit a report to the Committee on Energy and Natural Resources of the Senate and the Committee on Resources of the House of Representatives. Reports submitted to the Congress by the Secretary of the Interior and the States shall include detailed information regarding expenditures during the previous fiscal year.

(e)

Strategic unconventional resources

(1)

Program

The Secretary of the Interior shall establish a program for production of fuels from strategic unconventional resources, and production of oil and gas resources using CO2 enhanced recovery. The program shall focus initially on activities and domestic resources most likely to result in significant production in the near future, and shall include work necessary to improve extraction techniques, including surface and in situ operations. The program shall include characterization and assessment of potential resources, a sampling program, appropriate laboratory and other analyses and testing, and assessment of methods for exploration and development of these strategic unconventional resources.

(2)

Pilot projects

The program created in paragraph (1) shall include, but not be limited to, pilot projects on (A) the Maverick Basin heavy oil and tar sands formations of Texas, including the San Miguel deposits, (B) the Greater Green River Basin heavy oil, oil shale, tar sands, and coal deposits of Colorado, Utah, and Wyoming, (C) the shale, tar sands, heavy oil, and coal deposits in the Alabama-Mississippi-Tennessee region, (D) the shale, tar sands, heavy oil, and coal deposits in the Ohio River valley, and (E) strategic unconventional resources in California. The Secretary shall identify and report to Congress on feasible incentives to foster recovery of unconventional fuels by private industry within the United States. Such incentives may include, but are not limited to, long-term contracts for the purchase of unconventional fuels for defense purposes, Federal grants and loan guarantees for necessary capital expenditures, and favorable terms for the leasing of Government lands containing unconventional resources.

(3)

Definitions

In this subsection:

(A)

Strategic unconventional resources

The term strategic unconventional resources means hydrocarbon resources, including heavy oil, oil shale, tar sands, and coal deposits, from which liquid fuels may be produced.

(B)

In situ extraction methods

The term in situ extraction methods means recovery techniques that are applied to the resources while they are still in the ground, and are in commercial use or advanced stages of development. Such techniques include, but are not limited to, steam flooding, steam-assisted gravity drainage (including combination with electric power generation where appropriate), cyclic steam stimulation, air injection, and chemical treatment.

(4)

Funding

The Secretary shall carry out the program for the production of strategic unconventional fuels with funds from the Geo Fund in each of fiscal years 2007 through 2011 in the amount of not less than $35,000,000 each year. Each pilot project shall be allocated not less than $4,000,000 per year in each of fiscal years 2007 through 2011.

(f)

Support of geothermal and geopressure oil and gas energy production

(1)

In general

The Secretary shall carry out a grant program in support of geothermal and geopressure oil and gas energy production. The program shall include grants for a total of not less than three assessments of the use of innovative geothermal techniques such as organic rankine cycle systems at marginal, unproductive, and productive oil and gas wells, and not less than one assessment of the use of innovative geopressure techniques. The Secretary shall, to the extent practicable and in the public interest, make awards that—

(A)

include not less than five oil or gas well sites per project award;

(B)

use a range of oil or gas well hot water source temperatures from 150 degrees Fahrenheit to 300 degrees Fahrenheit;

(C)

use existing or new oil or gas wells;

(D)

cover a range of sizes from 175 kilowatts to one megawatt;

(E)

are located at a range of sites including tribal lands, Federal lease, State, or privately owned sites;

(F)

can be replicated at a wide range of sites;

(G)

facilitate identification of optimum techniques among competing alternatives;

(H)

include business commercialization plans that have the potential for production of equipment at high volumes and operation and support at a large number of sites; and

(I)

satisfy other criteria that the Secretary determines are necessary to carry out the program.

The Secretary shall give preference to assessments that address multiple elements contained in subparagraphs (A) through (I).
(2)

Grant awards

(A)

In general

Each grant award for assessment of innovative geothermal or geopressure technology such as organic rankine cycle systems at oil and gas wells made by the Secretary under this section shall include—

(i)

necessary and appropriate site engineering study;

(ii)

detailed economic assessment of site specific conditions;

(iii)

appropriate feasibility studies to determine ability for replication;

(iv)

design or adaptation of existing technology for site specific circumstances or conditions;

(v)

installation of equipment, service, and support; and

(vi)

monitoring for a minimum of one year after commissioning date.

(3)

Competitive grant selection

Not less than 180 days after the date of the enactment of this Act, the Secretary shall conduct a national solicitation for applications for grants under the program. Grant recipients shall be selected on a competitive basis based on criteria in subsection (b).

(4)

Federal share

The Federal share of costs of grants under this subsection shall be provided from funds made available to carry out this section. The Federal share of the cost of a project carried out with such a grant shall not exceed 50 percent of such cost.

(5)

Funding

The Secretary shall carry out the grant program under this subsection with funds from the Geo Fund in each of fiscal years 2007 through 2011 in the amount of not less than $5,000,000 each fiscal year. No funds authorized under this section may be used for the purposes of drilling new wells.

(6)

Amendment

Section 4 of the Geothermal Steam Act of 1970 (30 USC 1003) is amended by adding at the end the following:

(h)

Geothermal resources co-produced with the minerals

Any person who holds a lease or who operates a cooperative or unit plan under the Mineral Leasing Act, in the absence of an existing lease for geothermal resources under this Act, shall upon notice to the Secretary have the right to utilize any geothermal resources co-produced with the minerals for which the lease was issued during the operation of that lease or cooperative or unit plan, for the generating of electricity to operate the lease. Any electricity that is produced in excess of that which is required to operate the lease and that is sold for purposes outside of the boundary of the lease shall be subject to the requirements of section 5.

(g)

Liquid Fuels Grant Program

(1)

Program

The Secretary of the Interior shall establish a grant program for facilities for coal-to-liquids, petroleum coke-to-liquids, oil shale, tar sands, heavy oil, and Alaska natural gas-to-liquids and to assess the production of low-rank coal water fuel (in this subsection referred to as LRCWF).

(2)

LRCWF

The LRCWF grant project location shall use lignite coal from fields near the Tombigbee River within 60 miles of a land-grant college and shall be allocated $15,000,000 for expenditure during fiscal year 2007.

(3)

Definitions

In this subsection:

(A)

Coal-to-liquids front-end engineering and design

The terms coal-to-liquids front-end engineering and design and FEED mean those expenditures necessary to engineer, design, and obtain permits for a facility for a particular geographic location which will utilize a process or technique to produce liquid fuels from coal resources.

(B)

Low-rank coal water fuel

In this subsection the term low-rank coal water fuel means a liquid fuel produced from hydrothermal treatment of lignite and sub-bituminous coals.

(4)

Grant provisions

All grants shall require a 50 percent non-Federal cost share. The first 4 FEED grant recipients who receive full project construction financing commitments, based on earliest calendar date, shall not be required to repay any of their grants. The next 4 FEED grant recipients who receive such commitments shall be required to repay 25 percent of the grant. The next 4 FEED grant recipients who receive such commitments shall be required to repay 50 percent of the grant, and the remaining FEED grant recipeints shall be required to repay 75 percent of the grant. The LRCWF recipient shall not be required to repay the grant. Any required repayment shall be paid as part of the closing process for any construction financing relating to the grant. No repayment shall require the payment of interest if repaid within 5 years of the issuance of the grant. FEED grants shall be be limited to a maximum of $1,000,000 per 1,000 barrels per day of liquid fuels production capacity, not to exceed $25 million per year.

(5)

Funding

The Secretary shall carry out the grant program established by this subsection with funds from the Geo Fund.

(h)

Renewable energy from ocean wave, current, and thermal resources

(1)

Program

The Secretary of the Interior shall establish a grant program for the production of renewable energy from ocean waves, currents, and thermal resources.

(2)

Grant provisions

All grants under this subsection shall require a 50 percent non-Federal cost share.

(3)

Funding

The Secretary shall carry out this grant program with funds from the Geo Fund in each of fiscal years 2007 through 2011 in the amount of not less than $6,000,000 each year, and thereafter in such amounts as the Secretary may find appropriate.

(i)

Amendment to the Surface Mining Control and Reclamation Act of 1977

Section 517 of the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1267) is amended by adding adding at the end the following:

(i)

Any person who provides the regulatory authority with a map under subsection (b)(1) shall not be liable to any other person in any way for the accuracy or completeness of any such map which was not prepared and certified by or on behalf of such person.

.

27.

Leases for areas located within 100 miles of California or Florida

(a)

Authorization to cancel and exchange certain existing oil and gas leases; prohibition on submittal of exploration plans for certain leases prior to June 30, 2010

(1)

Authority

Within 2 years after the date of enactment of this Act, the lessee of an existing oil and gas lease for an area located completely within 100 miles of the coastline within the California or Florida Adjacent Zones shall have the option, without compensation, of exchanging such lease for a new oil and gas lease having a primary term of 5 years. For the area subject to the new lease, the lessee may select any unleased tract on the outer Continental Shelf that is in an area available for leasing. Further, with the permission of the relevant Governor, such a lessee may convert its existing oil and gas lease into a natural gas lease having a primary term of 5 years and covering the same area as the existing lease or another area within the same State’s Adjacent Zone within 100 miles of the coastline.

(2)

Administrative process

The Secretary of the Interior shall establish a reasonable administrative process to implement paragraph (1). Exchanges and conversions under subsection (a), including the issuance of new leases, shall not be considered to be major Federal actions for purposes of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). Further, such actions conducted in accordance with this section are deemed to be in compliance all provisions of the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.).

(3)

Operating restrictions

A new lease issued in exchange for an existing lease under this section shall be subject to such national defense operating stipulations on the OCS tract covered by the new lease as may be applicable upon issuance.

(4)

Priority

The Secretary shall give priority in the lease exchange process based on the amount of the original bonus bid paid for the issuance of each lease to be exchanged. The Secretary shall allow leases covering partial tracts to be exchanged for leases covering full tracts conditioned upon payment of additional bonus bids on a per-acre basis as determined by the average per acre of the original bonus bid per acre for the partial tract being exchanged.

(5)

Exploration plans

Any exploration plan submitted to the Secretary of the Interior after the date of the enactment of this Act and before July 1, 2010, for an oil and gas lease for an area wholly within 100 miles of the coastline within the California Adjacent Zone or Florida Adjacent Zone shall not be treated as received by the Secretary until the earlier of July 1, 2010, or the date on which a petition by the Adjacent State for oil and gas leasing covering the area within which is located the area subject to the oil and gas lease was approved.

(b)

Further lease cancellation and exchange provisions

(1)

Cancellation of lease

As part of the lease exchange process under this section, the Secretary shall cancel a lease that is exchanged under this section.

(2)

Consent of lessees

All lessees holding an interest in a lease must consent to cancellation of their leasehold interests in order for the lease to be cancelled and exchanged under this section.

(3)

Waiver of rights

As a prerequisite to the exchange of a lease under this section, the lessee must waive any rights to bring any litigation against the United States related to the transaction.

(4)

Plugging and abandonment

The plugging and abandonment requirements for any wells located on any lease to be cancelled and exchanged under this section must be complied with by the lessees prior to the cancellation and exchange.

(c)

Area partially within 100 miles of Florida

An existing oil and gas lease for an area located partially within 100 miles of the coastline within the Florida n Adjacent Zone may only be developed and produced using wells drilled from well-head locations at least 100 miles from the coastline to any bottom-hole location on the area of the lease. This subsection shall not apply if Florida has petitioned for leasing closer to the coastline than 100 miles.

(d)

Existing oil and gas lease defined

In this section the term existing oil and gas lease means an oil and gas lease in effect on the date of the enactment of this Act.

28.

Coastal impact assistance

Section 31 of the Outer Continental Shelf Lands Act (43 U.S.C. 1356a) is repealed.

29.

Oil shale and tar sands amendments

(a)

Repeal of requirement to establish payments

Section 369(o) of the Energy Policy Act of 2005 (Public Law 109–58; 119 Stat. 728; 42 U.S.C. 15927) is repealed.

(b)

Treatment of revenues

Section 21 of the Mineral Leasing Act (30 U.S.C. 241) is amended by adding at the end the following:

(e)

Revenues

(1)

In general

Notwithstanding the provisions of section 35, all revenues received from and under an oil shale or tar sands lease shall be disposed of as provided in this subsection.

(2)

Royalty rates for commercial leases

(A)

Royalty rates

The Secretary shall model the royalty schedule for oil shale and tar sands leases based on the royalty program currently in effect for the production of synthetic crude oil from oil sands in the Province of Alberta, Canada.

(B)

Reduction

The Secretary shall reduce any royalty otherwise required to be paid under subparagraph (A) under any oil shale or tar sands lease on a sliding scale based upon market price, with a 10 percent reduction if the average futures price of NYMEX Light Sweet Crude, or a similar index, drops, for the previous quarter year, below $50 (in January 1, 2006, dollars), and an 80 percent reduction if the average price drops below $30 (in January 1, 2006, dollars) for the quarter previous to the one in which the production is sold.

(3)

Disposition of revenues

(A)

Deposit

The Secretary shall deposit into a separate account in the Treasury all revenues derived from any oil shale or tar sands lease.

(B)

Allocations to states and local political subdivisions

The Secretary shall allocate 50 percent of the revenues deposited into the account established under subparagraph (A) to the State within the boundaries of which the leased lands are located, with a portion of that to be paid directly by the Secretary to the State’s local political subdivisions as provided in this paragraph.

(C)

Transmission of allocations

(i)

In general

Not later than the last business day of the month after the month in which the revenues were received, the Secretary shall transmit—

(I)

to each State two-thirds of such State’s allocations under subparagraph (B), and in accordance with clauses (ii) and (iii) to certain county-equivalent and municipal political subdivisions of such State a total of one-third of such State’s allocations under subparagraph (B), together with all accrued interest thereon; and

(II)

the remaining balance of such revenues deposited into the account that are not allocated under subparagraph (B), together with interest thereon, shall be transmitted to the miscellaneous receipts account of the Treasury, except that until a lease has been in production for 20 years 50 percent of such remaining balance derived from a lease shall be paid in accordance with subclause (I).

(ii)

Allocations to certain county-equivalent political subdivisions

The Secretary shall under clause (i)(I) make equitable allocations of the revenues to county-equivalent political subdivisions that the Secretary determines are closely associated with the leasing and production of oil shale and tar sands, under a formula that the Secretary shall determine by regulation.

(iii)

Allocations to municipal political subdivisions

The initial allocation to each county-equivalent political subdivision under clause (ii) shall be further allocated to the county-equivalent political subdivision and any municipal political subdivisions located partially or wholly within the boundaries of the county-equivalent political subdivision on an equitable basis under a formula that the Secretary shall determine by regulation.

(D)

Investment of deposits

The deposits in the Treasury account established under this section shall be invested by the Secretary of the Treasury in securities backed by the full faith and credit of the United States having maturities suitable to the needs of the account and yielding the highest reasonably available interest rates as determined by the Secretary of the Treasury.

(E)

Use of funds

A recipient of funds under this subsection may use the funds for any lawful purpose as determined by State law. Funds allocated under this subsection to States and local political subdivisions may be used as matching funds for other Federal programs without limitation. Funds allocated to local political subdivisions under this subsection may not be used in calculation of payments to such local political subdivisions under programs for payments in lieu of taxes or other similar programs.

(F)

No accounting required

No recipient of funds under this subsection shall be required to account to the Federal Government for the expenditure of such funds, except as otherwise may be required by law.

(4)

Definitions

In this subsection:

(A)

County-equivalent political subdivision

The term ‘county-equivalent political subdivision’ means a political jurisdiction immediately below the level of State government, including a county, parish, borough in Alaska, independent municipality not part of a county, parish, or borough in Alaska, or other equivalent subdivision of a State.

(B)

Municipal political subdivision

The term ‘municipal political subdivision’ means a municipality located within and part of a county, parish, borough in Alaska, or other equivalent subdivision of a State.

.

30.

Availability of OCS Receipts to provide payments under Secure Rural Schools and Community Self-Determination Act of 2000

Section 9 of the Outer Continental Shelf Lands Act (43 U.S.C. 1338) is amended by inserting after subsection (i), as added by section 7 of this Act, the following new subsection:

(j)

Availability of funds for payments under Secure Rural Schools and Community Self-Determination Act of 2000

Notwithstanding any other provision of this section, $50,000,000 of OCS Receipts shall be available to the Secretary of the Treasury for each of fiscal years 2007 through 2012 to make payments under sections 102 and 103 of the Secure Rural Schools and Community Self-Determination Act of 2000 (Public Law 106–393; 16 U.S.C. 500 note). The Secretary of the Treasury shall use the funds made available by this subsection to make such payments in lieu of using funds in the Treasury not otherwise appropriated, as otherwise authorized by sections 102(b)(3) and 103(b)(2) of such Act.

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June 26, 2006

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed