II 109th CONGRESS 1st Session S. 1026 IN THE SENATE OF THE UNITED STATES May 12, 2005 Ms. Landrieu introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To ensure that offshore energy development on the outer Continental Shelf continues to serve the needs of the United States, to create opportunities for new development and the use of alternative resources, and for other purposes.

1.

Short title

This Act may be cited as the Stewardship for Our Coasts and Opportunities for Reliable Energy Act.

2.

Outer continental shelf revenue sharing for non-moratoria coastal producing states

The Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) is amended by adding at the end the following:

32.

Outer continental shelf revenue sharing for non-moratoria coastal producing States

(a)

Definitions

In this section: (1)

Coastal political subdivision

The term coastal political subdivision means a political subdivision of a producing State, all or part of which lies within the boundaries of the coastal zone of the producing State that are identified in the coastal zone management program for the producing State under the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et seq.), as in effect on the date of enactment of this section. (2)

Coastal population

The term coastal population means the population, as determined by the most recent official data of the Census Bureau, of each political subdivision, any part of which lies within the designated coastal boundary of a State (as defined in a coastal zone management program of the State under the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et seq.)). (3)

Coastal state

The term coastal State has the meaning given the term in section 304 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1453). (4)

Coastline

The term coastline has the meaning given the term in section 2 of the Submerged Lands Act (43 U.S.C. 1301). (5)

Distance

The term distance means the minimum great circle distance, measured in statute miles. (6)

Leased tract

The term leased tract means a tract that is subject to a lease under section 6 or 8 for the purpose of drilling for, developing, and producing oil or natural gas resources. (7)

Leasing moratoria

The term leasing moratoria means the prohibitions on preleasing, leasing, and related activities on any geographic area of the outer Continental Shelf as contained in— (A)the moratorium statement of the President on June 12, 1998; or (B)section 110 of the Department of the Interior and Related Agencies Appropriations Act, 2002 (Public Law 107–63; 115 Stat. 438). (8)

Political subdivision

The term political subdivision means the local political jurisdiction immediately below the level of State government, including counties, parishes, and boroughs. (9)

Producing state

(A)

In general

The term producing State means a coastal State that has a coastal seaward boundary within 200 miles of the geographic center of a leased tract within any area of the outer Continental Shelf. (B)

Exclusion

The term producing State does not include a producing State, a majority of the coastline of which is subject to leasing moratoria. (10)

Qualified Outer Continental Shelf revenues

(A)

In general

The term qualified Outer Continental Shelf revenues means all amounts received by the United States from each leased tract or portion of a leased tract— (i)lying— (I)seaward of the zone covered by section 8(g); or (II)within the zone covered by section 8(g), but to which section 8(g) does not apply; and (ii)the geographic center of which lies within 200 miles of any part of the coastline of any coastal State. (B)

Inclusions

The term qualified Outer Continental Shelf revenues includes bonus bids, rents, royalties (including payments for royalty taken in kind and sold), net profit share payments, and related late-payment interest from natural gas and oil leases issued under this Act. (C)

Exclusion

The term qualified Outer Continental Shelf revenues does not include any revenues (other than revenues received under section 18(i)) from a leased tract or portion of a leased tract that is located in a geographic area subject to a leasing moratorium on January 1, 2005, unless the lease was in production on that date. (11)

Transferred amount

The term transferred amount means the amount transferred to the Secretary under subsection (b)(1) to make payments to producing States and coastal political subdivisions under this section for a fiscal year. (b)

Payments to producing States and coastal political subdivisions

(1)

Transfer of amounts

From qualified Outer Continental Shelf revenues deposited in the Treasury under this Act for a fiscal year, the Secretary of the Treasury shall transfer to the Secretary to make payments to producing States and coastal political subdivisions under this section— (A)for each of fiscal years 2006 through 2010, $500,000,000; and (B)for fiscal year 2011 and each subsequent fiscal year, an amount equal to 50 percent of qualified Outer Continental Shelf revenues received for a fiscal year. (2)

Disbursement

In each fiscal year, the Secretary shall, without further appropriation for purposes of paragraph (1)(B) and subject to the availability of appropriations for purposes of paragraph (1)(A), disburse to each producing State for which the Secretary has approved a plan under subsection (c), and to coastal political subdivisions under paragraph (4), the funds allocated to the producing State or coastal political subdivision under this section for the fiscal year. (3)

Allocation among producing States

(A)

In general

The transferred amount shall be allocated to each producing State based on the ratio that— (i)the amount of qualified outer Continental Shelf revenues generated off the coastline of the producing State; bears to (ii)the amount of qualified outer Continental Shelf revenues generated off the coastline of all producing States. (B)

Qualified Outer Continental Shelf revenues

(i)

Fiscal years 2006 through 2008

For each of fiscal years 2006 through 2008, a calculation of a payment under this subsection shall be based on qualified outer Continental Shelf revenues received during fiscal year 2005. (ii)

Fiscal years 2009 through 2010

For each of fiscal years 2009 through 2010, a calculation of a payment under this subsection shall be based on qualified outer Continental Shelf revenues received during fiscal year 2008. (iii)

Fiscal year 2011 and thereafter

Beginning in fiscal year 2011, a calculation of a payment under this subsection for each fiscal year during a 2-year fiscal year period shall be based on qualified outer Continental Shelf revenues received during the fiscal year preceding the first fiscal year of the 2-year fiscal year period. (C)

Multiple producing States

If more than 1 producing State is located within 200 miles of any portion of a leased tract, the amount allocated to each producing State for the leased tract shall be inversely proportional to the distance between— (i)the nearest point on the coastline of the producing State; and (ii)the geographic center of the leased tract. (D)

Minimum allocation

An amount allocated to a producing State under this paragraph shall be not less than 1 percent of the transferred amount. (4)

Payments to coastal political subdivisions

(A)

In general

The Secretary shall pay 35 percent of the amount allocated under paragraph (3) to the coastal political subdivisions in the producing State. (B)

Formula

Of the amount paid by the Secretary to coastal political subdivisions under subparagraph (A)— (i)25 percent shall be allocated to each coastal political subdivision in the proportion that— (I)the coastal population of the coastal political subdivision; bears to (II)the coastal population of all coastal political subdivisions in the producing State; (ii)25 percent shall be allocated to each coastal political subdivision in the proportion that— (I)the number of miles of coastline of the coastal political subdivision; bears to (II)the number of miles of coastline of all coastal political subdivisions in the producing State; and (iii)50 percent shall be allocated in amounts that are inversely proportional to the respective distances between the points in each coastal political subdivision that are closest to the geographic center of each leased tract, as determined by the Secretary. (C)

Exception for Louisiana

For the purposes of subparagraph (B)(ii), the coastline for coastal political subdivisions in the State of Louisiana without a coastline shall be the average length of the coastline of all other coastal political subdivisions in the State of Louisiana. (D)

Exception for Alaska

For the purposes of carrying out subparagraph (B)(iii) in the State of Alaska, the amount allocated shall be divided equally among the 2 coastal political subdivisions that are closest to the geographic center of a leased tract. (E)

Exclusion of certain leased tracts

For purposes of subparagraph (B)(iii), a leased tract or portion of a leased tract shall be excluded if the tract or portion of a leased tract is located in a geographic area subject to a leasing moratorium on January 1, 2005, unless the lease was in production on that date. (5)

No approved plan

(A)

In general

Subject to subparagraph (B) and except as provided in subparagraph (C), if any amount allocated to a producing State or coastal political subdivision under paragraph (3) or (4) is not disbursed because the producing State does not have in effect a plan that has been approved by the Secretary under subsection (c), the Secretary shall allocate the undisbursed amount equally among all other producing States. (B)

Retention of allocation

The Secretary shall hold in escrow an undisbursed amount described in subparagraph (A) until the date that the final appeal regarding the disapproval of a plan submitted under subsection (c) is decided. (C)

Waiver

The Secretary may waive the requirements of subparagraph (A) with respect to an allocated share of a producing State and hold the allocable share in escrow if the Secretary determines that the producing State is making a good faith effort to develop and submit, or update, a plan in accordance with subsection (c). (c)

Coastal impact assistance plan

(1)

Submission of State plan

(A)

In general

Not later than July 1, 2008, the Governor of a producing State shall submit to the Secretary a coastal impact assistance plan. (B)

Public participation

In carrying out subparagraph (A), the Governor shall solicit local input and provide for public participation in the development of the plan. (2)

Approval

(A)

In general

The Secretary shall approve a plan of a producing State submitted under paragraph (1) before disbursing any amount to the producing State, or to a coastal political subdivision located in the producing State, under this section. (B)

Components

The Secretary shall approve a plan submitted under paragraph (1) if— (i)the Secretary determines that the plan is consistent with the uses described in subsection (d); and (ii)the plan contains— (I)the name of the State agency that will have the authority to represent and act on behalf of the producing State in dealing with the Secretary for purposes of this section; (II)a program for the implementation of the plan that describes how the amounts provided under this section to the producing State will be used; (III)for each coastal political subdivision that receives an amount under this section— (aa)the name of a contact person; and (bb)a description of how the coastal political subdivision will use amounts provided under this section; (IV)a certification by the Governor that ample opportunity has been provided for public participation in the development and revision of the plan; and (V)a description of measures that will be taken to determine the availability of assistance from other relevant Federal resources and programs. (3)

Amendment to a plan

Any amendment to a plan submitted under paragraph (1) shall be— (A)developed in accordance with this subsection; and (B)submitted to the Secretary for approval or disapproval under paragraph (4). (4)

Procedure

Except as provided in subparagraph (B), not later than 90 days after the date on which a plan or amendment to a plan is submitted under paragraph (1) or (3), the Secretary shall approve or disapprove the plan or amendment. (d)

Authorized uses

(1)

Fiscal years 2006 through 2010

A producing State or coastal political subdivision shall use any amount transferred under subsection (b)(1)(A) that is distributed to the producing State or coastal political subdivision, including any amount deposited in a trust fund that is administered by the State or coastal political subdivision and dedicated to a use consistent with this section, in accordance with all applicable Federal and State law, only for 1 or more of the following purposes: (A)Projects and activities for the conservation, protection, or restoration of coastal areas, including wetland. (B)Mitigation of damage to fish, wildlife, or natural resources. (C)Planning assistance and the administrative costs of complying with this section. (D)Implementation of a federally-approved marine, coastal, or comprehensive conservation management plan. (E)Mitigation of the impact of outer Continental Shelf activities through funding of onshore infrastructure, education, health care, and public service needs. (2)

Fiscal year 2011 and thereafter

A producing State or coastal political subdivision shall use at least 25 percent of any amount transferred under subsection (b)(1)(B) that is distributed to the producing State or coastal political subdivision, including any amount deposited in a trust fund that is administered by the State or coastal political subdivision and dedicated to a use consistent with this section, for 1 or more of the purposes described in paragraph (1). (3)

Compliance with authorized uses

If the Secretary determines that any expenditure made by a producing State or coastal political subdivision is not consistent with this subsection, the Secretary shall not disburse any additional amount under this section to the producing State or the coastal political subdivision until all amounts obligated for unauthorized uses have been repaid or reobligated for authorized uses.

.

3.

Establishment of seaward lateral boundaries for coastal States

Section 4(a)(2)(A) of the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a)(2)(A)) is amended— (1)by inserting (i) after (A); (2)in the first sentence— (A)by striking President shall and inserting Secretary shall by regulation; and (B)by inserting before the period at the end the following: not later than 180 days after the date of enactment of the Stewardship for Our Coasts and Opportunities for Reliable Energy Act; and (3)by adding at the end the following: (i)(I)For purposes of this Act (including determining boundaries to authorize leasing and preleasing activities and any attributing revenues under this Act and calculating payments to producing States and coastal political subdivisions under section 32), the Secretary shall delineate the lateral boundaries between coastal States in areas of the outer Continental shelf under exclusive Federal jurisdiction, to the extent of the exclusive economic zone of the United States, in accordance with article 15 of the United Nations Convention on the Law of the Sea of December 10, 1982. (II)This clause shall not affect any right or title to Federal submerged land on the outer Continental Shelf. .

4.

Option to petition for leasing within certain areas on the outer continental shelf

Section 12 of the Outer Continental Shelf Lands Act (43 U.S.C. 1341) is amended by adding at the end the following: (g)

Leasing within the seaward lateral boundaries of coastal states

(1)

Definition of affected area

In this subsection, the term `affected area' means any area located— (A)in the areas of northern, central, and southern California and the areas of Oregon and Washington; (B)in the north, middle, or south planning area of the Atlantic Ocean; (C)in the eastern Gulf of Mexico planning area and lying— (i)south of 26 degrees north latitude; and (ii)east of 86 degrees west longitude; or (D)in the Straits of Florida. (2)

Restrictions on leasing

The Secretary shall not offer for offshore leasing, preleasing, or any related activity— (A)any area located on the outer Continental Shelf that, as of the date of enactment of this subsection, is designated as a marine sanctuary under the Marine Protection, Research, and Sanctuaries Act of 1972 (33 U.S.C. 1401 et seq.); or (B)except as provided in paragraphs (3) and (4), during the period beginning on the date of enactment of this subsection and ending on June 30, 2012, any affected area. (3)

Resource assessments

(A)

In general

Beginning on the date on which the Secretary delineates seaward lateral boundaries under section 4(a)(2)(A)(ii), a Governor of a State in which an affected area is located, with the consent of the legislature of the State, may submit to the Secretary a petition requesting a resource assessment of any area within the seaward lateral boundary of the State. (B)

Eligible resources

A petition for a resource assessment under subparagraph (A) may be for— (i)oil and gas leasing; (ii)gas-only leasing; or (iii)any other energy source leasing, including renewable energy leasing. (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 a resource assessment of the area would create an unreasonable risk of harm to the marine, human, or coastal environment of the State. (D)

Failure to Act

If the Secretary fails to approve or deny a petition in accordance with subparagraph (C)— (i)the petition shall be considered to be approved; and (ii)a resource assessment of any appropriate area shall be carried out as soon as practicable. (E)

Submission to state

As soon as practicable after the date on which a petition is approved under subparagraph (C) or (D), the Secretary shall— (i)complete the resource assessment for the area; and (ii)submit the completed resource assessment to the State. (4)

Petition for leasing

(A)

In general

On receipt of a resource assessment under paragraph (3)(E)(ii), the Governor of a State in which an affected area is located, with the consent of the legislature of the State, may submit to the Secretary a petition requesting that the Secretary make available any land that is within the seaward lateral boundaries of the State (as established under section 4(a)(2)(A)(ii)) and that is greater than 20 miles from the coastline of the State for the conduct of offshore leasing, pre-leasing, or related activities with respect to— (i)oil and gas leasing; (ii)gas-only leasing; or (iii)any other energy source leasing, including renewable energy leasing. (B)

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 create an unreasonable risk of harm to the marine, human, or coastal environment of the State. (C)

Failure to Act

If the Secretary fails to approve or deny a petition in accordance with subparagraph (B)— (i)the petition shall be considered to be approved; and (ii)any appropriate area shall be made available for oil and gas leasing, gas-only leasing, or any other energy source leasing, including renewable energy leasing. (5)

Revenue sharing

(A)

In general

Beginning on the date on which production begins in an area under this subsection, the State shall, without further appropriation, share in any qualified outer Continental Shelf revenues of the production under section 32. (B)

Applicable law

(i)

In general

Except as provided in clause (ii), a State shall not be required to comply with subsections (c) and (d) of section 32 to share in qualified outer Continental Shelf revenues under subparagraph (A). (ii)

Exception

Of any qualified outer Continental Shelf revenues received by a State (including a political subdivision of a State) under subparagraph (A), at least 25 percent shall be used for 1 or more of the purposes described in section 32(d)(1). (6)

Effect

Nothing in this subsection affects any right relating to an area described in paragraph (1) or (2) under a lease that was in existence on the day before the date of enactment of this subsection. .

5.

Alternate energy-related uses on the outer continental shelf

(a)

Amendment to Outer Continental Shelf Lands Act

Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337) is amended by adding at the end the following: (p)

Leases, easements, or Rights-of-Way for energy and related purposes

(1)

In general

The Secretary, in consultation with the Secretary of the Department in which the Coast Guard is operating and other relevant departments and agencies of the Federal Government, may grant a lease, easement, or right-of-way on the outer Continental Shelf for activities not otherwise authorized under this Act, the Deepwater Port Act of 1974 (33 U.S.C. 1501 et seq.), the Ocean Thermal Energy Conversion Act of 1980 (42 U.S.C. 9101 et seq.), or other applicable law, if those activities— (A)support exploration, development, production, transportation, or storage of oil, natural gas, or other minerals; (B)produce or support production, transportation, or transmission of energy from sources other than oil and gas; or (C)use, for energy-related or marine-related purposes, facilities in use on or before the date of enactment of this subsection for activities authorized under this Act. (2)

Payments

(A)

In general

The Secretary shall establish, by rule or agreement with the party to which the easement or right-of-way is granted under this subsection, reasonable forms of payment for the easement or right-of-way, including a fee, rental, bonus, or other payment. (B)

Assessment

A payment under subparagraph (A) shall not be assessed on the basis of throughput or production. (C)

Payments to states

If a lease, easement, right-of-way, license, or permit under this subsection covers a specific tract of, or regards a facility located on, the outer Continental Shelf and is not an easement or right-of-way for transmission or transportation of energy, minerals, or other natural resources, the Secretary shall pay 50 percent of any amount received from the holder of the lease, easement, right-of-way, license, or permit to the State off the shore of which the geographic center of the area covered by the lease, easement, right-of-way, license, permit, or facility is located. (3)

Consultation

Before exercising authority under this subsection, the Secretary shall consult with the Secretary of Defense and other appropriate agencies concerning issues related to national security and navigational obstruction. (4)

Competitive or noncompetitive basis

(A)

In general

The Secretary may issue a lease, easement, or right-of-way under paragraph (1) on a competitive or noncompetitive basis. (B)

Considerations

In determining whether a lease, easement, or right-of-way shall be granted competitively or noncompetitively, the Secretary shall consider such factors as— (i)prevention of waste and conservation of natural resources; (ii)the economic viability of an energy project; (iii)protection of the environment; (iv)the national interest and national security; (v)human safety; (vi)protection of correlative rights; and (vii)potential return for the lease, easement, or right-of-way. (5)

Regulations

Not later than 270 days after the date of enactment of this subsection, the Secretary, in consultation with the Secretary of the Department in which the Coast Guard is operating and other relevant agencies of the Federal Government and affected States, shall issue any necessary regulations to ensure— (A)safety; (B)protection of the environment; (C)prevention of waste; (D)conservation of the natural resources of the outer Continental Shelf; (E)protection of national security interests; and (F)protection of correlative rights in the outer Continental Shelf. (6)

Security

The Secretary shall require the holder of a lease, easement, or right-of-way granted under this subsection— (A)to furnish a surety bond or other form of security, as prescribed by the Secretary; and (B)to comply with such other requirements as the Secretary considers necessary to protect the interests of the United States. (7)

Effect of subsection

Nothing in this subsection displaces, supersedes, limits, or modifies the jurisdiction, responsibility, or authority of any Federal or State agency under any other Federal law. (8)

Applicability

This subsection does not apply to any area on the outer Continental Shelf designated as a National Marine Sanctuary. . (b)

Conforming amendment

Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337) is amended by striking the section heading and inserting the following: Leases, Easements, and Rights-of-Way on the Outer Continental Shelf.—. (c)

Savings provision

Nothing in the amendment made by subsection (a) requires any resubmittal of documents previously submitted or any reauthorization of actions previously authorized, with respect to any project— (1)for which offshore test facilities have been constructed before the date of enactment of this Act; or (2)for which a request for proposals has been issued by a public authority.

6.

Regulations

(a)

In general

The Secretary of the Interior shall issue such regulations as are necessary to carry out this Act and the amendments made by this Act, including regulations establishing procedures for entering into gas-only leases. (b)

Gas-Only leases

In issuing regulations establishing procedures for entering into gas-only leases, the Secretary shall— (1)ensure that gas-only leases under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) are not available in a State that (as of the day before the date of enactment of this Act) did not contain an affected area (as defined in section 9(a) of that Act (as amended by section 5(a))); and (2)define natural gas as— (A)unmixed natural gas; or (B)any mixture of natural or artificial gas (including compressed or liquefied petroleum gas) and condensate recovered from natural gas.