II 109th CONGRESS 2d Session S. 2314 IN THE SENATE OF THE UNITED STATES February 16, 2006 Mrs. Feinstein (for herself, Mr. Schumer, Mr. Kerry, and Mrs. Boxer) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To suspend the application of any provision of Federal law under which persons are relieved from the requirement to pay royalties for production of oil or natural gas from Federal lands in periods of high oil and natural gas prices, to require the Secretary to seek to renegotiate existing oil and natural gas leases to similarly limit suspension of royalty obligations under such leases, and for other purposes.

1.

Short title

This Act may be cited as the Royalty Relief Act of 2006.

2.

Suspension of royalty relief

(a)

Requirement

The Secretary of the Interior (referred to in this Act as the Secretary) shall suspend the application of any provision of Federal law under which a person would otherwise be provided relief from a requirement to pay a royalty for the production of oil or natural gas from Federal land (including submerged land) occurring after the date of enactment of this Act during a period in which— (1)for the production of oil, the average price of crude oil in the United States during the 4-week period immediately preceding the suspension is greater than $34.71 per barrel; and (2)for the production of natural gas, the average wellhead price of natural gas in the United States during the 4-week period immediately preceding the suspension is greater than $4.34 per 1,000 cubic feet. (b)

Determination of average prices

For purposes of subsection (a), the Secretary shall determine average prices, taking into consideration the most recent data reported by the Energy Information Administration.

3.

Renegotiation of existing leases

(a)

Requirement

The Secretary shall renegotiate each lease authorizing production of oil or natural gas on Federal land (including submerged land) issued by the Secretary before the date of the enactment of this Act as the Secretary determines to be necessary to modify the terms of the lease to ensure that a suspension of a requirement to pay royalties under the lease does not apply to production described in section 2(a). (b)

Failure to renegotiate and modify

Beginning on the date that is 1 year after the date of enactment of this Act, a lessee under a lease described in subsection (a) shall not be eligible— (1)to enter into a new lease described in that subsection; or (2)to obtain by sale or other transfer any lease issued before that date, unless the lessee— (A)renegotiates the lease; and (B)enters into an agreement with the Secretary to modify the terms of the lease in accordance with subsection (a).

4.

Conforming amendments

Sections 344, 345, and 346 of the Energy Policy Act of 2005 (42 U.S.C. 15904, 15905; 119 Stat. 704) are repealed.