[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3711 Placed on Calendar Senate (PCS)]







                                                       Calendar No. 529
109th CONGRESS
  2d Session
                                S. 3711

To enhance the energy independence and security of the United States by 
 providing for exploration, development, and production activities for 
    mineral resources in the Gulf of Mexico, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 20, 2006

  Mr. Domenici (for himself, Ms. Landrieu, Mr. Vitter, Mr. Frist, Mr. 
    McConnell, Mr. Martinez, Mr. Cochran, Mr. Lott, Mr. Shelby, Mr. 
  Sessions, Mr. Cornyn, and Mrs. Hutchison) introduced the following 
                  bill; which was read the first time

                             July 21, 2006

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
To enhance the energy independence and security of the United States by 
 providing for exploration, development, and production activities for 
    mineral resources in the Gulf of Mexico, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Gulf of Mexico Energy Security Act 
of 2006''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) 181 area.--The term ``181 Area'' means the area 
        identified in map 15, page 58, of the Proposed Final Outer 
        Continental Shelf Oil and Gas Leasing Program for 1997-2002, 
        dated August 1996, of the Minerals Management Service, 
        available in the Office of the Director of the Minerals 
        Management Service, excluding the area offered in OCS Lease 
        Sale 181, held on December 5, 2001.
            (2) 181 south area.--The term ``181 South Area'' means any 
        area--
                    (A) located--
                            (i) south of the 181 Area;
                            (ii) west of the Military Mission Line; and
                            (iii) in the Central Planning Area;
                    (B) excluded from the Proposed Final Outer 
                Continental Shelf Oil and Gas Leasing Program for 1997-
                2002, dated August 1996, of the Minerals Management 
                Service; and
                    (C) included in the areas considered for oil and 
                gas leasing, as identified in map 8, page 37 of the 
                document entitled ``Draft Proposed Program Outer 
                Continental Shelf Oil and Gas Leasing Program 2007-
                2012'', dated February 2006.
            (3) Bonus or royalty credit.--The term ``bonus or royalty 
        credit'' means a legal instrument or other written 
        documentation, or an entry in an account managed by the 
        Secretary, that may be used in lieu of any other monetary 
        payment for--
                    (A) a bonus bid for a lease on the outer 
                Continental Shelf; or
                    (B) a royalty due on oil or gas production from any 
                lease located on the outer Continental Shelf.
            (4) Central planning area.--The term ``Central Planning 
        Area'' means the Central Gulf of Mexico Planning Area of the 
        outer Continental Shelf, as designated in the document entitled 
        ``Draft Proposed Program Outer Continental Shelf Oil and Gas 
        Leasing Program 2007-2012'', dated February 2006.
            (5) Eastern planning area.--The term ``Eastern Planning 
        Area'' means the Eastern Gulf of Mexico Planning Area of the 
        outer Continental Shelf, as designated in the document entitled 
        ``Draft Proposed Program Outer Continental Shelf Oil and Gas 
        Leasing Program 2007-2012'', dated February 2006.
            (6) 2002-2007 planning area.--The term ``2002-2007 planning 
        area'' means any area--
                    (A) located in--
                            (i) the Eastern Planning Area, as 
                        designated in the Proposed Final Outer 
                        Continental Shelf Oil and Gas Leasing Program 
                        2002-2007, dated April 2002, of the Minerals 
                        Management Service;
                            (ii) the Central Planning Area, as 
                        designated in the Proposed Final Outer 
                        Continental Shelf Oil and Gas Leasing Program 
                        2002-2007, dated April 2002, of the Minerals 
                        Management Service; or
                            (iii) the Western Planning Area, as 
                        designated in the Proposed Final Outer 
                        Continental Shelf Oil and Gas Leasing Program 
                        2002-2007, dated April 2002, of the Minerals 
                        Management Service; and
                    (B) not located in--
                            (i) an area in which no funds may be 
                        expended to conduct offshore preleasing, 
                        leasing, and related activities under sections 
                        104 through 106 of the Department of the 
                        Interior, Environment, and Related Agencies 
                        Appropriations Act, 2006 (Public Law 109-54; 
                        119 Stat. 521) (as in effect on August 2, 
                        2005);
                            (ii) an area withdrawn from leasing under 
                        the ``Memorandum on Withdrawal of Certain Areas 
                        of the United States Outer Continental Shelf 
                        from Leasing Disposition'', from 34 Weekly 
                        Comp. Pres. Doc. 1111, dated June 12, 1998; or
                            (iii) the 181 Area or 181 South Area.
            (7) Gulf producing state.--The term ``Gulf producing 
        State'' means each of the States of Alabama, Louisiana, 
        Mississippi, and Texas.
            (8) Military mission line.--The term ``Military Mission 
        Line'' means the north-south line at 8641' W. longitude.
            (9) Qualified outer continental shelf revenues.--
                    (A) In general.--The term ``qualified outer 
                Continental Shelf revenues'' means--
                            (i) in the case of each of fiscal years 
                        2007 through 2016, all rentals, royalties, 
                        bonus bids, and other sums due and payable to 
                        the United States from leases entered into on 
                        or after the date of enactment of this Act 
                        for--
                                    (I) areas in the 181 Area located 
                                in the Eastern Planning Area; and
                                    (II) the 181 South Area; and
                            (ii) in the case of fiscal year 2017 and 
                        each fiscal year thereafter, all rentals, 
                        royalties, bonus bids, and other sums due and 
                        payable to the United States received on or 
                        after October 1, 2016, from leases entered into 
                        on or after the date of enactment of this Act 
                        for--
                                    (I) the 181 Area;
                                    (II) the 181 South Area; and
                                    (III) the 2002-2007 planning area.
                    (B) Exclusions.--The term ``qualified outer 
                Continental Shelf revenues'' does not include--
                            (i) revenues from the forfeiture of a bond 
                        or other surety securing obligations other than 
                        royalties, civil penalties, or royalties taken 
                        by the Secretary in-kind and not sold; or
                            (ii) revenues generated from leases subject 
                        to section 8(g) of the Outer Continental Shelf 
                        Lands Act (43 U.S.C. 1337(g)).
            (10) Coastal political subdivision.--The term ``coastal 
        political subdivision'' means a political subdivision of a Gulf 
        producing State any part of which political subdivision is--
                    (A) within the coastal zone (as defined in section 
                304 of the Coastal Zone Management Act of 1972 (16 
                U.S.C. 1453)) of the Gulf producing State as of the 
                date of enactment of this Act; and
                    (B) not more than 200 nautical miles from the 
                geographic center of any leased tract.
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.

SEC. 3. OFFSHORE OIL AND GAS LEASING IN 181 AREA AND 181 SOUTH AREA OF 
              GULF OF MEXICO.

    (a) 181 Area Lease Sale.--Except as provided in section 4, the 
Secretary shall offer the 181 Area for oil and gas leasing pursuant to 
the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) as soon 
as practicable, but not later than 1 year, after the date of enactment 
of this Act.
    (b) 181 South Area Lease Sale.--The Secretary shall offer the 181 
South Area for oil and gas leasing pursuant to the Outer Continental 
Shelf Lands Act (43 U.S.C. 1331 et seq.) as soon as practicable after 
the date of enactment of this Act.
    (c) Leasing Program.--The 181 Area and 181 South Area shall be 
offered for lease under this section notwithstanding the omission of 
the 181 Area or the 181 South Area from any outer Continental Shelf 
leasing program under section 18 of the Outer Continental Shelf Lands 
Act (43 U.S.C. 1344).
    (d) Conforming Amendment.--Section 105 of the Department of the 
Interior, Environment, and Related Agencies Appropriations Act, 2006 
(Public Law 109-54; 119 Stat. 522) is amended by inserting ``(other 
than the 181 South Area (as defined in section 2 of the Gulf of Mexico 
Energy Security Act of 2006))'' after ``lands located outside Sale 
181''.

SEC. 4. MORATORIUM ON OIL AND GAS LEASING IN CERTAIN AREAS OF GULF OF 
              MEXICO.

    (a) In General.--Effective during the period beginning on the date 
of enactment of this Act and ending on June 30, 2022, the Secretary 
shall not offer for leasing, preleasing, or any related activity--
            (1) any area east of the Military Mission Line in the Gulf 
        of Mexico;
            (2) any area in the Eastern Planning Area that is within 
        125 miles of the coastline of the State of Florida; or
            (3) any area in the Central Planning Area that is--
                    (A) within--
                            (i) the 181 Area; and
                            (ii) 100 miles of the coastline of the 
                        State of Florida; or
                    (B)(i) outside the 181 Area;
                    (ii) east of the western edge of the Pensacola 
                Official Protraction Diagram (UTM X coordinate 
                1,393,920 (NAD 27 feet)); and
                    (iii) within 100 miles of the coastline of the 
                State of Florida.
    (b) Military Mission Line.--Notwithstanding subsection (a), the 
United States reserves the right to designate by and through the 
Secretary of Defense, with the approval of the President, national 
defense areas on the outer Continental Shelf pursuant to section 12(d) 
of the Outer Continental Shelf Lands Act (43 U.S.C. 1341(d)).
    (c) Exchange of Certain Leases.--
            (1) In general.--The Secretary shall permit any person 
        that, as of the date of enactment of this Act, has entered into 
        an oil or gas lease with the Secretary in any area described in 
        paragraph (2) or (3) of subsection (a) to exchange the lease 
        for a bonus or royalty credit that may only be used in the Gulf 
        of Mexico.
            (2) Valuation of existing lease.--The amount of the bonus 
        or royalty credit for a lease to be exchanged shall be equal 
        to--
                    (A) the amount of the bonus bid; and
                    (B) any rental paid for the lease as of the date 
                the lessee notifies the Secretary of the decision to 
                exchange the lease.
            (3) Revenue distribution.--No bonus or royalty credit may 
        be used under this subsection in lieu of any payment due under, 
        or to acquire any interest in, a lease subject to the revenue 
        distribution provisions of section 8(g) of the Outer 
        Continental Shelf Lands Act (43 U.S.C. 1337(g)).
            (4) Regulations.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary shall promulgate 
        regulations that shall provide a process for--
                    (A) notification to the Secretary of a decision to 
                exchange an eligible lease;
                    (B) issuance of bonus or royalty credits in 
                exchange for relinquishment of the existing lease;
                    (C) transfer of the bonus or royalty credit to any 
                other person; and
                    (D) determining the proper allocation of bonus or 
                royalty credits to each lease interest owner.

SEC. 5. DISPOSITION OF QUALIFIED OUTER CONTINENTAL SHELF REVENUES FROM 
              181 AREA, 181 SOUTH AREA, AND 2002-2007 PLANNING AREAS OF 
              GULF OF MEXICO.

    (a) In General.--Notwithstanding section 9 of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1338) and subject to the other provisions of 
this section, for each applicable fiscal year, the Secretary of the 
Treasury shall deposit--
            (1) 50 percent of qualified outer Continental Shelf 
        revenues in the general fund of the Treasury; and
            (2) 50 percent of qualified outer Continental Shelf 
        revenues in a special account in the Treasury from which the 
        Secretary shall disburse--
                    (A) 75 percent to Gulf producing States in 
                accordance with subsection (b); and
                    (B) 25 percent to provide financial assistance to 
                States in accordance with section 6 of the Land and 
                Water Conservation Fund Act of 1965 (16 U.S.C. 460l-8), 
                which shall be considered income to the Land and Water 
                Conservation Fund for purposes of section 2 of that Act 
                (16 U.S.C. 460l-5).
    (b) Allocation Among Gulf Producing States and Coastal Political 
Subdivisions.--
            (1) Allocation among gulf producing states for fiscal years 
        2007 through 2016.--
                    (A) In general.--Subject to subparagraph (B), 
                effective for each of fiscal years 2007 through 2016, 
                the amount made available under subsection (a)(2)(A) 
                shall be allocated to each Gulf producing State in 
                amounts (based on a formula established by the 
                Secretary by regulation) that are inversely 
                proportional to the respective distances between the 
                point on the coastline of each Gulf producing State 
                that is closest to the geographic center of the 
                applicable leased tract and the geographic center of 
                the leased tract.
                    (B) Minimum allocation.--The amount allocated to a 
                Gulf producing State each fiscal year under 
                subparagraph (A) shall be at least 10 percent of the 
                amounts available under subsection (a)(2)(A).
            (2) Allocation among gulf producing states for fiscal year 
        2017 and thereafter.--
                    (A) In general.--Subject to subparagraphs (B) and 
                (C), effective for fiscal year 2017 and each fiscal 
                year thereafter--
                            (i) the amount made available under 
                        subsection (a)(2)(A) from any lease entered 
                        into within the 181 Area or the 181 South Area 
                        shall be allocated to each Gulf producing State 
                        in amounts (based on a formula established by 
                        the Secretary by regulation) that are inversely 
                        proportional to the respective distances 
                        between the point on the coastline of each Gulf 
                        producing State that is closest to the 
                        geographic center of the applicable leased 
                        tract and the geographic center of the leased 
                        tract; and
                            (ii) the amount made available under 
                        subsection (a)(2)(A) from any lease entered 
                        into within the 2002-2007 planning area shall 
                        be allocated to each Gulf producing State in 
                        amounts that are inversely proportional to the 
                        respective distances between the point on the 
                        coastline of each Gulf producing State that is 
                        closest to the geographic center of each 
                        historical lease site and the geographic center 
                        of the historical lease site, as determined by 
                        the Secretary.
                    (B) Minimum allocation.--The amount allocated to a 
                Gulf producing State each fiscal year under 
                subparagraph (A) shall be at least 10 percent of the 
                amounts available under subsection (a)(2)(A).
                    (C) Historical lease sites.--
                            (i) In general.--Subject to clause (ii), 
                        for purposes of subparagraph (A)(ii), the 
                        historical lease sites in the 2002-2007 
                        planning area shall include all leases entered 
                        into by the Secretary for an area in the Gulf 
                        of Mexico during the period beginning on 
                        October 1, 1982 (or an earlier date if 
                        practicable, as determined by the Secretary), 
                        and ending on December 31, 2015.
                            (ii) Adjustment.--Effective January 1, 
                        2022, and every 5 years thereafter, the ending 
                        date described in clause (i) shall be extended 
                        for an additional 5 calendar years.
            (3) Payments to coastal political subdivisions.--
                    (A) In general.--The Secretary shall pay 20 percent 
                of the allocable share of each Gulf producing State, as 
                determined under paragraphs (1) and (2), to the coastal 
                political subdivisions of the Gulf producing State.
                    (B) Allocation.--The amount paid by the Secretary 
                to coastal political subdivisions shall be allocated to 
                each coastal political subdivision in accordance with 
                subparagraphs (B), (C), and (E) of section 31(b)(4) of 
                the Outer Continental Shelf Lands Act (43 U.S.C. 
                1356a(b)(4)).
    (c) Timing.--The amounts required to be deposited under paragraph 
(2) of subsection (a) for the applicable fiscal year shall be made 
available in accordance with that paragraph during the fiscal year 
immediately following the applicable fiscal year.
    (d) Authorized Uses.--
            (1) In general.--Subject to paragraph (2), each Gulf 
        producing State and coastal political subdivision shall use all 
        amounts received under subsection (b) in accordance with all 
        applicable Federal and State laws, only for 1 or more of the 
        following purposes:
                    (A) Projects and activities for the purposes of 
                coastal protection, including conservation, coastal 
                restoration, hurricane protection, and infrastructure 
                directly affected by coastal wetland losses.
                    (B) Mitigation of damage to fish, wildlife, or 
                natural resources.
                    (C) Implementation of a federally-approved marine, 
                coastal, or comprehensive conservation management plan.
                    (D) Mitigation of the impact of outer Continental 
                Shelf activities through the funding of onshore 
                infrastructure projects.
                    (E) Planning assistance and the administrative 
                costs of complying with this section.
            (2) Limitation.--Not more than 3 percent of amounts 
        received by a Gulf producing State or coastal political 
        subdivision under subsection (b) may be used for the purposes 
        described in paragraph (1)(E).
    (e) Administration.--Amounts made available under subsection (a)(2) 
shall--
            (1) be made available, without further appropriation, in 
        accordance with this section;
            (2) remain available until expended; and
            (3) be in addition to any amounts appropriated under--
                    (A) the Outer Continental Shelf Lands Act (43 
                U.S.C. 1331 et seq.);
                    (B) the Land and Water Conservation Fund Act of 
                1965 (16 U.S.C. 460l-4 et seq.); or
                    (C) any other provision of law.
    (f) Limitations on Amount of Distributed Qualified Outer 
Continental Shelf Revenues.--
            (1) In general.--Subject to paragraph (2), the total amount 
        of qualified outer Continental Shelf revenues made available 
        under subsection (a)(2) shall not exceed $500,000,000 for each 
        of fiscal years 2016 through 2055.
            (2) Expenditures.--For the purpose of paragraph (1), for 
        each of fiscal years 2016 through 2055, expenditures under 
        subsection (a)(2) and shall be net of receipts from that fiscal 
        year from any area in the 181 Area in the Eastern Planning Area 
        and the 181 South Area.
            (3) Pro rata reductions.--If paragraph (1) limits the 
        amount of qualified outer Continental Shelf revenue that would 
        be paid under subparagraphs (A) and (B) of subsection (a)(2)--
                    (A) the Secretary shall reduce the amount of 
                qualified outer Continental Shelf revenue provided to 
                each recipient on a pro rata basis; and
                    (B) any remainder of the qualified outer 
                Continental Shelf revenues shall revert to the general 
                fund of the Treasury.
                                                       Calendar No. 529

109th CONGRESS

  2d Session

                                S. 3711

_______________________________________________________________________

                                 A BILL

To enhance the energy independence and security of the United States by 
 providing for exploration, development, and production activities for 
    mineral resources in the Gulf of Mexico, and for other purposes.

_______________________________________________________________________

                             July 21, 2006

            Read the second time and placed on the calendar