[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3926 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 3926

To provide for the energy, economic, and national security of America, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 21, 2006

 Mr. Santorum introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To provide for the energy, economic, and national security of America, 
                        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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Empower America: 
Securing America's Energy Future Act of 2006''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
                          TITLE I--PRODUCTION

                            Subtitle A--Coal

                 Part I--Coal-To-Liquid Fuel Promotion

Sec. 101. Short title.
Sec. 102. Definitions.
Sec. 103. Coal-to-liquid fuel loan guarantee program.
Sec. 104. Coal-to-liquid facilities loan program.
Sec. 105. Credit for investment in coal-to-liquid fuels projects.
Sec. 106. Temporary expensing for equipment used in coal-to-liquid 
                            fuels process.
Sec. 107. Modification of multiyear contract authority for procurement 
                            of fuel derived from coal, oil shale, and 
                            tar sands.
Sec. 108. Strategic Petroleum Reserve.
Sec. 109. Authorization to conduct research, development, testing, and 
                            evaluation of assured domestic fuels.
                  Part II--Clean Coal Power Initiative

Sec. 111. Clean coal power initiative.
            Part III--Incentives for Innovative Technologies

Sec. 116. Technical corrections.
                Subtitle B--Refinery Permitting Process

Sec. 121. Refinery permitting process.
                        Subtitle C--Oil and Gas

                  Part I--Deep Ocean Energy Resources

Sec. 131. Short title.
Sec. 132. Policy.
Sec. 133. Definitions under the outer continental shelf lands act.
Sec. 134. Determination of adjacent zones and planning areas.
Sec. 135. Administration of leasing.
Sec. 136. Grant of leases by Secretary.
Sec. 137. Disposition of receipts.
Sec. 138. Review of outer Continental Shelf exploration plans.
Sec. 139. Reservation of lands and rights.
Sec. 140. Outer continental shelf leasing program.
Sec. 141. Coordination with adjacent states.
Sec. 142. Environmental studies.
Sec. 143. Review of outer continental shelf development and production 
                            plans.
Sec. 144. Federal Energy Natural Resources Enhancement Fund Act of 
                            2006.
Sec. 145. Termination of effect of laws prohibiting the spending of 
                            appropriated funds for certain purposes.
Sec. 146. Outer Continental Shelf incompatible use.
Sec. 147. Repurchase of certain leases.
Sec. 148. Offsite environmental mitigation.
Sec. 149. Amendments to the Mineral Leasing Act.
Sec. 150. Minerals management service.
Sec. 151. Authority to use decommissioned offshore oil and gas 
                            platforms and other facilities for 
                            artificial reef, scientific research, or 
                            other uses.
Sec. 152. Repeal of requirement to conduct comprehensive inventory of 
                            OCS oil and natural gas resources.
Sec. 153. Mining and petroleum schools.
Sec. 154. Onshore and offshore mineral lease fees.
Sec. 155. OCS regional headquarters.
Sec. 156. National GEO Fund Act of 2006.
Sec. 157. Leases for areas located within 100 miles of California or 
                            Florida.
Sec. 158. Coastal impact assistance.
Sec. 159. Oil shale and tar sands amendments.
Sec. 160. Availability of OCS Receipts to provide payments under Secure 
                            Rural Schools and Community Self-
                            Determination Act of 2000.
                Part II--Domestic Oil and Gas Production

Sec. 171. Short title.
Sec. 172. Definitions.
Sec. 173. Leasing program for land within the Coastal Plain.
Sec. 174. Lease sales.
Sec. 175. Grant of leases by the Secretary.
Sec. 176. Lease terms and conditions.
Sec. 177. Coastal Plain environmental protection.
Sec. 178. Expedited judicial review.
Sec. 179. Use of revenues.
Sec. 180. Rights-of-way across the Coastal Plain.
Sec. 181. Conveyance.
                   Part III--Emergency Service Route

Sec. 191. Emergency service route.
                   TITLE II--RESEARCH AND DEVELOPMENT

Sec. 201. Renewable energy.
Sec. 202. Biomass research and development.
Sec. 203. Production incentives for cellulosic biofuels.
Sec. 204. Commercial byproducts from municipal solid waste and 
                            cellulosic biomass loan guarantee program.
Sec. 205. Fossil energy.
Sec. 206. Carbon capture research and development program.
Sec. 207. Advanced energy initiative for vehicles.
                 TITLE III--CONSERVATION AND EFFICIENCY

                     Subtitle A--Decreasing Demand

Sec. 301. Credit for teleworking.
Sec. 302. Employer-provided computer equipment treated as fringe 
                            benefit.
Sec. 303. Sense of Congress.
           Subtitle B--Corporate Average Fuel Economy Reform

Sec. 311. Short title.
Sec. 312. Cafe standards for passenger automobiles.
Sec. 313. Use of earned credits.
Sec. 314. Use of civil penalties for research and development.
Sec. 315. Effective date.
         Subtitle C--Other Conservation and Efficiency Programs

Sec. 321. Advanced building efficiency testbed.
Sec. 322. Energy efficient public buildings.
Sec. 323. Energy efficiency public information initiative.
                     TITLE IV--CONSUMER PROTECTION

Sec. 401. Short title.
Sec. 402. Protection of consumers against price gouging.
Sec. 403. Justifiable price increases.
Sec. 404. Emergency proclamations and orders.
Sec. 405. Enforcement by Federal Trade Commission.
Sec. 406. Penalties.
Sec. 407. Definitions.
Sec. 408. Effective date.
                        TITLE V--TAX INCENTIVES

Sec. 501. Extension of excise tax credit for coal-to-liquids.
Sec. 502. Extension of alternative motor vehicle credit.
Sec. 503. Tax incentives extended to encourage cellulosic ethanol 
                            production.
Sec. 504. Extension of biodiesel income and excise tax credits.
Sec. 505. Extension of renewable energy resources.
Sec. 506. Extension and modification of investment tax credit with 
                            respect to solar energy property and 
                            qualified fuel cell property.
Sec. 507. Credit for production of natural gas.
Sec. 508. Extension and modification of credit for residential energy 
                            efficient property.
                   TITLE VI--BOUTIQUE FUEL REDUCTIONS

Sec. 601. Boutique fuel reductions.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) according to the Energy Information Administration--
                    (A) the United States consumes approximately 
                20,700,000 barrels of oil per day;
                    (B) total petroleum consumption will grow to 
                approximately 26,100,000 barrels per day by 2025;
                    (C) global energy consumption will rise by over 34 
                percent by 2015; and
                    (D) petroleum imports will represent 60 percent of 
                the demand of the United States for petroleum in 2025, 
                up from 58 percent in 2004;
            (2) the United States imports approximately 13,500,000 
        barrels of oil per day;
            (3) 65 percent of the petroleum imports of the United 
        States come from Canada, Mexico, Saudi Arabia, Venezuela, and 
        Nigeria, respectively, according to the Energy Information 
        Administration;
            (4) approximately 17 percent of the oil imported by the 
        United States comes from the Middle East;
            (5) Energy Information Administration statistics show that 
        the top petroleum producers in the world include Saudi Arabia, 
        the former Soviet Union, Iran, China, and Venezuela, with 6 of 
        the 11 largest oil fields located in Saudi Arabia, Venezuela, 
        and Iran;
            (6) nearly \2/3\ of the proven oil reserves of the world 
        are located in the Middle East, with 45 percent of the reserves 
        located in Saudi Arabia, Iraq, and Iran;
            (7) over 80 percent of the total export earnings of Iran, 
        and 50 percent of the gross domestic product of Iran, are 
        generated through oil and gas revenues;
            (8) Iran has provided the terrorist organization Hezbollah 
        with between $60,000,000 and $100,000,000 annually to support 
        terror activities against the civilized world;
            (9) leaders of both Iran and Venezuela have publicly 
        denounced the United States and have labeled the citizens and 
        allies of the United States as the enemy;
            (10) the Energy Information Administration estimates that 
        94 percent of the energy used by the United States is provided 
        by fossil fuels and nuclear energy;
            (11) the energy policy of the United States must include 
        the use and development of a variety of energy sources, 
        including energy from coal, renewable sources, nuclear sources, 
        oil, and natural gas;
            (12) the Energy Information Administration reports that the 
        United States has approximately 25 percent of the coal reserves 
        of the world;
            (13)(A) the Energy Information Administration projects that 
        the United States will import coal in a quantity that will meet 
        less than 2 percent of the coal needs of the United States 
        through 2025; and
            (B) the National Mining Association reports that over 56 
        percent of all electricity in the United States is produced 
        through the use of coal;
            (14) the first coal-to-liquid fuel facility in the United 
        States, located in Schuylkill County, Pennsylvania, is in a 
        pre-construction phase;
            (15)(A) investment in the research and development of 
        alternative fuel sources has been significant over the last 
        decade; and
            (B) the Federal Government has spent more than 
        $35,000,000,000, while energy companies have invested more than 
        $100,000,000,000, on the research and development of 
        alternative fuel sources;
            (16) reducing the dependence of the United States on 
        foreign oil, and achieving energy security, requires an even 
        greater commitment in the future;
            (17) all the corn grown in the United States today could be 
        used to produce only enough ethanol to displace about 12 
        percent of the gasoline consumed;
            (18)(A) according to the Renewable Fuels Association, there 
        are over 100 ethanol plants in operation, 42 plants under 
        construction, over 60 plants in various planning stages, and 7 
        plants that are expanding;
            (B) ethanol production in 2005 totaled approximately 
        4,000,000,000 gallons, which is the equivalent of approximately 
        3 percent of the gasoline consumption of the United States; and
            (C) when the construction and expansion of planned ethanol 
        facilities is finished, annual ethanol capacity in the United 
        States will be approximately 7,700,000,000 gallons;
            (19)(A) there are now 65 biodiesel plants operating in the 
        United States and nearly 60 plants under construction; and
            (B) in 2005, production in the United States from the 
        plants reached 91,000,000 gallons, up from 2,000,000 gallons in 
        2000;
            (20)(A) research and development of renewable alternatives 
        must continue; and
            (B) according to the Department of Agriculture, ethanol 
        production from cellulosic feedstocks seems to be the most 
        promising renewable alternative for reducing the dependence of 
        the United States on crude oil imports; and
            (21) a study conducted by the Department of Energy and the 
        Department of Agriculture concluded that the land resources of 
        the United States could, by 2030, produce enough biomass to 
        displace the equivalent of at least 30 percent of petroleum 
        consumption by the United States without seriously disrupting 
        food production.

                          TITLE I--PRODUCTION

                            Subtitle A--Coal

                 PART I--COAL-TO-LIQUID FUEL PROMOTION

SEC. 101. SHORT TITLE.

    This part may be cited as the ``Coal-to-Liquid Fuel Promotion Act 
of 2006''.

SEC. 102. DEFINITIONS.

    In this part:
            (1) Coal-to-liquid.--The term ``coal-to-liquid'' means--
                    (A) with respect to a process or technology, the 
                use of the coal resources of the United States, using 
                the class of chemical reactions known as Fischer-
                Tropsch, to produce synthetic fuel suitable for 
                transportation; and
                    (B) with respect to a facility, the portion of a 
                facility related to the Fischer-Tropsch process, 
                Fischer-Tropsch finished fuel production, or the 
                capture, transportation, or sequestration of byproducts 
                of the use of coal at the Fischer-Tropsch facility, 
                including carbon emissions.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.

SEC. 103. COAL-TO-LIQUID FUEL LOAN GUARANTEE PROGRAM.

    (a) Eligible Projects.--Section 1703(b) of the Energy Policy Act of 
2005 (42 U.S.C. 16513(b)) is amended by adding at the end the 
following:
            ``(11) Large-scale coal-to-liquid facilities (as defined in 
        section 2 of the Coal-to-Liquid Fuel Promotion Act of 2006), 
        that use coal resources of the United States to produce not 
        less than 10,000 barrels a day of liquid transportation 
        fuel.''.
    (b) Authorization of Appropriations.--Section 1704 of the Energy 
Policy Act of 2005 (42 U.S.C. 16514) is amended by adding at the end 
the following:
    ``(c) Coal-to-Liquid Projects.--
            ``(1) Mandatory funding.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, not later than 30 days after the date 
                of enactment of this subsection, out of any funds in 
                the Treasury not otherwise appropriated, the Secretary 
                of the Treasury shall transfer to the Secretary to 
                provide the cost of guarantees for projects involving 
                large-scale coal-to-liquid facilities under section 
                1703(b)(11) $5,000,000,000, to remain available until 
                expended.
                    ``(B) Receipt and acceptance.--The Secretary shall 
                be entitled to receive, shall accept, and shall use to 
                provide the cost of guarantees for projects described 
                in subparagraph (A) the funds transferred under 
                subparagraph (A), without further appropriation. 
            ``(2) Authorization of appropriations.--In addition to the 
        amounts made available under paragraph (1), there are 
        authorized to be appropriated such sums as are necessary to 
        provide the cost of guarantees for projects involving large-
        scale coal-to-liquid facilities under section 1703(b)(11).
            ``(3) Limitations.--
                    ``(A) In general.--No loan guarantees shall be 
                provided under this title for projects described in 
                paragraph (1) or (2) after (as determined by the 
                Secretary)--
                            ``(i) the tenth such loan guarantee is 
                        issued under this title; or
                            ``(ii) production capacity covered by such 
                        loan guarantees reaches 100,000 barrels per day 
                        of coal-to-liquid fuel.
                    ``(B) Individual projects.--
                            ``(i) In general.--A loan guarantee may be 
                        provided under this title for any large-scale 
                        coal-to-liquid facility described in paragraph 
                        (1) or (2) that produces no more than 20,000 
                        barrels of coal-to-liquid fuel per day.
                            ``(ii) Non-federal funding requirement.--To 
                        be eligible for a loan guarantee under this 
                        title, a large-scale coal-to-liquid facility 
                        described in paragraph (1) or (2) that produces 
                        more than 20,000 barrels of coal-to-liquid fuel 
                        per day shall be required to provide non-
                        Federal funding for the proportional cost of 
                        the loan guarantee for production that exceeds 
                        20,000 barrels of coal-to-liquid fuel per 
                        day.''.

SEC. 104. COAL-TO-LIQUID FACILITIES LOAN PROGRAM.

    (a) Definition of Eligible Recipient.--In this section, the term 
``eligible recipient'' means an individual, organization, or other 
entity that owns, operates, or plans to construct a coal-to-liquid 
facility that will produce at least 10,000 barrels per day of coal-to-
liquid fuel.
    (b) Establishment.--The Secretary shall establish a program under 
which the Secretary shall provide loans, in a total amount not to 
exceed $20,000,000, for use by eligible recipients to pay the Federal 
share of the cost of obtaining any services necessary for the planning, 
permitting, and construction of a coal-to-liquid facility.
    (c) Application.--To be eligible to receive a loan under subsection 
(b), an owner or operator of a coal-to-liquid facility shall submit to 
the Secretary an application at such time, in such manner, and 
containing such information as the Secretary may require.
    (d) Non-Federal Match.--To be eligible to receive a loan under this 
section, an eligible recipient shall use non-Federal funds to provide a 
dollar-for-dollar match of the amount of the loan.
    (e) Repayment of Loan.--
            (1) In general.--To be eligible to receive a loan under 
        this section, an eligible recipient shall agree to repay the 
        original amount of the loan to the Secretary not later than 5 
        years after the date of the receipt of the loan.
            (2) Source of funds.--Repayment of a loan under paragraph 
        (1) may be made from any financing or assistance received for 
        the construction of a coal-to-liquid facility described in 
        subsection (a), including a loan guarantee provided under 
        section 1703(b)(11) of the Energy Policy Act of 2005 (42 U.S.C. 
        16513(b)(11)).
    (f) Funding.--
            (1) In general.--Notwithstanding any other provision of 
        law, not later than 30 days after the date of enactment of this 
        Act, out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall transfer to 
        the Secretary to carry out this section $200,000,000, to remain 
        available until expended.
            (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation. 

SEC. 105. CREDIT FOR INVESTMENT IN COAL-TO-LIQUID FUELS PROJECTS.

    (a) In General.--Section 46 of the Internal Revenue Code of 1986 
(relating to amount of credit) is amended by striking ``and'' at the 
end of paragraph (3), by striking the period at the end of paragraph 
(4) and inserting ``, and'', and by adding at the end the following new 
paragraph:
            ``(5) the qualifying coal-to-liquid fuels project 
        credit.''.
    (b) Amount of Credit.--Subpart E of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 (relating to rules for 
computing investment credit) is amended by inserting after section 48B 
the following new section:

``SEC. 48C. QUALIFYING COAL-TO-LIQUID FUELS PROJECT CREDIT.

    ``(a) In General.--For purposes of section 46, the qualifying coal-
to-liquid fuels project credit for any taxable year is an amount equal 
to 20 percent of the qualified investment for such taxable year.
    ``(b) Qualified Investment.--
            ``(1) In general.--For purposes of subsection (a), the 
        qualified investment for any taxable year is the basis of 
        property placed in service by the taxpayer during such taxable 
        year which is part of a qualifying coal-to-liquid fuels 
        project--
                    ``(A)(i) the construction, reconstruction, or 
                erection of which is completed by the taxpayer, or
                    ``(ii) which is acquired by the taxpayer if the 
                original use of such property commences with the 
                taxpayer, and
                    ``(B) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable.
            ``(2) Applicable rules.--For purposes of this section, 
        rules similar to the rules of subsection (a)(4) and (b) of 
        section 48 shall apply.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualifying coal-to-liquid fuels project.--The term 
        `qualifying coal-to-liquid fuels project' means any domestic 
        project which--
                    ``(A) employs the Fischer-Tropsch process to 
                produce at least 10,000 barrels per day of 
                transportation grade liquid fuels from coal (including 
                any property which allows for the capture, 
                transportation, or sequestration of by-products 
                resulting from such process, including carbon 
                emissions), and
                    ``(B) any portion of the qualified investment in 
                which is certified under the qualifying coal-to-liquid 
                program as eligible for credit under this section in an 
                amount (not to exceed $200,000,000) determined by the 
                Secretary.
            ``(2) Coal.--The term `coal' means any carbonized or 
        semicarbonized matter, including peat.
    ``(d) Qualifying Coal-to-Liquid Fuels Project Program.--
            ``(1) In general.--The Secretary, in consultation with the 
        Secretary of Energy, shall establish a qualifying coal-to-
        liquid fuels project program to consider and award 
        certifications for qualified investment eligible for credits 
        under this section to 10 qualifying coal-to-liquid fuels 
        project sponsors under this section. The total qualified 
        investment which may be awarded eligibility for credit under 
        the program shall not exceed $2,000,000,000.
            ``(2) Period of issuance.--A certificate of eligibility 
        under paragraph (1) may be issued only during the 10-fiscal 
        year period beginning on October 1, 2006.
            ``(3) Selection criteria.--The Secretary shall not make a 
        competitive certification award for qualified investment for 
        credit eligibility under this section unless the recipient has 
        documented to the satisfaction of the Secretary that--
                    ``(A) the award recipient is financially viable 
                without the receipt of additional Federal funding 
                associated with the proposed project,
                    ``(B) the recipient will provide sufficient 
                information to the Secretary for the Secretary to 
                ensure that the qualified investment is spent 
                efficiently and effectively,
                    ``(C) a market exists for the products of the 
                proposed project as evidenced by contracts or written 
                statements of intent from potential customers,
                    ``(D) the fuels identified with respect to the 
                gasification technology for such project will comprise 
                at least 90 percent of the fuels required by the 
                project for the production of transportation grade 
                liquid fuels,
                    ``(E) the award recipient's project team is 
                competent in the construction and operation of the 
                Fischer-Tropsch process, with preference given to those 
                recipients with experience which demonstrates 
                successful and reliable operations of such process, and
                    ``(F) the award recipient has met other criteria 
                established and published by the Secretary.
    ``(e) Denial of Double Benefit.--No deduction or other credit shall 
be allowed with respect to the basis of any property taken into account 
in determining the credit allowed under this section.''.
    (c) Conforming Amendments.--
            (1) Section 49(a)(1)(C) of the Internal Revenue Code of 
        1986 is amended by striking ``and'' at the end of clause (iii), 
        by striking the period at the end of clause (iv) and inserting 
        ``, and'', and by adding after clause (iv) the following new 
        clause:
                            ``(v) the basis of any property which is 
                        part of a qualifying coal-to-liquid fuels 
                        project under section 48C.''.
            (2) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 48B the following new item:

``48C. Qualifying coal-to-liquid fuels project credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to periods after the date of the enactment of this Act, under 
rules similar to the rules of section 48(m) of the Internal Revenue 
Code of 1986 (as in effect on the day before the date of the enactment 
of the Revenue Reconciliation Act of 1990).

SEC. 106. TEMPORARY EXPENSING FOR EQUIPMENT USED IN COAL-TO-LIQUID 
              FUELS PROCESS.

    (a) In General.--Part VI of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
179D the following new section:

``SEC. 179E. ELECTION TO EXPENSE CERTAIN COAL-TO-LIQUID FUELS 
              FACILITIES.

    ``(a) Treatment as Expenses.--A taxpayer may elect to treat the 
cost of any qualified coal-to-liquid fuels process property as an 
expense which is not chargeable to capital account. Any cost so treated 
shall be allowed as a deduction for the taxable year in which the 
expense is incurred.
    ``(b) Election.--
            ``(1) In general.--An election under this section for any 
        taxable year shall be made on the taxpayer's return of the tax 
        imposed by this chapter for the taxable year. Such election 
        shall be made in such manner as the Secretary may by 
        regulations prescribe.
            ``(2) Election irrevocable.--Any election made under this 
        section may not be revoked except with the consent of the 
        Secretary.
    ``(c) Qualified Coal-to-Liquid Fuels Process Property.--The term 
`qualified coal-to-liquid fuels process property' means any property 
located in the United States--
            ``(1) which employs the Fischer-Tropsch process to produce 
        transportation grade liquid fuels from coal (including any 
        property which allows for the capture, transportation, or 
        sequestration of by-products resulting from such process, 
        including carbon emissions),
            ``(2) the original use of which commences with the 
        taxpayer,
            ``(3) the construction of which--
                    ``(A) except as provided in subparagraph (B), is 
                subject to a binding construction contract entered into 
                after the date of the enactment of this section and 
                before January 1, 2011, but only if there was no 
                written binding construction contract entered into on 
                or before such date of enactment, or
                    ``(B) in the case of self-constructed property, 
                began after the date of the enactment of this section 
                and before January 1, 2011, and
            ``(4) which is placed in service by the taxpayer after the 
        date of the enactment of this section and before January 1, 
        2016.
    ``(d) Election to Allocate Deduction to Cooperative Owner.--If--
            ``(1) a taxpayer to which subsection (a) applies is an 
        organization to which part I of subchapter T applies, and
            ``(2) one or more persons directly holding an ownership 
        interest in the taxpayer are organizations to which part I of 
        subchapter T apply,
the taxpayer may elect to allocate all or a portion of the deduction 
allowable under subsection (a) to such persons. Such allocation shall 
be equal to the person's ratable share of the total amount allocated, 
determined on the basis of the person's ownership interest in the 
taxpayer. The taxable income of the taxpayer shall not be reduced under 
section 1382 by reason of any amount to which the preceding sentence 
applies.
    ``(e) Basis Reduction.--
            ``(1) In general.--For purposes of this title, if a 
        deduction is allowed under this section with respect to any 
        qualified coal-to-liquid fuels process property, the basis of 
        such property shall be reduced by the amount of the deduction 
        so allowed.
            ``(2) Ordinary income recapture.--For purposes of section 
        1245, the amount of the deduction allowable under subsection 
        (a) with respect to any property which is of a character 
        subject to the allowance for depreciation shall be treated as a 
        deduction allowed for depreciation under section 167.
    ``(f) Application With Other Deductions and Credits.--
            ``(1) Other deductions.--No deduction shall be allowed 
        under any other provision of this chapter with respect to any 
        expenditure with respect to which a deduction is allowed under 
        subsection (a) to the taxpayer.
            ``(2) Credits.--No credit shall be allowed under section 38 
        with respect to any amount for which a deduction is allowed 
        under subsection (a).
    ``(g) Reporting.--No deduction shall be allowed under subsection 
(a) to any taxpayer for any taxable year unless such taxpayer files 
with the Secretary a report containing such information with respect to 
the operation of the property of the taxpayer as the Secretary shall 
require.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) of the Internal Revenue Code of 1986 is 
        amended by striking ``and'' at the end of paragraph (36), by 
        striking the period at the end of paragraph (37) and inserting 
        ``, and'', and by adding at the end the following new 
        paragraph:
            ``(38) to the extent provided in section 179E(e)(1).''.
            (2) Section 1245(a) of such Code is amended by inserting 
        ``179E,'' after ``179D,'' both places it appears in paragraphs 
        (2)(C) and (3)(C).
            (3) Section 263(a)(1) of such Code is amended by striking 
        ``or'' at the end of subparagraph (J), by striking the period 
        at the end of subparagraph (K) and inserting ``, or'', and by 
        inserting after subparagraph (K) the following new 
        subparagraph:
                    ``(L) expenditures for which a deduction is allowed 
                under section 179E.''.
            (4) Section 312(k)(3)(B) of such Code is amended by 
        striking ``or 179D'' each place it appears in the heading and 
        text and inserting ``179D, or 179E''.
            (5) The table of sections for part VI of subchapter B of 
        chapter 1 of such Code is amended by inserting after the item 
        relating to section 179D the following new item:

``Sec. 179E. Election to expense certain coal-to-liquid fuels 
                            facilities.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to properties placed in service after the date of the enactment 
of this Act.

SEC. 107. MODIFICATION OF MULTIYEAR CONTRACT AUTHORITY FOR PROCUREMENT 
              OF FUEL DERIVED FROM COAL, OIL SHALE, AND TAR SANDS.

    Subsection (d) of section 2398a of title 10, United States Code, is 
amended to read as follows:
    ``(d) Multiyear Contract Authority.--Notwithstanding any other 
provision of law, a contract or other agreement for the procurement of 
covered fuel under subsection (b) may be for any term, not in excess of 
20 years, that the Secretary of Defense considers appropriate to assist 
in the development of a domestic alternative liquid fuel.''.

SEC. 108. STRATEGIC PETROLEUM RESERVE.

    (a) Development, Operation, and Maintenance of Reserve.--Section 
159 of the Energy Policy and Conservation Act (42 U.S.C. 6239) is 
amended--
            (1) by redesignating subsections (f), (g), (j), (k), and 
        (l) as subsections (a), (b), (e), (f), and (g), respectively; 
        and
            (2) by inserting after subsection (b) (as redesignated by 
        paragraph (1)) the following:
    ``(c) Study of Maintaining Coal-to-Liquid Products in Reserve.--Not 
later than 1 year after the date of enactment of the Coal-to-Liquid 
Fuel Promotion Act of 2006, the Secretary and the Secretary of Defense 
shall--
            ``(1) conduct a study of the feasibility and suitability of 
        maintaining coal-to-liquid products in the Reserve; and
            ``(2) submit to the Committee on Energy and Natural 
        Resources and the Committee on Armed Services of the Senate and 
        the Committee on Energy and Commerce and the Committee on Armed 
        Services of the House of Representatives a report describing 
        the results of the study.
    ``(d) Construction of Storage Facilities.--As soon as practicable 
after the date of enactment of the Coal-to-Liquid Fuel Promotion Act of 
2006, the Secretary may construct 1 or more storage facilities--
            ``(1) in the vicinity of pipeline infrastructure and at 
        least 1 military base; but
            ``(2) outside the boundaries of any State on the coast of 
        the Gulf of Mexico.''.
    (b) Petroleum Products for Storage in Reserve.--Section 160 of the 
Energy Policy and Conservation Act (42 U.S.C. 6240) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by inserting a semicolon at 
                the end;
                    (B) in paragraph (2), by striking ``and'' at the 
                end;
                    (C) in paragraph (3), by striking the period at the 
                end and inserting ``; and''; and
                    (D) by adding at the end the following:
            ``(4) coal-to-liquid products (as defined in section 2 of 
        the Coal-to-Liquid Fuel Promotion Act of 2006), as the 
        Secretary determines to be appropriate, in a quantity not to 
        exceed 20 percent of the total quantity of petroleum products 
        in the Reserve.'';
            (2) in subsection (b), by redesignating paragraphs (3) 
        through (5) as paragraphs (2) through (4), respectively; and
            (3) by redesignating subsections (f) and (h) as subsections 
        (d) and (e), respectively.
    (c) Conforming Amendments.--Section 167 of the Energy Policy and 
Conservation Act (42 U.S.C. 6247) is amended--
            (1) in subsection (b)--
                    (A) by redesignating paragraphs (2) and (3) as 
                paragraphs (1) and (2), respectively; and
                    (B) in paragraph (2) (as redesignated by 
                subparagraph (A)), by striking ``section 160(f)'' and 
                inserting ``section 160(e)''; and
            (2) in subsection (d), in the matter preceding paragraph 
        (1), by striking ``section 160(f)'' and inserting ``section 
        160(e)''.

SEC. 109. AUTHORIZATION TO CONDUCT RESEARCH, DEVELOPMENT, TESTING, AND 
              EVALUATION OF ASSURED DOMESTIC FUELS.

    Of the amount authorized to be appropriated for the Air Force for 
research, development, testing, and evaluation, $10,000,000 may be made 
available for the Air Force Research Laboratory to continue support 
efforts to test, qualify, and procure synthetic fuels developed from 
coal for aviation jet use.

                  PART II--CLEAN COAL POWER INITIATIVE

SEC. 111. CLEAN COAL POWER INITIATIVE.

    (a) Funding.--Section 401 of the Energy Policy Act of 2005 (42 
U.S.C. 15961) is amended by striking subsection (a) and inserting the 
following:
    ``(a) Clean Coal Power Initiative.--
            ``(1) In general.--Not later than 30 days after the date of 
        enactment of this Act, on October 1, 2008, and on each October 
        1 thereafter through October 1, 2014, out of any funds in the 
        Treasury not otherwise appropriated, the Secretary of the 
        Treasury shall transfer to the Secretary to carry out this 
        subtitle $200,000,000, to remain available until expended.
            ``(2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this subtitle the funds transferred under paragraph (1), 
        without further appropriation. ''.
    (b) Report.--Section 403 of the Energy Policy Act of 2005 (42 
U.S.C. 15963) is amended by striking ``2014'' and inserting ``2015''.

            PART III--INCENTIVES FOR INNOVATIVE TECHNOLOGIES

SEC. 116. TECHNICAL CORRECTIONS.

    (a) Terms and Conditions.--Section 1702 of the Energy Policy Act of 
2005 (42 U.S.C. 16512) is amended--
            (1) in subsection (c), by striking ``law,'' and all that 
        follows through ``equal to'' and inserting ``law or unless the 
        borrower requests a lesser amount, a guarantee by the Secretary 
        shall be in an amount that is equal to the lesser of 100 
        percent or the loan amount or''; and
            (2) in subsection (g)(4)(B)(ii), by striking ``to secure 
        the obligation'' and inserting ``by the borrower to secure the 
        obligation in order to reduce the cost of the obligation''.
    (b) Eligible Projects.--Section 1703(a)(2) of the Energy Policy Act 
of 2005 (42 U.S.C. 16513(a)(2)) is amended by striking ``guarantee is 
issued'' and inserting ``first guarantee for the new or significantly 
improved technology is issued''.

                Subtitle B--Refinery Permitting Process

SEC. 121. REFINERY PERMITTING PROCESS.

    (a) Short Title.--This section may be cited as the ``Gas Petroleum 
Refiner Improvement and Community Empowerment Act'' or the ``Gas PRICE 
Act''.
    (b) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            (3) Permit.--The term ``permit'' means any permit, license, 
        approval, variance, or other form of authorization that a 
        refiner is required to obtain--
                    (A) under any Federal law; or
                    (B) from a State or Indian tribal government agency 
                delegated authority by the Federal Government, or 
                authorized under Federal law, to issue permits.
            (4) Refiner.--The term ``refiner'' means a person that--
                    (A) owns or operates a refinery; or
                    (B) seeks to become an owner or operator of a 
                refinery.
            (5) Refinery.--
                    (A) In general.--The term ``refinery'' means--
                            (i) a facility at which crude oil is 
                        refined into transportation fuel or other 
                        petroleum products; and
                            (ii) a coal liquification or coal-to-liquid 
                        facility at which coal is processed into 
                        synthetic crude oil or any other fuel.
                    (B) Inclusions.--The term ``refinery'' includes--
                            (i) an expansion of a refinery;
                            (ii) a biorefinery; and
                            (iii) any facility that produces a 
                        renewable fuel (as defined in section 211(o)(1) 
                        of the Clean Air Act (42 U.S.C. 7545(o)(1)).
            (6) Refinery expansion.--The term ``refinery expansion'' 
        means a physical change in a refinery that results in an 
        increase in the capacity of the refinery.
            (7) Refinery permitting agreement.--The term ``refinery 
        permitting agreement'' means an agreement entered into between 
        the Administrator and a State or Indian tribe under subsection 
        (d).
            (8) Refinery project.--The term ``refinery project'' means 
        a project for--
                    (A) acquisition or development of a base 
                realignment and closure site for use for a petroleum 
                refinery; or
                    (B) acquisition, development, rehabilitation, 
                expansion, or improvement of petroleum refining 
                operations on a base realignment and closure site or in 
                a community affected by a base realignment and closure 
                site.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Commerce.
            (10) State.--The term ``State'' means--
                    (A) a State;
                    (B) the District of Columbia;
                    (C) the Commonwealth of Puerto Rico; and
                    (D) any other territory or possession of the United 
                States.
    (c) Economic Development Assistance to Encourage Petroleum-Based 
Refinery Activity on BRAC Property.--
            (1) Priority.--Notwithstanding section 206 of the Public 
        Works and Economic Development Act of 1965 (42 U.S.C. 3146), in 
        awarding funds made available to carry out section 209(c)(1) of 
        that Act (42 U.S.C. 3149(c)(1)) pursuant to section 702 of that 
        Act (42 U.S.C. 3232), the Secretary and the Economic 
        Development Administration shall give priority to refinery 
        projects.
            (2) Federal share.--Except as provided in paragraph 
        (3)(C)(ii) and notwithstanding the Public Works and Economic 
        Development Act of 1965 (42 U.S.C. 3121 et seq.), the Federal 
        share of a refinery project shall be 80 percent of the project 
        cost.
            (3) Additional award.--
                    (A) In general.--The Secretary shall make an 
                additional award in connection with a grant made to a 
                recipient for a refinery project.
                    (B) Amount.--The amount of an additional award 
                shall be 10 percent of the amount of the grant for the 
                refinery project.
                    (C) Use.--An additional award under this paragraph 
                shall be used--
                            (i) to carry out any eligible purpose under 
                        the Public Works and Economic Development Act 
                        of 1965 (42 U.S.C. 3121 et seq.);
                            (ii) notwithstanding section 204 of that 
                        Act (42 U.S.C. 3144), to pay up to 100 percent 
                        of the cost of an eligible project or activity 
                        under that Act; or
                            (iii) to meet the non-Federal share 
                        requirements of that Act or any other Act.
                    (D) Non-federal source.--For the purpose of 
                subparagraph (C)(iii), an additional award shall be 
                treated as funds from a non-Federal source.
                    (E) Funding.--The Secretary shall use to carry out 
                this paragraph any amounts made available for economic 
                development assistance programs or under section 702 of 
                that Act (42 U.S.C. 3232).
    (d) Streamlining of Refinery Permitting Process.--
            (1) In general.--At the request of the Governor of a State 
        or the governing body of an Indian tribe, the Administrator 
        shall enter into a refinery permitting agreement with the State 
        or Indian tribe under which the process for obtaining all 
        permits necessary for the construction and operation of a 
        refinery shall be streamlined using a systematic 
        interdisciplinary multimedia approach as provided in this 
        section.
            (2) Authority of administrator.--Under a refinery 
        permitting agreement--
                    (A) the Administrator shall have authority, as 
                applicable and necessary, to--
                            (i) accept from a refiner a consolidated 
                        application for all permits that the refiner is 
                        required to obtain to construct and operate a 
                        refinery;
                            (ii) in consultation and cooperation with 
                        each Federal, State, or Indian tribal 
                        government agency that is required to make any 
                        determination to authorize the issuance of a 
                        permit, establish a schedule under which each 
                        agency shall--
                                    (I) concurrently consider, to the 
                                maximum extent practicable, each 
                                determination to be made; and
                                    (II) complete each step in the 
                                permitting process; and
                            (iii) issue a consolidated permit that 
                        combines all permits issued under the schedule 
                        established under clause (ii); and
                    (B) the Administrator shall provide to State and 
                Indian tribal government agencies--
                            (i) financial assistance in such amounts as 
                        the agencies reasonably require to hire such 
                        additional personnel as are necessary to enable 
                        the government agencies to comply with the 
                        applicable schedule established under 
                        subparagraph (A)(ii); and
                            (ii) technical, legal, and other assistance 
                        in complying with the refinery permitting 
                        agreement.
            (3) Agreement by the state.--Under a refinery permitting 
        agreement, a State or governing body of an Indian tribe shall 
        agree that--
                    (A) the Administrator shall have each of the 
                authorities described in paragraph (2); and
                    (B) each State or Indian tribal government agency 
                shall--
                            (i) in accordance with State law, make such 
                        structural and operational changes in the 
                        agencies as are necessary to enable the 
                        agencies to carry out consolidated project-wide 
                        permit reviews concurrently and in coordination 
                        with the Environmental Protection Agency and 
                        other Federal agencies; and
                            (ii) comply, to the maximum extent 
                        practicable, with the applicable schedule 
                        established under paragraph (2)(A)(ii).
            (4) Interdisciplinary approach.--
                    (A) In general.--The Administrator and a State or 
                governing body of an Indian tribe shall incorporate an 
                interdisciplinary approach, to the maximum extent 
                practicable, in the development, review, and approval 
                of permits subject to this subsection.
                    (B) Options.--Among other options, the 
                interdisciplinary approach may include use of--
                            (i) environmental management practices; and
                            (ii) third party contractors.
            (5) Deadlines.--
                    (A) New refineries.--In the case of a consolidated 
                permit for the construction of a new refinery, the 
                Administrator and the State or governing body of an 
                Indian tribe shall approve or disapprove the 
                consolidated permit not later than--
                            (i) 360 days after the date of the receipt 
                        of the administratively complete application 
                        for the consolidated permit; or
                            (ii) on agreement of the applicant, the 
                        Administrator, and the State or governing body 
                        of the Indian tribe, 90 days after the 
                        expiration of the deadline established under 
                        clause (i).
                    (B) Expansion of existing refineries.--In the case 
                of a consolidated permit for the expansion of an 
                existing refinery, the Administrator and the State or 
                governing body of an Indian tribe shall approve or 
                disapprove the consolidated permit not later than--
                            (i) 120 days after the date of the receipt 
                        of the administratively complete application 
                        for the consolidated permit; or
                            (ii) on agreement of the applicant, the 
                        Administrator, and the State or governing body 
                        of the Indian tribe, 30 days after the 
                        expiration of the deadline established under 
                        clause (i).
            (6) Federal agencies.--Each Federal agency that is required 
        to make any determination to authorize the issuance of a permit 
        shall comply with the applicable schedule established under 
        paragraph (2)(A)(ii).
            (7) Judicial review.--Any civil action for review of any 
        permit determination under a refinery permitting agreement 
        shall be brought exclusively in the United States district 
        court for the district in which the refinery is located or 
        proposed to be located.
            (8) Efficient permit review.--In order to reduce the 
        duplication of procedures, the Administrator shall use State 
        permitting and monitoring procedures to satisfy substantially 
        equivalent Federal requirements under this title.
            (9) Severability.--If 1 or more permits that are required 
        for the construction or operation of a refinery are not 
        approved on or before any deadline established under paragraph 
        (5), the Administrator may issue a consolidated permit that 
        combines all other permits that the refiner is required to 
        obtain other than any permits that are not approved.
            (10) Savings.--Nothing in this subsection affects the 
        operation or implementation of otherwise applicable law 
        regarding permits necessary for the construction and operation 
        of a refinery.
            (11) Consultation with local governments.--Congress 
        encourages the Administrator, States, and tribal governments to 
        consult, to the maximum extent practicable, with local 
        governments in carrying out this subsection.
            (12) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as are necessary to carry out this 
        subsection.
            (13) Effect on local authority.--Nothing in this subsection 
        affects--
                    (A) the authority of a local government with 
                respect to the issuance of permits; or
                    (B) any requirement or ordinance of a local 
                government (such as a zoning regulation).
    (e) Efficiency.--
            (1) Methane reduction projects.--
                    (A) In general.--Not later than 180 days after the 
                date of enactment of this Act, the Administrator shall 
                solicit applications from eligible entities, as 
                determined by the Administrator, for grants under the 
                Natural Gas STAR Program under the Environmental 
                Protection Agency to pay the Federal share of the cost 
                of projects relating to the reduction of methane 
                emissions in the oil and gas industries.
                    (B) Project inclusions.--To receive a grant under 
                subparagraph (A), the application of the eligible 
                entity shall include--
                            (i) an identification of 1 or more 
                        technologies used to achieve a reduction in the 
                        emission of methane; and
                            (ii) an analysis of the cost-effectiveness 
                        of a technology described in clause (i).
                    (C) Limitation.--A grant to an eligible entity 
                under this paragraph shall not exceed $50,000.
                    (D) Federal share.--The Federal share of the cost 
                of a project under this paragraph shall not exceed 50 
                percent.
                    (E) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $1,000,000 for the period of fiscal years 
                2006 through 2010.
            (2) Efficiency promotion workshops.--
                    (A) In general.--The Administrator, in conjunction 
                with the Interstate Oil and Gas Compact Commission, 
                shall conduct a series of technical workshops to 
                provide information to officials in oil- and gas-
                producing States relating to methane emission reduction 
                techniques.
                    (B) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $1,000,000 for the period of fiscal years 
                2006 through 2010.
    (f) Fuel Emergency Waivers.--Section 211(c)(4)(C) of the Clean Air 
Act (42 U.S.C. 7545(c)(4)(C)) (as amended by section 1541 of the Energy 
Policy Act of 2005 (Public Law 109-58; 119 Stat. 1106)) is amended--
            (1) by redesignating the first clause (v) as clause (vi);
            (2) by redesignating the second clause (v) as clause (vii); 
        and
            (3) by inserting after clause (iv) the following:
    ``(v) A State shall be held harmless and not be required to revise 
its State implementation plan under section 110 to account for the 
emissions from a waiver granted by the Administrator under clause 
(ii).''.
    (g) Fischer-Tropsch Fuels.--
            (1) In general.--In cooperation with the Secretary of 
        Energy, the Secretary of Defense, the Administrator of the 
        Federal Aviation Administration, Secretary of Health and Human 
        Services, and Fischer-Tropsch industry representatives, the 
        Administrator shall--
                    (A) conduct a research and demonstration program to 
                evaluate the air quality benefits of ultra-clean 
                Fischer-Tropsch transportation fuel, including diesel 
                and jet fuel;
                    (B) evaluate the use of ultra-clean Fischer-Tropsch 
                transportation fuel as a mechanism for reducing engine 
                exhaust emissions; and
                    (C) submit recommendations to Congress on the most 
                effective use and associated benefits of these ultra-
                clean fuel for reducing public exposure to exhaust 
                emissions.
            (2) Guidance and technical support.--The Administrator 
        shall, to the extent necessary, issue any guidance or technical 
        support documents that would facilitate the effective use and 
        associated benefit of Fischer-Tropsch fuel and blends.
            (3) Requirements.--The program described in paragraph (1) 
        shall consider--
                    (A) the use of neat (100 percent) Fischer-Tropsch 
                fuel and blends with conventional crude oil-derived 
                fuel for heavy-duty and light-duty diesel engines and 
                the aviation sector; and
                    (B) the production costs associated with domestic 
                production of those ultra clean fuel and prices for 
                consumers.
            (4) Reports.--The Administrator shall submit to the 
        Committee on Environment and Public Works of the Senate and the 
        Committee on Energy and Commerce of the House of 
        Representatives--
                    (A) not later than October 1, 2007, an interim 
                report on actions taken to carry out this subsection; 
                and
                    (B) not later than December 1, 2008, a final report 
                on actions taken to carry out this subsection.

                        Subtitle C--Oil and Gas

                  PART I--DEEP OCEAN ENERGY RESOURCES

SEC. 131. SHORT TITLE.

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

SEC. 132. 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.

SEC. 133. 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) in subsection (a), by inserting after ``control'' the 
        following: ``or lying within the United States exclusive 
        economic zone adjacent to the territories of the United 
        States'';
            (2) by striking the semicolon at the end of each of 
        subsections (a) through (o) and inserting a period;
            (3) by amending subsection (f) to read as follows:
    ``(f) The term `affected State' means the Adjacent State.'';
            (4) by striking ``; and'' at the end of subsection (p) and 
        inserting a period; and
            (5) 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 
subsection, 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.''.

SEC. 134. 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.''.

SEC. 135. 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 1 year 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.''.

SEC. 136. GRANT OF LEASES BY SECRETARY.

    (a) In General.--Section 8 of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1337) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (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.'';
                    (B) in paragraph (3)--
                            (i) by striking subparagraph (A) and 
                        redesignating subparagraphs (B) and (C) as 
                        subparagraphs (A) and (B), respectively; and
                            (ii) in subparagraph (A) (as redesignated 
                        by clause (i)) by striking ``In the Western'' 
                        and all that follows through ``Alaska, the 
                        Secretary'' and inserting ``The Secretary'';
            (2) by adding at the end of subsection (b) the following:
``The Secretary may issue more than 1 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 2. The Secretary may 
issue regulations that the Secretary determines are necessary to manage 
such leases consistent with the purposes of this Act.'';
            (3) in subsection (g)--
                    (A) by striking paragraphs (1), (2), (4), (5), (6), 
                and (7); and
                    (B) in paragraph (3)--
                            (i) by striking the last sentence; and
                            (ii) by striking ``(3)'';
            (4) in subsection (p)(2), by striking subparagraph (B) and 
        inserting the following:
            ``(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.''; and
            (5) 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 1 
        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, the term `natural gas' means natural gas and all 
        substances produced in association with gas, including 
        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 
1 year 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 1 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 1 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.''.
    (b) Effective Date.--The amendments made by subsection (a)(3) take 
effect on October 1, 2006.

SEC. 137. DISPOSITION OF RECEIPTS.

    Section 9 of the Outer Continental Shelf Lands Act (43 U.S.C. 1338) 
is amended--
            (1) by striking ``All rentals'' and inserting the 
        following:
    ``(a) In General.--All rentals'';
            (2) in subsection (a) (as designated by paragraph (1)) by 
        inserting ``, if not paid as otherwise provided in this title'' 
        after ``receipts''; and
            (3) by adding at the end 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 the amendment made by 
                section 136(a)(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 144 of the Deep Ocean Energy 
                        Resources Act of 2006.
                            ``(iii) 5 percent into the account 
                        established by section 153 of the Deep Ocean 
                        Energy Resources Act of 2006.
                            ``(iv) 5 percent into the account 
                        established by section 156 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 144 of the Deep Ocean Energy 
                        Resources Act of 2006.
                            ``(iii) 5 percent into the account 
                        established by section 153 of the Deep Ocean 
                        Energy Resources Act of 2006.
                            ``(iv) 5 percent into the account 
                        established by section 156 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 the amendment made by 
                section 136(a)(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 144 of the Deep Ocean Energy 
                        Resources Act of 2006.
                            ``(iii) 5 percent into the account 
                        established by section 153 of the Deep Ocean 
                        Energy Resources Act of 2006.
                            ``(iv) 5 percent into the account 
                        established by section 156 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 144 of the Deep Ocean 
                        Energy Resources Act of 2006.
                            ``(iii) 5 percent into the account 
                        established by section 153 of the Deep Ocean 
                        Energy Resources Act of 2006.
                            ``(iv) 5 percent into the account 
                        established by section 156 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.--
                    ``(A) In general.--The Secretary shall make an 
                initial allocation of the OCS Receipts to be shared 
                under paragraph (1)(B) as follows:
                            ``(i) 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.
                            ``(ii) 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.
                    ``(B) Definition of outer continental shelf oil and 
                gas activities.--The Secretary shall define the term 
                `outer Continental Shelf oil and gas activities' for 
                purposes of this subparagraph to include--
                            ``(i) construction of vessels, drillships, 
                        and platforms involved in exploration, 
                        production, and development on the outer 
                        Continental Shelf;
                            ``(ii) support and supply bases, ports, and 
                        related activities;
                            ``(iii) 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;
                            ``(iv) pipelines and other means of 
                        transporting oil and gas production from the 
                        outer Continental Shelf; and
                            ``(v) processing and refining of oil and 
                        gas production from the outer Continental 
                        Shelf.
                    ``(C) Coastal point.--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 1 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.''.

SEC. 138. 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 1 lease held by 
        a lessee in any 1 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).
            ``(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.''.

SEC. 139. 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.''; and
            (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 1 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 1 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 (42 U.S.C. 4321 et seq.) 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.''.

SEC. 140. 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 ``(c)(1)'' and all that 
        follows through the end of paragraph (2) 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 (42 U.S.C. 4321 et seq.). 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.''.

SEC. 141. 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 at the end 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 2 alternate landing locations in the Adjacent 
State, acceptable to the Adjacent State, located within 50 miles on 
either side of the proposed landing location.''.

SEC. 142. 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 (42 U.S.C. 4321 et seq.):
            ``(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.''.

SEC. 143. REVIEW OF OUTER CONTINENTAL SHELF DEVELOPMENT AND PRODUCTION 
              PLANS.

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

``SEC. 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 1 
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.''.

SEC. 144. FEDERAL ENERGY NATURAL RESOURCES ENHANCEMENT FUND ACT OF 
              2006.

    (a) Findings.--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--
                    (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 (16 
                U.S.C. 1531 et seq.);
                    (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, 1 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, 1 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 
                subsection (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 
                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 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 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 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 subsection (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 subsection (b)(4).
    (e) Limitation on Use.--Amounts made 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 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 subparagraphs (A) and (B).

SEC. 145. 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.

SEC. 146. 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.

SEC. 147. 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 1 year 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.

SEC. 148. 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 of 1970 (30 U.S.C. 1001 et seq.), the Mineral 
Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.), the Weeks Law 
(Act of March 1, 1911), the Act of May 10, 1872 (commonly known as the 
``General Mining Act of 1872'') (30 U.S.C. 22 et seq.), the first 
section of the Act of July 31, 1947 (commonly known as the ``Materials 
Act of 1947'') (30 U.S.C. 601), 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.

SEC. 149. 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 (2) 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.''.

SEC. 150. 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''.

SEC. 151. 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:

``SEC. 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--
            ``(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 1 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.

SEC. 152. 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.

SEC. 153. 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, 1 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, 1 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 (30 U.S.C. 29); and
                    (F) funds received under section 10 of the Energy 
                and Mineral Schools Reinvestment Act, as designated and 
                amended by subsection (b) of this section.
            (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, as designated and 
                amended by subsection (b) of this section.
                    (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, as designated and 
                amended by subsection (b) of this section.
    (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:

``SECTION 1. SHORT TITLE.

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

``SEC. 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.

``SEC. 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 established under section 153(a)(1) of 
the Deep Ocean Energy Resources Act of 2006, 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.

``SEC. 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.

``SEC. 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 2 or more schools; and
            ``(2) research into any aspects of petroleum, geothermal, 
        mining, or mineral engineering or beneficiation problems, 
        including exploration, that are related to the mission of the 
        Department of the Interior and that are considered by the 
        Committee to be desirable.

``SEC. 6. SUPPORT FOR SCHOOLS WITH ENERGY AND MINERAL RESOURCE PROGRAMS 
              IN PETROLEUM AND MINERAL EXPLORATION GEOLOGY, PETROLEUM 
              GEOPHYSICS, OR MINING GEOPHYSICS.

    ``(a) 20 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 1 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).

``SEC. 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 1 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.

``SEC. 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.

``SEC. 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 153(a)(1) of the 
Deep Ocean Energy Resources Act of 2006 as required by section 10(d) of 
this Act.
    ``(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 (10 U.S.C. 1121 note), and 
Executive Order 13363 (69 Fed. Reg. 70175; relating to establishing the 
Afghanistan and Iraq Campaign Medals).

``SEC. 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 1 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 153(a)(1) of the Deep Ocean Energy Resources Act of 2006.

``SEC. 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, 1 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 5315 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 (119 Stat. 744), 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.

``SEC. 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 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 1 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 1 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.

``SEC. 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 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 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 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 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 12 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 12 
        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 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 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 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 5 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 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 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 or University 
        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.''.

SEC. 154. ONSHORE AND OFFSHORE MINERAL LEASE FEES.

    Except as otherwise provided in this part, 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.

SEC. 155. 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.

SEC. 156. 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, 1 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, 1 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 3 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 1 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 5 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 1 
                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 1 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 U.S.C. 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 (30 U.S.C. 181 et seq.), 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.--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 recipients 
        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 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 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.''.

SEC. 157. 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 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.

SEC. 158. COASTAL IMPACT ASSISTANCE.

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

SEC. 159. OIL SHALE AND TAR SANDS AMENDMENTS.

    (a) Repeal of Requirement to Establish Payments.--Subsection (o) of 
section 369 of the Energy Policy Act of 2005 (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--
            (1) by redesignating subsection (d) as subsection (e);
            (2) by redesignating the second subsection (c) (relating to 
        offsite leases) as subsection (d);
            (3) in paragraphs (1) and (3) of subsection (e) (as 
        redesignated by paragraph (1)) by striking ``subsection (c)'' 
        each place it appears and inserting ``subsection (d)''; and
            (4) by adding at the end the following:
    ``(f) 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 1 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.''.

SEC. 160. 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) 
(as amended by section 137) is amended by adding at the end the 
following:
    ``(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 (16 
U.S.C. 500 note; Public Law 106-393). 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.''.

                PART II--DOMESTIC OIL AND GAS PRODUCTION

SEC. 171. SHORT TITLE.

    This part may be cited as the ``Arctic Coastal Plain Domestic 
Energy Security Act of 2006''.

SEC. 172. DEFINITIONS.

    In this part:
            (1) Coastal plain.--The term ``Coastal Plain'' means the 
        area identified as the ``1002 Coastal Plain Area'' on the map.
            (2) Federal agreement.--The term ``Federal Agreement'' 
        means the Federal Agreement and Grant Right-of-Way for the 
        Trans-Alaska Pipeline issued on January 23, 1974, in accordance 
        with section 28 of the Mineral Leasing Act (30 U.S.C. 185) and 
        the Trans-Alaska Pipeline Authorization Act (43 U.S.C. 1651 et 
        seq.).
            (3) Final statement.--The term ``Final Statement'' means 
        the final legislative environmental impact statement on the 
        Coastal Plain, dated April 1987, and prepared pursuant to 
        section 1002 of the Alaska National Interest Lands Conservation 
        Act (16 U.S.C. 3142) and section 102(2)(C) of the National 
        Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)).
            (4) Map.--The term ``map'' means the map prepared by the 
        United States Geological Survey, entitled ``Arctic National 
        Wildlife Refuge 1002 Coastal Plain Area'', dated September 
        2005, and on file with the United States Geological Survey.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior or the designee of the Secretary.

SEC. 173. LEASING PROGRAM FOR LAND WITHIN THE COASTAL PLAIN.

    (a) In General.--The Secretary shall take such actions as are 
necessary--
            (1) to establish and implement in accordance with this part 
        a competitive oil and gas leasing program under the Mineral 
        Leasing Act (30 U.S.C. 181 et seq.) that will result in an 
        environmentally sound program for the exploration, development, 
        and production of the oil and gas resources of the Coastal 
        Plain; and
            (2) to administer the provisions of this part through 
        regulations, lease terms, conditions, restrictions, 
        prohibitions, stipulations, and other provisions that--
                    (A) ensure the oil and gas exploration, 
                development, and production activities on the Coastal 
                Plain will result in no significant adverse effect on 
                fish and wildlife, their habitat, subsistence 
                resources, and the environment; and
                    (B) require the application of the best 
                commercially available technology for oil and gas 
                exploration, development, and production to all 
                exploration, development, and production operations 
                under this part in a manner that ensures the receipt of 
                fair market value by the public for the mineral 
                resources to be leased.
    (b) Repeal.--Section 1003 of the Alaska National Interest Lands 
Conservation Act (16 U.S.C. 3143) is repealed.
    (c) Compliance With Requirements Under Certain Other Laws.--
            (1) Compatibility.--For purposes of the National Wildlife 
        Refuge System Administration Act of 1966 (16 U.S.C. 668dd et 
        seq.)--
                    (A) the oil and gas leasing program and activities 
                authorized by this section in the Coastal Plain shall 
                be considered to be compatible with the purposes for 
                which the Arctic National Wildlife Refuge was 
                established; and
                    (B) no further findings or decisions shall be 
                required to implement that program and those 
                activities.
            (2) Adequacy of the department of the interior's 
        legislative environmental impact statement.--The Final 
        Statement shall be considered to satisfy the requirements under 
        the National Environmental Policy Act of 1969 (42 U.S.C. 4321 
        et seq.) that apply with respect to actions authorized to be 
        taken by the Secretary to develop and promulgate the 
        regulations for the establishment of a leasing program 
        authorized by this part before the conduct of the first lease 
        sale.
            (3) Compliance with nepa for other actions.--
                    (A) In general.--Before conducting the first lease 
                sale under this part, the Secretary shall prepare an 
                environmental impact statement under the National 
                Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
                seq.) with respect to the actions authorized by this 
                part that are not referred to in paragraph (2).
                    (B) Identification and analysis.--Notwithstanding 
                any other provision of law, in carrying out this 
                paragraph, the Secretary shall not be required--
                            (i) to identify nonleasing alternative 
                        courses of action; or
                            (ii) to analyze the environmental effects 
                        of those courses of action.
                    (C) Identification of preferred action.--Not later 
                than 18 months after the date of enactment of this Act, 
                the Secretary shall--
                            (i) identify only a preferred action and a 
                        single leasing alternative for the first lease 
                        sale authorized under this section; and
                            (ii) analyze the environmental effects and 
                        potential mitigation measures for those 2 
                        alternatives.
                    (D) Public comments.--The Secretary shall only 
                consider public comments that--
                            (i) specifically address the preferred 
                        action of the Secretary; and
                            (ii) are filed not later than 20 days after 
                        the date of publication of an environmental 
                        analysis.
                    (E) Effect of compliance.--Notwithstanding any 
                other law, compliance with this paragraph shall be 
                considered to satisfy all requirements for the analysis 
                and consideration of the environmental effects of 
                proposed leasing under this part.
    (d) Relationship to State and Local Authority.--Nothing in this 
part expands or limits any State or local regulatory authority.
    (e) Special Areas.--
            (1) Designation.--
                    (A) In general.--The Secretary, after consultation 
                with the State of Alaska, the City of Kaktovik, Alaska, 
                and the North Slope Borough, Alaska, may designate not 
                more than 45,000 acres of the Coastal Plain as a 
                special area if the Secretary determines that the 
                special area would be of such unique character and 
                interest as to require special management and 
                regulatory protection.
                    (B) Sadlerochit spring area.--The Secretary shall 
                designate as a special area in accordance with 
                subparagraph (A) the Sadlerochit Spring area, 
                comprising approximately 4,000 acres as depicted on the 
                map.
            (2) Management.--The Secretary shall manage each special 
        area designated under this subsection in a manner that 
        preserves the unique and diverse character of the area, 
        including fish, wildlife, subsistence resources, and cultural 
        values of the area.
            (3) Exclusion from leasing or surface occupancy.--
                    (A) In general.--The Secretary may exclude any 
                special area designated under this subsection from 
                leasing.
                    (B) No surface occupancy.--If the Secretary leases 
                all or a portion of a special area for the purposes of 
                oil and gas exploration, development, production, and 
                related activities, there shall be no surface occupancy 
                of the land comprising the special area.
            (4) Directional drilling.--Notwithstanding any other 
        provision of this subsection, the Secretary may lease all or a 
        portion of a special area under terms that permit the use of 
        horizontal drilling technology from sites on leases located 
        outside the special area.
    (f) Limitation on Closed Areas.--The Secretary may not close land 
within the Coastal Plain to oil and gas leasing or to exploration, 
development, or production except in accordance with this part.
    (g) Regulations.--
            (1) In general.--Not later than 15 months after the date of 
        enactment of this Act, the Secretary shall issue such 
        regulations as are necessary to carry out this part, including 
        rules and regulations relating to protection of the fish and 
        wildlife, fish and wildlife habitat, subsistence resources, and 
        environment of the Coastal Plain.
            (2) Revision of regulations.--The Secretary shall 
        periodically review and, as appropriate, revise the rules and 
        regulations issued under paragraph (1) to reflect any 
        significant biological, environmental, or engineering data that 
        come to the attention of the Secretary.

SEC. 174. LEASE SALES.

    (a) In General.--Land may be leased pursuant to this part to any 
person qualified to obtain a lease for deposits of oil and gas under 
the Mineral Leasing Act (30 U.S.C. 181 et seq.).
    (b) Procedures.--The Secretary shall, by regulation, establish 
procedures for--
            (1) receipt and consideration of sealed nominations for any 
        area in the Coastal Plain for inclusion in, or exclusion (as 
        provided in subsection (c)) from, a lease sale;
            (2) the holding of lease sales after that nomination 
        process; and
            (3) public notice of and comment on designation of areas to 
        be included in, or excluded from, a lease sale.
    (c) Lease Sale Bids.--Bidding for leases under this part shall be 
by sealed competitive cash bonus bids.
    (d) Acreage Minimum in First Sale.--For the first lease sale under 
this part, the Secretary shall offer for lease those tracts the 
Secretary considers to have the greatest potential for the discovery of 
hydrocarbons, taking into consideration nominations received pursuant 
to subsection (b)(1), but in no case less than 200,000 acres.
    (e) Timing of Lease Sales.--The Secretary shall--
            (1) not later than 22 months after the date of enactment of 
        this Act, conduct the first lease sale under this part; and
            (2) conduct additional sales at appropriate intervals if, 
        as determined by the Secretary, sufficient interest in 
        development exists to warrant the conduct of the additional 
        sales.

SEC. 175. GRANT OF LEASES BY THE SECRETARY.

    (a) In General.--On payment by a lessee of such bonus as may be 
accepted by the Secretary, the Secretary may grant to the highest 
responsible qualified bidder in a lease sale conducted pursuant to 
section 174 a lease for any land on the Coastal Plain.
    (b) Subsequent Transfers.--
            (1) In general.--No lease issued under this part may be 
        sold, exchanged, assigned, sublet, or otherwise transferred 
        except with the approval of the Secretary.
            (2) Condition for approval.--Before granting any approval 
        described in paragraph (1), the Secretary shall consult with, 
        and give due consideration to the opinion of, the Attorney 
        General.

SEC. 176. LEASE TERMS AND CONDITIONS.

    (a) In General.--An oil or gas lease issued pursuant to this part 
shall--
            (1) provide for the payment of a royalty of not less than 
        12\1/2\ percent of the amount or value of the production 
        removed or sold from the lease, as determined by the Secretary 
        in accordance with regulations applicable to other Federal oil 
        and gas leases;
            (2) provide that the Secretary may close, on a seasonal 
        basis, such portions of the Coastal Plain to exploratory 
        drilling activities as are necessary to protect caribou calving 
        areas and other species of fish and wildlife;
            (3) require that each lessee of land within the Coastal 
        Plain shall be fully responsible and liable for the reclamation 
        of land within the Coastal Plain and any other Federal land 
        that is adversely affected in connection with exploration, 
        development, production, or transportation activities conducted 
        under the lease and within the Coastal Plain by the lessee or 
        by any of the subcontractors or agents of the lessee;
            (4) provide that the lessee may not delegate or convey, by 
        contract or otherwise, that reclamation responsibility and 
        liability to another person without the express written 
        approval of the Secretary;
            (5) provide that the standard of reclamation for land 
        required to be reclaimed under this part shall be, to the 
        maximum extent practicable--
                    (A) a condition capable of supporting the uses that 
                the land was capable of supporting prior to any 
                exploration, development, or production activities; or
                    (B) on application by the lessee, to a higher or 
                better standard, as approved by the Secretary;
            (6) contain terms and conditions relating to protection of 
        fish and wildlife, fish and wildlife habitat, subsistence 
        resources, and the environment as required under section 
        173(a)(2);
            (7) provide that each lessee, and each agent and contractor 
        of a lessee, use their best efforts to provide a fair share of 
        employment and contracting for Alaska Natives and Alaska Native 
        Corporations from throughout the State, as determined by the 
        level of obligation previously agreed to in the Federal 
        Agreement;
            (8) prohibit the export of oil produced under the lease; 
        and
            (9) contain such other provisions as the Secretary 
        determines to be necessary to ensure compliance with this 
        section and regulations issued under this part.
    (b) Project Labor Agreements.--The Secretary, as a term and 
condition of each lease under this part, and in recognizing the 
proprietary interest of the Federal Government in labor stability and 
in the ability of construction labor and management to meet the 
particular needs and conditions of projects to be developed under the 
leases issued pursuant to this part (including the special concerns of 
the parties to those leases), shall require that each lessee, and each 
agent and contractor of a lessee, under this part negotiate to obtain a 
project labor agreement for the employment of laborers and mechanics on 
production, maintenance, and construction under the lease.

SEC. 177. COASTAL PLAIN ENVIRONMENTAL PROTECTION.

    (a) No Significant Adverse Effect Standard To Govern Authorized 
Coastal Plain Activities.--In accordance with section 173, the 
Secretary shall administer this part through regulations, lease terms, 
conditions, restrictions, prohibitions, stipulations, and other 
provisions that--
            (1) ensure that oil and gas exploration, development, and 
        production activities on the Coastal Plain will result in no 
        significant adverse effect on fish and wildlife, fish and 
        wildlife habitat, and the environment;
            (2) require the application of the best commercially 
        available technology for oil and gas exploration, development, 
        and production on all new exploration, development, and 
        production operations; and
            (3) ensure that the maximum surface acreage covered in 
        connection with the leasing program by production and support 
        facilities, including airstrips and any areas covered by gravel 
        berms or piers for support of pipelines, does not exceed 2,000 
        acres on the Coastal Plain.
    (b) Site-Specific Assessment and Mitigation.--The Secretary shall 
also require, with respect to any proposed drilling and related 
activities, that--
            (1) a site-specific analysis be made of the probable 
        effects, if any, that the drilling or related activities will 
        have on fish and wildlife, fish and wildlife habitat, and the 
        environment;
            (2) a plan be implemented to avoid, minimize, and mitigate 
        (in that order and to the maximum extent practicable) any 
        significant adverse effect identified under paragraph (1); and
            (3) the development of the plan occur after consultation 
        with each agency having jurisdiction over matters mitigated by 
        the plan.
    (c) Regulations To Protect Coastal Plain Fish and Wildlife 
Resources, Subsistence Users, and the Environment.--Before implementing 
the leasing program authorized by this part, the Secretary shall 
prepare and promulgate regulations, lease terms, conditions, 
restrictions, prohibitions, stipulations, and other measures designed 
to ensure that the activities carried out on the Coastal Plain under 
this part are conducted in a manner consistent with the purposes and 
environmental requirements of this part.
    (d) Compliance With Federal and State Environmental Laws and Other 
Requirements.--The proposed regulations, lease terms, conditions, 
restrictions, prohibitions, and stipulations for the leasing program 
under this part shall require--
            (1) compliance with all applicable provisions of Federal 
        and State environmental law;
            (2) implementation of and compliance with--
                    (A) standards that are at least as effective as the 
                safety and environmental mitigation measures, as 
                described in items 1 through 29 on pages 167 through 
                169 of the Final Statement, on the Coastal Plain;
                    (B) seasonal limitations on exploration, 
                development, and related activities, as necessary, to 
                avoid significant adverse effects during periods of 
                concentrated fish and wildlife breeding, denning, 
                nesting, spawning, and migration;
                    (C) design safety and construction standards for 
                all pipelines and any access and service roads that 
                minimize, to the maximum extent practicable, adverse 
                effects on--
                            (i) the passage of migratory species (such 
                        as caribou); and
                            (ii) the flow of surface water by requiring 
                        the use of culverts, bridges, and other 
                        structural devices;
                    (D) prohibitions on general public access to, and 
                use of, all pipeline access and service roads;
                    (E) stringent reclamation and rehabilitation 
                requirements in accordance with this section for the 
                removal from the Coastal Plain of all oil and gas 
                development and production facilities, structures, and 
                equipment on completion of oil and gas production 
                operations, except in a case in which the Secretary 
                determines that those facilities, structures, or 
                equipment--
                            (i) would assist in the management of the 
                        Arctic National Wildlife Refuge; and
                            (ii) are donated to the United States for 
                        that purpose;
                    (F) appropriate prohibitions or restrictions on--
                            (i) access by all modes of transportation;
                            (ii) sand and gravel extraction; and
                            (iii) use of explosives;
                    (G) reasonable stipulations for protection of 
                cultural and archaeological resources;
                    (H) measures to protect groundwater and surface 
                water, including--
                            (i) avoidance, to the maximum extent 
                        practicable, of springs, streams, and river 
                        systems;
                            (ii) the protection of natural surface 
                        drainage patterns, wetland, and riparian 
                        habitats; and
                            (iii) the regulation of methods or 
                        techniques for developing or transporting 
                        adequate supplies of water for exploratory 
                        drilling; and
                    (I) research, monitoring, and reporting 
                requirements;
            (3) that exploration activities (except surface geological 
        studies) be limited to the period between approximately 
        November 1 and May 1 of each year and be supported, if 
        necessary, by ice roads, winter trails with adequate snow 
        cover, ice pads, ice airstrips, and air transport methods 
        (except that those exploration activities may be permitted at 
        other times if the Secretary determines that the exploration 
        will have no significant adverse effect on fish and wildlife, 
        fish and wildlife habitat, and the environment of the Coastal 
        Plain);
            (4) consolidation of facility siting;
            (5) avoidance or reduction of air traffic-related 
        disturbance to fish and wildlife;
            (6) treatment and disposal of hazardous and toxic wastes, 
        solid wastes, reserve pit fluids, drilling muds and cuttings, 
        and domestic wastewater, including, in accordance with 
        applicable Federal and State environmental laws (including 
        regulations)--
                    (A) preparation of an annual waste management 
                report;
                    (B) development and implementation of a hazardous 
                materials tracking system; and
                    (C) prohibition on the use of chlorinated solvents;
            (7) fuel storage and oil spill contingency planning;
            (8) conduct of periodic field crew environmental briefings;
            (9) avoidance of significant adverse effects on subsistence 
        hunting, fishing, and trapping;
            (10) compliance with applicable air and water quality 
        standards;
            (11) appropriate seasonal and safety zone designations 
        around well sites, within which subsistence hunting and 
        trapping shall be limited; and
            (12) all other protective environmental stipulations, 
        restrictions, terms, and conditions considered necessary by the 
        Secretary.
    (e) Considerations.--In preparing and issuing regulations, lease 
terms, conditions, restrictions, prohibitions, and stipulations under 
this section, the Secretary shall take into consideration--
            (1) the stipulations and conditions that govern the 
        National Petroleum Reserve-Alaska leasing program, as set forth 
        in the 1999 Northeast National Petroleum Reserve-Alaska Final 
        Integrated Activity Plan/Environmental Impact Statement;
            (2) the environmental protection standards that governed 
        the initial Coastal Plain seismic exploration program under 
        parts 37.31 through 37.33 of title 50, Code of Federal 
        Regulations (or successor regulations); and
            (3) the land use stipulations for exploratory drilling on 
        the KIC-ASRC private land described in Appendix 2 of the 
        agreement between Arctic Slope Regional Corporation and the 
        United States dated August 9, 1983.
    (f) Facility Consolidation Planning.--
            (1) In general.--After providing for public notice and 
        comment, the Secretary shall prepare and periodically update a 
        plan to govern, guide, and direct the siting and construction 
        of facilities for the exploration, development, production, and 
        transportation of oil and gas resources from the Coastal Plain.
            (2) Objectives.--The objectives of the plan shall be--
                    (A) the avoidance of unnecessary duplication of 
                facilities and activities;
                    (B) the encouragement of consolidation of common 
                facilities and activities;
                    (C) the location or confinement of facilities and 
                activities to areas that will minimize impact on fish 
                and wildlife, fish and wildlife habitat, and the 
                environment;
                    (D) the use of existing facilities, to the maximum 
                extent practicable; and
                    (E) the enhancement of compatibility between 
                wildlife values and development activities.
    (g) Access to Public Land.--The Secretary shall--
            (1) manage public land in the Coastal Plain in accordance 
        with subsections (a) and (b) of section 811 of the Alaska 
        National Interest Lands Conservation Act (16 U.S.C. 3121); and
            (2) ensure that local residents shall have reasonable 
        access to public land in the Coastal Plain for traditional 
        uses.

SEC. 178. EXPEDITED JUDICIAL REVIEW.

    (a) Filing of Complaints.--
            (1) Deadline.--A complaint seeking judicial review of a 
        provision of this part or an action of the Secretary under this 
        part shall be filed--
                    (A) except as provided in subparagraph (B), during 
                the 90-day period beginning on the date on which the 
                action being challenged was carried out; or
                    (B) in the case of a complaint based solely on 
                grounds arising after the 90-day period described in 
                subparagraph (A), by not later than 90 days after the 
                date on which the complainant knew or reasonably should 
                have known about the grounds for the complaint.
            (2) Venue.--A complaint seeking judicial review of a 
        provision of this part or an action of the Secretary under this 
        part shall be filed in the United States Court of Appeals for 
        the District of Columbia.
            (3) Scope.--
                    (A) In general.--Judicial review of a decision of 
                the Secretary relating to a lease sale under this part 
                (including an environmental analysis of such a lease 
                sale) shall be--
                            (i) limited to a review of whether the 
                        decision is in accordance with this part; and
                            (ii) based on the administrative record of 
                        the decision.
                    (B) Presumptions.--Any identification by the 
                Secretary of a preferred course of action relating to a 
                lease sale, and any analysis by the Secretary of 
                environmental effects, under this part shall be 
                presumed to be correct unless proven otherwise by clear 
                and convincing evidence.
    (b) Limitation on Other Review.--Any action of the Secretary that 
is subject to judicial review under this section shall not be subject 
to judicial review in any civil or criminal proceeding for enforcement.

SEC. 179. USE OF REVENUES.

    Notwithstanding any other provision of law, all adjusted bonus, 
rental, and royalty revenues from oil and gas leasing and operations 
authorized under this part shall be used to carry out this Act and the 
amendments made by this Act, with priority given to loan guarantees, 
demonstrations, and grants made or carried out under parts I and II of 
title I and title II (as determined by the Secretary).

SEC. 180. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN.

    (a) Exemption.--Sections 1101 through 1108 of the Alaska National 
Interest Lands Conservation Act (16 U.S.C. 3161 et seq.) shall not 
apply to any right-of-way or easement across the Coastal Plain for the 
transportation of oil and gas issued by the Secretary under section 28 
of the Mineral Leasing Act (30 U.S.C. 185).
    (b) Terms and Conditions.--The Secretary shall include in any 
right-of-way or easement described in subsection (a) such terms and 
conditions as the Secretary determines to be necessary to ensure that 
the transportation of oil or gas does not significantly adversely 
affect any fish, wildlife, subsistence resource, or habitat, or the 
environment, of the Coastal Plain, including terms and conditions 
requiring facilities to be sited or designed to avoid any unnecessary 
duplication of roads or pipelines.
    (c) Regulations.--In promulgating regulations pursuant to section 
173(g), the Secretary shall include provisions for rights-of-way and 
easements described in subsection (a).

SEC. 181. CONVEYANCE.

    Notwithstanding section 1302(h)(2) of the Alaska National Interest 
Lands Conservation Act (16 U.S.C. 3192(h)(2)), to remove any impediment 
on a title to land, and to clarify land ownership patterns in the 
Coastal Plain, the Secretary shall--
            (1) to the extent necessary to fulfill the entitlement of 
        the Kaktovik Inupiat Corporation under section 12 of the Alaska 
        Native Claims Settlement Act (43 U.S.C. 1611), as determined by 
        the Secretary, convey to that Corporation the surface estate of 
        the land described in paragraph (1) of Public Land Order 6959, 
        in accordance with the terms and conditions of the agreement 
        between the Secretary, the United States Fish and Wildlife 
        Service, the Bureau of Land Management, and the Kaktovik 
        Inupiat Corporation, dated January 22, 1993; and
            (2) convey to the Arctic Slope Regional Corporation the 
        remaining subsurface estate to which that Corporation is 
        entitled under the agreement between that corporation and the 
        United States, dated August 9, 1983.

                   PART III--EMERGENCY SERVICE ROUTE

SEC. 191. EMERGENCY SERVICE ROUTE.

    Section 1948 of the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (Public Law 109-59; 119 
Stat. 1514) is repealed.

                   TITLE II--RESEARCH AND DEVELOPMENT

SEC. 201. RENEWABLE ENERGY.

    Section 931 of the Energy Policy Act of 2005 (42 U.S.C. 16231) is 
amended--
            (1) by striking subsections (b) through (e);
            (2) by redesignating subsections (f) and (g) as subsections 
        (b) and (c), respectively; and
            (3) by adding at the end the following:
    ``(d) Funding.--
            ``(1) Appropriation.--
                    ``(A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, the Secretary of the 
                Treasury shall transfer to the Secretary to carry out 
                this section--
                            ``(i) not later than 30 days after the date 
                        of enactment of this subparagraph, 
                        $632,000,000;
                            ``(ii) on October 1, 2007, $742,000,000; 
                        and
                            ``(iii) on October 1, 2008, $852,000,000.
                    ``(B) Receipt and acceptance.--Subject to 
                paragraphs (2) through (4), the Secretary shall be 
                entitled to receive, shall accept, and shall use to 
                carry out renewable energy research, demonstration, and 
                commercial application activities (including activities 
                authorized under this subtitle) the funds transferred 
                under subparagraph (A), without further appropriation.
                    ``(C) Availability of funds.--Funds transferred 
                under subparagraph (A) shall remain available until 
                expended.
            ``(2) Bioenergy.--Of the amounts made available by 
        paragraph (1), the Secretary shall use to carry out section 
        932--
                    ``(A) $213,000,000 for fiscal year 2007, of which 
                $100,000,000 shall be for section 932(d);
                    ``(B) $251,000,000 for fiscal year 2008, of which 
                $125,000,000 shall be for section 932(d); and
                    ``(C) $274,000,000 for fiscal year 2009, of which 
                $150,000,000 shall be for section 932(d).
            ``(3) Solar power.--Of the amounts made available by 
        paragraph (1), the Secretary shall use to carry out activities 
        under subsection (a)(2)(A)--
                    ``(A) $140,000,000 for fiscal year 2007, of which 
                $40,000,000 shall be for activities under section 935;
                    ``(B) $200,000,000 for fiscal year 2008, of which 
                $50,000,000 shall be for activities under section 935; 
                and
                    ``(C) $250,000,000 for fiscal year 2009, of which 
                $50,000,000 shall be for activities under section 935.
            ``(4) Administration.--Of the funds made available by 
        paragraph (1), not less than $5,000,000 for each fiscal year 
        shall be made available for grants to--
                    ``(A) part B institutions;
                    ``(B) Tribal Colleges or Universities (as defined 
                in section 316(b) of the Higher Education Act of 1965 
                (20 U.S.C. 1059c(b))); and
                    ``(C) Hispanic-serving institutions.''.

SEC. 202. BIOMASS RESEARCH AND DEVELOPMENT.

    Section 310 of the Biomass Research and Development Act of 2000 (7 
U.S.C. 8609) is amended by striking subsection (b) and inserting the 
following:
    ``(b) Additional Funding.--
            ``(1) In general.--In addition to the amounts transferred 
        under subsection (a), not later than 30 days after the date of 
        enactment of this paragraph, on October 1, 2007, and on each 
        October 1 thereafter through October 1, 2015, out of any funds 
        in the Treasury not otherwise appropriated, the Secretary of 
        the Treasury shall transfer to the Secretary to carry out this 
        title $200,000,000, to remain available until expended.
            ``(2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this title the funds transferred under paragraph (1), without 
        further appropriation.''.

SEC. 203. PRODUCTION INCENTIVES FOR CELLULOSIC BIOFUELS.

    Section 942 of the Energy Policy Act of 2005 (42 U.S.C. 16251) is 
amended by striking subsection (f) and inserting the following:
    ``(f) Funding.--
            ``(1) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary to carry out this section--
                    ``(A) not later than 30 days after the date of 
                enactment of this paragraph, $150,000,000;
                    ``(B) on October 1, 2007, $200,000,000; and
                    ``(C) on each October 1 thereafter through October 
                1, 2010, $250,000,000.
            ``(2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation.
            ``(3) Availability of funds.--Funds transferred under 
        paragraph (1) shall remain available until expended.''.

SEC. 204. COMMERCIAL BYPRODUCTS FROM MUNICIPAL SOLID WASTE AND 
              CELLULOSIC BIOMASS LOAN GUARANTEE PROGRAM.

    Section 1510 of the Energy Policy Act of 2005 (42 U.S.C. 16501) is 
amended by striking subsection (k) and inserting the following:
    ``(k) Funding.--
            ``(1) Mandatory funding.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, not later than 30 days after the date 
                of enactment of this paragraph, out of any funds in the 
                Treasury not otherwise appropriated, the Secretary of 
                the Treasury shall transfer to the Secretary to carry 
                out this section $1,000,000,000, to remain available 
                until expended.
                    ``(B) Receipt and acceptance.--The Secretary shall 
                be entitled to receive, shall accept, and shall use to 
                carry out this section the funds transferred under 
                subparagraph (A), without further appropriation. 
            ``(2) Authorization of appropriations.--In addition to the 
        amounts made available under paragraph (1), there are 
        authorized to be appropriated such sums as are necessary to 
        carry out this section.''.

SEC. 205. FOSSIL ENERGY.

    Section 961 of the Energy Policy Act of 2005 (42 U.S.C. 16291) is 
amended by striking subsections (b) through (e) and inserting the 
following:
    ``(b) Funding.--
            ``(1) Appropriation.--
                    ``(A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, the Secretary of the 
                Treasury shall transfer to the Secretary to carry out 
                fossil energy research, development, demonstration, and 
                commercial application activities, including activities 
                authorized under this subtitle--
                            ``(i) not later than 30 days after the date 
                        of enactment of this subparagraph, 
                        $387,000,000;
                            ``(ii) on October 1, 2007, $401,000,000; 
                        and
                            ``(iii) on October 1, 2008, $424,000,000.
                    ``(B) Receipt and acceptance.--The Secretary shall 
                be entitled to receive, shall accept, and shall use to 
                carry out this section the funds transferred under 
                subparagraph (A), without further appropriation.
                    ``(C) Availability of funds.--Funds transferred 
                under subparagraph (A) shall remain available until 
                expended.
            ``(2) Allocations.--From amounts made available under 
        paragraph (1), the Secretary shall use--
                    ``(A) for activities under section 962--
                            ``(i) $367,000,000 for fiscal year 2007;
                            ``(ii) $376,000,000 for fiscal year 2008; 
                        and
                            ``(iii) $394,000,000 for fiscal year 2009; 
                        and
                    ``(B) for activities under section 964--
                            ``(i) $20,000,000 for fiscal year 2007;
                            ``(ii) $25,000,000 for fiscal year 2008; 
                        and
                            ``(iii) $30,000,000 for fiscal year 2009.
            ``(3) Authorization of appropriations.--In addition to the 
        amounts made available under paragraph (1), there are 
        authorized to be appropriated to the Secretary to carry out 
        fossil energy research, development, demonstration, and 
        commercial application activities, including activities 
        authorized under this subtitle, $224,000,000 for fiscal year 
        2007, $225,000,000 for fiscal year 2008, $217,000,000 for 
        fiscal year 2009, and $25,000,000 for each of fiscal years 2010 
        through 2012, including--
                    ``(A) for activities under section 966--
                            ``(i) $1,500,000 for fiscal year 2007; and
                            ``(ii) $450,000 for each of fiscal years 
                        2008 and 2009; and
                    ``(B) for the Office of Arctic Energy under section 
                3197 of the Floyd D. Spence National Defense 
                Authorization Act for Fiscal Year 2001 (42 U.S.C. 
                7144d), $25,000,000 for each of fiscal years 2007 
                through 2012.
            ``(4) Limitations.--
                    ``(A) Uses.--None of the funds made available or 
                authorized under this section may be used for Fossil 
                Energy Environmental Restoration or Import/Export 
                Authorization.
                    ``(B) Institutions of higher education.--Of the 
                funds made available by paragraph (2)(B) for each 
                fiscal year, not less than 20 percent shall be 
                dedicated to research and development carried out at 
                institutions of higher education.''.

SEC. 206. CARBON CAPTURE RESEARCH AND DEVELOPMENT PROGRAM.

    Section 963 of the Energy Policy Act of 2005 (42 U.S.C. 16293) is 
amended by striking subsection (c) and inserting the following:
    ``(c) Funding.--
            ``(1) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary to carry out this section--
                    ``(A) not later than 30 days after the date of 
                enactment of this subparagraph, $25,000,000;
                    ``(B) on October 1, 2007, $30,000,000; and
                    ``(C) on October 1, 2008, $35,000,000.
            ``(2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation.
            ``(3) Availability of funds.--Funds transferred under 
        paragraph (1) shall remain available until expended.''.

SEC. 207. ADVANCED ENERGY INITIATIVE FOR VEHICLES.

    (a) Purposes.--The purposes of this section are--
            (1) to enable and promote, in partnership with industry, 
        comprehensive development, demonstration, and commercialization 
        of a wide range of electric drive components, systems, and 
        vehicles using diverse electric drive transportation 
        technologies;
            (2) to make critical public investments to help private 
        industry, institutions of higher education, National 
        Laboratories, and research institutions to expand innovation, 
        industrial growth, and jobs in the United States;
            (3) to expand the availability of the existing electric 
        infrastructure for fueling light duty transportation and other 
        on-road and nonroad vehicles that are using petroleum and are 
        mobile sources of emissions--
                    (A) including the more than 3,000,000 reported 
                units (such as electric forklifts, golf carts, and 
                similar nonroad vehicles) in use on the date of 
                enactment of this Act; and
                    (B) with the goal of enhancing the energy security 
                of the United States, reduce dependence on imported 
                oil, and reduce emissions through the expansion of 
                grid-supported mobility;
            (4) to accelerate the widespread commercialization of all 
        types of electric drive vehicle technology into all sizes and 
        applications of vehicles, including commercialization of plug-
        in hybrid electric vehicles and plug-in hybrid fuel cell 
        vehicles; and
            (5) to improve the energy efficiency of and reduce the 
        petroleum use in transportation.
    (b) Definitions.--In this section:
            (1) Battery.--The term ``battery'' means an energy storage 
        device used in an on-road or nonroad vehicle powered in whole 
        or in part using an off-board or on-board source of 
        electricity.
            (2) Electric drive transportation technology.--The term 
        ``electric drive transportation technology'' means--
                    (A) a vehicle that--
                            (i) uses an electric motor for all or part 
                        of the motive power of the vehicle; and
                            (ii) may use off-board electricity, 
                        including battery electric vehicles, fuel cell 
                        vehicles, engine dominant hybrid electric 
                        vehicles, plug-in hybrid electric vehicles, 
                        plug-in hybrid fuel cell vehicles, and electric 
                        rail; or
                    (B) equipment relating to transportation or mobile 
                sources of air pollution that uses an electric motor to 
                replace an internal combustion engine for all or part 
                of the work of the equipment, including corded electric 
                equipment linked to transportation or mobile sources of 
                air pollution.
            (3) Engine dominant hybrid electric vehicle.--The term 
        ``engine dominant hybrid electric vehicle'' means an on-road or 
        nonroad vehicle that--
                    (A) is propelled by an internal combustion engine 
                or heat engine using--
                            (i) any combustible fuel; and
                            (ii) an on-board, rechargeable storage 
                        device; and
                    (B) has no means of using an off-board source of 
                electricity.
            (4) Fuel cell vehicle.--The term ``fuel cell vehicle'' 
        means an on-road or nonroad vehicle that uses a fuel cell (as 
        defined in section 803 of the Energy Policy Act of 2005 (42 
        U.S.C. 16152)).
            (5) Initiative.--The term ``Initiative'' means the Advanced 
        Battery Initiative established by the Secretary under 
        subsection (f)(1).
            (6) Nonroad vehicle.--The term ``nonroad vehicle'' has the 
        meaning given the term in section 216 of the Clean Air Act (42 
        U.S.C. 7550).
            (7) Plug-in hybrid electric vehicle.--The term ``plug-in 
        hybrid electric vehicle'' means an on-road or nonroad vehicle 
        that is propelled by an internal combustion engine or heat 
        engine using--
                    (A) any combustible fuel;
                    (B) an on-board, rechargeable storage device; and
                    (C) a means of using an off-board source of 
                electricity.
            (8) Plug-in hybrid fuel cell vehicle.--The term ``plug-in 
        hybrid fuel cell vehicle'' means a fuel cell vehicle with a 
        battery powered by an off-board source of electricity.
            (9) Industry alliance.--The term ``Industry Alliance'' 
        means the entity selected by the Secretary under subsection 
        (f)(2).
            (10) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given the 
        term in section 2 of the Energy Policy Act of 2005 (42 U.S.C. 
        15801).
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
    (c) Goals.--The goals of the electric drive transportation 
technology program established under subsection (e) shall be to 
develop, in partnership with industry and institutions of higher 
education, projects that focus on--
            (1) innovative electric drive technology developed in the 
        United States;
            (2) growth of employment in the United States in electric 
        drive design and manufacturing;
            (3) validation of the plug-in hybrid potential through 
        fleet demonstrations; and
            (4) acceleration of fuel cell commercialization through 
        comprehensive development and commercialization of the electric 
        drive technology systems that are the foundational technology 
        of the fuel cell vehicle system.
    (d) Assessment.--Not later than 120 days after the date of 
enactment of this Act, the Secretary shall offer to enter into an 
arrangement with the National Academy of Sciences--
            (1) to conduct an assessment (in cooperation with industry, 
        standards development organizations, and other entities, as 
        appropriate), of state-of-the-art battery technologies with 
        potential application for electric drive transportation;
            (2) to identify knowledge gaps in the scientific and 
        technological bases of battery manufacture and use;
            (3) to identify fundamental research areas that would 
        likely have a significant impact on the development of superior 
        battery technologies for electric drive vehicle applications; 
        and
            (4) to recommend steps to the Secretary to accelerate the 
        development of battery technologies for electric drive 
        transportation.
    (e) Program.--The Secretary shall conduct a program of research, 
development, demonstration, and commercial application for electric 
drive transportation technology, including--
            (1) high-capacity, high-efficiency batteries;
            (2) high-efficiency on-board and off-board charging 
        components;
            (3) high-powered drive train systems for passenger and 
        commercial vehicles and for nonroad equipment;
            (4) control system development and power train development 
        and integration for plug-in hybrid electric vehicles, plug-in 
        hybrid fuel cell vehicles, and engine dominant hybrid electric 
        vehicles, including--
                    (A) development of efficient cooling systems;
                    (B) analysis and development of control systems 
                that minimize the emissions profile when clean diesel 
                engines are part of a plug-in hybrid drive system; and
                    (C) development of different control systems that 
                optimize for different goals, including--
                            (i) battery life;
                            (ii) reduction of petroleum consumption; 
                        and
                            (iii) green house gas reduction;
            (5) nanomaterial technology applied to both battery and 
        fuel cell systems;
            (6) large-scale demonstrations, testing, and evaluation of 
        plug-in hybrid electric vehicles in different applications with 
        different batteries and control systems, including--
                    (A) military applications;
                    (B) mass market passenger and light-duty truck 
                applications;
                    (C) private fleet applications; and
                    (D) medium- and heavy-duty applications;
            (7) a nationwide education strategy for electric drive 
        transportation technologies providing secondary and high school 
        teaching materials and support for education offered by 
        institutions of higher education that is focused on electric 
        drive system and component engineering;
            (8) development, in consultation with the Administrator of 
        the Environmental Protection Agency, of procedures for testing 
        and certification of criteria pollutants, fuel economy, and 
        petroleum use for light-, medium-, and heavy-duty vehicle 
        applications, including consideration of--
                    (A) the vehicle and fuel as a system, not just an 
                engine; and
                    (B) nightly off-board charging; and
            (9) advancement of battery and corded electric 
        transportation technologies in mobile source applications by--
                    (A) improvement in battery, drive train, and 
                control system technologies; and
                    (B) working with industry and the Administrator of 
                the Environmental Protection Agency--
                            (i) to understand and inventory markets; 
                        and
                            (ii) to identify and implement methods of 
                        removing barriers for existing and emerging 
                        applications.
    (f) Advanced Battery Initiative.--
            (1) In general.--The Secretary shall establish and carry 
        out an Advanced Battery Initiative in accordance with this 
        subsection to support research, development, demonstration, and 
        commercial application of battery technologies.
            (2) Industry alliance.--Not later than 180 days after the 
        date of enactment of this Act, the Secretary shall 
        competitively select an Industry Alliance to represent 
        participants who are private, for-profit firms, the primary 
        business of which is the manufacturing of batteries.
            (3) Research.--
                    (A) Grants.--The Secretary shall carry out research 
                activities of the Initiative through competitively-
                awarded grants to--
                            (i) researchers, including Industry 
                        Alliance participants;
                            (ii) small businesses;
                            (iii) National Laboratories; and
                            (iv) institutions of higher education.
                    (B) Industry alliance.--The Secretary shall 
                annually solicit from the Industry Alliance--
                            (i) comments to identify advanced battery 
                        technology needs relevant to electric drive 
                        technology;
                            (ii) an assessment of the progress of 
                        research activities of the Initiative; and
                            (iii) assistance in annually updating 
                        advanced battery technology roadmaps.
            (4) Availability to the public.--The information and 
        roadmaps developed under this subsection shall be available to 
        the public.
            (5) Preference.--In making awards under this subsection, 
        the Secretary shall give preference to participants in the 
        Industry Alliance.
    (g) Cost Sharing.--In carrying out this section, the Secretary 
shall require cost sharing in accordance with section 988 of the Energy 
Policy Act of 2005 (42 U.S.C. 16352).
    (h) Funding.--
            (1) In general.--Not later than 30 days after the date of 
        enactment of this Act, on October 1, 2007, and on each October 
        1 thereafter through October 1, 2011, out of any funds in the 
        Treasury not otherwise appropriated, the Secretary of the 
        Treasury shall transfer to the Secretary to carry out this 
        section $300,000,000, to remain available until expended.
            (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation. 

                 TITLE III--CONSERVATION AND EFFICIENCY

                     Subtitle A--Decreasing Demand

SEC. 301. CREDIT FOR TELEWORKING.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to foreign tax credit, 
etc.) is amended by adding at the end the following new section:

``SEC. 30D. TELEWORKING CREDIT.

    ``(a) Allowance of Credit.--In the case of an eligible taxpayer, 
there shall be allowed as a credit against the tax imposed by this 
chapter for the taxable year an amount equal to the qualified 
teleworking expenses paid or incurred by the taxpayer during such year.
    ``(b) Maximum Credit.--
            ``(1) Per teleworker limitation.--The credit allowed by 
        subsection (a) for a taxable year with respect to qualified 
        teleworking expenses paid or incurred by or on behalf of an 
        individual teleworker shall not exceed--
                    ``(A) in the case of an eligible taxpayer described 
                in subsection (c)(1)(A), $1,000, and
                    ``(B) in the case of an eligible taxpayer described 
                in subsection (c)(1)(B), $2,000.
            ``(2) Reduction for teleworking less than full year.--In 
        the case of an individual who is in a teleworking arrangement 
        for less than a full taxable year, the dollar amount referred 
        to subparagraph (A) or (B) of paragraph (1) shall be reduced by 
        an amount which bears the same ratio to such dollar amount as 
        the number of months in which such individual is not in a 
        teleworking arrangement bears to 12. For purposes of the 
        preceding sentence, an individual shall be treated as being in 
        a teleworking arrangement for a month if the individual is 
        subject to such arrangement for any day of such month.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Eligible taxpayer.--The term `eligible taxpayer' 
        means--
                    ``(A) in the case of an individual, an individual 
                who performs services for an employer under a 
                teleworking arrangement, and
                    ``(B) in the case of an employer, an employer for 
                whom employees perform services under a teleworking 
                arrangement.
            ``(2) Teleworking arrangement.--The term `teleworking 
        arrangement' means an arrangement under which an employee 
        teleworks for an employer not less than 75 days per year.
            ``(3) Qualified teleworking expenses.--The term `qualified 
        teleworking expenses' means expenses paid or incurred under a 
        teleworking arrangement for furnishings and electronic 
        information equipment which are used to enable an individual to 
        telework.
            ``(4) Telework.--The term `telework' means to perform work 
        functions, using electronic information and communication 
        technologies, thereby reducing or eliminating the physical 
        commute to and from the traditional work site.
    ``(d) Limitation Based on Amount of Tax.--
            ``(1) Liability for tax.--The credit allowable under 
        subsection (a) for any taxable year shall not exceed the excess 
        (if any) of--
                    ``(A) the regular tax for the taxable year, reduced 
                by the sum of the credits allowable under subpart A and 
                the preceding sections of this subpart, over
                    ``(B) the tentative minimum tax for the taxable 
                year.
            ``(2) Carryforward of unused credit.--If the amount of the 
        credit allowable under subsection (a) for any taxable year 
        exceeds the limitation under paragraph (1) for the taxable 
        year, the excess shall be carried to the succeeding taxable 
        year and added to the amount allowable as a credit under 
        subsection (a) for such succeeding taxable year.
    ``(e) Special Rules.--
            ``(1) Basis reduction.--The basis of any property for which 
        a credit is allowable under subsection (a) shall be reduced by 
        the amount of such credit (determined without regard to 
        subsection (d)).
            ``(2) Recapture.--The Secretary shall, by regulations, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any property which ceases 
        to be property eligible for such credit.
            ``(3) Property used outside united states not qualified.--
        No credit shall be allowed under subsection (a) with respect to 
        any property referred to in section 50(b)(1) or with respect to 
        the portion of the cost of any property taken into account 
        under section 179.
            ``(4) Election to not take credit.--No credit shall be 
        allowed under subsection (a) for any expense if the taxpayer 
        elects to not have this section apply with respect to such 
        expense.
            ``(5) Denial of double benefit.--No deduction or credit 
        (other than under this section) shall be allowed under this 
        chapter with respect to any expense which is taken into account 
        in determining the credit under this section.''.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 1016 of the Internal Revenue 
        Code of 1986 is amended by striking ``and'' at the end of 
        paragraph (36), by striking the period at the end of paragraph 
        (37) and inserting ``, and'', and by adding at the end the 
        following new paragraph:
            ``(38) to the extent provided in section 30D(e)(1), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 30D.''.
            (2) Section 55(c)(3) of such Code is amended by inserting 
        ``30D(d),'' after ``30(b)(3),''.
            (3) Section 6501(m) of such Code is amended by inserting 
        ``30D(e)(4),'' after ``30C(e)(5),''.
    (c) Clerical Amendment.--The table of sections for subpart B of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

``Sec. 30D. Teleworking credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 302. EMPLOYER-PROVIDED COMPUTER EQUIPMENT TREATED AS FRINGE 
              BENEFIT.

    (a) In General.--Subsection (a) of section 132 of the Internal 
Revenue Code of 1986 is amended by striking ``or'' at the end of 
paragraph (7), by striking the period at the end of paragraph (8) and 
inserting ``, or'', and by adding at the end the following new 
paragraph:
            ``(9) qualified employer-provided computer equipment 
        fringe.''.
    (b) Qualified Employer-Provided Computer Equipment Fringe.--Section 
132 of the Internal Revenue Code of 1986 is amended by redesignating 
subsection (o) as subsection (p) and by inserting after subsection (n) 
the following new subsection:
    ``(o) Qualified Employer-Provided Computer Equipment Fringe.--For 
purposes of this section--
            ``(1) In general.--The term `qualified employer-provided 
        computer equipment fringe' means any computer and related 
        equipment and services provided to an employee by an employer 
        if--
                    ``(A) such computer and related equipment and 
                services are necessary for the employee to perform work 
                for the employer from the employee's home, and
                    ``(B) the employee makes substantial business use 
                of the equipment in the performance of work for the 
                employer.
            ``(2) Substantial use.--For purposes of paragraph (1), the 
        term `substantial business use' includes standby use for 
        periods when work from home may be required by the employer 
        such as during work closures caused by the threat of terrorism, 
        inclement weather, or natural disasters.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.

SEC. 303. SENSE OF CONGRESS.

    It is the sense of Congress that Congress and the employees of the 
legislative branch of the Federal Government should--
            (1) conserve gasoline, aviation, and diesel fuel by 
        whatever means practicable; and
            (2) as a part of such conservation efforts, promote 
        teleworking.

           Subtitle B--Corporate Average Fuel Economy Reform

SEC. 311. SHORT TITLE.

    This subtitle may be cited as the ``Corporate Average Fuel Economy 
Reform Act of 2006''.

SEC. 312. CAFE STANDARDS FOR PASSENGER AUTOMOBILES.

    (a) Average Fuel Economy Standards for Automobiles.--Section 32902 
of title 49, United States Code, is amended--
            (1) by striking subsections (b) and (c) and inserting the 
        following:
    ``(b) Passenger Automobiles.--
            ``(1) In general.--Not later than 18 months before the 
        beginning of each model year, the Secretary of Transportation 
        shall prescribe by regulation average fuel economy standards 
        for passenger automobiles manufactured by a manufacturer in 
        that model year. Each standard shall be the maximum feasible 
        average fuel economy level that the Secretary decides the 
        manufacturers can achieve in that model year. The Secretary may 
        prescribe separate standards for different classes of passenger 
        automobiles.
            ``(2) Minimum standard.--In prescribing standards under 
        paragraph (1), the Secretary shall ensure that each 
        manufacturer's standard for a particular model year is not less 
        than the greater of--
                    ``(A) the standard in effect on the date of 
                enactment of the Corporate Average Fuel Economy Reform 
                Act of 2006; or
                    ``(B) a standard established in accordance with the 
                requirement of section 315(c)(2) of that Act.
    ``(c) Flexibility of Authority.--
            ``(1) In general.--The authority of the Secretary to 
        prescribe by regulation average fuel economy standards for 
        automobiles under this section includes the authority to 
        prescribe standards based on 1 or more vehicle attributes that 
        relate to fuel economy, and to express the standards in the 
        form of a mathematical function. The Secretary may issue a 
        regulation prescribing standards for 1 or more model years.
            ``(2) Required lead-time.--If the Secretary prescribes an 
        amendment to a standard under this section that makes an 
        average fuel economy standard more stringent, the Secretary 
        shall prescribe such amendment not later than 18 months before 
        the beginning of the model year to which the amendment applies.
            ``(3) No across-the-board increases.--A standard, or an 
        amendment to a standard under this section, may not be 
        expressed as a uniform percentage increase from the fuel-
        economy performance of automobile classes or categories already 
        achieved in a model year by a manufacturer.'';
            (2) in subsection (f), by inserting ``motor vehicle safety, 
        emissions,'' after ``economy,'';
            (3) in subsection (f), by striking ``energy'' and inserting 
        ``energy and reduce its dependence on oil for transportation'';
            (4) by striking subsection (j) and inserting the following:
    ``(j) Comments From DOE and EPA.--
            ``(1) Notice of proposed rulemaking.--Before issuing a 
        notice proposing to prescribe or amend an average fuel economy 
        standard under subsection (a), (b), or (g), the Secretary of 
        Transportation shall give the Secretary of Energy and the 
        Administrator of the Environmental Protection Agency at least 
        10 days to comment on the proposed standard or amendment. If 
        the Secretary of Energy or the Administrator concludes that the 
        proposed standard or amendment would adversely affect the 
        conservation goals of the Department of Energy or the 
        environmental protection goals of the Environmental Protection 
        Agency, respectively, the Secretary or the Administrator may 
        provide written comments to the Secretary of Transportation 
        about the impact of the proposed standard or amendment on those 
        goals. To the extent that the Secretary of Transportation does 
        not revise a proposed standard or amendment to take into 
        account the comments, if any, the Secretary shall include the 
        comments in the notice.
            ``(2) Notice of final rule.--Before taking final action on 
        a standard or an exemption from a standard under this section, 
        the Secretary of Transportation shall notify the Secretary of 
        Energy and the Administrator of the Environmental Protection 
        Agency and provide them a reasonable time to comment on the 
        standard or exemption.''; and
            (5) by adding at the end the following:
    ``(k) Costs-Benefits.--The Secretary of Transportation may not 
prescribe an average fuel economy standard under this section that 
imposes marginal costs that exceed marginal benefits, as determined at 
the time any change in the standard is promulgated.''.
    (b) Exemption Criteria.--Section 32904(b)(6)(B) of title 49, United 
States Code, is amended by striking ``exemption would result in reduced 
employment in the United States related to motor vehicle 
manufacturing'' and inserting ``manufacturer requesting the exemption 
will transfer employment from the United States related to motor 
vehicle manufacturing because of the grant of the exemption''.
    (c) Conforming Amendments.--
            (1) Section 32902 of title 49, United States Code, is 
        amended--
                    (A) in subsection (d)(1), by striking ``or (c) of 
                this section'';
                    (B) in subsection (e)(2), by striking ``(c), or (d) 
                of this section'' and inserting ``or (d)'';
                    (C) in subsection (g)--
                            (i) in paragraph (1)--
                                    (I) by striking ``subsection (a) or 
                                (d)'' each place it appears and 
                                inserting ``subsection (a), (b), or 
                                (d)'';
                                    (II) by striking ``(1)'';
                            (ii) by striking paragraph (2); and
                    (D) in subsection (h), by striking ``(c),'' and 
                inserting ``(b),''.
            (2) Section 32903 of such title is amended by striking 
        ``section 32902(b)-(d) of this title'' each place it appears 
        and inserting ``subsection (b) or (d) of section 32902''.
            (3) Section 32904(a)(1)(B) of such title is amended by 
        striking ``section 32902(b)-(d) of this title'' and inserting 
        ``subsection (b) or (d) of section 32902''.
            (4) The first sentence of section 32909(b) of such title is 
        amended to read as follows: ``The petition shall be filed not 
        later than 59 days after the regulation is prescribed.''.
            (5) Section 32917(b)(1)(B) of such title is amended by 
        striking ``or (c) of this title''.

SEC. 313. USE OF EARNED CREDITS.

    Section 32903 of title 49, United States Code, is amended--
            (1) in subsection (a), by striking ``3 consecutive model 
        years'' and inserting ``5 consecutive model years'';
            (2) in subsection (b)(2), by striking ``3 model years'' and 
        inserting ``5 model years'';
            (3) by redesignating subsection (f) as subsection (g); and
            (4) by inserting after subsection (e) the following:
    ``(f) Credit Transfers.--Taking into consideration the potential 
effect of transfers on creating incentives for manufacturers to produce 
more efficient vehicles and domestic automotive employment, the 
Secretary of Transportation may permit, by regulation, on such terms 
and conditions as the Secretary may specify, a manufacturer of 
automobiles that earns credits to transfer such credits attributable to 
1 of the following production segments in a model year to apply those 
credits in that model year to the other production segment:
            ``(1) Passenger-automobile production.
            ``(2) Non-passenger-automobile production.''.

SEC. 314. USE OF CIVIL PENALTIES FOR RESEARCH AND DEVELOPMENT.

    Section 32912 of title 49, United States Code, is amended by adding 
at the end the following:
    ``(e) Research and Development and Use of Civil Penalties.--
            ``(1) Availability.--All civil penalties assessed by the 
        Secretary or by a Court shall be credited to an account at the 
        Department of Transportation and shall be available to the 
        Secretary to carry out the research program described in 
        paragraph (2).
            ``(2) Research and development.--The Secretary shall carry 
        out a program of research and development into fuel saving 
        automotive technologies and to support rulemaking related to 
        the corporate average fuel economy program.''.

SEC. 315. EFFECTIVE DATE.

    (a) In General.--Except as provided under subsection (b), this 
subtitle, and the amendments made by this subtitle, shall take effect 
on the date of the enactment of this Act.
    (b) Transition for Passenger Automobile Standard.--Notwithstanding 
subsection (a), and except as provided in subsection (c)(2), until the 
effective date of a standard for passenger automobiles that is issued 
under the authority of section 32902(b) of title 49, United States 
Code, as amended by this subtitle, the standard or standards in place 
for passenger automobiles under the authority of section 32902 of that 
title, as that section was in effect on the day before the date of 
enactment of this Act, shall remain in effect.
    (c) Rulemaking.--
            (1) Initiation of rulemaking under amended law.--Not later 
        than 60 days after the date of the enactment of this Act, the 
        Secretary of Transportation shall initiate a rulemaking for 
        passenger automobiles under section 32902(b) of title 49, 
        United States Code, as amended by this subtitle.
            (2) Amendment of existing standard.--Until the Secretary 
        issues a final rule pursuant to the rulemaking initiated in 
        accordance with paragraph (1), the Secretary shall amend the 
        average fuel economy standard prescribed pursuant to section 
        32092(b) of title 49, United States Code, with respect to 
        passenger automobiles in model years to which the standard 
        adopted by such final rule does not apply.

         Subtitle C--Other Conservation and Efficiency Programs

SEC. 321. ADVANCED BUILDING EFFICIENCY TESTBED.

    Section 107(c) of the Energy Policy Act of 2005 (42 U.S.C. 
15812(c)) is amended by striking ``(c)'' and all that follows through 
``For any'' and inserting the following:
    ``(c) Funding.--
            ``(1) In general.--Not later than 30 days after the date of 
        enactment of this paragraph, and on each October 1 thereafter 
        through October 1, 2008, out of any funds in the Treasury not 
        otherwise appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary of Energy to carry out this section 
        $6,000,000, to remain available until expended.
            ``(2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation. 
            ``(3) Allocation of funds.--For any''.

SEC. 322. ENERGY EFFICIENT PUBLIC BUILDINGS.

    Section 125(c) of the Energy Policy Act of 2005 (42 U.S.C. 
15822(c)) is amended by striking ``(c)'' and all that follows through 
``Not more than'' and inserting the following:
    ``(c) Funding.--
            ``(1) In general.--Not later than 30 days after the date of 
        enactment of this paragraph, on October 1, 2007, and on each 
        October 1 thereafter through October 1, 2010, out of any funds 
        in the Treasury not otherwise appropriated, the Secretary of 
        the Treasury shall transfer to the Secretary of Energy to carry 
        out this section $30,000,000, to remain available until 
        expended.
            ``(2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation. 
            ``(3) Use of funds.--Not more than''.

SEC. 323. ENERGY EFFICIENCY PUBLIC INFORMATION INITIATIVE.

    Section 134 of the Energy Policy Act of 2005 (42 U.S.C. 15832) is 
amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``The Secretary'' and inserting ``The 
                Secretary, in cooperation with the Secretary of 
                Education,'';
                    (B) by redesignating paragraphs (2), (3), and (4) 
                as paragraphs (3), (4), and (5), respectively; and
                    (C) by inserting after paragraph (1) the following:
            ``(2) the national security implications of remaining 
        dependent on foreign sources of oil;'';
            (2) in subsection (d), by striking ``2010'' and inserting 
        ``2011''; and
            (3) by striking subsection (e) and inserting the following:
    ``(e) Funding.--
            ``(1) In general.--Not later than 30 days after the date of 
        enactment of this paragraph, on October 1, 2007, and on each 
        October 1 thereafter through October 1, 2010, out of any funds 
        in the Treasury not otherwise appropriated, the Secretary of 
        the Treasury shall transfer to the Secretary of Energy to carry 
        out this section $90,000,000, to remain available until 
        expended.
            ``(2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation.''.

                     TITLE IV--CONSUMER PROTECTION

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Gasoline Consumer Anti-price-
gouging Protection Act''.

SEC. 402. PROTECTION OF CONSUMERS AGAINST PRICE GOUGING.

    It is unlawful for any supplier to increase the price at which that 
supplier sells, or offers to sell, gasoline or petroleum distillates 
in, or for use in--
            (1) an area covered by a Presidential proclamation issued 
        under section 404(a)(1) by an unconscionable amount during the 
        period beginning on the date the proclamation is issued and 
        ending on the date specified in the proclamation; or
            (2) an area covered by a Federal Trade Commission emergency 
        order issued under section 404(a)(2) by an unconscionable 
        amount during the period beginning on the date the order is 
        issued and ending on the date specified in the order.

SEC. 403. JUSTIFIABLE PRICE INCREASES.

    (a) In General.--The prohibition in section 402 does not apply to 
the extent that the increase in the price of the gasoline or petroleum 
distillate is substantially attributable to--
            (1) an increase in the wholesale cost of gasoline and 
        petroleum distillates to a retail seller or reseller;
            (2) an increase in the replacement costs for gasoline or 
        petroleum distillate sold;
            (3) an increase in operational costs; or
            (4) local, regional, national, or international market 
        conditions.
    (b) Other Mitigating Factors.--In determining whether a violation 
of section 402 has occurred, there also shall be taken into account, 
among other factors, the price that would reasonably equate supply and 
demand in a competitive and freely functioning market and whether the 
price at which the gasoline or petroleum distillate was sold reasonably 
reflects additional costs or risks, not within the control of the 
seller, that were paid or incurred by the seller.

SEC. 404. EMERGENCY PROCLAMATIONS AND ORDERS.

    (a) In General.--
            (1) Presidential emergency proclamations.--The President 
        may issue an emergency proclamation when an abnormal market 
        disruption has occurred or is reasonably expected to occur.
            (2) FTC emergency orders.--In the absence of a Presidential 
        proclamation under paragraph (1), the Federal Trade Commission, 
        by majority vote, may--
                    (A) determine that an abnormal market disruption 
                affecting more than 1 State has occurred or is 
                reasonably expected to occur; and
                    (B) issue an emergency order if it makes such a 
                determination.
    (b) Scope and Duration.--
            (1) In general.--The emergency proclamation or order--
                    (A) shall specify with particularity--
                            (i) the period for which the proclamation 
                        or order applies; and
                            (ii) the event, circumstance, or condition 
                        that is the reason such a proclamation or order 
                        is determined to be necessary; and
                    (B) may specify the area or region to which it 
                applies, which, for the 48 contiguous States, may not 
                be limited to a single State.
            (2) Limitations.--An emergency proclamation or a order 
        under subsection (a)--
                    (A) may not apply for a period of more than 30 
                consecutive days (renewable for a consecutive period of 
                not more than 30 days); and
                    (B) may apply to a period of not more than 7 days 
                preceding the occurrence of an event, circumstance, or 
                condition that is the reason such a proclamation or 
                order is necessary.

SEC. 405. ENFORCEMENT BY FEDERAL TRADE COMMISSION.

    (a) Violation Is Unfair or Deceptive Act or Practice.--Section 402 
of this title shall be enforced by the Federal Trade Commission as if 
the violation of section 402 were an unfair or deceptive act or 
practice proscribed under a rule issued under section 18(a)(1)(B) of 
the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
    (b) Actions by the Commission.--The Commission shall prevent any 
supplier from violating this title in the same manner, by the same 
means, and with the same jurisdiction, powers, and duties as though all 
applicable terms and provisions of the Federal Trade Commission Act (15 
U.S.C. 41 et seq.) were incorporated into and made a part of this 
title. Any entity that violates any provision of this title is subject 
to the penalties and entitled to the privileges and immunities provided 
in the Federal Trade Commission Act in the same manner, by the same 
means, and with the same jurisdiction, power, and duties as though all 
applicable terms and provisions of the Federal Trade Commission Act 
were incorporated into and made a part of this title.
    (c) Regulations.--Not later than 180 days after the date of 
enactment of this Act, the Federal Trade Commission shall prescribe 
such regulations as may be necessary or appropriate to implement this 
title.

SEC. 406. PENALTIES.

    (a) Civil Penalty.--
            (1) In general.--In addition to any penalty applicable 
        under the Federal Trade Commission Act any supplier who 
        violates this title is punishable by a civil penalty of--
                    (A) not more than $500,000, in the case of an 
                independent small business marketer of gasoline (within 
                the meaning of section 324(c) of the Clean Air Act (42 
                U.S.C. 7625(c)); and
                    (B) not more than $5,000,000 in the case of any 
                other supplier.
            (2) Method of assessment.--The penalty provided by 
        paragraph (1) shall be assessed in the same manner as civil 
        penalties imposed under section 5 of the Federal Trade 
        Commission Act (15 U.S.C. 45).
            (3) Multiple offenses; mitigating factors.--In assessing 
        the penalty provided by subsection (a)--
                    (A) each day of a continuing violation shall be 
                considered a separate violation; and
                    (B) the Commission shall take into consideration 
                the seriousness of the violation and the efforts of the 
                supplier committing the violation to remedy the harm 
                caused by the violation in a timely manner.
    (b) Criminal Penalty.--
            (1) In general.--In addition to any penalty applicable 
        under the Federal Trade Commission Act, the violation of this 
        title is punishable by a fine of not more than $1,000,000, 
        imprisonment for not more than 2 years, or both.
            (2) Enforcement.--The criminal penalty provided by 
        paragraph (1) may be imposed only pursuant to a criminal action 
        brought by the Attorney General or other officer of the 
        Department of Justice, or any attorney specially appointed by 
        the Attorney General of the United States, in accordance with 
        section 515 of title 28, United States Code.

SEC. 407. DEFINITIONS.

    In this title:
            (1) Abnormal market disruption.--The term ``abnormal market 
        disruption'' means there is a reasonable likelihood that, in 
        the absence of a proclamation under section 404(a), there will 
        be an increase in the average price of gasoline or petroleum 
        distillates as a result of a change in the market, whether 
        actual or imminently threatened, resulting from extreme 
        weather, a natural disaster, strike, civil disorder, war, 
        military action, a national or local emergency, or other 
        similar cause, that adversely affects the availability or 
        delivery gasoline or petroleum distillates.
            (2) Supplier.--The term ``supplier'' means any person 
        engaged in the trade or business of selling, reselling, at 
        retail or wholesale, or distributing gasoline or petroleum 
        distillates.
            (3) Unconscionable amount.--The term ``unconscionable 
        amount'' means, with respect to any supplier to whom section 
        402 applies, a significant increase in the price at which 
        gasoline or petroleum distillates are sold or offered for sale 
        by that supplier that increases the price, for the same grade 
        of gasoline or petroleum distillate, to an amount that--
                    (A) substantially exceeds the average price at 
                which gasoline or petroleum distillates were sold or 
                offered for sale by that supplier during the 30-day 
                period immediately preceding the sale or offer;
                    (B) substantially exceeds the average price at 
                which gasoline or petroleum distillates were sold or 
                offered for sale by that person's competitors during 
                the period for which the emergency proclamation 
                applies; and
                    (C) cannot be justified by taking into account the 
                factors described in section 403(b).

SEC. 408. EFFECTIVE DATE.

    This title shall take effect on the date on which a final rule 
issued by the Federal Trade Commission under section 405(c) is 
published in the Federal Register.

                        TITLE V--TAX INCENTIVES

SEC. 501. EXTENSION OF EXCISE TAX CREDIT FOR COAL-TO-LIQUIDS.

    (a) In General.--Section 6426(d)(4) of the Internal Revenue Code of 
1986 (relating to termination) is amended by inserting ``or any liquid 
fuel described in paragraph (2)(E)'' after ``liquefied hydrogen''.
    (b) Conforming Amendment.--Section 6427(e)(5) of such Code is 
amended by inserting ``or any liquid fuel described in section 
6426(d)(2)(E)'' after ``liquefied hydrogen''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to any sale or use for any period after the date of 
the enactment of this Act.

SEC. 502. EXTENSION OF ALTERNATIVE MOTOR VEHICLE CREDIT.

    (a) In General.--Section 30B(j) of the Internal Revenue Code of 
1986 (relating to termination) is amended by striking ``2010'' both 
places it appears and ``2009'' and inserting ``2014''.
    (b) Delay on Limitation of Certain Vehicles Eligible for 
Alternative Motor Vehicle Credit.--Paragraph (2) of section 30B(f) of 
the Internal Revenue Code of 1986 is amended by striking ``December 31, 
2005'' and inserting ``December 31, 2007''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendment made by section 1341(a) of the 
Energy Policy Act of 2005.

SEC. 503. TAX INCENTIVES EXTENDED TO ENCOURAGE CELLULOSIC ETHANOL 
              PRODUCTION.

    (a) Alcohol Fuel Mixture Excise Tax Credit.--Section 6426(b)(5) of 
the Internal Revenue Code of 1986 (relating to termination) is amended 
by inserting ``(December 31, 2015, in the case of ethanol produced from 
cellulosic feedstocks)'' after ``December 31, 2010''.
    (b) Income Tax Credit for Alcohol Used as Fuel; Small Ethanol 
Producer Credit; Ethanol Blender Credit.--
            (1) In general.--Section 40(e)(1)(A) of the Internal 
        Revenue Code of 1986 (relating to termination) is amended by 
        inserting ``(December 31, 2015, in the case of ethanol produced 
        from cellulosic feedstocks)'' after ``December 31, 2010''.
            (2) Conforming amendments for reduced credit for ethanol 
        blenders.--Section 40(h) of such Code (relating to reduced 
        credit for ethanol blenders) is amended--
                    (A) by inserting ``(2015, in the case of ethanol 
                produced from cellulosic feedstocks)'' after ``2010'' 
                in paragraph (1), and
                    (B) by striking ``2010'' in the table contained in 
                paragraph (2) and inserting ``2015''.
    (c) Rebate for Alcohol Fuel Used To Produce a Mixture.--Section 
6427(e)(5)(A) of the Internal Revenue Code of 1986 (relating to 
termination) is amended by inserting ``(December 31, 2015, in the case 
of ethanol produced from cellulosic feedstocks)'' after ``December 31, 
2010''.

SEC. 504. EXTENSION OF BIODIESEL INCOME AND EXCISE TAX CREDITS.

    Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) of the Internal 
Revenue Code of 1986 are each amended by striking ``2008'' and 
inserting ``2010''.

SEC. 505. EXTENSION OF RENEWABLE ENERGY RESOURCES.

    Section 45(d) of the Internal Revenue Code of 1986 (relating to 
qualified facilities) is amended by striking ``2008'' each place it 
appears and inserting ``2012''.

SEC. 506. EXTENSION AND MODIFICATION OF INVESTMENT TAX CREDIT WITH 
              RESPECT TO SOLAR ENERGY PROPERTY AND QUALIFIED FUEL CELL 
              PROPERTY.

    (a) Solar Energy Property.--Paragraphs (2)(A)(i)(II) and (3)(A)(ii) 
of section 48(a) of the Internal Revenue Code of 1986 are each amended 
by striking ``2008'' and inserting ``2016''.
    (b) Eligible Fuel Cell Property.--Paragraph (1)(E) of section 48(c) 
of the Internal Revenue Code of 1986 is amended by striking ``2007'' 
and inserting ``2015''.
    (c) Credits Allowed Against the Alternative Minimum Tax.--Section 
38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified 
credits) is amended by striking the period at the end of clause 
(ii)(II) and inserting ``, and'', and by adding at the end the 
following new clause:
                            ``(iii) the portion of the investment 
                        credit under section 46(2) as determined under 
                        section 48(a)(2)(A)(i).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.

SEC. 507. CREDIT FOR PRODUCTION OF NATURAL GAS.

    (a) Allowance of Credit.--Subpart D of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 (relating to business 
related credits) is amended by inserting after section 45M the 
following new section:

``SEC. 45N. CREDIT FOR PRODUCTION OF NATURAL GAS.

    ``(a) In General.--For purposes of section 38, in the case of a 
taxpayer, the amount of the natural gas production credit determined 
under this section for a taxable year is equal to the product of--
            ``(1) $2, multiplied by
            ``(2) each 1,000,000 British thermal units of natural gas 
        produced by the taxpayer at a high Btu fuel facility during the 
        taxable year.
    ``(b) Reduction in Credit Amount as Natural Gas Prices Increase.--
For purposes of this section, in the case of natural gas produced after 
the first day of a production month following the date on which the 
spot price of natural gas delivered at Henry Hub, Louisiana, on 
average, exceeds $6 per million British thermal units for 30 
consecutive trading days, the $2 amount under subsection (a) shall be 
reduced (but not below zero) by an amount which is equal to the amount 
by which such spot price exceeds $6 per million British thermal units.
    ``(c) High Btu Fuel Facility.--For purposes of this section--
            ``(1) In general.--The term `high Btu fuel facility' means 
        a facility that produces high Btu biomass fuel and which is 
        placed in service after the date of the enactment of this 
        section and before January 1, 2012.
            ``(2) High btu biomass fuel.--The term `high Btu biomass 
        fuel' means fuel produced from biomass (as defined in section 
        45K(c)(3)) that--
                    ``(A) contains no more than 7 pounds of water per 
                million standard cubic feet,
                    ``(B) contains not less than 95 percent methane per 
                volume, and
                    ``(C) has a Btu content of at least 950 per square 
                cubic feet.
    ``(d) Other Rules To Apply.--Rules similar to the rules of 
paragraphs (1), (3), (4), and (5) of section 45(e) shall apply for 
purposes of this section.
    ``(e) Denial of Double Benefit.--No credit shall be allowed under 
subsection (a) for natural gas produced by the taxpayer if a credit is 
allowed to the taxpayer with respect to such gas under section 45, 45I, 
or 45K.
    ``(f) Application of Section.--This section shall not apply to 
natural gas produced at any facility after the date which is 10 years 
after the date such facility is placed in service.''.
    (b) Credit To Be Part of General Business Credit.--Subsection (b) 
of section 38 of the Internal Revenue Code of 1986 (relating to general 
business credit) is amended by striking ``and'' at the end of paragraph 
(29), by striking the period at the end of paragraph (30) and inserting 
``, and'', and by adding at the end the following new paragraph:
            ``(31) the natural gas production credit determined under 
        section 45N(a).''.
    (c) Conforming Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 45M the 
following new item:

``Sec. 45N. Credit for production of natural gas.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to natural gas produced after December 31, 2006, in taxable years 
ending after such date.

SEC. 508. EXTENSION AND MODIFICATION OF CREDIT FOR RESIDENTIAL ENERGY 
              EFFICIENT PROPERTY.

    (a) Extension.--Section 25D of the Internal Revenue Code of 1986 
(relating to termination) is amended by striking ``2007'' and inserting 
``2015''.
    (b) Modification of Maximum Credit.--Paragraph (1) of section 
25D(b) of the Internal Revenue Code of 1986 (relating to limitations) 
is amended to read as follows:
            ``(1) Maximum credit.--The credit allowed under subsection 
        (a) for any taxable year shall not exceed--
                    ``(A) $1,000 with respect to each half kilowatt of 
                capacity of qualified photovoltaic property for which 
                qualified photovoltaic property expenditures are made,
                    ``(B) $2,000 with respect to any qualified solar 
                water heating property expenditures, and
                    ``(C) $500 with respect to each half kilowatt of 
                capacity of qualified fuel cell property (as defined in 
                section 48(c)(1)) for which qualified fuel cell 
                property expenditures are made.''.
    (c) Credit Allowed Against Alternative Minimum Tax.--
            (1) In general.--Section 25D(b) of the Internal Revenue 
        Code of 1986 (as amended by subsection (b)) is amended by 
        adding at the end the following new paragraph:
            ``(3) Credit allowed against alternative minimum tax.--The 
        credit allowed under subsection (a) for the taxable year shall 
        not exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under 
                subpart A of part IV of subchapter A and section 27 for 
                the taxable year.''.
            (2) Conforming amendment.--Subsection (c) of section 25D of 
        such Code is amended to read as follows:
    ``(c) Carryforward of Unused Credit.--If the credit allowable under 
subsection (a) for any taxable year exceeds the limitation imposed by 
subsection (b)(3) for such taxable year, such excess shall be carried 
to the succeeding taxable year and added to the credit allowable under 
subsection (a) for such succeeding taxable year.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.

                   TITLE VI--BOUTIQUE FUEL REDUCTIONS

SEC. 601. BOUTIQUE FUEL REDUCTIONS.

    Section 211(c)(4)(C) of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)) 
(as amended by section 1541 of the Energy Policy Act of 2005 (Public 
Law 109-58; 119 Stat. 1106)) is amended--
            (1) by redesignating the second clause (v) as clause (vi); 
        and
            (2) in clause (vi) (as redesignated by paragraph (1)), by 
        striking subclauses (III) and (IV) and inserting the following:
    ``(III) The Administrator shall remove a fuel from the list 
published under subclause (II) if a fuel ceases to be included in a 
State implementation plan or if a fuel in a State implementation plan 
is identical to a Federal fuel formulation implemented by the 
Administrator and shall reduce the total number of fuels permitted to 
be included in a State implementation plan or revision on the list 
published under subclause (II) accordingly.
    ``(IV) Subclause (I) shall not limit the authority of the 
Administrator to approve a control or prohibition respecting any new 
fuel under this paragraph in a State implementation plan or revision to 
a State implementation plan if the new fuel completely replaces a fuel 
on the list published under subclause (II).''.
                                 <all>