[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6428 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 6428

     To provide for State enhanced authority for coastal and ocean 
 resources, expansion of America's supply of natural gas and oil, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              July 8, 2008

 Mr. Scalise introduced the following bill; which was referred to the 
 Committee on Natural Resources, and in addition to the Committees on 
Ways and Means, Energy and Commerce, Armed Services, and the Judiciary, 
for a period to be subsequently determined by the Speaker, in each case 
for consideration of such provisions as fall within the jurisdiction of 
                        the committee concerned

_______________________________________________________________________

                                 A BILL


 
     To provide for State enhanced authority for coastal and ocean 
 resources, expansion of America's supply of natural gas and oil, 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.

    (a) Short Title.--This Act may be cited as the ``Grow American 
Supply Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title.
Sec. 2. Policy.
Sec. 3. Definitions under the Submerged Lands Act.
Sec. 4. Seaward boundaries of States.
Sec. 5. Exceptions from confirmation and establishment of States' 
                            title, power, and rights.
Sec. 6. Definitions under the Outer Continental Shelf Lands Act.
Sec. 7. Determination of Adjacent Zones and Planning Areas.
Sec. 8. Administration of leasing.
Sec. 9. Grant of leases by Secretary.
Sec. 10. Disposition of receipts.
Sec. 11. Review of Outer Continental Shelf exploration plans.
Sec. 12. Reservation of lands and rights.
Sec. 13. Outer Continental Shelf leasing program.
Sec. 14. Coordination with Adjacent States.
Sec. 15. Environmental studies.
Sec. 16. Review of Outer Continental Shelf development and production 
                            plans.
Sec. 17. Termination of effect of laws prohibiting the spending of 
                            appropriated funds for certain purposes.
Sec. 18. Outer Continental Shelf incompatible use.
Sec. 19. Repurchase of certain leases.
Sec. 20. Offsite environmental mitigation.
Sec. 21. Regulation of onshore surface-disturbing activities.
Sec. 22. Authority to use decommissioned offshore oil and gas platforms 
                            and other facilities for artificial reef, 
                            scientific research, or other uses.
Sec. 23. OCS regional headquarters.
Sec. 24. Oil shale and tar sands amendments.
Sec. 25. Buy and build American.
Sec. 26. Repeal of the Gulf of Mexico Energy Security Act of 2006.
Sec. 27. Royalty-in-kind.
Sec. 28. Mandatory issuance of regulations promoting production of 
                            natural gas from gas hydrates.
Sec. 29. Mandatory issuance of regulations promoting enhanced oil and 
                            natural gas production through carbon 
                            dioxide injection.
Sec. 30. Minimum rental rates for future oil, gas, and coal Federal 
                            leases.
Sec. 31. Outer Continental Shelf discharges and emissions.
Sec. 32. Onshore oil and gas royalties.
Sec. 33. OCS joint permitting offices.

SEC. 2. POLICY.

    It is the policy of the United States that--
            (1) the United States is blessed with abundant energy 
        resources on the outer Continental Shelf and has developed a 
        comprehensive framework of environmental laws and regulations 
        and fostered the development of state-of-the-art technology 
        that allows for the responsible development of these resources 
        for the benefit of its citizenry;
            (2) adjacent States are required by the circumstances to 
        commit significant resources in support of exploration, 
        development, and production activities for mineral resources on 
        the outer Continental Shelf, and it is fair and proper for a 
        portion of the receipts from such activities to be shared with 
        Adjacent States and their local coastal governments;
            (3) the existing laws governing the leasing and production 
        of the mineral resources of the outer Continental Shelf have 
        reduced the production of mineral resources, have preempted 
        Adjacent States from being sufficiently involved in the 
        decisions regarding the allowance of mineral resource 
        development, and have been harmful to the national interest;
            (4) the national interest is served by granting the 
        Adjacent States more options related to whether or not mineral 
        leasing should occur in the outer Continental Shelf within 
        their Adjacent Zones;
            (5) it is not reasonably foreseeable that exploration of a 
        leased tract located more than 25 miles seaward of the 
        coastline, development and production of a natural gas 
        discovery located more than 25 miles seaward of the coastline, 
        or development and production of an oil discovery located more 
        than 50 miles seaward of the coastline will adversely affect 
        resources near the coastline;
            (6) transportation of oil from a leased tract might 
        reasonably be foreseen, under limited circumstances, to have 
        the potential to adversely affect resources near the coastline 
        if the oil is within 50 miles of the coastline, but such 
        potential to adversely affect such resources is likely no 
        greater, and probably less, than the potential impacts from 
        tanker transportation because tanker spills usually involve 
        large releases of oil over a brief period of time; and
            (7) among other bodies of inland waters, the Great Lakes, 
        Long Island Sound, Delaware Bay, Chesapeake Bay, Albemarle 
        Sound, San Francisco Bay, and Puget Sound are not part of the 
        outer Continental Shelf, and are not subject to leasing by the 
        Federal Government for the exploration, development, and 
        production of any mineral resources that might lie beneath 
        them.

SEC. 3. DEFINITIONS UNDER THE SUBMERGED LANDS ACT.

    Section 2 of the Submerged Lands Act (43 U.S.C. 1301) is amended--
            (1) in paragraph (2) of subsection (a) by striking all 
        after ``seaward to a line'' and inserting ``twelve nautical 
        miles distant from the coast line;'';
            (2) by striking subsection (b) and redesignating the 
        subsequent subsections in order as subsections (b) through (g);
            (3) by striking the period at the end of subsection (g) (as 
        so redesignated) and inserting ``; and'';
            (4) by adding the following:
    ``(i) The term `Secretary' means the Secretary of the Interior.''; 
and
            (5) by defining ``State'' as it is defined in section 2(r) 
        of the Outer Continental Shelf Lands Act (43 U.S.C. 1331(r)).

SEC. 4. SEAWARD BOUNDARIES OF STATES.

    Section 4 of the Submerged Lands Act (43 U.S.C. 1312) is amended--
            (1) in the first sentence by striking ``original'', and in 
        the same sentence by striking ``three geographical'' and 
        inserting ``twelve nautical''; and
            (2) by striking all after the first sentence and inserting 
        the following: ``Extension and delineation of lateral offshore 
        State boundaries under the provisions of this Act shall follow 
        the lines used to determine the Adjacent Zones of coastal 
        States under the Outer Continental Shelf Lands Act to the 
        extent such lines extend twelve nautical miles for the nearest 
        coastline.''.

SEC. 5. EXCEPTIONS FROM CONFIRMATION AND ESTABLISHMENT OF STATES' 
              TITLE, POWER, AND RIGHTS.

    Section 5 of the Submerged Lands Act (43 U.S.C. 1313) is amended--
            (1) by redesignating subsections (a) through (c) in order 
        as paragraphs (1) through (3);
            (2) by inserting ``(a)'' before ``There is excepted''; and
            (3) by inserting at the end the following:
    ``(b) Exception of Oil and Gas Mineral Rights.--There is excepted 
from the operation of sections 3 and 4 all of the oil and gas mineral 
rights for lands beneath the navigable waters that are located within 
the expanded offshore State seaward boundaries established under this 
Act. These oil and gas mineral rights shall remain Federal property and 
shall be considered to be part of the Federal outer Continental Shelf 
for purposes of the Outer Continental Shelf Lands Act (43 U.S.C. 1331 
et seq.) and subject to leasing under the authority of that Act and to 
laws applicable to the leasing of the oil and gas resources of the 
Federal outer Continental Shelf. All existing Federal oil and gas 
leases within the expanded offshore State seaward boundaries shall 
continue unchanged by the provisions of this Act, except as otherwise 
provided herein. However, a State may exercise all of its sovereign 
powers of taxation within the entire extent of its expanded seaward 
State boundaries.''.

SEC. 6. DEFINITIONS UNDER THE OUTER CONTINENTAL SHELF LANDS ACT.

    Section 2 of the Outer Continental Shelf Lands Act (43 U.S.C. 1331) 
is amended--
            (1) by amending subsection (f) to read as follows:
    ``(f) The term `affected State' means the Adjacent State.'';
            (2) by striking the semicolon at the end of each of 
        subsections (a) through (o) and inserting a period;
            (3) by striking ``; and'' at the end of subsection (p) and 
        inserting a period;
            (4) by adding at the end the following:
    ``(r) The term `Adjacent State' means, with respect to any program, 
plan, lease sale, leased tract or other activity, proposed, conducted, 
or approved pursuant to the provisions of this Act, any State the laws 
of which are declared, pursuant to section 4(a)(2), to be the law of 
the United States for the portion of the outer Continental Shelf on 
which such program, plan, lease sale, leased tract or activity 
appertains or is, or is proposed to be, conducted. For purposes of this 
Act, the term `State' includes all States having a coastline contiguous 
to the Arctic, Atlantic, and Pacific Oceans and the Gulf of Mexico, the 
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, the Virgin Islands, American Samoa, Guam, the other 
Territories of the United States, and the District of Columbia.
    ``(s) The term `Adjacent Zone' means, with respect to any program, 
plan, lease sale, leased tract, or other activity, proposed, conducted, 
or approved pursuant to the provisions of this Act, the portion of the 
outer Continental Shelf for which the laws of a particular Adjacent 
State are declared, pursuant to section 4(a)(2), to be the law of the 
United States.
    ``(t) The term `miles' means statute miles.
    ``(u) The term `coastline' has the same meaning as the term `coast 
line' as defined in section 2(c) of the Submerged Lands Act (43 U.S.C. 
1301(c)).
    ``(v) The term `Neighboring State' means a coastal State having a 
common boundary at the coastline with the Adjacent State.''; and
            (5) in subsection (a), by inserting after ``control'' the 
        following: ``or lying within the United States' Exclusive 
        Economic Zone and outer Continental Shelf adjacent to the 
        Commonwealth of Puerto Rico, the Commonwealth of the Northern 
        Mariana Islands, the Virgin Islands, American Samoa, Guam, and 
        the other Territories of the United States''.

SEC. 7. 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. The Secretary 
shall designate the Adjacent Zones of States, and additional OCS 
Planning Areas, for parts of the United States' Exclusive Economic Zone 
and outer Continental Shelf not covered by the referenced maps.''.

SEC. 8. ADMINISTRATION OF LEASING.

    Section 5 of the Outer Continental Shelf Lands Act (43 U.S.C. 1334) 
is amended by adding at the end the following:
    ``(k) Voluntary Partial Relinquishment of a Lease.--Any lessee of a 
producing lease may relinquish to the Secretary any portion of a lease 
that the lessee has no interest in producing and that the Secretary 
finds is geologically prospective. In return for any such 
relinquishment, the Secretary shall provide to the lessee a royalty 
incentive for the portion of the lease retained by the lessee, in 
accordance with regulations promulgated by the Secretary to carry out 
this subsection. The Secretary shall publish final regulations 
implementing this subsection within 365 days after the date of 
enactment of the Grow American Supply Act.
    ``(l) Natural Gas Lease Regulations.--Not later than July 1, 2009, 
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 75 
        miles of the coastline within an area withdrawn from 
        disposition by leasing on the day after the date of enactment 
        of the Grow American Supply Act;
            ``(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 Grow American Supply Act;
            ``(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. 9. GRANT OF LEASES BY SECRETARY.

    Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337) 
is amended--
            (1) in subsection (a)(1) by inserting after the first 
        sentence the following: ``Further, the Secretary may grant 
        natural gas leases in a manner similar to the granting of oil 
        and gas leases and under the various bidding systems available 
        for oil and gas leases.'';
            (2) in subsection (a)(1) by striking ``12\1/2\ per centum'' 
        in each occurrence and inserting ``16\2/3\ per centum'' for 
        each;
            (3) in subsection (a)(1) by redesignating subparagraph (I) 
        as subparagraph (J), and inserting the following new 
        subparagraph (I):
                    ``(I) cash bonus bid with royalty fixed by the 
                Secretary at 18\3/4\ per centum in the amount or value 
                of production saved, removed, or sold, subject to the 
                following adjustments:
                            ``(i) if the arithmetic average of the 
                        closing prices on the New York Mercantile 
                        Exchange for light sweet crude oil, or a 
                        similar index as determined by the Secretary, 
                        for the 365 days prior to issuance of the final 
                        notice of lease sale exceeded $150.00 per 
                        barrel (in January 1, 2008, dollars), the 
                        royalty rate shall be fixed by the Secretary at 
                        20 per centum in the amount or value of 
                        production, removed, or sold;
                            ``(ii) if the arithmetic average of the 
                        closing prices on the New York Mercantile 
                        Exchange for light sweet crude oil, or a 
                        similar index as determined by the Secretary, 
                        for the 365 days prior to issuance of the final 
                        notice of lease sale was less than $75.00 per 
                        barrel (in January 1, 2008, dollars), the 
                        royalty rate shall be fixed by the Secretary at 
                        17\1/2\ per centum in the amount or value of 
                        production, removed, or sold;
                            ``(iii) the royalty rate fixed in the lease 
                        shall be reduced up to 4 per centum as follows:
                                    ``(I) 100 per centum of this amount 
                                if the first production well is spudded 
                                within 3 years after issuance of the 
                                lease,
                                    ``(II) 75 per centum of this amount 
                                if the first production well is spudded 
                                between 3 and 4 years after issuance of 
                                the lease,
                                    ``(III) 50 per centum of this 
                                amount if the first production well is 
                                spudded between 4 and 5 years after 
                                issuance of the lease, and
                                    ``(IV) 25 per centum of this amount 
                                if the first production well is spudded 
                                between 5 and 6 years after issuance of 
                                the lease.'';
            (4) in subsection (a) by adding the following:
            ``(9) The Secretary shall use only the bidding system 
        provided for in paragraph (1)(I) of this subsection for all 
        lease sales conducted from January 1, 2009, through January 1, 
        2019. However, the Secretary may reduce the royalty rate fixed 
        under that bidding system by up to 2 per centum for tracts 
        located in frontier areas, as determined by the Secretary, if 
        the Secretary finds that the royalty rate otherwise fixed by 
        the bidding system would likely significantly reduce production 
        resulting from use of such bidding system in frontier areas.
            ``(10) The royalty rate for leases in effect on January 1, 
        2009, having a royalty rate of 18\3/4\ per centum, that have 
        not spudded the first production well prior to July 1, 2008, 
        shall be reduced up to 4 per centum as follows:
                    ``(A) 100 per centum of this amount if the first 
                production well is spudded within 3 years after 
                issuance of the lease,
                    ``(B) 75 per centum of this amount if the first 
                production well is spudded between 3 and 4 years after 
                issuance of the lease,
                    ``(C) 50 per centum of this amount if the first 
                production well is spudded between 4 and 5 years after 
                issuance of the lease, and
                    ``(D) 25 per centum of this amount if the first 
                production well is spudded between 5 and 6 years after 
                issuance of the lease.
            ``(11) The royalty rate for leases in effect on January 1, 
        2009, having a royalty rate of less than 18\3/4\ per centum, 
        that have not spudded the first production well prior to July 
        1, 2008, shall be reduced by up to 2 per centum as follows:
                    ``(A) 100 per centum of this amount if the first 
                production well is spudded within 3 years after 
                issuance of the lease,
                    ``(B) 75 per centum of this amount if the first 
                production well is spudded between 3 and 4 years after 
                issuance of the lease,
                    ``(C) 50 per centum of this amount if the first 
                production well is spudded between 4 and 5 years after 
                issuance of the lease,
                    ``(D) 25 per centum of this amount if the first 
                production well is spudded between 5 and 6 years after 
                issuance of the lease.'';
            (5) by adding at the end of subsection (b) the following: 
        ``The Secretary may issue more than one lease for a given tract 
        if each lease applies to a separate and distinct range of 
        vertical depths, horizontal surface area, or a combination of 
        the two. The Secretary may issue regulations that the Secretary 
        determines are necessary to manage such leases consistent with 
        the purposes of this Act.'';
            (6) by amending subsection (p)(2)(B) to read as follows:
                    ``(B) The Secretary shall provide for the payment 
                to coastal states, and their local coastal governments, 
                of 50 percent of Federal receipts from projects 
                authorized under this section located within the area 
                extending seaward of State submerged lands. Payments 
                shall be based on a formula established by the 
                Secretary by rulemaking no later than 180 days after 
                the date of enactment of the that provides for 
                equitable distribution, based on proximity to the 
                project, among coastal states that have a coastline 
                that is located within 200 miles of the geographic 
                center of the project.''; and
            (7) 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 unless the Governor of the 
        Adjacent State agrees to such production.
            ``(3) Estimates of btu content.--The Secretary shall make 
        estimates of the natural gas Btu content of discovered fields 
        on a natural gas lease only after the completion of at least 
        one exploration well, the data from which has been tied to the 
        results of a three-dimensional seismic survey of the field. The 
        Secretary may not require the lessee to further delineate any 
        discovered field prior to making such estimates.
            ``(4) Definition of natural gas.--For purposes of a natural 
        gas lease, natural gas means natural gas and all substances 
        produced in association with gas, including, but not limited 
        to, hydrocarbon liquids (other than crude oil) that are 
        obtained by the condensation of hydrocarbon vapors and separate 
        out in liquid form from the produced gas stream.
    ``(r) Removal of Restrictions on Joint Bidding in Certain Areas of 
the Outer Continental Shelf.--Restrictions on joint bidders shall no 
longer apply to tracts determined to be `frontier tracts' or otherwise 
`high cost tracts' under final regulations that shall be published by 
the Secretary by not later than 365 days after the date of enactment of 
the Grow American Supply Act.
    ``(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 (January 1, 2008, dollars) for oil 
and for natural gas of $6.75 per million Btu (January 1, 2008, 
dollars). Any royalties paid because of such new or revised price 
thresholds shall be treated as offsetting receipts. Any royalties paid 
under lease price thresholds agreed to after the date of enactment of 
the Grow American Supply Act shall be subject to immediate receipts 
sharing under section 9, and the balance not shared under that section 
shall be transferred by the Secretary of the Interior to the Treasury.
    ``(t) Mandatory Price Thresholds for Royalty Suspension Volumes.--
After the date of enactment of the Grow American Supply Act, price 
thresholds shall apply to any royalty suspension volumes granted by the 
Secretary. Unless otherwise set by the Secretary by regulation or for a 
particular lease sale within the final notice of sale, the price 
thresholds shall be $40.50 for oil (January 1, 2008, dollars) and $6.75 
for natural gas (January 1, 2008, dollars).''.

SEC. 10. DISPOSITION OF RECEIPTS.

    Section 9 of the Outer Continental Shelf Lands Act (43 U.S.C. 1338) 
is amended as follows:
            (1) By designating the existing text as subsection (a).
            (2) In subsection (a) (as so designated) by inserting ``, 
        if not paid as otherwise provided in this title'' after 
        ``receipts''.
            (3) by adding the following:
    ``(b) Treatment of OCS Receipts.--
            ``(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, 2008, the Secretary 
                shall share OCS Receipts derived from lease tracts 
                located completely beyond 4 marine leagues from any 
                coastline in the following areas:
                            ``(i) On portions of the Gulf of Mexico OCS 
                        Region that were available for leasing under 
                        the 2002 through 2007 5-Year OCS Oil and Gas 
                        Leasing Program.
                            ``(ii) Lease tracts in production prior to 
                        October 1, 2008, located on portions of the OCS 
                        that were not available for leasing under the 
                        2002 through 2007 5-Year OCS Oil and Gas 
                        Leasing Program.
                            ``(iii) Lease tracts for which leases are 
                        issued prior to October 1, 2008, located in the 
                        Alaska OCS Region completely beyond 4 marine 
                        leagues from any 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 2009, 10 percent.
                            ``(ii) For fiscal year 2010, 12 percent.
                            ``(iii) For fiscal year 2011, 14 percent.
                            ``(iv) For fiscal year 2012, 16 percent.
                            ``(v) For fiscal year 2013, 18 percent.
                            ``(vi) For fiscal year 2014, 20 percent.
                            ``(vii) For fiscal year 2015, 22 percent.
                            ``(viii) For fiscal year 2016, 24 percent.
                            ``(ix) For fiscal year 2017, 26 percent.
                            ``(x) For fiscal year 2018 and each 
                        subsequent fiscal year, 50 percent.
                    ``(C) The provisions of this paragraph shall not 
                apply to leases that could not have been issued but for 
                section 5(k) of this Act or section 8(b) of this Act.
            ``(3) Immediate receipts sharing.--Beginning October 1, 
        2008, the Secretary shall share 50 percent of OCS Receipts 
        derived from all leases located completely beyond 4 marine 
        leagues from any coastline not included within the provisions 
        of paragraph (2), except that the Secretary shall only share 25 
        percent of such OCS Receipts derived from all such leases 
        within a State's Adjacent Zone if leasing is not allowed within 
        at least 25 percent of that State's Adjacent Zone located 
        completely within 75 miles of any coastline.
            ``(4) Receipts sharing from tracts within 4 marine leagues 
        of any coastline.--
                    ``(A) Areas described in paragraph (2).--Beginning 
                October 1, 2008, and continuing through September 30, 
                2013, the Secretary shall share with the adjacent State 
                and its coastal political subdivisions 27 percent of 
                OCS Receipts derived from all leases located within 4 
                marine leagues from any coastline within areas 
                described in paragraph (2). For each fiscal year after 
                September 30, 2013, the Secretary shall increase the 
                percent shared in 5 percent increments each fiscal year 
                until the sharing rate for all leases located within 4 
                marine leagues from any coastline within areas 
                described in paragraph (2) becomes 75 percent.
                    ``(B) Areas not described in paragraph (2).--
                Beginning October 1, 2008, the Secretary shall share 
                with the adjacent State and its coastal political 
                subdivisions 50 percent of OCS receipts derived from 
                all leases located completely or partially within 4 
                marine leagues from any coastline within areas not 
                described paragraph (2).
            ``(5) 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 to the 
                Adjacent State.
                    ``(B) Royalties.--Deposits derived from royalties 
                and net profit shares from a leased tract, including 
                interest thereon, shall be allocated at the end of each 
                fiscal year as follows:
                            ``(i) 50 percent to the Adjacent State.
                            ``(ii) 50 percent to all States, including 
                        the Adjacent State, having a coastline point 
                        within 300 miles of the leased tract, divided 
                        equally, if such State allows leasing within at 
                        least 25 percent of its Adjacent Zone within 75 
                        miles of the coastline.
                    ``(C) Limitation if not admitted to the union as a 
                state.--Any entity defined as a `State' under section 
                2(r), that has not been admitted to the Union as a 
                State shall only be entitled to one-half of a `State' 
                share under (a)(vi) and (b)(vi).
    ``(c) 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)(4), (b)(5)(A) and 
                (b)(5)(B)(i) and (ii) for the immediate prior fiscal 
                year;
                    ``(B) to each coastal county-equivalent and 
                municipal political subdivisions of such State a total 
                of 40 percent of such State's allocations under 
                subsections (b)(4), (b)(5)(A), and (b)(5)(B)(i) and 
                (ii), for the immediate prior fiscal year, together 
                with all accrued interest thereon; and
                    ``(C) the remaining allocations under subsection 
                (b)(5), together with all accrued interest thereon.
            ``(2) Allocations to coastal county-equivalent political 
        subdivisions.--The Secretary shall make an initial allocation 
        of the OCS Receipts to be shared under paragraph (1)(B) as 
        follows:
                    ``(A) 25 percent shall be allocated to coastal 
                county-equivalent political subdivisions that are 
                completely more than 25 miles landward of the coastline 
                and at least a part of which lies not more than 75 
                miles landward from the coastline, with the allocation 
                among such coastal county-equivalent political 
                subdivisions based on population.
                    ``(B) 75 percent shall be allocated to coastal 
                county-equivalent political subdivisions that are 
                completely or partially less than 25 miles landward of 
                the coastline, with the allocation among such coastal 
                county-equivalent political subdivisions to be further 
                allocated as follows:
                            ``(i) 25 percent shall be allocated based 
                        on the ratio of such coastal county-equivalent 
                        political subdivision's population to the 
                        coastal population of all coastal county-
                        equivalent political subdivisions in the State.
                            ``(ii) 25 percent shall be allocated based 
                        on the ratio of such coastal county-equivalent 
                        political subdivision's coastline miles to the 
                        coastline miles of all coastal county-
                        equivalent political subdivisions in the State 
                        as calculated by the Secretary. In such 
                        calculations, coastal county-equivalent 
                        political subdivisions without a coastline 
                        shall be considered to have 50 percent of the 
                        average coastline miles of the coastal county-
                        equivalent political subdivisions that do have 
                        coastlines.
                            ``(iii) 50 percent shall be allocated 
                        equally 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.
            ``(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.
    ``(d) 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.
    ``(e) Use of Funds.--A recipient of funds under this section may 
use the funds for one or more of the following:
            ``(1) To reduce in-State college tuition at public 
        institutions of higher learning and otherwise support public 
        education, including career technical education.
            ``(2) To make transportation infrastructure improvements.
            ``(3) To reduce taxes.
            ``(4) To promote, fund, and provide for--
                    ``(A) coastal or environmental restoration;
                    ``(B) fish, wildlife, and marine life habitat 
                enhancement;
                    ``(C) waterways construction and maintenance;
                    ``(D) levee construction and maintenance and shore 
                protection; and
                    ``(E) marine and oceanographic education and 
                research.
            ``(5) To promote, fund, and provide for--
                    ``(A) infrastructure associated with energy 
                production activities conducted on the outer 
                Continental Shelf;
                    ``(B) energy demonstration projects;
                    ``(C) supporting infrastructure for shore-based 
                energy projects;
                    ``(D) State geologic programs, including geologic 
                mapping and data storage programs, and State 
                geophysical data acquisition;
                    ``(E) State seismic monitoring programs, including 
                operation of monitoring stations;
                    ``(F) development of oil and gas resources through 
                enhanced recovery techniques;
                    ``(G) alternative energy development, including bio 
                fuels, coal-to-liquids, oil shale, tar sands, 
                geothermal, geopressure, wind, waves, currents, hydro, 
                and other renewable energy;
                    ``(H) energy efficiency and conservation programs; 
                and
                    ``(I) front-end engineering and design for 
                facilities that produce liquid fuels from hydrocarbons 
                and other biological matter.
            ``(6) To promote, fund, and provide for--
                    ``(A) historic preservation programs and projects;
                    ``(B) natural disaster planning and response; and
                    ``(C) hurricane and natural disaster insurance 
                programs.
            ``(7) For any other purpose as determined by State law.
    ``(f) 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.
    ``(g) 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.
    ``(h) Use of Federal Revenues From Certain New Leases To Reduce 
Social Security Debt.--
            ``(1) Special dedicated account in social security trust 
        fund.--25 percent of OCS Receipts that are derived from leases 
        under this Act on tracts that would not have been available for 
        leasing prior to the enactment of the Grow American Supply Act 
        and that would otherwise have been deposited in the General 
        Fund of the Treasury and not allocated to any other specific 
        use shall be deposited in a Special Dedicated Account in the 
        Federal Old-Age and Survivors Insurance Trust Fund. 
        Notwithstanding section 201(d) of the Social Security Act, 
        amounts deposited in the Special Dedicated Account under this 
        subsection 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.
            ``(2) Expenditures.--No portion of the principal amount of 
        such Special Dedicated Account or of the accrued interest in 
        such account may be expended in any fiscal year unless the 
        Secretary of the Treasury determines that revenues allocated to 
        the Federal Old-Age and Survivors Insurance Trust Fund in that 
        fiscal year will be less than expenditures from the Fund in 
        that fiscal year, and in any such fiscal year the Secretary may 
        transfer such amounts as may be necessary from the Special 
        Dedicated Account to the general account in the Federal Old-Age 
        and Survivors Insurance Trust Fund for expenditure in that 
        fiscal year to the extent necessary to equalize revenues and 
        expenditures from such Trust Fund in that fiscal year.
    ``(i) Deficit Reduction.--
            ``(1) In general.--Subchapter A of chapter 98 of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following new section:

```SEC. 9511. DEFICIT REDUCTION TRUST FUND.

    ```(a) Creation.--There is established in the Treasury of the 
United States a trust fund to be known as the `Deficit Reduction Trust 
Fund', consisting of such amounts as may be appropriated or credited to 
the Deficit Reduction Trust Fund as provided in this section.
    ```(b) Transfers.--There are hereby appropriated to the Deficit 
Reduction Trust Fund amounts equivalent to 25 percent of all OCS 
Receipts, as defined in section 9(j)(8) of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1338), that are derived from leases under that Act 
on tracts that would not have been available for leasing prior to the 
enactment of the Grow American Supply Act and that would otherwise have 
been deposited in the General Fund of the Treasury and not allocated to 
any other specific use.
    ```(c) Expenditures.--Amounts in the Deficit Reduction Trust Fund 
shall be available as provided in appropriation Acts only for the 
purpose of reducing the Federal debt.'.
    ``(j) 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, or from net 
        profit shares, 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 and royalties, excluding royalties from leases amended 
        under the authority of section 8(s) of this Act.''.

SEC. 11. REVIEW OF OUTER CONTINENTAL SHELF EXPLORATION PLANS.

    Subsections (c) and (d) of section 11 of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1340) are amended to read as follows:
    ``(c) Plan Review; Plan Provisions.--
            ``(1) Except as otherwise provided in this Act, prior to 
        commencing exploration pursuant to any oil and gas lease issued 
        or maintained under this Act, the holder thereof shall submit 
        an exploration plan (hereinafter in this section referred to as 
        a `plan') to the Secretary for review which shall include all 
        information and documentation required under paragraphs (2) and 
        (3). The Secretary shall review the plan for completeness 
        within 10 days of submission. If the Secretary finds that the 
        plan is not complete, the Secretary shall notify the lessee 
        with a detailed explanation and require such modifications of 
        such plan as are necessary to achieve completeness. The 
        Secretary shall have 10 days to review a modified plan for 
        completeness. Such plan may apply to more than one lease held 
        by a lessee in any one region of the outer Continental Shelf, 
        or by a group of lessees acting under a unitization, pooling, 
        or drilling agreement, and the lessee shall certify that such 
        plan is consistent with the terms of the lease and is 
        consistent with all statutory and regulatory requirements in 
        effect on the date of issuance of the lease, and any 
        regulations promulgated under this Act to the conservation of 
        resources after the date of lease issuances. The Secretary 
        shall have 30 days from the date the plan is deemed complete to 
        conduct a review of the plan. If the Secretary finds the plan 
        is not consistent with the lease and all such statutory and 
        regulatory requirements, the Secretary shall notify the lessee 
        with a detailed explanation of such modifications of such plan 
        as are necessary to achieve compliance. The Secretary shall 
        have 30 days to review any modified plan submitted by the 
        lessee. The lessee shall not take any action under the 
        exploration plan within the 30-day review period, or thereafter 
        until the plan has been modified to achieve compliance as so 
        notified.
            ``(2) An exploration plan submitted under this subsection 
        shall include, in the degree of detail which the Secretary may 
        by regulation require--
                    ``(A) a schedule of anticipated exploration 
                activities to be undertaken;
                    ``(B) a description of equipment to be used for 
                such activities;
                    ``(C) the general location of each well to be 
                drilled; and
                    ``(D) such other information deemed pertinent by 
                the Secretary.
            ``(3) The Secretary may, by regulation, require that such 
        plan be accompanied by a general statement of development and 
        production intentions which shall be for planning purposes only 
        and which shall not be binding on any party.
    ``(d) Plan Revisions; Conduct of Exploration Activities.--
            ``(1) If a significant revision of an exploration plan 
        under this subsection is submitted to the Secretary, the 
        process to be used for the review of such revision shall be the 
        same as set forth in subsection (c) of this section.
            ``(2) All exploration activities pursuant to any lease 
        shall be conducted in accordance with an exploration plan or a 
        revised plan which has been submitted to and reviewed by the 
        Secretary.''.

SEC. 12. 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 is extended by a State under subsection (h), 
        nor may the President withdraw from leasing any area for which 
        a State failed to prohibit, or petition to prohibit, leasing 
        under subsection (g). Further, in the area of the outer 
        Continental Shelf more than 75 miles from any coastline, not 
        more than 25 percent of the acreage of any OCS Planning Area 
        may be withdrawn from leasing under this section at any point 
        in time. A withdrawal by the President may be for a term not to 
        exceed 5 years. Except when otherwise provided by law, 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 the date of enactment of the 
                Grow American Supply Act, the Secretary shall not offer 
                for leasing for oil and gas, or natural gas, any area 
                within 35 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 35 miles of the coastline not withdrawn 
                from leasing under that Memorandum that is included 
                within the territorial waters and Exclusive Economic 
                Zone adjacent to the Commonwealth of Puerto Rico, the 
                Commonwealth of the Northern Mariana Islands, the 
                Virgin Islands, American Samoa, Guam, and the other 
                Territories of the United States, or any area within 35 
                miles of the coastline within the Florida Straits 
                Planning Area as indicated on the map entitled 
                `Atlantic 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.
                    ``(B) Areas between 35 and 75 miles from the 
                coastline.--Unless an Adjacent State petitions under 
                subsection (h) within one year after the date of 
                enactment of the Grow American Supply Act for natural 
                gas leasing or within three years after date of 
                enactment for oil and gas leasing, the Secretary shall 
                offer for leasing any area more than 35 miles but less 
                than 75 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 35 miles but less than 75 miles of 
                the coastline not withdrawn under that Memorandum that 
                is included within the Exclusive Economic Zone adjacent 
                to the Commonwealth of Puerto Rico, the Commonwealth of 
                the Northern Mariana Islands, the Virgin Islands, 
                American Samoa, Guam, and the other Territories of the 
                United States, or any area more than 35 miles but less 
                than 75 miles of the coastline within the Florida 
                Straits Planning Area as indicated on the map entitled 
                `Atlantic 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.
            ``(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. 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 
                enactment of a State statute providing for such, shall 
                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 35 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.
                    ``(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 35 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 date of enactment 
                of the Grow American Supply Act 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 Extend Withdrawal From Leasing Within Certain Areas 
of the Outer Continental Shelf.--A State, through enactment of a State 
statute, may extend for a period of time of up to 5 years for each 
extension the withdrawal from leasing for all or part of any area 
within the State's Adjacent Zone located more than 35 miles, but less 
than 75 miles, from the coastline that is subject to subsection 
(g)(1)(B). A State may extend multiple times for any particular area 
but not more than once per calendar year for any particular area, may a 
State extend the withdrawal for an area to cause it to extend to a 
total of more than 5 years from the date of concurrence by the 
legislature. A State must prepare separate extensions, with enactment 
of separate State statutes, for oil and gas leasing and for natural gas 
leasing. An extension by a State may affect some areas to be withdrawn 
from all leasing and some areas to be withdrawn only from one type of 
leasing.
    ``(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 any State.
    ``(j) Prohibition on Leasing East of the Military Mission Line.--
            ``(1) Notwithstanding any other provision of law, from and 
        after the date of enactment of the Grow American Supply Act, 
        prior to January 1, 2022, no area of the outer Continental 
        Shelf located in the Gulf of Mexico east of the military 
        mission line may be offered for leasing for oil and gas or 
        natural gas unless a waiver is issued by the Secretary of 
        Defense. If such a waiver is granted, 50 percent of the OCS 
        Receipts from a lease within such area issued because of such 
        waiver shall be paid under section 9 and the other 50 percent 
        shall be paid annually to the National Guards of all States, 
        allocated by the Secretary among the States on a per capita 
        basis using the entire population of such States.
            ``(2) In this subsection, the term `military mission line' 
        means a line located at 86 degrees, 41 minutes West Longitude, 
        and extending south from the coast of Florida to the outer 
        boundary of United States exclusive economic zone in the Gulf 
        of Mexico.''.

SEC. 13. OUTER CONTINENTAL SHELF LEASING PROGRAM.

    Section 18 of the Outer Continental Shelf Lands Act (43 U.S.C. 
1344) is amended--
            (1) in subsection (a), by adding at the end of paragraph 
        (3) the following: ``The Secretary shall, in each 5-year 
        program, include lease sales that when viewed as a whole 
        propose to offer for oil and gas or natural gas leasing at 
        least 75 percent of the available unleased acreage within each 
        OCS Planning Area. Available unleased acreage is that portion 
        of the outer Continental Shelf that is not under lease at the 
        time of the proposed lease sale, and has not otherwise been 
        made unavailable for leasing by law.'';
            (2) in subsection (c), by striking so much as precedes 
        paragraph (3) and inserting the following:
    ``(c)(1) During the preparation of any proposed leasing program 
under this section, the Secretary shall consider and analyze leasing 
throughout the entire Outer Continental Shelf without regard to any 
other law affecting such leasing. During this preparation the Secretary 
shall invite and consider suggestions from any interested Federal 
agency, including the Attorney General, in consultation with the 
Federal Trade Commission, and from the Governor of any coastal State. 
The Secretary may also invite or consider any suggestions from the 
executive of any local government in a coastal State that have been 
previously submitted to the Governor of such State, and from any other 
person. Further, the Secretary shall consult with the Secretary of 
Defense regarding military operational needs in the outer Continental 
Shelf. The Secretary shall work with the Secretary of Defense to 
resolve any conflicts that might arise regarding offering any area of 
the outer Continental Shelf for oil and gas or natural gas leasing. If 
the Secretaries are not able to resolve all such conflicts, any 
unresolved issues shall be elevated to the President for resolution.
    ``(2) After the consideration and analysis required by paragraph 
(1), including the consideration of the suggestions received from any 
interested Federal agency, the Federal Trade Commission, the Governor 
of any coastal State, any local government of a coastal State, and any 
other person, the Secretary shall publish in the Federal Register a 
proposed leasing program accompanied by a draft environmental impact 
statement prepared pursuant to the National Environmental Policy Act of 
1969. After the publishing of the proposed leasing program and during 
the comment period provided for on the draft environmental impact 
statement, the Secretary shall submit a copy of the proposed program to 
the Governor of each affected State for review and comment. The 
Governor may solicit comments from those executives of local 
governments in the Governor's State that the Governor, in the 
discretion of the Governor, determines will be affected by the proposed 
program. If any comment by such Governor is received by the Secretary 
at least 15 days prior to submission to the Congress pursuant to 
paragraph (3) and includes a request for any modification of such 
proposed program, the Secretary shall reply in writing, granting or 
denying such request in whole or in part, or granting such request in 
such modified form as the Secretary considers appropriate, and stating 
the Secretary's reasons therefor. All such correspondence between the 
Secretary and the Governor of any affected State, together with any 
additional information and data relating thereto, shall accompany such 
proposed program when it is submitted to the Congress.''; and
            (3) by adding at the end the following:
    ``(i) Projection of State Adjacent Zone Resources and State and 
Local Government Shares of OCS Receipts.--Concurrent with the 
publication of the scoping notice at the beginning of the development 
of each 5-year outer Continental Shelf oil and gas leasing program, or 
as soon thereafter as possible, the Secretary shall--
            ``(1) provide to each Adjacent State a current estimate of 
        proven and potential oil and gas resources located within the 
        State's Adjacent Zone; and
            ``(2) provide to each Adjacent State, and coastal political 
        subdivisions thereof, a best-efforts projection of the OCS 
        Receipts that the Secretary expects will be shared with each 
        Adjacent State, and its coastal political subdivisions, using 
        the assumption that the unleased tracts within the State's 
        Adjacent Zone are fully made available for leasing, including 
        long-term projected OCS Receipts. In addition, the Secretary 
        shall include a macroeconomic estimate of the impact of such 
        leasing on the national economy and each State's economy, 
        including investment, jobs, revenues, personal income, and 
        other categories.''.

SEC. 14. COORDINATION WITH ADJACENT STATES.

    Section 19 of the Outer Continental Shelf Lands Act (43 U.S.C. 
1345) is amended--
            (1) in subsection (a) in the first sentence by inserting 
        ``, for any tract located within the Adjacent State's Adjacent 
        Zone,'' after ``government''; and
            (2) by adding the following:
    ``(f)(1) No Federal agency may permit or otherwise approve, without 
the concurrence of the Adjacent State, the construction of a crude oil 
or petroleum products (or both) pipeline within the part of the 
Adjacent State's Adjacent Zone that is withdrawn from oil and gas or 
natural gas leasing, except that such a pipeline may be approved, 
without such Adjacent State's concurrence, to pass through such 
Adjacent Zone if at least 50 percent of the production projected to be 
carried by the pipeline within its first 10 years of operation is from 
areas of the Adjacent State's Adjacent Zone.
    ``(2) No State may prohibit the construction within its Adjacent 
Zone or its State waters of a natural gas pipeline that will transport 
natural gas produced from the outer Continental Shelf. However, an 
Adjacent State may prevent a proposed natural gas pipeline landing 
location if it proposes two alternate landing locations in the Adjacent 
State, acceptable to the Adjacent State, located within 50 miles on 
either side of the proposed landing location.''.

SEC. 15. ENVIRONMENTAL STUDIES.

    Section 20(d) of the Outer Continental Shelf Lands Act (43 U.S.C. 
1346) is amended--
            (1) by inserting ``(1)'' after ``(d)''; and
            (2) by adding at the end the following:
    ``(2) For all programs, lease sales, leases, and actions under this 
Act, the following shall apply regarding the application of the 
National Environmental Policy Act of 1969:
            ``(A) Granting or directing lease suspensions and the 
        conduct of all preliminary activities on outer Continental 
        Shelf tracts, including seismic activities, are categorically 
        excluded from the need to prepare either an environmental 
        assessment or an environmental impact statement, and the 
        Secretary shall not be required to analyze whether any 
        exceptions to a categorical exclusion apply for activities 
        conducted under the authority of this Act.
            ``(B) The environmental impact statement developed in 
        support of each 5-year oil and gas leasing program provides the 
        environmental analysis for all lease sales to be conducted 
        under the program and such sales shall not be subject to 
        further environmental analysis.
            ``(C) Exploration plans shall not be subject to any 
        requirement to prepare an environmental impact statement, and 
        the Secretary may find that exploration plans are eligible for 
        categorical exclusion due to the impacts already being 
        considered within an environmental impact statement or due to 
        mitigation measures included within the plan.
            ``(D) Within each OCS Planning Area, after the preparation 
        of the first development and production plan environmental 
        impact statement for a leased tract within the Area, future 
        development and production plans for leased tracts within the 
        Area shall only require the preparation of an environmental 
        assessment unless the most recent development and production 
        plan environmental impact statement within the Area was 
        finalized more than 10 years prior to the date of the approval 
        of the plan, in which case an environmental impact statement 
        shall be required.''.

SEC. 16. REVIEW OF OUTER CONTINENTAL SHELF DEVELOPMENT AND PRODUCTION 
              PLANS.

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

``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 the date of enactment of the Grow American 
Supply Act, 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 Grow 
American Supply Act.
    ``(c) Scope and Contents of Plan.--A plan may apply to more than 
one oil and gas lease, and shall set forth, in the degree of detail 
established by regulations issued by the Secretary--
            ``(1) the general work to be performed;
            ``(2) a description of all facilities and operations 
        located on the outer Continental Shelf that are proposed by the 
        lessee or known by the lessee (whether or not owned or operated 
        by such lessee) to be directly related to the proposed 
        development, including the location and size of such facilities 
        and operations, and the land, labor, material, and energy 
        requirements associated with such facilities and operations;
            ``(3) the environmental safeguards to be implemented on the 
        outer Continental Shelf and how such safeguards are to be 
        implemented;
            ``(4) all safety standards to be met and how such standards 
        are to be met;
            ``(5) an expected rate of development and production and a 
        time schedule for performance; and
            ``(6) such other relevant information as the Secretary may 
        by regulation require.
    ``(d) Completeness Review of the Plan.--
            ``(1) Prior to commencing any activity under a development 
        and production plan pursuant to any oil and gas lease issued or 
        maintained under this Act, the lessee shall certify that the 
        plan is consistent with the terms of the lease and that it is 
        consistent with all statutory and regulatory requirements in 
        effect on the date of issuance of the lease, and any 
        regulations promulgated under this Act related to the 
        conservation of resources after the date of lease issuance. The 
        plan shall include all required information and documentation 
        required under subsection (c).
            ``(2) The Secretary shall review the plan for completeness 
        within 30 days of submission. If the Secretary finds that the 
        plan is not complete, the Secretary shall notify the lessee 
        with a detailed explanation of such modifications of such plan 
        as are necessary to achieve completeness. The Secretary shall 
        have 30 days to review a modified plan for completeness.
    ``(e) Review for Consistency of the Plan.--
            ``(1) After a determination that a plan is complete, the 
        Secretary shall have 120 days to conduct a review of the plan, 
        to ensure that it is consistent with the terms of the lease, 
        and that it is consistent with all such statutory and 
        regulatory requirements applicable to the lease. The review 
        shall ensure that the plan is consistent with lease terms, and 
        statutory and regulatory requirements applicable to the lease, 
        related to national security or national defense, including any 
        military operating stipulations or other restrictions. The 
        Secretary shall seek the assistance of the Department of 
        Defense in the conduct of the review of any plan prepared under 
        this section for a lease containing military operating 
        stipulations or other restrictions and shall accept the 
        assistance of the Department of Defense in the conduct of the 
        review of any plan prepared under this section for any other 
        lease when the Secretary of Defense requests an opportunity to 
        participate in the review. If the Secretary finds that the plan 
        is not consistent, the Secretary shall notify the lessee with a 
        detailed explanation of such modifications of such plan as are 
        necessary to achieve consistency.
            ``(2) The Secretary shall have 120 days to review a 
        modified plan.
            ``(3) The lessee shall not conduct any activities under the 
        plan during any 120-day review period, or thereafter until the 
        plan has been modified to achieve compliance as so notified.
            ``(4) After review by the Secretary provided for by this 
        section, a lessee may operate pursuant to the plan without 
        further review or approval by the Secretary.
    ``(f) Review of Revision of the Approved Plan.--The lessee may 
submit to the Secretary any revision of a plan if the lessee determines 
that such revision will lead to greater recovery of oil and natural 
gas, improve the efficiency, safety, and environmental protection of 
the recovery operation, is the only means available to avoid 
substantial economic hardship to the lessee, or is otherwise not 
inconsistent with the provisions of this Act, to the extent such 
revision is consistent with protection of the human, marine, and 
coastal environments. The process to be used for the review of any such 
revision shall be the same as that set forth in subsections (d) and 
(e).
    ``(g) Cancellation of Lease on Failure To Submit Plan or Comply 
With a Plan.--Whenever the owner of any lease fails to submit a plan in 
accordance with regulations issued under this section, or fails to 
comply with a plan, the lease may be canceled in accordance with 
section 5(c) and (d). Termination of a lease because of failure to 
comply with a plan, including required modifications or revisions, 
shall not entitle a lessee to any compensation.
    ``(h) Production and Transportation of Natural Gas; Submission of 
Plan to Federal Energy Regulatory Commission; Impact Statement.--If any 
development and production plan submitted to the Secretary pursuant to 
this section provides for the production and transportation of natural 
gas, the lessee shall contemporaneously submit to the Federal Energy 
Regulatory Commission that portion of such plan that relates to the 
facilities for transportation of natural gas. The Secretary and the 
Federal Energy Regulatory Commission shall agree as to which of them 
shall prepare an environmental impact statement pursuant to the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) 
applicable to such portion of such plan, or conduct studies as to the 
effect on the environment of implementing it. Thereafter, the findings 
and recommendations by the agency preparing such environmental impact 
statement or conducting such studies pursuant to such agreement shall 
be adopted by the other agency, and such other agency shall not 
independently prepare another environmental impact statement or 
duplicate such studies with respect to such portion of such plan, but 
the Federal Energy Regulatory Commission, in connection with its review 
of an application for a certificate of public convenience and necessity 
applicable to such transportation facilities pursuant to section 7 of 
the Natural Gas Act (15 U.S.C. 717f), may prepare such environmental 
studies or statement relevant to certification of such transportation 
facilities as have not been covered by an environmental impact 
statement or studies prepared by the Secretary. The Secretary, in 
consultation with the Federal Energy Regulatory Commission, shall 
promulgate rules to implement this subsection, but the Federal Energy 
Regulatory Commission shall retain sole authority with respect to rules 
and procedures applicable to the filing of any application with the 
Commission and to all aspects of the Commission's review of, and action 
on, any such application.''.

SEC. 17. TERMINATION OF EFFECT OF LAWS PROHIBITING THE SPENDING OF 
              APPROPRIATED FUNDS FOR CERTAIN PURPOSES.

    (a) Outer Continental Shelf.--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.
    (b) Oil Shale and Tar Sands.--Section 433 of the Consolidated 
Appropriations Act, 2008, and all other provisions of existing Federal 
law prohibiting the spending of appropriated funds to issue final 
commercial leasing regulations or to perform any other function related 
to section 369 of the Energy Policy Act of 2005 shall have no force or 
effect.

SEC. 18. 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 Federal 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. 19. 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, but not including any outer 
Continental Shelf oil and gas leases that were subject to litigation in 
the Court of Federal Claims on January 1, 2008, if the Secretary finds 
that such lease qualifies for repurchase and cancellation under the 
regulations authorized by this section.
    (b) Regulations.--Not later than 365 days after the date of 
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 
                timeframe 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. 20. OFFSITE ENVIRONMENTAL MITIGATION.

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

SEC. 21. REGULATION OF ONSHORE SURFACE-DISTURBING ACTIVITIES.

    Section 17(g) of the Mineral Leasing Act (30 U.S.C. 226(g)) is 
amended to read as follows:
    ``(g) Regulation of Surface-Disturbing Activities.--
            ``(1) Regulation of surface-disturbing activities.--The 
        Secretary of the Interior, or for National Forest lands, the 
        Secretary of Agriculture, shall regulate all surface-disturbing 
        activities conducted pursuant to any lease issued under this 
        Act, and shall determine reclamation and other actions as 
        required in the interest of conservation of surface resources.
            ``(2) Submission of exploration plan; completion review; 
        compliance review.--
                    ``(A) Prior to beginning oil and gas exploration 
                activities, a lessee shall submit an exploration plan 
                to the Secretary of the Interior for review.
                    ``(B) The Secretary shall review the plan for 
                completeness within 10 days of submission.
                    ``(C) In the event the exploration plan is 
                determined to be incomplete, the Secretary shall notify 
                the lessee in writing and specify the items or 
                information needed to complete the exploration plan.
                    ``(D) The Secretary shall have 10 days to review 
                any modified exploration plan submitted by the lessee.
                    ``(E) To be deemed complete, an exploration plan 
                shall include, in the degree of detail to be determined 
                by the Secretary by rule or regulation--
                            ``(i) a drilling plan containing a 
                        description of the drilling program;
                            ``(ii) the surface and projected completion 
                        zone location;
                            ``(iii) pertinent geologic data;
                            ``(iv) expected hazards, and proposed 
                        mitigation measures to address such hazards;
                            ``(v) a schedule of anticipated exploration 
                        activities to be undertaken;
                            ``(vi) a description of equipment to be 
                        used for such activities;
                            ``(vii) a certification from the lessee 
                        stating that the exploration plan complies with 
                        all lease, regulatory and statutory 
                        requirements in effect on the date of the 
                        issuance of the lease and any regulations 
                        promulgated after the date of lease issuance 
                        related to the conservation of resources;
                            ``(viii) evidence that the lessee has 
                        secured an adequate bond, surety, or other 
                        financial arrangement prior to commencement of 
                        any surface disturbing activity;
                            ``(ix) a plan that details the complete and 
                        timely reclamation of the lease tract; and
                            ``(x) such other relevant information as 
                        the Secretary may by regulation require.
                    ``(F) Upon a determination that the exploration 
                plan is complete, the Secretary shall have 30 days from 
                the date the plan is deemed complete to conduct a 
                review of the plan.
                    ``(G) If the Secretary finds the exploration plan 
                is not consistent with all statutory and regulatory 
                requirements described in subparagraph (E)(vii), the 
                Secretary shall notify the lessee with a detailed 
                explanation of such modifications of the exploration 
                plan as are necessary to achieve compliance.
                    ``(H) The lessee shall not take any action under 
                the exploration plan within a 30 day review period, or 
                thereafter until the plan has been modified to achieve 
                compliance as so notified.
                    ``(I) After review by the Secretary provided by 
                this subsection, a lessee may operate pursuant to the 
                plan without further review or approval by the 
                Secretary.
            ``(3) Plan revisions; conduct of exploration activities.--
                    ``(A) If a significant revision of an exploration 
                plan under this subsection is submitted to the 
                Secretary, the process to be used for the review of 
                such revision shall be the same as set forth in 
                paragraph (1) of this subsection.
                    ``(B) All exploration activities pursuant to any 
                lease shall be conducted in accordance with an 
                exploration plan that has been submitted to and 
                reviewed by the Secretary or a revision of such plan.
            ``(4) Submission of development and production plan; 
        completeness review; compliance review.--
                    ``(A) Prior to beginning oil and gas development 
                and production activities, a lessee shall submit a 
                development and exploration plan to the Secretary of 
                the Interior. Upon submission, such plans shall be 
                subject to a review for completeness.
                    ``(B) The Secretary shall review the plan for 
                completeness within 30 days of submission.
                    ``(C) In the event a development and production 
                plan is determined to be incomplete, the Secretary 
                shall notify the lessee in writing and specify the 
                items or information needed to complete the plan.
                    ``(D) The Secretary shall have 30 days to review 
                for completeness any modified development and 
                production plan submitted by the lessee.
                    ``(E) To be deemed complete, a development and 
                production plan shall include, in the degree of detail 
                to be determined by the Secretary by rule or 
                regulation--
                            ``(i) a drilling plan containing a 
                        description of the drilling program;
                            ``(ii) the surface and projected completion 
                        zone location;
                            ``(iii) pertinent geologic data;
                            ``(iv) expected hazards, and proposed 
                        mitigation measures to address such hazards;
                            ``(v) a statement describing all facilities 
                        and operations proposed by the lessee and known 
                        by the lessee (whether or not owned or operated 
                        by such lessee) that shall be constructed or 
                        utilized in the development and production of 
                        oil or gas from the leases areas, including the 
                        location and site of such facilities and 
                        operations, the land, labor, material, and 
                        energy requirements associated with such 
                        facilities and operations;
                            ``(vi) the general work to be performed;
                            ``(vii) the environmental safeguards to be 
                        implemented in connection with the development 
                        and production and how such safeguards are to 
                        be implemented;
                            ``(viii) all safety standards to be met and 
                        how such standards are to be met;
                            ``(ix) an expected rate of development and 
                        production and a time schedule for performance;
                            ``(x) a certification from the lessee 
                        stating that the development and production 
                        plan complies with all lease, regulatory, and 
                        statutory requirements in effect on the date of 
                        issuance of the lease, and any regulations 
                        promulgated after the date of lease issuance 
                        related to the conservation of resources;
                            ``(xi) evidence that the lessee has secured 
                        an adequate bond, surety, or other financial 
                        arrangement prior to commencement of any 
                        surface disturbing activity;
                            ``(xii) a plan that details the complete 
                        and timely reclamation of the lease tract; and
                            ``(xiii) such other relevant information as 
                        the Secretary may by regulation require.
                    ``(F) Upon a determination that the development and 
                production plan is complete, the Secretary shall have 
                120 days from the date the plan is deemed complete to 
                conduct a review of the plan.
                    ``(G) If the Secretary finds the development and 
                production plan is not consistent with all statutory 
                and regulatory requirements described in subparagraph 
                (E)(x), the Secretary shall notify the lessee with a 
                detailed explanation of such modifications of the 
                development and production plan as are necessary to 
                achieve compliance.
                    ``(H) The lessee shall not take any action under 
                the development and production plan within a 120 day 
                review period, or thereafter until the plan has been 
                modified to achieve compliance as so notified.
            ``(5) Plan revisions; conduct of development and production 
        activities.--
                    ``(A) If a significant revision of a development 
                and production plan under this subsection is submitted 
                to the Secretary, the process to be used for the review 
                of such revision shall be the same as set forth in 
                paragraph (4) of this subsection.
                    ``(B) All development and production activities 
                pursuant to any lease shall be conducted in accordance 
                with a development and production plan that has been 
                submitted to and reviewed by the Secretary or a 
                revision of such plan.
            ``(6) Cancellation of lease on failure to submit plan or 
        comply with approved plan.--Whenever the owner of any lease 
        fails to submit a plan in accordance with regulations issued 
        under this section, or fails to comply with a plan, the lease 
        may be canceled in accordance with section 31. Termination of a 
        lease because of failure to comply with a plan, including 
        required modifications or revisions, shall not entitle a lessee 
        to any compensation.''.

SEC. 22. 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 2008''.
    (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 but not limited to--
            ``(1) ongoing maintenance of the platform or other 
        facility;
            ``(2) any liability obligations that might arise;
            ``(3) removal of the platform or other facility if 
        determined necessary by the Secretary; and
            ``(4) any other requirements and obligations that the 
        Secretary may deem appropriate by regulation.
    ``(c) Plugging and Abandonment.--The Secretary shall ensure that 
plugging and abandonment of wells is accomplished at an appropriate 
time.
    ``(d) Potential To Petition To Opt-Out of Regulations.--An Adjacent 
State acting through a resolution of its legislature, with concurrence 
of its Governor, may preliminarily petition to opt-out of the 
application of regulations promulgated under this section to platforms 
and other facilities located in the area of its Adjacent Zone within 12 
miles of the coastline. Upon receipt of the preliminary petition, the 
Secretary shall complete an environmental assessment that documents the 
anticipated environmental effects of approving the petition. The 
Secretary shall provide the environmental assessment to the State, 
which then has the choice of no action or confirming its petition by 
further action of its legislature, with the concurrence of its 
Governor. The Secretary is authorized to except such area from the 
application of such regulations, and shall approve any confirmed 
petition.
    ``(e) Limitation on Liability.--A person that had used an offshore 
oil and gas platform or other facility for oil and gas purposes and 
that no longer has any ownership or control of the platform or other 
facility shall not be liable under Federal law for any costs or damages 
arising from such platform or other facility after the date the 
platform or other facility is used for any purpose under subsection 
(a), unless such costs or damages arise from--
            ``(1) use of the platform or other facility by the person 
        for development or production of oil or gas; or
            ``(2) another act or omission of the person.
    ``(f) Other Leasing and Use Not Affected.--This section, and the 
use of any offshore oil and gas platform or other facility for any 
purpose under subsection (a), shall not affect--
            ``(1) the authority of the Secretary to lease any area 
        under this Act; or
            ``(2) any activity otherwise authorized under this Act.''.
    (c) Deadline for Regulations.--The Secretary of the Interior shall 
issue regulations under subsection (b) by not later than 180 days after 
the date of enactment of this Act.
    (d) Study and Report on Effects of Removal of Platforms.--Not later 
than one year after the date of enactment of this Act, the Secretary of 
the Interior, in consultation with other Federal agencies as the 
Secretary deems advisable, shall study and report to the Congress 
regarding how the removal of offshore oil and gas platforms and other 
facilities from the outer Continental Shelf would affect existing fish 
stocks and coral populations.

SEC. 23. OCS REGIONAL HEADQUARTERS.

    Not later than July 1, 2011, 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, 2011, for leasing, for oil and 
gas or natural gas, covering at least 40 percent of the area of its 
Adjacent Zone within 75 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. 24. OIL SHALE AND TAR SANDS AMENDMENTS.

    (a) Royalty Rates for Leases.--Section 369(o) of the Energy Policy 
Act of 2005 (Public Law 109-58; 119 Stat. 728; 42 U.S.C. 15927) is 
amended by designating the existing language as (1), by redesignating 
the existing (1) and (2) as (A) and (B), respectively, and by adding a 
new paragraph (2), as follows:
            ``(2) Default provisions.--In the absence of the issuance 
        of regulations or other designation by the Secretary, the 
        following shall be the royalties, fees, rentals, bonus 
        provisions and other payments for research, development and 
        demonstration leases, and commercial leases, issued under the 
        authority of this section:
                    ``(A) Royalty rates for commercial leases.--
                            ``(i) Royalty rates.--The royalty rate for 
                        commercial leases shall be 15% of the value of 
                        production at the first sale.
                            ``(ii) Reduction.--The royalty rate fixed 
                        in the lease shall be reduced up to 5 per 
                        centum as follows:
                                    ``(I) 100 per centum of this amount 
                                if the lease is brought to first 
                                sustained production within 3 years 
                                after issuance of the lease.
                                    ``(II) 80 per centum of this amount 
                                if the lease is brought to first 
                                sustained production between 3 and 4 
                                years after issuance of the lease.
                                    ``(III) 60 per centum of this 
                                amount if the lease is brought to first 
                                sustained production between 4 and 5 
                                years after issuance of the lease.
                                    ``(IV) 40 per centum of this amount 
                                if the lease is brought to first 
                                sustained production between 5 and 6 
                                years after issuance of the lease.
                                    ``(V) 20 per centum of this amount 
                                if the lease is brought to first 
                                sustained production between 6 and 7 
                                years after issuance of the lease.
                    ``(B) Royalty rates for research, development, and 
                demonstration leases.--
                            ``(i) Royalty rates.--The royalty rate for 
                        research, development, and demonstration leases 
                        that have been converted to full-sized leases 
                        shall be 12 percent of the value of production 
                        at the first sale.
                            ``(ii) Reduction.--The royalty rate fixed 
                        in the lease shall be reduced up to 3 per 
                        centum as follows:
                                    ``(I) 100 per centum of this amount 
                                if the lease is brought to first 
                                sustained production within 3 years 
                                after conversion to a full-sized lease.
                                    ``(II) 80 per centum of this amount 
                                if the lease is brought to first 
                                sustained production between 3 and 4 
                                years after conversion to a full-sized 
                                lease.
                                    ``(III) 60 per centum of this 
                                amount if the lease is brought to first 
                                sustained production between 4 and 5 
                                years after conversion to a full-sized 
                                lease.
                                    ``(IV) 40 per centum of this amount 
                                if the lease is brought to first 
                                sustained production between 5 and 6 
                                years after conversion to a full-sized 
                                lease.
                                    ``(V) 20 per centum of this amount 
                                if the lease is brought to first 
                                sustained production between 6 and 7 
                                years after conversion to a full-sized 
                                lease.
                    ``(C) Other provisions.--Commercial tracts shall be 
                leased to the highest bidder based on sealed bids. The 
                provisions for deposits, rentals, fees, and other 
                matters shall be the same for commercial oil shale and 
                tar sands leases as for oil and gas leases under the 
                Mineral Leasing Act.''.
    (b) Treatment of Receipts.--Section 21 of the Mineral Leasing Act 
(30 U.S.C. 241) is amended by adding at the end the following:
    ``(e) Receipts.--
            ``(1) In general.--Notwithstanding the provisions of 
        section 35, all funds received from and under an oil shale or 
        tar sands lease shall be disposed of as provided in this 
        subsection.
            ``(2) Disposition of receipts.--
                    ``(A) Deposit.--The Secretary shall deposit into a 
                separate account in the Treasury all receipts 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 receipts 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 receipts 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 20 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 receipts 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.
            ``(3) 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.''.
    (c) Interagency Coordination and Expeditious Review of Permitting 
Process.--
            (1) Department of interior as lead agency.--Upon written 
        request of a prospective applicant for Federal authorization to 
        develop a proposed oil shale or tar sands project, the 
        Department shall act as the lead Federal agency for the 
        purposes of coordinating all applicable Federal authorizations 
        and environmental reviews. To the maximum extent practicable 
        under applicable Federal law, the Secretary shall coordinate 
        this Federal authorization and review process with any Indian 
        tribes and State and local agencies responsible for conducting 
        any separate permitting and environmental reviews.
            (2) Schedule.--The Secretary, in coordination with the 
        agencies with authority over Federal authorizations and, as 
        appropriate, with Indian tribes and State and local agencies 
        that are willing to coordinate their separate permitting and 
        environmental reviews with the Federal authorizations and 
        environmental reviews, shall establish a schedule with prompt 
        and binding intermediate and ultimate deadlines, not to exceed 
        18 months from the date of the written request, for the review 
        of, and Federal authorization decisions relating to, oil shale 
        or tar sands project development and operation.
            (3) Consolidated environmental review.--If the Department 
        determines that two or more environmental impact statements are 
        required, the Department shall consolidate all or some of such 
        statements in order to promote efficiency and timeliness in the 
        permitting process to the extent practicable. The Department 
        may consolidate the environmental reviews of any Federal agency 
        considering any aspect of the proposed oil shale or tar sands 
        project including ancillary surface processing facilities, 
        electric generation or transmission facilities, and other 
        related facilities.
            (4) Appeals.--In the event any agency has denied a Federal 
        authorization required for an oil shale or tar sands project, 
        or has failed to act by a deadline established by the Secretary 
        pursuant to paragraph (2) for deciding whether to issue the 
        Federal authorization, the applicant or any State in which the 
        proposed oil shale or tar sands project would be located may 
        file an appeal with the Secretary. In consultation with the 
        affected agency, the Secretary may then either issue the 
        necessary Federal authorization with appropriate conditions, or 
        deny the appeal. The Secretary shall issue a decision within 60 
        days after the filing of the appeal.
            (5) Conforming regulations.--Not later than 6 months after 
        the date of enactment of this Act, the Secretary shall issue 
        any regulations necessary to implement this section.
    (d) Oil Shale and Tar Sands Land Exchanges.--Section 206 of the 
Federal Land Policy and Management Act of 1976 (43 U.S.C. 1716), is 
hereby amended by adding the following new subsection:
    ``(j)  Oil Shale and Tar Sands Land Exchanges.--For the purpose of 
promoting the economic recovery of oil shale and tar sands resources, 
the Secretary of the Interior shall identify and pursue to completion 
exchange and disposition of non-park, non-wilderness Federal lands, 
including lands having a non-Federal surface owner, containing deposits 
of oil shale and/or tar sands. The Secretary shall identify blocks of 
land containing oil shale and/or tar sands deposits for the purpose of 
maximizing consolidation of land ownership, and mineral interests, into 
manageable blocks within the following geologic basins located in 
Colorado, Utah, and Wyoming: Green River, Piceance Creek, Uinta, and 
Washakie. The Secretary shall consider the geology of the basin when 
determining the size of manageable blocks. The Secretary shall conduct 
exchanges that are favorable to and in the overall best interest of the 
United States.''.
    (e) Procurement of Unconventional Fuels.--Section 2398a of title 
10, United States Code, is amended in subsection (d) by striking ``1 or 
more'' and inserting ``up to 25''.

SEC. 25. BUY AND BUILD AMERICAN.

    (a) Buy and Build American.--It is the intention of the Congress 
that this Act, among other things, results in a healthy and growing 
American industrial, manufacturing, transportation, and service sector 
employing the vast talents of America's workforce to assist in the 
development of affordable energy from the Outer Continental Shelf. 
Moreover, the Congress intends to monitor the deployment of personnel 
and material in the Outer Continental Shelf to encourage the 
development of American technology and manufacturing to enable United 
States workers to benefit from this Act by good jobs and careers, as 
well as the establishment of important industrial facilities to support 
expanded access to American resources.
    (b) Safeguard for Extraordinary Ability.--Section 30(a) of the 
Outer Continental Shelf Lands Act (43 U.S.C. 1356(a)) is amended in the 
matter preceding paragraph (1) by striking ``regulations which'' and 
inserting ``regulations that shall be supplemental and complimentary 
with and under no circumstances a substitution for the provisions of 
the Constitution and laws of the United States extended to the subsoil 
and seabed of the outer Continental Shelf pursuant to section 4(a)(1) 
of this Act, except insofar as such laws would otherwise apply to 
individuals who have extraordinary ability in the sciences, arts, 
education, or business, which has been demonstrated by sustained 
national or international acclaim, and that''.

SEC. 26. REPEAL OF THE GULF OF MEXICO ENERGY SECURITY ACT OF 2006.

    The Gulf of Mexico Energy Security Act of 2006 is repealed 
effective October 1, 2008, except the Secretary of the Interior shall 
make any payments to State and local governments based on FY2008 
receipts under the Gulf of Mexico Energy Security Act of 2006.

SEC. 27. ROYALTY-IN-KIND.

    Section 27 of the Outer Continental Shelf Lands Act (43 U.S.C. 
1353) is amended as follows:
            (1) By striking paragraph (3) of subsection (a) and 
        replacing it with the following:
            ``(3) Title to any royalty or net profit share oil or gas 
        from leases issued under this Act or the Mineral Leasing Act 
        may not be transferred by the Secretary to another Federal 
        Government agency except by sale for cash at fair market value. 
        If not purchased by another Federal Government agency, such oil 
        and gas must be sold under subsections (b), (c), or (d). 
        Proceeds from sales under this section shall be treated as 
        offsetting receipts and shall be subject to any receipts 
        sharing provisions applicable to the leases from which the in-
        kind royalty or net profit share production was produced in the 
        same manner as if it had been paid in value. After payment of 
        such shared receipts to State and local governments, the 
        Secretary shall deposit the remainder of the receipts from 
        sales into the Treasury of the United States and they shall be 
        credited to miscellaneous receipts.''.
            (2) In the first sentence of subsection (d) strike 
        ``transferred'' and insert ``sold''.

SEC. 28. MANDATORY ISSUANCE OF REGULATIONS PROMOTING PRODUCTION OF 
              NATURAL GAS FROM GAS HYDRATES.

    (a) Section 353 of the Energy Policy Act of 2005 (42 U.S.C. 15909) 
is amended as follows:
            (1) In subsection (b)(1) strike ``may'' and insert 
        ``shall''.
            (2) In subsection (b)(3) in the first sentence strike ``if 
        the Secretary determines that such royalty relief would 
        encourage production''.
            (3) In subsection (b)(4) by inserting at the end ``when the 
        price of natural gas on NYMEX (Henry Hub) exceeds $6.75/million 
        btu (January 1, 2008 dollars)''.
    (b) The Secretary shall issue the final regulations under section 
353 of the Energy Policy Act of 2005 not later than 180 days after the 
date of enactment of the Grow American Supply Act.

SEC. 29. MANDATORY ISSUANCE OF REGULATIONS PROMOTING ENHANCED OIL AND 
              NATURAL GAS PRODUCTION THROUGH CARBON DIOXIDE INJECTION.

    (a) Subsection (b)(1) of section 354 of the Energy Policy Act of 
2005 (42 U.S.C. 15910) is amended to read as follows:
            ``(1) In general.--The Secretary shall undertake a 
        rulemaking to provide for reduction of the royalty under a 
        Federal oil and gas lease that is an eligible lease.''.
    (b) The Secretary shall issue the final regulations under section 
354 of the Energy Policy Act of 2005 not later than 180 days after 
enactment of Grow American Supply Act.

SEC. 30. MINIMUM RENTAL RATES FOR FUTURE OIL, GAS, AND COAL FEDERAL 
              LEASES.

    Effective upon the date of enactment of the Grow American Supply 
Act, the minimum annual rental rate for oil and gas, oil shale, tar 
sands, and coal leases issued after that date shall be no less than 
$4.00 per acre for the first 5 years, and increasing by $1 per acre/per 
year for each thereafter until the lessee begins to pay royalties for 
leases under the Mineral Leasing Act (30 U.S.C. 181 et seq.), the 
Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.), the 
Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), and any 
other statute that provides for the leasing of lands and waters owned 
and/or controlled by the Federal Government for mineral exploration and 
production. Any increased rental receipts under this section shall be 
treated as offsetting receipts.

SEC. 31. OUTER CONTINENTAL SHELF DISCHARGES AND EMISSIONS.

    The Secretary of the Interior shall require that all operations 
related to oil and gas exploration, development, and production on the 
outer Continental Shelf utilize the best available and safest 
technology to minimize air emissions and discharges into the water, 
including but not limited to drilling muds and fluids, unless the 
Minerals Management Service Regional Supervisor determines that the 
interests of safety require such discharges or emissions.

SEC. 32. ONSHORE OIL AND GAS ROYALTIES.

    (a) In General.--Effective January 1, 2009, the royalty rate for 
all new oil and gas leases issued under the authority of the Mineral 
Leasing Act (30 U.S.C. 181 et seq.), the Mineral Leasing Act for 
Acquired Lands (30 U.S.C. 351 et seq.), and other statutes providing 
for the issuance of oil and gas leases on public lands or other lands 
containing mineral rights owned by the United States Government, 
excluding the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et 
seq.), shall be fixed by the Secretary at 15 per centum in the amount 
or value of production saved, removed, or sold, subject to the 
following adjustments--
            (1) if the arithmetic average of the closing prices on the 
        New York Mercantile Exchange for light sweet crude oil, or a 
        similar index as determined by the Secretary, for the 365 days 
        prior to issuance of the final notice of lease sale exceeded 
        $150.00 per barrel (in January 1, 2008, dollars), the royalty 
        rate shall be fixed by the Secretary at 16\1/4\ per centum in 
        the amount or value of production, removed, or sold;
            (2) if the arithmetic average of the closing prices on the 
        New York Mercantile Exchange for light sweet crude oil, or a 
        similar index as determined by the Secretary, for the 365 days 
        prior to issuance of the final notice of lease sale was less 
        than $75.00 per barrel (in January 1, 2008, dollars), the 
        royalty rate shall be fixed by the Secretary at 13\3/4\ per 
        centum in the amount or value of production, removed, or sold; 
        and
            (3) the royalty rate fixed in the lease shall be reduced up 
        to 4 per centum as follows: (A) 100 per centum of this amount 
        if the first production well is spudded within 3 years after 
        issuance of the lease, (B) 75 per centum of this amount if the 
        first production well is spudded between 3 and 4 years after 
        issuance of the lease, (C) 50 per centum of this amount if the 
        first production well is spudded between 4 and 5 years after 
        issuance of the lease, (D) 25 per centum of this amount if the 
        first production well is spudded between 5 and 6 years after 
        issuance of the lease.
    (b) Reduction.--The Secretary may reduce the royalty rate fixed 
under subsection (a) by up to 2 per centum for tracts located in 
frontier areas, as determined by the Secretary, if the Secretary finds 
that the royalty rate otherwise fixed by subsection (a) would likely 
significantly reduce production resulting from use of such bidding 
system in frontier areas.
    (c) Rate for Certain Leases.--The royalty rate for oil and gas 
leases in effect on January 1, 2009, that have not spudded the first 
production well prior to July 1, 2008, issued under the authority of 
the Mineral Leasing Act (30 U.S.C. 181 et seq.), the Mineral Leasing 
Act for Acquired Lands (30 U.S.C. 351 et seq.), and other statutes 
providing for the issuance of oil and gas leases on public lands or 
other lands containing mineral rights owned by the United States 
Government, excluding the Outer Continental Shelf Lands Act (43 U.S.C. 
1331 et seq.) shall be reduced up to 2 per centum as follows:
            (1) 100 per centum of this amount if the first production 
        well is spudded within 3 years after issuance of the lease,
            (2) 75 per centum of this amount if the first production 
        well is spudded between 3 and 4 years after issuance of the 
        lease,
            (3) 50 per centum of this amount if the first production 
        well is spudded between 4 and 5 years after issuance of the 
        lease, and
            (4) 25 per centum of this amount if the first production 
        well is spudded between 5 and 6 years after issuance of the 
        lease.

SEC. 33. OCS JOINT PERMITTING OFFICES.

    (a) Establishment.--The Secretary of the Interior (referred to in 
this section as the ``Secretary'') shall establish Federal OCS Joint 
Regional Permitting Offices (referred to in this section as the 
``Regional Permitting Offices'').
    (b) Memorandum of Understanding.--Not later than 90 days after the 
date of enactment of this Act, the Secretary shall enter into a 
memorandum of understanding for purposes of this section with--
            (1) the Secretary of Commerce;
            (2) the Administrator of the Environmental Protection 
        Agency; and
            (3) the Chief of Engineers.
    (c) Designation of Qualified Staff.--
            (1) In general.--Not later than 30 days after the date of 
        the signing of the memorandum of understanding under subsection 
        (b), all Federal signatory parties shall assign to each of the 
        Regional Permitting Offices identified in subsection (d) a 
        sufficient number of employees with expertise to address the 
        full spectrum of agency regulatory issues relating to the 
        Regional Permitting Office in which the employee is employed, 
        including, as applicable, particular expertise in--
                    (A) the consultations and the preparation of 
                biological opinions under section 7 of the Endangered 
                Species Act of 1973 (16 U.S.C. 1536);
                    (B) permits under section 404 of Federal Water 
                Pollution Control Act (33 U.S.C. 1344);
                    (C) regulatory matters under the Clean Air Act (42 
                U.S.C. 7401 et seq.);
                    (D) the consultations and preparation of documents 
                under the Marine Mammals Protection Act; and
                    (E) the preparation of analyses under the National 
                Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
                seq.).
            (2) Duties.--Each employee assigned under paragraph (1) 
        shall--
                    (A) not later than 90 days after the date of 
                assignment, report to the Minerals Management Service 
                Regional Director in the Regional Permitting Office to 
                which the employee is assigned;
                    (B) be responsible for all issues relating to the 
                jurisdiction of the home office or agency of the 
                employee; and
                    (C) participate as part of the team of personnel 
                working on proposed energy projects, planning, and 
                environmental analyses.
    (d) Regional Permitting Offices.--The following Minerals Management 
Service Regional Headquarters shall serve as the Regional Permitting 
Offices:
            (1) Anchorage, Alaska.
            (2) New Orleans, Louisiana.
            (3) MMS Pacific Regional Headquarters.
            (4) MMS Atlantic Regional Headquarters.
    (e) Reports.--Not later than 3 years after the date of enactment of 
this Act, the Secretary shall submit to Congress a report that outlines 
the results of the Regional Permitting Offices to date.
    (f) Transfer of Funds.--For the purposes of coordination and 
processing of oil and gas use authorizations on the Federal outer 
Continental Shelf under the administration of the Regional Permitting 
Offices identified in subsection (d), the Secretary may authorize the 
expenditure or transfer of such funds as are necessary to--
            (1) the United States Fish and Wildlife Service;
            (2) the Bureau of Indian Affairs;
            (3) the Environmental Protection Agency;
            (4) the National Oceanic and Atmospheric Administration; 
        and
            (5) the Corps of Engineers.
                                 <all>