[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3280 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 3280

   To increase refining capacity and the supply of fuel, to open and 
        preserve access to oil and gas, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 17, 2008

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

_______________________________________________________________________

                                 A BILL


 
   To increase refining capacity and the supply of fuel, to open and 
        preserve access to oil and gas, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``American 
Affordable Fuels Act of 2008''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
         TITLE I--INCREASING REFINING CAPACITY AND FUEL SUPPLY

Sec. 101. Definitions.
Sec. 102. Collaborative permitting process for domestic fuels 
                            facilities.
Sec. 103. Evaluation of Fischer-Tropsch diesel and jet fuel as an 
                            emission control strategy.
Sec. 104. Economic development assistance to support commercial-scale 
                            cellulosic biomass ethanol projects and 
                            coal-to-liquids facilities on BRAC property 
                            and Indian land.
Sec. 105. Alternative hydrocarbon and renewable reserves disclosures 
                            classification system.
Sec. 106. Extension of election to expense certain refineries.
Sec. 107. Expansion of special allowance to cellulosic biofuel plant 
                            property.
Sec. 108. Authorization of appropriations.
         TITLE II--OPENING AND PRESERVING ACCESS TO OIL AND GAS

                Subtitle A--Deep Ocean Energy Resources

Sec. 201. Policy.
Sec. 202. Definitions under the Submerged Lands Act.
Sec. 203. Seaward boundaries of States.
Sec. 204. Exceptions from rights of States.
Sec. 205. Definitions under the Outer Continental Shelf Lands Act.
Sec. 206. Determination of adjacent zones and planning areas.
Sec. 207. Administration of leasing.
Sec. 208. Grant of leases by Secretary.
Sec. 209. Disposition of receipts.
Sec. 210. Reservation of land and rights.
Sec. 211. Outer Continental Shelf leasing program.
Sec. 212. Coordination with adjacent States.
Sec. 213. Environmental studies.
Sec. 214. Federal energy natural resources enhancement.
Sec. 215. Termination of effect of laws prohibiting the spending of 
                            appropriated funds for certain purposes.
Sec. 216. Outer Continental Shelf incompatible use.
Sec. 217. Repurchase of certain leases.
Sec. 218. Offsite environmental mitigation.
Sec. 219. Minerals Management Service.
Sec. 220. Authority to use decommissioned offshore oil and gas 
                            platforms and other facilities for 
                            artificial reef, scientific research, or 
                            other uses.
Sec. 221. Repeal of requirement to conduct comprehensive inventory of 
                            OCS oil and natural gas resources.
Sec. 222. Mining and petroleum schools.
Sec. 223. Onshore and offshore mineral lease fees.
Sec. 224. OCS regional headquarters.
Sec. 225. National Geo Fund Act of 2008.
Sec. 226. Leases for areas located within 100 miles of California or 
                            Florida.
Sec. 227. Coastal impact assistance.
Sec. 228. Oil shale and tar sands.
Sec. 229. Availability of OCS receipts to provide payments under Secure 
                            Rural Schools and Community Self-
                            Determination Act of 2000.
Sec. 230. Sense of Congress to buy and build American.
Sec. 231. Repeal of the Gulf of Mexico Energy Security Act of 2006.
       Subtitle B--Leasing Program for Land Within Coastal Plain

Sec. 241. Definitions.
Sec. 242. Leasing program for land within the Coastal Plain.
Sec. 243. Lease sales.
Sec. 244. Grant of leases by the Secretary.
Sec. 245. Lease terms and conditions.
Sec. 246. Coastal Plain environmental protection.
Sec. 247. Expedited judicial review.
Sec. 248. Rights-of-way and easements across Coastal Plain.
Sec. 249. Conveyance.
Sec. 250. Local government impact aid and community service assistance.
Sec. 251. Prohibition on exports.
Sec. 252. Allocation of revenues.
                         Subtitle C--Oil Shale

Sec. 261. Removal of prohibition on final regulations for commercial 
                            leasing program for oil shale resources on 
                            public land.
     Subtitle D--Alternative Fuels and Fuels Derived From Tar Sands

Sec. 271. Procurement and acquisition of alternative fuels and fuels 
                            derived from tar sands.
          Subtitle E--Percentage Depletion From Marginal Wells

Sec. 281. Elimination of taxable income limit on percentage depletion 
                            for oil and natural gas produced from 
                            marginal wells.
  TITLE III--EXPANDING NATURAL GAS AS A MAINSTREAM TRANSPORTATION FUEL

Sec. 301. Renewable fuel program.
Sec. 302. New qualified alternative fuel motor vehicle credit allowed 
                            for dual fueled automobiles.
Sec. 303. Natural gas vehicle research, development, and demonstration 
                            projects.
Sec. 304. Development of low-emission natural gas transportation-fueled 
                            vehicles.
Sec. 305. Natural gas conversion emission certifications.

         TITLE I--INCREASING REFINING CAPACITY AND FUEL SUPPLY

SEC. 101. DEFINITIONS.

    In this title:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Coal-to-liquid.--The term ``coal-to-liquid'' means--
                    (A) with respect to a process or technology, the 
                use of a feedstock, the majority of which is derived 
                from the coal resources of the United States, using the 
                class of reactions known as Fischer-Tropsch, to produce 
                synthetic fuel suitable for transportation; and
                    (B) with respect to a facility, the portion of a 
                facility related to producing the inputs for the 
                Fischer-Tropsch process, or the finished fuel from the 
                Fischer-Tropsch process, using a feedstock that is 
                primarily domestic coal at the Fischer-Tropsch 
                facility.
            (3) Domestic fuels facility.--
                    (A) In general.--The term ``domestic fuels 
                facility'' means--
                            (i) a coal liquification or coal-to-liquid 
                        facility at which coal is processed into 
                        synthetic crude oil or any other transportation 
                        fuel;
                            (ii) a facility that produces a renewable 
                        fuel (as defined in section 211(o)(1) of the 
                        Clean Air Act (42 U.S.C. 7545(o)(1))); and
                            (iii) a facility at which crude oil is 
                        refined into transportation fuel or other 
                        petroleum products.
                    (B) Inclusion.--The term ``domestic fuels 
                facility'' includes a domestic fuels facility 
                expansion.
            (4) Domestic fuels facility expansion.--The term ``domestic 
        fuels facility expansion'' means a physical change in a 
        domestic fuels facility that results in an increase in the 
        capacity of the domestic fuels facility.
            (5) Domestic fuels facility permitting agreement.--The term 
        ``domestic fuels facility permitting agreement'' means an 
        agreement entered into between the Administrator and a State or 
        Indian tribe under section 102.
            (6) Domestic fuels producer.--The term ``domestic fuels 
        producer'' means an individual or entity that--
                    (A) owns or operates a domestic fuels facility; or
                    (B) seeks to become an owner or operator of a 
                domestic fuels facility.
            (7) Indian land.--The term ``Indian land'' has the meaning 
        given the term ``Indian lands'' in section 3 of the Native 
        American Business Development, Trade Promotion, and Tourism Act 
        of 2000 (25 U.S.C. 4302).
            (8) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            (9) Permit.--The term ``permit'' means any permit, license, 
        approval, variance, or other form of authorization that a 
        refiner is required to obtain--
                    (A) under any Federal law; or
                    (B) from a State or Indian tribal government agency 
                delegated with authority by the Federal Government, or 
                authorized under Federal law to issue permits.
            (10) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (11) State.--The term ``State'' means--
                    (A) a State;
                    (B) the District of Columbia;
                    (C) the Commonwealth of Puerto Rico; and
                    (D) any other territory or possession of the United 
                States.

SEC. 102. COLLABORATIVE PERMITTING PROCESS FOR DOMESTIC FUELS 
              FACILITIES.

    (a) In General.--At the request of the Governor of a State or the 
governing body of an Indian tribe, the Administrator shall enter into a 
domestic fuels facility permitting agreement with the State or Indian 
tribe under which the process for obtaining all permits necessary for 
the construction and operation of a domestic fuels facility shall be 
improved using a systematic interdisciplinary multimedia approach as 
provided in this section.
    (b) Authority of Administrator.--Under a domestic fuels facility 
permitting agreement--
            (1) the Administrator shall have authority, as applicable 
        and necessary, to--
                    (A) accept from a refiner a consolidated 
                application for all permits that the domestic fuels 
                producer is required to obtain to construct and operate 
                a domestic fuels facility;
                    (B) establish a schedule under which each Federal, 
                State, or Indian tribal government agency that is 
                required to make any determination to authorize the 
                issuance of a permit shall--
                            (i) concurrently consider, to the maximum 
                        extent practicable, each determination to be 
                        made; and
                            (ii) complete each step in the permitting 
                        process; and
                    (C) issue a consolidated permit that combines all 
                permits that the domestic fuels producer is required to 
                obtain; and
            (2) the Administrator shall provide to State and Indian 
        tribal government agencies--
                    (A) financial assistance in such amounts as the 
                agencies reasonably require to hire such additional 
                personnel as are necessary to enable the government 
                agencies to comply with the applicable schedule 
                established under paragraph (1)(B); and
                    (B) technical, legal, and other assistance in 
                complying with the domestic fuels facility permitting 
                agreement.
    (c) Agreement by the State.--Under a domestic fuels facility 
permitting agreement, a State or governing body of an Indian tribe 
shall agree that--
            (1) the Administrator shall have each of the authorities 
        described in subsection (b); and
            (2) each State or Indian tribal government agency shall--
                    (A) make such structural and operational changes in 
                the agencies as are necessary to enable the agencies to 
                carry out consolidated project-wide permit reviews 
                concurrently and in coordination with the Environmental 
                Protection Agency and other Federal agencies; and
                    (B) comply, to the maximum extent practicable, with 
                the applicable schedule established under subsection 
                (b)(1)(B).
    (d) Interdisciplinary Approach.--
            (1) In general.--The Administrator and a State or governing 
        body of an Indian tribe shall incorporate an interdisciplinary 
        approach, to the maximum extent practicable, in the 
        development, review, and approval of domestic fuels facility 
        permits subject to this section.
            (2) Options.--Among other options, the interdisciplinary 
        approach may include use of--
                    (A) environmental management practices; and
                    (B) third party contractors.
    (e) Deadlines.--
            (1) New domestic fuels facilities.--In the case of a 
        consolidated permit for the construction of a new domestic 
        fuels facility, the Administrator and the State or governing 
        body of an Indian tribe shall approve or disapprove the 
        consolidated permit not later than--
                    (A) 360 days after the date of the receipt of the 
                administratively complete application for the 
                consolidated permit; or
                    (B) on agreement of the applicant, the 
                Administrator, and the State or governing body of the 
                Indian tribe, 90 days after the expiration of the 
                deadline established under subparagraph (A).
            (2) Expansion of existing domestic fuels facilities.--In 
        the case of a consolidated permit for the expansion of an 
        existing domestic fuels facility, the Administrator and the 
        State or governing body of an Indian tribe shall approve or 
        disapprove the consolidated permit not later than--
                    (A) 120 days after the date of the receipt of the 
                administratively complete application for the 
                consolidated permit; or
                    (B) on agreement of the applicant, the 
                Administrator, and the State or governing body of the 
                Indian tribe, 30 days after the expiration of the 
                deadline established under subparagraph (A).
    (f) Federal Agencies.--Each Federal agency that is required to make 
any determination to authorize the issuance of a permit shall comply 
with the applicable schedule established under subsection (b)(1)(B).
    (g) Judicial Review.--Any civil action for review of any 
determination of any Federal, State, or Indian tribal government agency 
in a permitting process conducted under a domestic fuels facility 
permitting agreement brought by any individual or entity shall be 
brought exclusively in the United States district court for the 
district in which the domestic fuels facility is located or proposed to 
be located.
    (h) Efficient Permit Review.--In order to reduce the duplication of 
procedures, the Administrator shall use State permitting and monitoring 
procedures to satisfy substantially equivalent Federal requirements 
under this section.
    (i) Severability.--If 1 or more permits that are required for the 
construction or operation of a domestic fuels facility are not approved 
on or before any deadline established under subsection (e), the 
Administrator may issue a consolidated permit that combines all other 
permits that the domestic fuels producer is required to obtain other 
than any permits that are not approved.
    (j) Savings.--Nothing in this section affects the operation or 
implementation of otherwise applicable law regarding permits necessary 
for the construction and operation of a domestic fuels facility.
    (k) Consultation With Local Governments.--Congress encourages the 
Administrator, States, and tribal governments to consult, to the 
maximum extent practicable, with local governments in carrying out this 
section.
    (l) Effect on Local Authority.--Nothing in this section affects--
            (1) the authority of a local government with respect to the 
        issuance of permits; or
            (2) any requirement or ordinance of a local government 
        (such as zoning regulations).

SEC. 103. EVALUATION OF FISCHER-TROPSCH DIESEL AND JET FUEL AS AN 
              EMISSION CONTROL STRATEGY.

    (a) In General.--In cooperation with the Secretary of Energy, the 
Secretary of Defense, the Administrator of the Federal Aviation 
Administration, Secretary of Health and Human Services, and Fischer-
Tropsch industry representatives, the Administrator shall--
            (1) conduct a research and demonstration program to 
        evaluate the air quality benefits of ultra-clean Fischer-
        Tropsch transportation fuel, including diesel and jet fuel;
            (2) evaluate the use of ultra-clean Fischer-Tropsch 
        transportation fuel as a mechanism for reducing engine exhaust 
        emissions; and
            (3) submit recommendations to Congress on the most 
        effective use and associated benefits of these ultra-clean 
        fuels for reducing public exposure to exhaust emissions.
    (b) Guidance and Technical Support.--The Administrator shall, to 
the extent necessary, issue any guidance or technical support documents 
that would facilitate the effective use and associated benefit of 
Fischer-Tropsch fuel and blends.
    (c) Requirements.--The program described in subsection (a) shall 
consider--
            (1) the use of neat (100 percent) Fischer-Tropsch fuel and 
        blends with conventional crude oil-derived fuel for heavy-duty 
        and light-duty diesel engines and the aviation sector; and
            (2) the production costs associated with domestic 
        production of those ultra clean fuel and prices for consumers.
    (d) Reports.--The Administrator shall submit to the Committee on 
Environment and Public Works of the Senate and the Committee on Energy 
and Commerce of the House of Representatives--
            (1) not later than 180 days after the date of enactment of 
        this Act, an interim report on actions taken to carry out this 
        section; and
            (2) not later than 1 year after the date of enactment of 
        this Act, a final report on actions taken to carry out this 
        section.

SEC. 104. ECONOMIC DEVELOPMENT ASSISTANCE TO SUPPORT COMMERCIAL-SCALE 
              CELLULOSIC BIOMASS ETHANOL PROJECTS AND COAL-TO-LIQUIDS 
              FACILITIES ON BRAC PROPERTY AND INDIAN LAND.

    (a) Priority.--Notwithstanding section 206 of the Public Works and 
Economic Development Act of 1965 (42 U.S.C. 3146), in awarding funds 
made available to carry out section 209(c)(1) of that Act (42 U.S.C. 
3149(c)(1)) pursuant to section 702 of that Act (42 U.S.C. 3232), the 
Secretary and the Economic Development Administration shall give 
priority to projects to support commercial-scale cellulosic biomass 
ethanol projects and coal-to-liquids facilities.
    (b) Federal Share.--Except as provided in subsection (c)(3)(B) and 
notwithstanding the Public Works and Economic Development Act of 1965 
(42 U.S.C. 3121 et seq.), the Federal share of a project to support a 
commercial-scale biomass ethanol facility or coal-to-liquid facility 
shall be--
            (1) 80 percent of the project cost; or
            (2) for a project carried out on Indian land, 100 percent 
        of the project cost.
    (c) Additional Award.--
            (1) In general.--The Secretary shall make an additional 
        award in connection with a grant made to a recipient (including 
        any Indian tribe for use on Indian land) for a project to 
        support a commercial-scale biomass ethanol facility or coal-to-
        liquid facility.
            (2) Amount.--The amount of an additional award shall be 10 
        percent of the amount of the grant for the project.
            (3) Use.--An additional award under this subsection shall 
        be used--
                    (A) to carry out any eligible purpose under the 
                Public Works and Economic Development Act of 1965 (42 
                U.S.C. 3121 et seq.);
                    (B) notwithstanding section 204 of that Act (42 
                U.S.C. 3144), to pay up to 100 percent of the cost of 
                an eligible project or activity under that Act; or
                    (C) to meet the non-Federal share requirements of 
                that Act or any other Act.
            (4) Non-federal source.--For the purpose of paragraph 
        (3)(C), an additional award shall be treated as funds from a 
        non-Federal source.
            (5) Funding.--The Secretary shall use to carry out this 
        subsection any amounts made available--
                    (A) for economic development assistance programs; 
                or
                    (B) under section 702 of the Public Works and 
                Economic Development Act of 1965 (42 U.S.C. 3232).

SEC. 105. ALTERNATIVE HYDROCARBON AND RENEWABLE RESERVES DISCLOSURES 
              CLASSIFICATION SYSTEM.

    (a) In General.--The Securities and Exchange Commission shall 
appoint a task force composed of government and private sector 
representatives, including experts in the field of dedicated energy 
crop feedstocks for cellulosic biofuels production, to analyze, and 
submit to Congress a report (including recommendations) on--
            (1) modernization of the hydrocarbon reserves disclosures 
        classification system of the Commission to reflect advances in 
        reserves recovery from nontraditional sources (such as deep 
        water, oil shale, tar sands, and renewable reserves for 
        cellulosic biofuels feedstocks); and
            (2) the creation of a renewable reserves classification 
        system for cellulosic biofuels feedstocks.
    (b) Deadline for Report.--The Commission shall submit the report 
required under subsection (a) not later than 180 days after the date of 
enactment of this Act.

SEC. 106. EXTENSION OF ELECTION TO EXPENSE CERTAIN REFINERIES.

    Paragraph (1) of section 179C(c) of the Internal Revenue Code of 
1986 is amended--
            (1) by striking ``January 1, 2012'' in subparagraph (B) and 
        inserting ``January 1, 2014'', and
            (2) by striking ``January 1, 2008'' each place it appears 
        in subparagraph (F) and inserting ``January 1, 2010''.

SEC. 107. EXPANSION OF SPECIAL ALLOWANCE TO CELLULOSIC BIOFUEL PLANT 
              PROPERTY.

    (a) In General.--Paragraph (3) of section 168(l) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(3) Cellulosic biofuel.--The term `cellulosic biofuel' 
        means any alcohol, ether, ester, or hydrocarbon produced from 
        any lignocellulosic or hemicellulosic matter that is available 
        on a renewable or recurring basis.''.
    (b) Conforming Amendments.--Subsection (l) of section 168 of the 
Internal Revenue Code of 1986 is amended--
            (1) by striking ``cellulosic biomass ethanol'' each place 
        it appears and inserting ``cellulosic biofuel'',
            (2) by striking ``Cellulosic Biomass Ethanol'' in the 
        heading of such subsection and inserting ``Cellulosic 
        Biofuel'', and
            (3) by striking ``cellulosic biomass ethanol'' in the 
        heading of paragraph (2) thereof and inserting ``cellulosic 
        biofuel''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 108. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as are necessary 
to carry out this title and the amendments made by this title.

         TITLE II--OPENING AND PRESERVING ACCESS TO OIL AND GAS

                Subtitle A--Deep Ocean Energy Resources

SEC. 201. 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 (including 
        regulations) and fostered the development of state-of-the-art 
        technology that allows for the responsible development of those 
        resources for the benefit of the citizens of the United States;
            (2) adjacent States (as defined in section 2 of the Outer 
        Continental Shelf Lands Act (43 U.S.C. 1331)) are required 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 the activities to be shared with 
        adjacent States and local coastal governments;
            (3) the existing laws governing the leasing and production 
        of the mineral resources of the outer Continental Shelf have--
                    (A) reduced the production of mineral resources;
                    (B) preempted adjacent States from being 
                sufficiently involved in the decisions regarding the 
                allowance of mineral resource development; and
                    (C) been harmful to the national interest;
            (4) the national interest is served by granting the 
        adjacent States more options relating to whether or not mineral 
        leasing should occur in the outer Continental Shelf within the 
        Adjacent Zones (as defined in section 2 of the Outer 
        Continental Shelf Lands Act (43 U.S.C. 1331)) of the adjacent 
        States;
            (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 the 
        potential to adversely affect those 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 
        those bodies of water.

SEC. 202. DEFINITIONS UNDER THE SUBMERGED LANDS ACT.

    Section 2 of the Submerged Lands Act (43 U.S.C. 1301) is amended--
            (1) in subsection (a)(2), by striking ``three geographical 
        miles distant'' and all that follows through ``beyond three 
        geographical miles,'' and inserting ``12 nautical miles distant 
        from the coast line of the State;'';
            (2) by striking subsection (b);
            (3) by redesignating subsections (c) through (f) as 
        subsections (b) through (e), respectively; and
            (4) by striking subsection (g) and inserting the following:
    ``(f) Secretary.--The term `Secretary' means the Secretary of the 
Interior.
    ``(g) State.--The term `State' has the meaning given the term in 
section 2 of the Outer Continental Shelf Lands Act (43 U.S.C. 1331).''.

SEC. 203. SEAWARD BOUNDARIES OF STATES.

    Section 4 of the Submerged Lands Act (43 U.S.C. 1312) is amended to 
read as follows:

``SEC. 4. SEAWARD BOUNDARIES OF STATES.

    ``(a) In General.--The seaward boundary of each coastal State is 
approved and confirmed as a line 12 nautical miles distant from the 
coast line of the coastal State or, in the case of the Great Lakes, to 
the international boundary.
    ``(b) Offshore State Boundaries.--Extension and delineation of 
lateral offshore State boundaries under this Act shall follow the lines 
used to determine the Adjacent Zones of coastal States under the Outer 
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) to the extent the 
lines extend 12 nautical miles from the nearest coastline.''.

SEC. 204. EXCEPTIONS FROM RIGHTS OF STATES.

    Section 5 of the Submerged Lands Act (43 U.S.C. 1313) is amended--
            (1) by redesignating subsections (a) through (c) as 
        paragraphs (1) through (3), respectively, and indenting 
        appropriately;
            (2) by striking ``Sec.'' and all that follows through 
        ``There is excepted'' and inserting the following:

``SEC. 5. EXCEPTIONS FROM RIGHTS OF STATES.

    ``(a) In General.--There is excepted''; and
            (3) by adding at the end the following:
    ``(b) Exception of Oil and Gas Mineral Rights.--
            ``(1) In general.--There is excepted from the operation of 
        sections 3 and 4 all of the oil and gas mineral rights for land 
        beneath the navigable waters that are located within the 
        expanded offshore State seaward boundaries established under 
        this Act.
            ``(2) Federal outer continental shelf.--Those oil and gas 
        mineral rights shall--
                    ``(A) remain Federal property;
                    ``(B) 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.);
                    ``(C) be subject to leasing under the authority of 
                that Act; and
                    ``(D) be subject to laws applicable to the leasing 
                of the oil and gas resources of the Federal outer 
                Continental Shelf.
            ``(3) Existing leases.--Except as otherwise provided in the 
        American Affordable Fuels Act of 2008 and amendments made by 
        that Act, all Federal oil and gas leases in existence as of the 
        date of enactment of that Act within the expanded offshore 
        State seaward boundaries shall continue unchanged by that Act 
        and amendments made by that Act.
            ``(4) Taxation.--A State may exercise all of the sovereign 
        powers of the State relating to taxation within the entire 
        extent of the expanded offshore boundaries of the State.''.

SEC. 205. DEFINITIONS UNDER THE OUTER CONTINENTAL SHELF LANDS ACT.

    Section 2 of the Outer Continental Shelf Lands Act (43 U.S.C. 1331) 
is amended--
            (1) in subsection (a), by inserting before the semicolon at 
        the end the following: ``or lying within the United States 
        exclusive economic zone adjacent to the territories of the 
        United States'';
            (2) by striking the semicolon at the end of each of 
        subsections (a) through (o) and inserting a period;
            (3) by striking subsection (f) and inserting the following:
    ``(f) Affected State; Adjacent State.--
            ``(1) In general.--The terms `affected State' and `adjacent 
        State' mean, with respect to any program, plan, lease sale, 
        leased tract, or other activity proposed, conducted, or 
        approved pursuant to 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 the program, plan, lease sale, leased tract, or activity 
        appertains or is, or is proposed to be, conducted.
            ``(2) State.--In this subsection, the term `State' includes 
        Puerto Rico and other territories of the United States.'';
            (4) in subsection (p), by striking ``; and'' at the end and 
        inserting a period; and
            (5) by adding at the end the following:
    ``(r) Adjacent Zone.--The term `Adjacent Zone' means, with respect 
to any program, plan, lease sale, leased tract, or other activity 
proposed, conducted, or approved pursuant to 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.
    ``(s) Bonus Bids.--The term `bonus bids' means all funds received 
by the Secretary to issue an outer Continental Shelf minerals lease.
    ``(t) Coastline.--The term `coastline' has the meaning given the 
term `coast line' in section 2 of the Submerged Lands Act (43 U.S.C. 
1301).
    ``(u) Mile.--The term `mile' means a statute mile.
    ``(v) Neighboring State.--The term `neighboring State' means a 
coastal State having a common boundary at the coastline with an 
adjacent State.
    ``(w) OCS Planning Area.--The term `OCS Planning Area' means an 
outer Continental Shelf planning area established by the Secretary 
under this Act.
    ``(x) OCS Receipts.--The term `OCS Receipts' means bonus bids, 
royalties, and conservation of resources fees imposed under section 
8(t).
    ``(y) Royalties.--The term `royalties' means all funds received by 
the Secretary from production of oil or natural gas, or the sale of 
production taken in-kind, from an outer Continental Shelf minerals 
lease.''.

SEC. 206. 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--
            (1) by designating the first, second, and third sentences 
        as clause (i), (iii), and (iv), respectively;
            (2) in clause (i) (as so designated), by striking ``, and 
        the President'' and all that follows through the end of the 
        sentence; and
            (3) by inserting after clause (i) (as so designated) the 
        following:
                            ``(ii) Adjacent zones and planning areas.--
                        The lines extending seaward and defining the 
                        Adjacent Zone of each State, and each Planning 
                        Area of the outer Continental Shelf, shall be 
                        as indicated on the maps for each outer 
                        Continental Shelf region entitled--
                                    ``(I) `Alaska OCS Region State 
                                Adjacent Zone and OCS Planning Areas';
                                    ``(II) `Pacific OCS Region State 
                                Adjacent Zones and OCS Planning Areas';
                                    ``(III) `Gulf of Mexico OCS Region 
                                State Adjacent Zones and OCS Planning 
                                Areas'; and
                                    ``(IV) `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 of the 
                        Minerals Management Service.''.

SEC. 207. 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.--
            ``(1) In general.--Any lessee of a producing lease may 
        relinquish to the Secretary any portion of a lease that--
                    ``(A) the lessee has no interest in producing; and
                    ``(B) the Secretary finds is geologically 
                prospective.
            ``(2) Royalty incentive.--In return for any 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.
            ``(3) Regulations.--Not later than 1 year after the date of 
        enactment of this subsection, the Secretary shall promulgate 
        final regulations to carry out this subsection.
    ``(l) Natural Gas Lease Regulations.--Not later than July 1, 2010, 
the Secretary shall promulgate final regulations that shall--
            ``(1) establish procedures for entering into natural gas 
        leases;
            ``(2) ensure that natural gas leases are only available for 
        tracts on the outer Continental Shelf that are wholly within 
        100 miles of the coastline within an area withdrawn from 
        disposition by leasing on the day after the date of enactment 
        of this subsection;
            ``(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 American Affordable Fuels 
        Act of 2008 and amendments made by that 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)(A) provide that any crude oil produced from a well 
        and reinjected into the leased tract shall not be subject to 
        payment of royalty; and
            ``(B) require the Secretary to 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. 208. GRANT OF LEASES BY SECRETARY.

    (a) In General.--Section 8 of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1337) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by inserting after the first 
                sentence the following: ``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, under this 
                Act.''; and
                    (B) in paragraph (3)--
                            (i) by striking subparagraph (A);
                            (ii) by redesignating subparagraphs (B) and 
                        (C) as subparagraphs (A) and (B), respectively; 
                        and
                            (iii) in subparagraph (A) (as so 
                        redesignated), by striking ``In the Western'' 
                        and all that follows through ``the Secretary'' 
                        the first place it appears and inserting ``The 
                        Secretary'';
            (2) in subsection (b)--
                    (A) in paragraph (6), by striking ``and'' after the 
                semicolon at the end;
                    (B) in paragraph (7), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(8) at the option of the Secretary--
                    ``(A) issue more than 1 lease for a given tract if 
                each lease applies to a separate and distinct range of 
                vertical depths, horizontal surface area, or both; and
                    ``(B) promulgate such regulations as the Secretary 
                determines are necessary to manage those leases 
                consistent with this Act.''.
            (3) in subsection (p)(2), by striking subparagraph (B) and 
        inserting the following:
                    ``(B) Payments to coastal states and local coastal 
                governments.--
                            ``(i) In general.--The Secretary shall 
                        provide for--
                                    ``(I) the payment to coastal 
                                States, and the local coastal 
                                governments of the coastal States, of 
                                75 percent of Federal receipts from 
                                projects authorized under this section 
                                located partially or completely within 
                                the area extending seaward of State 
                                submerged land out to 4 marine leagues 
                                from the coastline; and
                                    ``(II) the payment to coastal 
                                States of 50 percent of the receipts 
                                from projects completely located in the 
                                area more than 4 marine leagues from 
                                the coastline.
                            ``(ii) Payment formula.--Payments shall be 
                        based on a formula established by the Secretary 
                        by rulemaking not later than 180 days after the 
                        date of enactment of the American Affordable 
                        Fuels Act of 2008 that provides for equitable 
                        distribution, based on proximity to the 
                        project, among coastal States that have 
                        coastline that is located within 200 miles of 
                        the geographic center of the project.''; and
            (4) 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 
        containing the natural gas and the 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 the production.
            ``(3) Estimates of btu content.--
                    ``(A) In general.--The Secretary shall make 
                estimates of the natural gas Btu content of discovered 
                fields on a natural gas lease only after the completion 
                of at least 1 exploration well, the data from which has 
                been tied to the results of a 3-dimensional seismic 
                survey of the field.
                    ``(B) Further delineation.--The Secretary may not 
                require the lessee to further delineate any discovered 
                field prior to making the estimates.
            ``(4) Natural gas.--For purposes of a natural gas lease, 
        natural gas means natural gas and all substances produced in 
        association with gas, including hydrocarbon liquids (other than 
        crude oil) that are obtained by the condensation of hydrocarbon 
        vapors and separated out in liquid form from the produced gas 
        stream.
    ``(r) Removal of Restrictions on Joint Bidding in Certain Areas of 
the Outer Continental Shelf.--
            ``(1) Alaska ocs region.--Restrictions on joint bidders 
        shall not apply to tracts located in the Alaska OCS Region.
            ``(2) Other ocs regions.--The restrictions shall not apply 
        to tracts in other OCS regions determined to be frontier tracts 
        or otherwise high cost tracts under final regulations that 
        shall be promulgated by the Secretary by not later than 1 year 
        after the date of enactment of the American Affordable Fuels 
        Act of 2008.
    ``(s) Royalty Suspension Provisions.--
            ``(1) In general.--Effective beginning on the date of 
        enactment of the American Affordable Fuels Act of 2008, price 
        thresholds shall apply to any royalty suspension volumes 
        granted by the Secretary.
            ``(2) Price thresholds.--Unless otherwise set by the 
        Secretary by regulation or for a particular lease sale, the 
        price thresholds shall be--
                    ``(A) $40.50 for oil (January 1, 2006 dollars); and
                    ``(B) $6.75 for natural gas (January 1, 2006 
                dollars).
    ``(t) Conservation of Resources Fees.--
            ``(1) In general.--Not later than 1 year after the date of 
        enactment of the American Affordable Fuels Act of 2008, the 
        Secretary by regulation shall establish a conservation of 
        resources fee for nonproducing leases that will apply to new 
        and existing leases which shall be set at $3.75 per acre per 
        year.
            ``(2) Administration.--The fee shall apply on and after 
        October 1, 2008, and shall be treated as offsetting 
        receipts.''.
    (b) Conforming Amendments.--
            (1) Section 8(g) of the Outer Continental Shelf Lands Act 
        (43 U.S.C. 1337(g)) is amended--
                    (A) by striking ``(g)'' and all that follows 
                through ``(3) Whenever'' and inserting the following:
    ``(g) Common Potentially Hydrocarbon-Bearing Areas.--If'';
                    (B) in paragraph (3), by striking the last 
                sentence; and
                    (C) by striking paragraphs (4) through (7).
            (2) Effective date.--The amendments made by paragraph (1) 
        take effect on October 1, 2008.

SEC. 209. DISPOSITION OF RECEIPTS.

    Section 9 of the Outer Continental Shelf Lands Act (43 U.S.C. 1338) 
is amended to read as follows:

``SEC. 9. DISPOSITION OF RECEIPTS.

    ``(a) 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 that is 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 the 
        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) Producing state.--The term `producing State' means an 
        adjacent State having an Adjacent Zone containing leased tracts 
        from which OCS Receipts were derived.
    ``(b) Deposit in Treasury.--Except as otherwise provided in this 
Act, effective beginning June 5, 1950, all rentals, royalties, and 
other sums paid to the Secretary or the Secretary of the Navy under any 
lease on the outer Continental Shelf shall be deposited in the Treasury 
and credited to miscellaneous receipts.
    ``(c) Treatment of OCS Receipts From Tracts Completely Within 100 
Miles of the Coastline.--
            ``(1) Deposit.--The Secretary shall deposit into a separate 
        account in the Treasury the portion of OCS Receipts for each 
        fiscal year that will be shared under paragraphs (2), (3), and 
        (4).
            ``(2) Phased-in receipts sharing.--
                    ``(A) Covered areas.--Effective beginning October 
                1, 2008, the Secretary shall share OCS Receipts derived 
                from the following areas:
                            ``(i) Lease tracts located on portions of 
                        the Gulf of Mexico OCS Region completely beyond 
                        4 marine leagues from any coastline and 
                        completely within 100 miles of any coastline 
                        that were available for leasing under the 2002-
                        2007 5-Year OCS Oil and Gas Leasing Program.
                            ``(ii) Lease tracts in production prior to 
                        October 1, 2008, completely beyond 4 marine 
                        leagues from any coastline and completely 
                        within 100 miles of any coastline located on 
                        portions of the OCS that were not available for 
                        leasing under the 2002-2007 5-Year OCS Oil and 
                        Gas Leasing Program.
                            ``(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 and completely 
                        within 100 miles of the coastline.
                    ``(B) Percentages.--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, 5 percent.
                            ``(ii) For fiscal year 2010, 8 percent.
                            ``(iii) For fiscal year 2011, 11 percent.
                            ``(iv) For fiscal year 2012, 14 percent.
                            ``(v) For fiscal year 2013, 17 percent.
                            ``(vi) For fiscal year 2014, 20 percent.
                            ``(vii) For fiscal year 2015, 23 percent.
                            ``(viii) For fiscal year 2016, 26 percent.
                            ``(ix) For fiscal year 2017, 29 percent.
                            ``(x) For fiscal year 2018, 32 percent.
                            ``(xi) For fiscal year 2019, 35 percent.
                            ``(xii) For fiscal year 2020 and each 
                        subsequent fiscal year, 37.5 percent.
                    ``(C) Nonapplication.--This paragraph shall not 
                apply to leases that could not have been issued but for 
                section 5(k) or the amendments made by section 205 of 
                the American Affordable Fuels Act of 2008.
            ``(3) Immediate receipts sharing.--Effective beginning 
        October 1, 2008, the Secretary shall share 37.50 percent of OCS 
        Receipts derived from all leases located completely beyond 4 
        marine leagues from any coastline and completely within 100 
        miles of any coastline not included under paragraph (2).
            ``(4) Receipts sharing from tracts within 4 marine leagues 
        of any coastline.--
                    ``(A) Areas covered by phased-in receipts 
                sharing.--
                            ``(i) Initial period.--For each of fiscal 
                        years 2009 and 2010, the Secretary shall share 
                        25 percent of OCS Receipts derived from all 
                        leases located within 4 marine leagues from any 
                        coastline within an area described in paragraph 
                        (2).
                            ``(ii) Subsequent period.--For fiscal year 
                        2011 and each fiscal year thereafter, 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) is 75 percent.
                    ``(B) Other areas.--For fiscal year 2009 and each 
                fiscal year thereafter, the Secretary shall share 75 
                percent of OCS receipts derived from all leases located 
                completely or partially within 4 marine leagues from 
                any coastline within an area not described paragraph 
                (2).
            ``(5) Allocations.--
                    ``(A) In general.--The Secretary shall allocate the 
                OCS Receipts deposited into the separate account 
                established by paragraph (1) that are shared under 
                paragraphs (2), (3), and (4) in accordance with this 
                paragraph.
                    ``(B) Bonus bids.--Deposits derived from bonus bids 
                from a leased tract (including interest on the 
                deposits) shall be allocated at the end of each fiscal 
                year to the adjacent State.
                    ``(C) Royalties.--Deposits derived from royalties 
                from a leased tract (including interest on the 
                deposits) shall be allocated at the end of each fiscal 
                year to the adjacent State and any other producing 
                State with a leased tract within the Adjacent Zone of 
                the producing State within 100 miles of coastline of 
                the producing State that generated royalties during the 
                fiscal year, if the other producing State has a 
                coastline point within 300 miles of any portion of the 
                leased tract, in which case the amount allocated for 
                the leased tract shall be--
                            ``(i) \1/3\ to the adjacent State; and
                            ``(ii) \2/3\ to each producing State 
                        (including the adjacent State), inversely 
                        proportional to the distance between the 
                        nearest point on the coastline of the producing 
                        State and the geographic center of the leased 
                        tract.
    ``(d) Treatment of OCS Receipts From Tracts Partially or Completely 
Beyond 100 Miles of the Coastline.--
            ``(1) Deposit.--The Secretary shall deposit into a separate 
        account in the Treasury the portion of OCS Receipts for each 
        fiscal year that will be shared under paragraphs (2) and (3).
            ``(2) Phased-in receipts sharing.--
                    ``(A) Covered areas.--Effective beginning October 
                1, 2008, the Secretary shall share OCS Receipts derived 
                from the following areas:
                            ``(i) Lease tracts located on portions of 
                        the Gulf of Mexico OCS Region partially or 
                        completely beyond 100 miles of any coastline 
                        that were available for leasing under the 2002-
                        2007 5-Year OCS Oil and Gas Leasing Program.
                            ``(ii) Lease tracts in production prior to 
                        October 1, 2008, partially or completely beyond 
                        100 miles of any coastline located on portions 
                        of the outer Continental Shelf that were not 
                        available for leasing under the 2002-2007 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 partially or completely 
                        beyond 100 miles of the coastline.
                    ``(B) Percentages.--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, 5 percent.
                            ``(ii) For fiscal year 2010, 8 percent.
                            ``(iii) For fiscal year 2011, 11 percent.
                            ``(iv) For fiscal year 2012, 14 percent.
                            ``(v) For fiscal year 2013, 17 percent.
                            ``(vi) For fiscal year 2014, 20 percent.
                            ``(vii) For fiscal year 2015, 23 percent.
                            ``(viii) For fiscal year 2016, 26 percent.
                            ``(ix) For fiscal year 2017, 29 percent.
                            ``(x) For fiscal year 2018, 32 percent.
                            ``(xi) For fiscal year 2019, 35 percent.
                            ``(xii) For fiscal year 2020 and each 
                        subsequent fiscal year, 37.5 percent.
                    ``(C) Nonapplication.--This paragraph shall not 
                apply to leases that could not have been issued but for 
                section 5(k) or the amendments made by section 205 of 
                the American Affordable Fuels Act of 2008.
            ``(3) Immediate receipts sharing.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), effective beginning October 1, 2008, 
                the Secretary shall share 37.50 percent of OCS Receipts 
                derived from all leases located completely beyond 4 
                marine leagues from any coastline and completely within 
                100 miles of any coastline not included under paragraph 
                (2).
                    ``(B) States that prohibit leasing within 100 miles 
                of coastlines.--The Secretary shall only share 25 
                percent of OCS Receipts derived from all leases 
                described in subparagraph (A) within the Adjacent Zone 
                of a State if no leasing is allowed within any portion 
                of the Adjacent Zone of the State located completely 
                within 100 miles of any coastline.
            ``(4) Allocations.--
                    ``(A) In general.--The Secretary shall allocate the 
                OCS Receipts deposited into the separate account 
                established by paragraph (1) that are shared under 
                paragraphs (2) and (3) in accordance with this 
                paragraph.
                    ``(B) Bonus bids.--Deposits derived from bonus bids 
                from a leased tract (including interest on the 
                deposits) shall be allocated at the end of each fiscal 
                year to the adjacent State.
                    ``(C) Royalties.--Deposits derived from royalties 
                from a leased tract (including interest on the 
                deposits) shall be allocated at the end of each fiscal 
                year to the adjacent State and any other producing 
                State with a leased tract within the Adjacent Zone of 
                the producing State beyond 100 miles of coastline of 
                the producing State that generated royalties during the 
                fiscal year, if the other producing State has a 
                coastline point within 300 miles of any portion of the 
                leased tract, in which case the amount allocated for 
                the leased tract shall be--
                            ``(i) \1/3\ to the adjacent State; and
                            ``(ii) \2/3\ to each producing State 
                        (including the adjacent State), inversely 
                        proportional to the distance between the 
                        nearest point on the coastline of the producing 
                        State and the geographic center of the leased 
                        tract.
    ``(e) Transmission of Allocations.--
            ``(1) Definition of outer continental shelf oil and gas 
        activities.--In this subsection, the term `outer Continental 
        Shelf oil and gas activities' includes--
                    ``(A) construction of vessels, drill ships, and 
                platforms involved in exploration, production, and 
                development on the outer Continental Shelf;
                    ``(B) support and supply bases, ports, and related 
                activities;
                    ``(C) offices of geologists, geophysicists, 
                engineers, and other professionals involved in support 
                of exploration, production, and development of oil and 
                gas on the outer Continental Shelf;
                    ``(D) pipelines and other means of transporting oil 
                and gas production from the outer Continental Shelf; 
                and
                    ``(E) processing and refining of oil and gas 
                production from the outer Continental Shelf.
            ``(2) Allocation among states and political subdivisions.--
        Not later than 90 days after the end of each fiscal year, the 
        Secretary shall transmit--
                    ``(A) to each State 60 percent of the allocations 
                of the State under subsections (c)(5) and (d)(4) for 
                the immediate prior fiscal year;
                    ``(B) to each coastal county-equivalent and 
                municipal political subdivision of the State a total of 
                40 percent of the allocations of the State under 
                subsections (c)(5) and (d)(4), together with all 
                accrued interest on the amounts; and
                    ``(C) the remaining allocations under subsections 
                (b)(5) and (c)(4), together with all accrued interest 
                on the amounts.
            ``(3) Allocations to coastal county-equivalent political 
        subdivisions.--The Secretary shall make an initial allocation 
        of the OCS Receipts to be shared under paragraph (2)(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 the 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 
                allocated as follows:
                            ``(i) 25 percent shall be allocated based 
                        on the ratio of the population of the coastal 
                        county-equivalent political subdivision to the 
                        coastal population of all coastal county-
                        equivalent political subdivisions in the State.
                            ``(ii)(I) 25 percent shall be allocated 
                        based on the ratio of the coastline miles of 
                        the coastal county-equivalent political 
                        subdivision to the coastline miles of all 
                        coastal county-equivalent political 
                        subdivisions in the State, as calculated by the 
                        Secretary.
                            ``(II) In the calculations, coastal county-
                        equivalent political subdivisions without a 
                        coastline shall be considered to have 50 
                        percent of the average coastline miles of the 
                        coastal county-equivalent political 
                        subdivisions that do have coastlines.
                            ``(iii) 25 percent shall be allocated to 
                        all coastal county-equivalent political 
                        subdivisions having a coastline point within 
                        300 miles of the leased tract for which OCS 
                        Receipts are being shared based on a formula 
                        that allocates the funds based on the relative 
                        distance from the leased tract of the coastal 
                        county-equivalent political subdivision.
                            ``(iv)(I) 25 percent shall be allocated to 
                        all coastal county-equivalent political 
                        subdivisions having a coastline point within 
                        300 miles of the leased tract for which OCS 
                        Receipts are being shared based on the relative 
                        level of outer Continental Shelf oil and gas 
                        activities in a coastal political subdivision 
                        compared to the level of outer Continental 
                        Shelf activities in all coastal political 
                        subdivisions in the State.
                            ``(II) For purposes of this subparagraph, 
                        if a coastal county-equivalent political 
                        subdivision does not have a coastline, the 
                        coastal point of the coastal county-equivalent 
                        political subdivision shall be the point on the 
                        coastline closest to the coastal county-
                        equivalent political subdivision.
            ``(4) Allocations to coastal municipal political 
        subdivisions.--The initial allocation to each coastal county-
        equivalent political subdivision under paragraph (2) shall be 
        allocated to the coastal county-equivalent political 
        subdivision and any coastal municipal political subdivision 
        located partially or wholly within the boundaries of the 
        coastal county-equivalent political subdivision as follows:
                    ``(A) \1/3\ shall be allocated to the coastal 
                county-equivalent political subdivision.
                    ``(B) \2/3\ shall be allocated on a per capita 
                basis to the municipal political subdivisions and the 
                county-equivalent political subdivision, with the 
                allocation to the county-equivalent political 
                subdivision based on the population of the county-
                equivalent political subdivision not included within 
                the boundaries of a municipal political subdivision.
    ``(f) 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 the amounts are deposited 
and yielding the highest reasonably available interest rates, as 
determined by the Secretary of the Treasury.
    ``(g) Use of Funds.--A recipient of funds under this section may 
use the funds--
            ``(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 
                biofuels, 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; and
            ``(7) any other purpose as determined by State law.
    ``(h) No Accounting Required.--
            ``(1) In general.--No recipient of funds under this section 
        shall be required to account to the Federal Government for the 
        expenditure of the funds, except as may otherwise required by 
        law.
            ``(2) State accounting and auditing.--A State may enact 
        legislation providing for accounting for and auditing of 
        expenditures of funds under this section.
            ``(3) Matching funds for other programs.--Funds allocated 
        under this section to States and political subdivisions may be 
        used as matching funds for other Federal programs.
    ``(i) Effect of Future Laws.--
            ``(1) In general.--Subject to paragraph (2), enactment of 
        any future Federal law that has the effect, as determined by 
        the Secretary, of restricting any Federal agency from spending 
        appropriated funds, or otherwise preventing the agency from 
        fulfilling the preexisting responsibilities of the agency as of 
        the date of enactment of the American Affordable Fuels Act of 
        2008 to issue any permit or other approval impacting on the 
        outer Continental Shelf oil and gas leasing program or any 
        lease issued under the program, or to implement any provision 
        of the American Affordable Fuels Act of 2008, shall prohibit 
        any sharing of OCS Receipts under this section directly with 
        the States, and the coastal political subdivisions of the 
        States, for the duration of the restriction.
            ``(2) Nonapplication.--Paragraph (1) shall not apply if the 
        responsibilities of a Federal agency have been reassigned to 
        another Federal agency by the law with no prevention of 
        performance, as determined by the Secretary.
            ``(3) Timing.--The Secretary shall make the determination 
        of the existence of restricting effects described in paragraph 
        (1) not later than 30 days after the date of receipt of a 
        petition by any outer Continental Shelf lessee or producing 
        State.''.

SEC. 210. RESERVATION OF LAND AND RIGHTS.

    Section 12 of the Outer Continental Shelf Lands Act (43 U.S.C. 
1341) is amended--
            (1) by striking ``Sec. 12'' and all that follows through 
        ``The President'' and inserting the following:

``SEC. 12. RESERVATIONS.

    ``(a) Authority of the President.--
            ``(1) In general.--The President''; and
            (2) in subsection (a), by adding at the end the following:
            ``(2) Withdrawals.--
                    ``(A) By the president.--The President may 
                partially or completely revise or revoke any prior 
                withdrawal made by the President under this section.
                    ``(B) Initiated by a state.--The President may not 
                revise or revoke a withdrawal that was initiated by a 
                petition from a State and approved by the Secretary 
                under subsection (h).
                    ``(C) Failure to prohibit leasing.--The President 
                may not withdraw from leasing any area for which a 
                State failed to prohibit, or petition to prohibit, 
                leasing under subsection (g).
            ``(3) Maximum area withdrawn.--In the case of any area of 
        the outer Continental Shelf that is more than 100 miles from 
        any coastline, the President may not withdraw from leasing more 
        than 25 percent of the acreage of any OCS Planning Area.
            ``(4) Length of withdrawal.--A withdrawal by the President 
        may be for a term of not to exceed 10 years.
            ``(5) Considerations.--When considering potential uses of 
        the outer Continental Shelf, to the maximum extent practicable, 
        the President shall accommodate competing interests and 
        potential uses.''; and
            (3) 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, beginning on the date of enactment of this 
                subsection, the Secretary shall not offer for leasing 
                for oil and gas, or natural gas--
                            ``(i) any area within 50 miles of 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
                            ``(ii) any area within 50 miles of the 
                        coastline not withdrawn under that Memorandum 
                        that is included within the Gulf of Mexico OCS 
                        Region Eastern Planning Area as indicated on 
                        the map entitled `Gulf of Mexico OCS Region 
                        State Adjacent Zones and OCS Planning Areas' or 
                        the Florida Straits Planning Area as indicated 
                        on the map entitled `Atlantic OCS Region State 
                        Adjacent Zones and OCS Planning Areas', both of 
                        which are dated September 2005 and on file in 
                        the Office of the Director, National Ocean 
                        Resources and Royalty Service.
                    ``(B) Areas between 50 and 100 miles from the 
                coastline.--Unless an adjacent State petitions under 
                subsection (h) within 1 year after the date of 
                enactment of this subsection for natural gas leasing or 
                by June 30, 2010, for oil and gas leasing, the 
                Secretary shall offer for leasing--
                            ``(i) any area more than 50 miles but less 
                        than 100 miles from the coastline that was 
                        withdrawn from disposition by leasing in the 
                        Atlantic OCS Region, the Pacific OCS Region, or 
                        the Gulf of Mexico OCS Region Eastern Planning 
                        Area, as depicted on the maps referred to in 
                        this subparagraph, under the `Memorandum on 
                        Withdrawal of Certain Areas of the United 
                        States Outer Continental Shelf from Leasing 
                        Disposition', 34 Weekly Comp. Pres. Doc. 1111, 
                        dated June 12, 1998; or
                            ``(ii) any area more than 50 miles but less 
                        than 100 miles from the coastline not withdrawn 
                        under that Memorandum that is included within 
                        the Gulf of Mexico OCS Region Eastern Planning 
                        Area as indicated on the map entitled `Gulf of 
                        Mexico OCS Region State Adjacent Zones and OCS 
                        Planning Areas' or within the Florida Straits 
                        Planning Area as indicated on the map entitled 
                        `Atlantic OCS Region State Adjacent Zones and 
                        OCS Planning Areas', both of which are dated 
                        September 2005 and on file in the Office of the 
                        Director, National Ocean Resources and Royalty 
                        Service.
            ``(2) Revocation of withdrawal.--
                    ``(A) In general.--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, is revoked and no 
                longer in effect.
                    ``(B) Tracts partially added.--
                            ``(i) In general.--Any tract only partially 
                        added to the Gulf of Mexico OCS Region Central 
                        Planning Area by this Act shall be eligible for 
                        leasing of the part of the tract that is 
                        included within the Gulf of Mexico OCS Region 
                        Central Planning Area.
                            ``(ii) Remainder of tract.--The remainder 
                        of a tract described in clause (i) that lies 
                        outside of the Gulf of Mexico OCS Region 
                        Central Planning Area may be developed and 
                        produced by the lessee of the partial tract 
                        using extended reach or similar drilling from a 
                        location on a leased area.
                    ``(C) Use of tracts.--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) Petitions.--
                            ``(i) In general.--The Governor of a State, 
                        with the concurrence of the legislature of the 
                        State, may submit to the Secretary a petition 
                        requesting that the Secretary make available 
                        any area that is within the Adjacent Zone of 
                        the State, included under paragraph (1), and 
                        that--
                                    ``(I) is greater than 25 miles from 
                                any point on the coastline of a 
                                neighboring State for the conduct of 
                                offshore leasing, pre-leasing, and 
                                related activities with respect to 
                                natural gas leasing; or
                                    ``(II) is greater than 50 miles 
                                from any point on the coastline of a 
                                neighboring State for the conduct of 
                                offshore leasing, pre-leasing, and 
                                related activities with respect to oil 
                                and gas leasing.
                            ``(ii) Other leasing.--The adjacent State 
                        may petition for leasing any other area within 
                        the Adjacent Zone of the State--
                                    ``(I) if leasing is allowed in the 
                                similar area of the Adjacent Zone of 
                                the applicable neighboring State; or
                                    ``(II) if leasing is not allowed, 
                                if the neighboring State, acting 
                                through the Governor of the neighboring 
                                State, expresses the concurrence of the 
                                neighboring State with the petition.
                            ``(iii) Secretarial finding.--The Secretary 
                        shall only consider a petition under clause 
                        (ii) after--
                                    ``(I) making a finding that leasing 
                                is allowed in the similar area of the 
                                Adjacent Zone of the applicable 
                                neighboring State; or
                                    ``(II) receiving the concurrence of 
                                the neighboring State.
                            ``(iv) Date of receipt.--The date of 
                        receipt by the Secretary of a concurrence by a 
                        neighboring State shall constitute the date of 
                        receipt of the petition for the State 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 25 miles of the coastline by--
                            ``(i) requiring a net reduction in the 
                        number of production platforms;
                            ``(ii) requiring a net increase in the 
                        average distance of production platforms from 
                        the coastline;
                            ``(iii) limiting permanent surface 
                        occupancy on new leases to areas that are more 
                        than 10 miles from the coastline;
                            ``(iv) limiting certain tracts to being 
                        produced from shore or from platforms located 
                        on other tracts; or
                            ``(v) other conditions that the adjacent 
                        State may consider appropriate if the Secretary 
                        does not determine that production is made 
                        economically or technically impracticable or 
                        otherwise impossible.
                    ``(C) Action by secretary.--
                            ``(i) In general.--Not later than 90 days 
                        after receipt of a petition of a State 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 Adjacent Zone of the State.
                            ``(ii) Environmental assessment.--Prior to 
                        approving the petition, the Secretary shall 
                        complete an environmental assessment under the 
                        National Environmental Policy Act of 1969 (42 
                        U.S.C. 4321 et seq.) 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 the receipt of the petition.
                    ``(E) Amendment of 5-year leasing program.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), notwithstanding section 18, not 
                        later than 180 days after the approval of a 
                        petition under subparagraph (C) or (D), after 
                        the expiration of the time limits established 
                        by paragraph (1)(B), and not later than 180 
                        days after the enactment of this subsection for 
                        the areas made available for leasing under 
                        paragraph (2), the Secretary shall amend the 5-
                        Year Outer Continental Shelf Oil and Gas 
                        Leasing Program (in effect on the date of 
                        enactment of this subsection) to include 1 or 
                        more lease sales for at least 75 percent of the 
                        associated areas.
                            ``(ii) Exception.--
                                    ``(I) In general.--The Secretary 
                                shall not make the amendment described 
                                in clause (i) if there are, from the 
                                date of approval, expiration of the 
                                time limits, or the date of enactment 
                                of this subsection, as applicable, less 
                                than 1 year remaining in the 5-Year 
                                Leasing Program described in clause 
                                (i).
                                    ``(II) Subsequent leasing 
                                program.--In a case described in 
                                subclause (I), the Secretary shall 
                                include the associated areas within 
                                lease sales under the next 5-Year Outer 
                                Continental Shelf Oil and Gas Leasing 
                                Program.
                            ``(iii) No further consultations 
                        required.--For purposes of amending the 5-Year 
                        Outer Continental Shelf Oil and Gas Leasing 
                        Program in accordance with this section, 
                        further consultations with States shall not be 
                        required.
                            ``(iv) Environmental assessment.--For 
                        purposes of this section, an environmental 
                        assessment performed under the National 
                        Environmental Policy Act of 1969 (42 U.S.C. 
                        4321 et seq.) to assess the effects of 
                        approving the petition shall be sufficient to 
                        support the amendment of the 5-Year Outer 
                        Continental Shelf Oil and Gas Leasing Program.
    ``(h) Option To Petition for Extension of Withdrawal From Leasing 
Within Certain Areas of Outer Continental Shelf.--
            ``(1) In general.--The Governor of a State, with the 
        concurrence of the legislature of the State, may submit to the 
        Secretary a petition requesting that the Secretary extend, for 
        a period of not more than 5 years, the withdrawal from leasing 
        for all or part of any area within the Adjacent Zone of the 
        State located more than 50 miles, but less than 100 miles, from 
        the coastline that is subject to subsection (g)(1)(B).
            ``(2) Limitation on petitions.--A State may petition not 
        more than once per calendar year for any particular area.
            ``(3) Separate petitions.--A State shall submit separate 
        petitions, with separate votes by the legislature of the State, 
        for oil and gas leasing and for natural gas leasing.
            ``(4) Scope of petitions.--A petition of a State may 
        request certain areas to be withdrawn from all leasing and 
        certain areas to be withdrawn only from 1 type of leasing.
    ``(i) Effect of Other Laws.--
            ``(1) In general.--Adoption by any adjacent State of any 
        constitutional provision, or enactment of any State law, that 
        has the effect, as determined by the Secretary, of restricting 
        the Governor or the legislature, or both, of the State from 
        exercising full discretion relating to subsection (g) or (h) 
        shall for the duration of the restriction--
                    ``(A) prohibit any sharing of OCS receipts (as that 
                term is defined in section 9(a)) under this Act with 
                the adjacent State, and the coastal political 
                subdivisions of the adjacent State; and
                    ``(B) prohibit the adjacent State from exercising 
                any authority under subsection (h).
            ``(2) Timing.--The Secretary shall make the determination 
        of the existence of a restricting constitutional provision or 
        State statute not later than 30 days after receipt of a 
        petition by any outer Continental Shelf lessee or coastal 
        State.
    ``(j) Prohibition on Leasing East of the Military Mission Line.--
            ``(1) Definition of military mission line.--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 the State of Florida to the outer 
        boundary of United States territorial waters in the Gulf of 
        Mexico.
            ``(2) Prohibition.--Notwithstanding any other provision of 
        law, during the period beginning on the date of enactment of 
        this subsection and ending on 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.
            ``(3) Disposition of receipts.--If a waiver described in 
        paragraph (2) is granted, 62.5 percent of the OCS Receipts from 
        a lease within the area issued as a result of the waiver shall 
        be paid annually to the National Guards of all States having a 
        point that is within 1,000 miles of the lease, allocated among 
        the States on a per capita basis relative to the entire 
        population of the States.''.

SEC. 211. 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)(3)--
                    (A) by striking ``(3) The Secretary'' and inserting 
                the following:
            ``(3) Timing and location of leasing.--
                    ``(A) In general.--The Secretary''; and
                    (B) by adding at the end the following:
                    ``(B) Lease sales.--
                            ``(i) In general.--For each 5-year program, 
                        the Secretary shall include lease sales that, 
                        if 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.
                            ``(ii) Available unleased acreage.--For the 
                        purpose of clause (i), available unleased 
                        acreage shall be that portion of the outer 
                        Continental Shelf that is not under lease at 
                        the time of the proposed lease sale, and has 
                        not otherwise been made unavailable for leasing 
                        by law.'';
            (2) in subsection (c), by striking ``(c)(1)'' and all that 
        follows through the end of paragraph (2) and inserting the 
        following:
    ``(c) Proposed Leasing Program.--
            ``(1) Consideration and analysis.--
                    ``(A) In general.--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 the leasing.
                    ``(B) Suggestions from federal agencies and coastal 
                states.--During the preparation of the program, the 
                Secretary shall invite and consider suggestions from 
                any interested Federal agency, including the Department 
                of Justice, in consultation with the Federal Trade 
                Commission, and from the Governor of any coastal State.
                    ``(C) Suggestions from local governments.--The 
                Secretary may 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 the State, and from any other person.
                    ``(D) Coordination with secretary of defense.--
                            ``(i) In general.--The Secretary shall 
                        consult with the Secretary of Defense regarding 
                        military operational needs in the outer 
                        Continental Shelf.
                            ``(ii) Conflicts.--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.
                            ``(iii) Unresolved issues.--If the 
                        Secretaries are not able to resolve all of the 
                        conflicts, any unresolved issues shall be 
                        elevated to the President for resolution.
            ``(2) Review and comment on proposed leasing program.--
                    ``(A) Publication.--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 
                individual or entity), the Secretary shall publish in 
                the Federal Register a description of a proposed 
                leasing program accompanied by a draft environmental 
                impact statement prepared pursuant to the National 
                Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
                seq.).
                    ``(B) Copy to affected states.--After publication 
                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.
                    ``(C) Comments from local governments.--The 
                Governor may solicit comments from those executives of 
                local governments in the State of the Governor that the 
                Governor, in the discretion of the Governor, determines 
                will be affected by the proposed program.
                    ``(D) Request for modification by governor.--
                            ``(i) In general.--If any comment by the 
                        Governor is received by the Secretary at least 
                        15 days prior to submission to Congress 
                        pursuant to paragraph (3) and includes a 
                        request for any modification of the proposed 
                        program, the Secretary shall reply in writing--
                                    ``(I) granting or denying the 
                                request in whole or in part, or 
                                granting the request in such modified 
                                form as the Secretary considers 
                                appropriate; and
                                    ``(II) stating the reasons for the 
                                decision of the Secretary.
                            ``(ii) Correspondence.--All correspondence 
                        between the Secretary and the Governor of any 
                        affected State described in clause (i), 
                        together with any additional information and 
                        data related to the correspondence, shall 
                        accompany the proposed program when the 
                        proposed program is submitted to 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 notice of scope at the beginning of the development 
of each 5-year outer Continental Shelf oil and gas leasing program or 
as soon as practicable thereafter, the Secretary shall--
            ``(1) provide to each adjacent State a current estimate of 
        proven and potential oil and gas resources located within the 
        Adjacent Zone of the State; and
            ``(2) provide to each adjacent State, and coastal political 
        subdivisions of the State--
                    ``(A) an estimate of the OCS Receipts that the 
                Secretary expects will be shared with each adjacent 
                State, and the coastal political subdivisions of the 
                State, using the assumption that the unleased tracts 
                within the Adjacent Zone of the State are fully made 
                available for leasing, including long-term projected 
                OCS Receipts; and
                    ``(B) a macroeconomic estimate of the impact of the 
                leasing on the national economy and the economy of each 
                State, including the impact on investment, jobs, 
                revenues, personal income, and other categories.''.

SEC. 212. COORDINATION WITH ADJACENT STATES.

    Section 19 of the Outer Continental Shelf Lands Act (43 U.S.C. 
1345) is amended--
            (1) in the first sentence of subsection (a), by inserting 
        ``, for any tract located within the Adjacent Zone of the 
        adjacent State,'' after ``government''; and
            (2) by adding at the end the following:
    ``(f) Construction of Pipelines.--
            ``(1) In general.--Except as provided in paragraph (2), no 
        Federal agency may permit or otherwise approve, without the 
        concurrence of the adjacent State, the construction of a 
        pipeline for crude oil or petroleum products, or both, within 
        the part of the Adjacent Zone of the adjacent State that is 
        withdrawn from oil and gas or natural gas leasing.
            ``(2) Construction without concurrence.--A pipeline may be 
        approved, without the concurrence of the adjacent State, to 
        pass through the Adjacent Zone of the adjacent State if at 
        least 50 percent of the production projected to be carried by 
        the pipeline during the first 10 years of operation is from 
        areas of the Adjacent Zone of the adjacent State.
            ``(3) Natural gas pipelines.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), no State may prohibit the 
                construction within the Adjacent Zone or waters of the 
                State of a natural gas pipeline that will transport 
                natural gas produced from the outer Continental Shelf.
                    ``(B) Alternate location.--An adjacent State may 
                prevent a proposed natural gas pipeline landing 
                location if the State proposes 2 alternate landing 
                locations in the adjacent State, acceptable to the 
                adjacent State, located within 50 miles on either side 
                of the proposed landing location.''.

SEC. 213. ENVIRONMENTAL STUDIES.

    Section 20(d) of the Outer Continental Shelf Lands Act (43 U.S.C. 
1346(d)) is amended--
            (1) by striking ``(d) The Secretary'' and inserting the 
        following:
    ``(d) Environmental Information.--
            ``(1) In general.--The Secretary''; and
            (2) by adding at the end the following:
            ``(2) Application of national environmental policy act of 
        1969.--
                    ``(A) In general.--In the case of each program, 
                lease sale, lease, and action under this Act, this 
                paragraph shall apply regarding the application of the 
                National Environmental Policy Act of 1969 (42 U.S.C. 
                4321 et seq.).
                    ``(B) Lease suspensions and preliminary 
                activities.--
                            ``(i) In general.--The granting or 
                        directing of a lease suspension and the conduct 
                        of all preliminary activities on outer 
                        Continental Shelf tracts (including seismic 
                        activities) shall be categorically excluded 
                        from the need to prepare an environmental 
                        assessment or an environmental impact 
                        statement.
                            ``(ii) Exceptions.--The Secretary shall not 
                        be required to analyze whether any exceptions 
                        to a categorical exclusion apply to activities 
                        conducted under this Act.
                    ``(C) Further environmental analysis.--The 
                environmental impact statement developed in support of 
                each 5-year oil and gas leasing program shall provide 
                the environmental analysis for all lease sales to be 
                conducted under the program and such sales shall not be 
                subject to further environmental analysis.
                    ``(D) Exploration plans.--
                            ``(i) In general.--Exploration plans shall 
                        not be subject to any requirement to prepare an 
                        environmental impact statement.
                            ``(ii) Categorical exclusion.--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.
                    ``(E) Further development and production plans.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), within each OCS Planning Area, 
                        after the preparation of the first development 
                        and production plan environmental impact 
                        statement for a leased tract within the OCS 
                        Planning Area, future development and 
                        production plans for leased tracts within the 
                        Area shall only require the preparation of an 
                        environmental assessment.
                            ``(ii) Older statements.--If the most 
                        recent development and production plan 
                        environmental impact statement within the OCS 
                        Planning Area was finalized more than 10 years 
                        before the date of the approval of the plan, an 
                        environmental impact statement shall be 
                        required.''.

SEC. 214. FEDERAL ENERGY NATURAL RESOURCES ENHANCEMENT.

    (a) Findings.--Congress finds that--
            (1) energy and minerals exploration, development, and 
        production on Federal onshore and offshore land (including 
        biobased fuel, natural gas, minerals, oil, geothermal, and 
        power from wind, waves, currents, and thermal energy) involves 
        significant outlays of funds by Federal and State wildlife, 
        fish, and natural resource management agencies for 
        environmental studies, planning, development, monitoring, and 
        management of wildlife, fish, air, water, and other natural 
        resources;
            (2) State wildlife, fish, and natural resource management 
        agencies are funded primarily through permit and license fees 
        paid to the States by the general public to hunt and fish, and 
        through Federal excise taxes on equipment used for those 
        activities;
            (3) funds generated from consumptive and recreational uses 
        of wildlife, fish, and other natural resources are inadequate 
        to address the natural resources related to energy and minerals 
        development on Federal onshore and offshore land;
            (4) funds made available to Federal agencies responsible 
        for managing Federal onshore and offshore land and Federal-
        trust wildlife and fish species and habitats are inadequate to 
        address the natural resources related to energy and minerals 
        development on Federal onshore and offshore land;
            (5) receipts derived from sales, bonus bids, and royalties 
        under the mineral leasing laws of the United States are paid to 
        the Treasury through the Minerals Management Service of the 
        Department of the Interior; and
            (6) none of the receipts derived from sales, bonus bids, 
        and royalties under the minerals leasing laws of the United 
        States are paid to Federal or State agencies to examine, 
        monitor, and manage wildlife, fish, air, water, and other 
        natural resources related to natural gas, oil, and mineral 
        exploration and development.
    (b) Purposes.--The purposes of this section are--
            (1) to authorize expenditures for the monitoring and 
        management of wildlife and fish, and habitat, and air, water, 
        and other natural resources related to energy and minerals 
        development on Federal onshore and offshore land;
            (2) to authorize expenditures for each fiscal year to the 
        Secretary of the Interior and the States; and
            (3) to use funds made available under this section to 
        secure the necessary trained workforce or contractual services 
        to conduct environmental studies, planning, development, 
        monitoring, and post-development management of wildlife and 
        fish and habitat and air, water, and other natural resources 
        that may be related to biobased fuel, gas, mineral, oil, wind, 
        or other energy exploration, development, transportation, 
        transmission, and associated activities on Federal onshore and 
        offshore land, including--
                    (A) pertinent research, surveys, and environmental 
                analyses conducted to identify any impact on wildlife, 
                fish, air, water, and other natural resources from 
                energy and mineral exploration, development, 
                production, and transportation or transmission;
                    (B) projects to maintain, improve, or enhance 
                wildlife and fish populations and habitat or air, 
                water, or other natural resources, including activities 
                under the Endangered Species Act of 1973 (16 U.S.C. 
                1531 et seq.);
                    (C) research, surveys, environmental analyses, and 
                projects that assist in managing (including mitigating 
                onsite or offsite, or both) the impacts of energy and 
                mineral activities on wildlife, fish, air, water, and 
                other natural resources; and
                    (D) projects to teach young people to live off the 
                land.
    (c) Definitions.--In this section:
            (1) Enhancement program.--The term ``enhancement program'' 
        means the Federal energy natural resources enhancement program 
        established by this section.
            (2) State.--The term ``State'' means the Governor of the 
        State.
    (d) Establishment of Federal Energy Natural Resources Enhancement 
Program.--
            (1) In general.--There is established the Federal energy 
        natural resources enhancement program.
            (2) Payment to secretary of the interior.--For fiscal year 
        2009 and each fiscal year thereafter, \1/3\ of the amounts made 
        available for the enhancement program shall be available to the 
        Secretary of the Interior for use for the purposes described in 
        subsection (b)(3).
            (3) Payment to states.--
                    (A) In general.--For fiscal year 2009 and each 
                fiscal year thereafter, \2/3\ of the amounts made 
                available for the enhancement program shall be 
                available to the States for use for the purposes 
                described in subsection (b)(3).
                    (B) Use of payments by state.--Each State shall use 
                the payments made under this paragraph only for 
                carrying out projects and programs for the purposes 
                described in subsection (b)(3).
                    (C) Encourage use of private funds by state.--Each 
                State shall use the payments made under this paragraph 
                to leverage private funds for carrying out projects for 
                the purposes described in subsection (b)(3).
    (e) Limitation on Use.--Amounts made available under this section 
may not be used for the purchase of any interest in land.
    (f) Reports to Congress.--During fiscal year 2010 and each fiscal 
year thereafter, the Secretary of the Interior and each State receiving 
funds from the Enhancement Fund shall submit to the Committee on Energy 
and Natural Resources of the Senate and the Committee on Natural 
Resources of the House of Representatives a report describing the 
expenditures made available under this section during the previous 
fiscal year, including--
            (1) a summary of pertinent scientific research and surveys 
        conducted to identify impacts on wildlife, fish, and other 
        natural resources from energy and mineral developments;
            (2) a summary of projects planned and completed to 
        maintain, improve or enhance wildlife and fish populations and 
        habitat or other natural resources;
            (3) a list of additional actions that assist, or would 
        assist, in managing (including mitigating onsite or offsite, or 
        both) the impacts of energy and mineral development on 
        wildlife, fish, and other natural resources; and
            (4) a summary of non-Federal funds used to plan, conduct, 
        and complete the plans and programs identified in paragraphs 
        (1) and (2).
    (g) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $150,000,000 for fiscal year 
2009 and each fiscal year thereafter.

SEC. 215. TERMINATION OF EFFECT OF LAWS PROHIBITING THE SPENDING OF 
              APPROPRIATED FUNDS FOR CERTAIN PURPOSES.

    Notwithstanding any other provision of law, each provision of 
Federal law in effect on the date of enactment of this Act that 
prohibits the spending of Federal funds to conduct oil and natural gas 
leasing and preleasing activities, or to issue a lease to any 
individual or entity, for any area of the outer Continental Shelf shall 
have no force or effect.

SEC. 216. OUTER CONTINENTAL SHELF INCOMPATIBLE USE.

    (a) In General.--Except as provided in subsection (b), no Federal 
agency may permit construction or operation 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.
    (b) Exceptions.--Subsection (a) shall not apply to any facility, 
transportation corridor, or operating area the construction, operation, 
designation, or maintenance of which is or will be--
            (1) located in an area of the outer Continental Shelf that 
        is unavailable for oil and gas or natural gas leasing by 
        operation of law;
            (2) used for a military readiness activity (as defined in 
        section 315(f) of division A of Public Law 107-314; 16 U.S.C. 
        703 note); or
            (3) required in the national interest, as determined by the 
        President.

SEC. 217. 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 or gas lease that was subject to litigation in 
the Court of Federal Claims on January 1, 2006, if the Secretary finds 
that the lease qualifies for repurchase and cancellation under the 
regulations authorized by this section.
    (b) Regulations.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary shall publish final 
        regulations providing 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.
            (2) Required findings.--Under the regulations, on a written 
        request by the lessee, the Secretary shall repurchase and 
        cancel a lease on a finding by the Secretary that--
                    (A) a request by the lessee for a required permit 
                or other approval complied with applicable law (other 
                than the Coastal Zone Management Act of 1972 (16 U.S.C. 
                1451 et seq.)), and terms of the lease and the permit 
                or other approval were denied;
                    (B) a Federal agency failed to act on a request by 
                the lessee for a required permit, other approval, or 
                administrative appeal within a regulatory or statutory 
                time-frame associated with the requested action, 
                whether mandatory or discretionary, 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 the condition of 
                approval was not mandated by Federal law (including 
                regulations) in effect on the date of lease issuance, 
                or was not specifically allowed under the terms of the 
                lease.
            (3) Administrative remedies.--Under the regulations, 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.
            (4) Final agency decision.--The Secretary shall make a 
        final agency decision on a request by a lessee under this 
        section not later than 180 days after the date of the request.
            (5) Compensation.--
                    (A) Amount.--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.
                    (B) Form.--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.
                    (C) Final agency decision.--Failure of the 
                Secretary to make a final agency decision on a request 
                by a lessee under this section within 180 days after 
                the date of the 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 does not prejudice any other rights 
that the lessee would have in the absence of this section.

SEC. 218. OFFSITE ENVIRONMENTAL MITIGATION.

    (a) In General.--Notwithstanding any other provision of law--
            (1) any person conducting activities under a law described 
        in subsection (b) may, in satisfying any mitigation 
        requirements associated with the activities, propose mitigation 
        measures on a site away from the area impacted; and
            (2) the Secretary of the Interior shall accept those 
        proposed measures if the Secretary finds that the measures 
        generally achieve the purposes for which the mitigation 
        measures were applied.
    (b) Covered Laws.--Subsection (a) applies to--
            (1) the Mineral Leasing Act (30 U.S.C. 181 et seq.);
            (2) the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et 
        seq.);
            (3) the Act of August 7, 1947 (commonly known as the 
        ``Mineral Leasing Act for Acquired Lands'') (30 U.S.C. 351 et 
        seq.);
            (4) the Act of March 1, 1911 (commonly known as the ``Weeks 
        Law'') (16 U.S.C. 480 et seq.);
            (5) sections 2318 through 2352 of the Revised Statutes 
        (commonly known as the ``Mining Law of 1872'') (30 U.S.C. 21 et 
        seq.);
            (6) the Act of July 31, 1947 (commonly known as the 
        ``Materials Act of 1947'') (30 U.S.C. 601 et seq.); and
            (7) the Outer Continental Shelf Lands Act (43 U.S.C. 1331 
        et seq.)

SEC. 219. MINERALS MANAGEMENT SERVICE.

    The bureau known as the ``Minerals Management Service'' in the 
Department of the Interior shall be known as the ``National Ocean 
Resources and Royalty Service''.

SEC. 220. 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 is amended 
by inserting after section 9 (43 U.S.C. 1338) 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.--Subject to subsections (b) through (f), the 
Secretary shall promulgate 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 the obligations of the transferee, including--
            ``(1) ongoing maintenance of the platform or other 
        facility;
            ``(2) any liability obligations that might arise;
            ``(3) removal of the platform or other facility if 
        determined necessary by the Secretary; and
            ``(4) any other requirements and obligations that the 
        Secretary may, by regulation, determine to be appropriate.
    ``(c) Plugging and Abandonment.--The Secretary shall ensure that 
plugging and abandonment of wells is accomplished at an appropriate 
time under this section.
    ``(d) Potential to Petition to Opt-Out of Regulations.--
            ``(1) In general.--An adjacent State, with the concurrence 
        of the Governor and legislature of the State, 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 the Adjacent Zone of the 
        State within 12 miles of the coastline.
            ``(2) Environmental assessment.--
                    ``(A) In general.--On receipt of the preliminary 
                petition, the Secretary shall complete an environmental 
                assessment that documents the anticipated environmental 
                effects of approving the petition.
                    ``(B) Provision to state.--The Secretary shall 
                provide the environmental assessment to the State, 
                which shall have the choice of no action or confirming 
                the petition of the State by further action, with the 
                concurrence of the Governor and legislature of the 
                State.
                    ``(C) Excepted areas.--The Secretary--
                            ``(i) may except an area from the 
                        application of such regulations; and
                            ``(ii) 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 the platform or other facility after the date the platform 
or other facility is used for any purpose under subsection (a), unless 
the 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.
    ``(g) Deadline for Regulations.--Not later than 180 days after the 
date of enactment of the American Affordable Fuels Act of 2008, the 
Secretary of the Interior shall promulgate such regulations as are 
necessary to carry out this section.''.
    (c) Study and Report on Effects of Removal of Platforms.--Not later 
than 1 year after the date of enactment of this Act, the Secretary of 
the Interior, in consultation with other Federal agencies as the 
Secretary considers advisable, shall conduct a study and submit a 
report to Congress regarding how the removal of offshore oil and gas 
platforms and other facilities from the outer Continental Shelf would 
affect fish stocks and coral populations.

SEC. 221. REPEAL OF REQUIREMENT TO CONDUCT COMPREHENSIVE INVENTORY OF 
              OCS OIL AND NATURAL GAS RESOURCES.

    Section 357 of the Energy Policy Act of 2005 (42 U.S.C. 15912) is 
repealed.

SEC. 222. MINING AND PETROLEUM SCHOOLS.

    (a) Maintenance and Restoration of Existing and Historic Petroleum 
and Mining Engineering Programs.--Public Law 98-409 (30 U.S.C. 1221 et 
seq.) is amended to read as follows:

``SECTION 1. SHORT TITLE.

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

``SEC. 2. DEFINITIONS.

    ``In this Act:
            ``(1) ABET, inc.--The term `ABET, Inc.' means the 
        Accreditation Board for Engineering and Technology, Inc.
            ``(2) Committee.--The term `Committee' means the Committee 
        on Petroleum, Mining, and Mineral Engineering and Energy and 
        Mineral Resource Education established under section 12.
            ``(3) Covered school.--The term `covered school' means an 
        institution of higher education that--
                    ``(A) maintains an engineering program that meets 
                the specific program criteria, established by the 
                member societies of ABET, Inc., for petroleum, mining, 
                or mineral engineering; and
                    ``(B) is accredited as of the date of enactment of 
                the American Affordable Fuels Act of 2008 by ABET, Inc.
            ``(4) Department.--The term `Department' means the 
        Department of the Interior.
            ``(5) Institution of higher education.--The term 
        `institution of higher education' has the meaning given the 
        term in section 101(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1001(a)).
            ``(6) Office.--The term `Office' means the Office of 
        Petroleum and Mining Schools established under section 10(b).
            ``(7) Secretary.--The term `Secretary' means the Secretary 
        of the Interior.

``SEC. 3. PROVISION OF FUNDS TO COVERED SCHOOLS.

    ``(a) In General.--Subject to subsections (b) and (c), the 
Secretary shall provide funds to covered schools to assist the covered 
schools to maintain programs in petroleum, mining, and mineral 
engineering education and research.
    ``(b) Use of Funds.--Funds made available under this section may 
only be used to carry out programs described in subsection (a).
    ``(c) Funding.--The Secretary shall use not less than 25 percent of 
the amount of funds provided each fiscal year under section 222(d) of 
the American Affordable Fuels Act of 2008 to carry out this section.

``SEC. 4. MAINTAINING AND RESTORING COVERED SCHOOL PROGRAMS.

    ``(a) In General.--Subject to subsections (b) through (i), the 
Secretary shall provide funds to covered schools to assist the covered 
schools to maintain programs in petroleum, mining, and mineral 
engineering education and research.
    ``(b) Use of Funds.--Funds made available under this section may 
only be used to carry out programs described in subsection (a).
    ``(c) Enhancement of Training of Engineers.--Each covered school 
that receives funds under this section shall use the funds to provide 
for and enhance the training of undergraduate and graduate petroleum, 
mining, and mineral engineers through research, investigations, 
demonstrations, and experiments in a manner that enhances undergraduate 
education.
    ``(d) Duration and Expansion of Program.--Each covered school that 
receives funds under this section shall--
            ``(1) use the funds to maintain the program for which the 
        funds are provided for at least 10 years after the date of the 
        first receipt of the funds; and
            ``(2) take steps described in the application of the 
        covered school for funding to increase the number of 
        undergraduate students enrolled in and completing the programs 
        of study in petroleum, mining, and mineral engineering.
    ``(e) Research, Investigation, Demonstration, Experimentation, and 
Training.--
            ``(1) In general.--The research, investigation, 
        demonstration, experimentation, and training authorized by this 
        section may include--
                    ``(A) development and production of conventional 
                and nonconventional fuel resources;
                    ``(B) the production of metallic and nonmetallic 
                mineral resources, including industrial mineral 
                resources; and
                    ``(C) the production of stone, sand, and gravel.
            ``(2) Undergraduate students.--In each case described in 
        paragraph (1), the work carried out with funds made available 
        under this Act shall include a significant opportunity for 
        participation by undergraduate students.
    ``(f) Research for Energy and Mineral Resource Development and 
Production.--Research funded under this Act for energy and mineral 
resource development and production may include--
            ``(1) studies of petroleum, mining, and mineral extraction 
        and immediately related beneficiation technology;
            ``(2) mineral economics, reclamation technology, and 
        practices for active operations;
            ``(3) the development of remining systems and technologies 
        to facilitate reclamation that fosters the ultimate recovery of 
        resources at abandoned petroleum, mining, and aggregate 
        production sites; and
            ``(4) research on ways to extract petroleum and mineral 
        resources that reduce the environmental impact of those 
        activities.
    ``(g) Grants for Science and Engineering Studies and Research.--
            ``(1) Basic science and engineering.--Grants for basic 
        science and engineering studies and research under this section 
        shall not require additional participation by funding partners.
            ``(2) Applied science and engineering.--Grants for studies 
        to demonstrate the proof of concept for science and engineering 
        or the demonstration of feasibility and implementation--
                    ``(A) shall include participation by industry; and
                    ``(B) may include funding from other Federal 
                agencies.
    ``(h) Use of Funds for Land, Buildings, and Equipment.--
            ``(1) In general.--No funds made available under this 
        section shall be used for--
                    ``(A) the acquisition by purchase or lease of any 
                land or interests in land; or
                    ``(B) the rental, purchase, construction, 
                preservation, or repair of any building.
            ``(2) Existing laboratories or equipment.--
                    ``(A) In general.--Funding made available under 
                this section may be used with the express approval of 
                the Secretary for proposals that will provide for 
                maintaining or upgrading of existing laboratories and 
                laboratory equipment.
                    ``(B) Maintenance.--Funding for maintenance under 
                subparagraph (A) shall not be used for the overhead 
                expenses of a covered school.
            ``(3) Oil and gas drilling rigs.--
                    ``(A) In general.--Funding made available under 
                this Act may be used for maintaining and upgrading 
                mines and oil and gas drilling rig owned by a covered 
                school that are used for undergraduate and graduate 
                training and worker safety training.
                    ``(B) Eligibility.--To be eligible to use funding 
                made available under this Act to maintain or upgrade a 
                mine or oil or gas drilling rigs, a covered school 
                shall demonstrate to the Secretary that the rig has 
                been--
                            ``(i) owned by the covered school during 
                        the 5-year period ending on the date of 
                        enactment of the American Affordable Fuels Act 
                        of 2008; and
                            ``(ii) actively used for instructional or 
                        training purposes during that period.
            ``(4) Overhead expenses.--Of the amount of funding made 
        available under this section for research, investigation, 
        demonstration, experimentation, or training, a covered school 
        shall not use for overhead expenses more than a percentage or 
        amount determined by the Secretary, which shall not exceed 10 
        percent of the amount of the funding.
    ``(i) Funding.--The Secretary shall use not less than 25 percent of 
the amount of funds provided each fiscal year under section 222(d) of 
the American Affordable Fuels Act of 2008 to carry out this section.

``SEC. 5. FORMER AND NEW PETROLEUM AND MINING ENGINEERING PROGRAMS.

    ``(a) In General.--An institution of higher education that formerly 
met the requirements of a covered school immediately before the date of 
enactment of the American Affordable Fuels Act of 2008, or that seeks 
to establish a new program described in section 4(b), shall be eligible 
for funding under this Act only if--
            ``(1) the institution of higher education --
                    ``(A) establishes a petroleum, mining, or mineral 
                engineering program that meets specific program 
                criteria and is accredited by ABET, Inc., with 
                particular consideration awarded to establishing 
                programs and minority-serving institutions;
                    ``(B) agrees to the conditions described in section 
                4; and
                    ``(C) agrees to maintain the accredited program for 
                at least 10 years after the date of the first receipt 
                of funds under this Act; and
            ``(2) the Secretary determines that the program will 
        strengthen and increase the number of nationally available, 
        well-qualified faculty members in petroleum, mining, and 
        mineral engineering.
    ``(b) Consultation With Committee.--The Secretary shall seek the 
advice of the Committee in determining the criteria used to carry out 
this section.

``SEC. 6. FUNDING OF CONSORTIA OF HISTORIC AND EXISTING SCHOOLS.

    ``The Secretary may make funds available under this Act to 
consortia of covered schools and institutions of higher education 
described in section 5 (including consortia that include institutions 
of higher education that are ineligible for funds under this Act, if 
those institutions of higher education, respectively, have skills, 
programs, or facilities specifically identified as needed by the 
consortia) to meet the necessary expenses for purposes of--
            ``(1) specific energy and mineral research projects of 
        broad application that could not otherwise be undertaken, 
        including the expenses of planning and coordinating regional 
        petroleum, geothermal, mining, and mineral engineering or 
        beneficiation projects by 2 or more covered schools; and
            ``(2) research into any aspects of petroleum, geothermal, 
        mining, or mineral engineering or beneficiation problems, 
        including exploration, that are related to the mission of the 
        Department.

``SEC. 7. SUPPORT FOR SCHOOLS WITH ENERGY AND MINERAL RESOURCE PROGRAMS 
              IN PETROLEUM AND MINERAL EXPLORATION GEOLOGY, PETROLEUM 
              GEOPHYSICS, OR MINING GEOPHYSICS.

    ``(a) In General.--The Secretary may use not more than 12 percent 
of the amount of funds provided each fiscal year under section 222(d) 
of the American Affordable Fuels Act of 2008 to provide assistance to 
institutions of higher education that are not covered schools, with 
particular consideration awarded to minority-serving institutions.
    ``(b) Eligibility.--The Secretary shall determine the eligibility 
of a college, university, or educational institution to receive funding 
under this section using criteria that include--
            ``(1) the presence of a substantial program of 
        undergraduate and graduate geoscience instruction and research 
        in 1 or more of the fields of petroleum geology, geothermal 
        geology, mineral exploration geology, economic geology, 
        industrial minerals geology, mining geology, petroleum 
        geophysics, mining geophysics, geological engineering, or 
        geophysical engineering, with a demonstrated history of 
        achievement;
            ``(2) evidence of institutional commitment for the purposes 
        of this Act that includes a significant opportunity for 
        participation by undergraduate students in research;
            ``(3) evidence that the institution of higher education has 
        or can obtain significant industrial cooperation in activities 
        within the scope of this Act;
            ``(4) an agreement by the institution of higher education 
        to maintain the programs for which the funding is sought for at 
        least the 10-year period beginning on the date the institution 
        of higher education first receives the funds; and
            ``(5) requiring that funding under this section shall be 
        for the purposes and subject to the conditions described in 
        section 4.
    ``(c) Consultation With Committee.--The Secretary shall seek the 
advice of the Committee in determining the criteria used to carry out 
this section.

``SEC. 8. DESIGNATION OF FUNDS FOR SCHOLARSHIPS AND FELLOWSHIPS.

    ``(a) In General.--The Secretary may use 10 percent of the amount 
of funds provided each fiscal year under section 222(d) of the American 
Affordable Fuels Act of 2008 to provide merit-based scholarships for 
undergraduate education, graduate fellowships, and postdoctoral 
fellowships.
    ``(b) Eligibility for Obtaining Scholarship or Fellowship.--To be 
eligible to obtain a scholarship or a graduate fellowship under this 
section, an individual student shall--
            ``(1) be a citizen or lawful permanent resident of the 
        United States; and
            ``(2) agree in writing to complete a course of studies and 
        receive a degree in petroleum, mining, mineral engineering, 
        petroleum geology, geothermal geology, mining and economic 
        geology, petroleum and mining geophysics, or mineral economics.
    ``(c) Eligibility for Retaining Scholarship or Fellowship.--
            ``(1) In general.--To be eligible to retain a scholarship 
        or a graduate fellowship under this section, an individual 
        student shall--
                    ``(A) continue in 1 of the course of studies 
                described in subsection (b)(2);
                    ``(B) remain in good academic standing, as 
                determined by the institution of higher education; and
                    ``(C) allow for the reinstatement of the 
                scholarship or graduate fellowship by the Secretary, on 
                the recommendation of the institution of higher 
                education.
            ``(2) Recovery.--The regulations promulgated to carry out 
        this section may provide for recovery of funds from an 
        individual who fails to complete any of the courses of study 
        described in subsection (b)(2) after notice that the completion 
        is a requirement of the receipt of funding under this section.
    ``(d) Grants.--
            ``(1) In general.--To carry out this section, the Secretary 
        shall award grants to covered schools and other institutions of 
        higher education that are eligible to receive funding under 
        section 4, 5, or 7.
            ``(2) Administration.--A covered school or other 
        institution of higher education shall--
                    ``(A) be responsible for enforcing the requirements 
                of this section for scholarship or fellowship students; 
                and
                    ``(B) return to the Secretary any funds recovered 
                from an individual under subsection (c)(2).
            ``(3) Application for grants.--An institution of higher 
        education seeking funds under this section shall describe in 
        the application of the institution of higher education to the 
        Secretary for funding--
                    ``(A) the number of students that would be awarded 
                scholarships or fellowships if the application is 
                approved;
                    ``(B) how the students would be selected; and
                    ``(C) how this section will be enforced.

``SEC. 9. FUNDING CRITERIA FOR INSTITUTIONS.

    ``(a) Contents of Applications.--Each application to the Secretary 
for funds for a project under this Act shall describe--
            ``(1) the nature of the project to be undertaken;
            ``(2) the period during which the project will be carried 
        out;
            ``(3) the qualifications of the personnel who will direct 
        and conduct the project;
            ``(4) the estimated costs of the project;
            ``(5) the importance of the project to the United States, 
        region, or States concerned;
            ``(6) the relationship to other known related research 
        projects being carried out;
            ``(7) the extent to which the project will maximize the 
        opportunity for the training of undergraduate petroleum, 
        mining, and mineral engineers, geologists, and geophysicists; 
        and
            ``(8) the extent of participation by nongovernmental 
        sources in the project.
    ``(b) Application Requirement.--
            ``(1) In general.--No funds shall be made available under 
        this Act unless the funds are provided pursuant to an 
        application approved by the Secretary.
            ``(2) Basis for availability.--All funds for a project 
        under this Act shall be made available on the basis of--
                    ``(A) the merit of the application;
                    ``(B) the need for the knowledge that the project 
                is expected to produce when completed; and
                    ``(C) the opportunity the project provides for the 
                undergraduate training of individuals as petroleum, 
                mining, and mineral engineers, geologists, and 
                geophysicists.
            ``(3) Competitive review.--The Secretary may use 
        competitive review by nongovernmental experts in relevant 
        fields to determine which applications to approve, to the 
        extent practicable.
    ``(c) Payment of Funds.--
            ``(1) In general.--Funds made available under this Act 
        shall be paid--
                    ``(A) at such times and in such amounts during each 
                fiscal year as is determined by the Secretary; and
                    ``(B) on vouchers approved by the Secretary.
            ``(2) Duties of institutions of higher education.--Each 
        institution of higher education that receives funds under this 
        Act shall--
                    ``(A) establish a plan to provide for the training 
                of individuals as petroleum, mining, and mineral 
                engineers, geologists, and geophysicists under a 
                curriculum appropriate to the field of mineral 
                resources and mineral engineering and related fields;
                    ``(B) establish policies and procedures that ensure 
                that Federal funds made available under this Act for 
                any fiscal year will supplement and, to the extent 
                practicable, increase the level of funds that would, in 
                the absence of the Federal funds, be made available for 
                purposes of this Act, and in no case supplant the 
                funds; and
                    ``(C) have an officer appointed by the governing 
                authority of the institution of higher education who 
                shall--
                            ``(i) receive and account for all funds 
                        paid under this Act; and
                            ``(ii) make an annual report to the 
                        Secretary on or before the first day of 
                        September of each year, that contains--
                                    ``(I) a description of work 
                                accomplished and the status of projects 
                                underway;
                                    ``(II) a detailed statement of the 
                                amounts received under this Act during 
                                the preceding fiscal year; and
                                    ``(III) a description of 
                                disbursements under this Act on 
                                schedules prescribed by the Secretary.
    ``(d) Misuse of Funds.--If any of the funds received by the 
authorized receiving officer of a program under this Act are found by 
the Secretary to have been improperly diminished, lost, or misapplied, 
the Secretary shall recover the funds.
    ``(e) Cooperative Programs.--Institutions of higher education 
receiving funds under this Act are authorized and encouraged to plan 
and conduct programs under this Act in cooperation with each other and 
with other agencies, entities, and individuals.

``SEC. 10. DUTIES OF SECRETARY.

    ``(a) In General.--The Secretary, acting through the Assistant 
Secretary for Land and Minerals Management, shall--
            ``(1) administer this Act; and
            ``(2) not later than 1 year after the date of enactment of 
        the American Affordable Fuels Act of 2008, promulgate such 
        rules and regulations as are necessary to carry out this Act.
    ``(b) Office of Petroleum and Mining Schools.--
            ``(1) Establishment.--There is established in the 
        Department, under the supervision of the Assistant Secretary 
        for Land and Minerals Management, an office to be known as the 
        Office of Petroleum and Mining Schools (hereafter in this Act 
        referred to as the `Office') to administer this Act.
            ``(2) Director.--
                    ``(A) In general.--The Office shall be headed by a 
                Director.
                    ``(B) Qualifications.--The Director shall be--
                            ``(i) a member of the Senior Executive 
                        Service;
                            ``(ii) allocated from among the existing 
                        Senior Executive Service positions at the 
                        Department; and
                            ``(iii) a career reserved position (as 
                        defined in section 3132(a)(8) of title 5, 
                        United States Code).
            ``(3) Other officers and employees.--
                    ``(A) In general.--The Director may--
                            ``(i) appoint a Deputy Director; and
                            ``(ii) employ such officers and employees 
                        as may be necessary to enable the Office to 
                        carry out the functions of the Office.
                    ``(B) Appointments.--The appointments shall be--
                            ``(i) made from existing positions at the 
                        Department; and
                            ``(ii) subject to the provisions of title 
                        5, United States Code, governing appointments 
                        in the competitive service.
                    ``(C) Compensation.--The positions shall be paid in 
                accordance with the provisions of chapter 51 and 
                subchapter III of chapter 53 of title 5, United States 
                Code, relating to classification and General Schedule 
                pay rates.
            ``(4) Duties.--The Director shall assist and advise the 
        Secretary and the Committee by--
                    ``(A) providing professional and administrative 
                staff support for the Committee, including 
                recordkeeping and maintaining minutes of all Committee 
                and subcommittee meetings;
                    ``(B) coordinating the activities of the Committee 
                with Federal agencies and departments, and institutions 
                of higher education to which funds are provided under 
                this Act;
                    ``(C) maintaining accurate records of funds 
                disbursed for all scholarship and fellowship grants, 
                research grants, and grants for career technical 
                education purposes;
                    ``(D) preparing any regulations required to 
                implement this Act;
                    ``(E) conducting site visits at institutions of 
                higher education receiving funding under this Act; and
                    ``(F) serving as a central repository for reports 
                and a clearinghouse for public information on research 
                funded by this Act.
            ``(5) Meetings.--The Director or an employee of the Office 
        shall be present at each meeting of the Committee or a 
        subcommittee of the Committee.
            ``(6) Contracts.--The Director may contract with public or 
        private agencies, institutions, organizations, and individuals 
        without regard to subsections (a) and (b) of section 3324 of 
        title 31, United States Code, and section 3709 of the Revised 
        Statutes (41 U.S.C. 5), in carrying out the functions of the 
        Director.
            ``(7) Compliance.--As needed, the Director shall ascertain 
        whether the requirements of this Act have been met by 
        institutions of higher education and individuals.
    ``(c) Assistance.--The Secretary, acting through the Office, 
shall--
            ``(1) furnish such advice and assistance as will best 
        promote the purposes of this Act;
            ``(2) participate in coordinating research, investigations, 
        demonstrations, and experiments initiated under this Act;
            ``(3) indicate to institutions of higher education 
        receiving funds under this Act such lines of inquiry as the 
        Secretary determines important; and
            ``(4) encourage and assist in the establishment and 
        maintenance of cooperation between institutions of higher 
        education, other research organizations, the Department, and 
        other Federal agencies.
    ``(d) Conflicts of Interest.--The Secretary shall establish 
procedures--
            ``(1) to ensure that each employee and contractor of the 
        Office and each member of the Committee shall disclose to the 
        Secretary any financial interests in or financial relationships 
        with institutions of higher education or individuals receiving 
        funds, scholarships or fellowships under this Act;
            ``(2) to require any employee, contractor, or member of the 
        Committee with a financial relationship disclosed under 
        paragraph (1) to recuse the employee, contractor, or member of 
        the Committee from--
                    ``(A) any recommendation or decision regarding the 
                awarding of funds, scholarships, or fellowships; or
                    ``(B) any review, report, analysis, or 
                investigation regarding compliance with this Act by an 
                institution of higher education or any individual.
    ``(e) Compliance.--On or before the first day of July of each year 
beginning after the date of enactment of the American Affordable Fuels 
Act of 2008, an institution of higher education receiving funds under 
this Act shall--
            ``(1) certify compliance with this Act; and
            ``(2) on request of the Director of the Office, provide 
        documentation of compliance with this Act.
    ``(f) Progress Towards Completion of Studies.--An individual 
granted a scholarship or fellowship with funds provided under this Act 
shall through the respective institution of higher education of the 
individual, advise the Director of the Office of progress towards 
completion of the course of studies and on the awarding of the 
applicable degree within 30 days after the award.
    ``(g) Veterans Preferences.--The regulations required to carry out 
this Act shall include a preference for veterans and service members 
who have received or will receive either the Afghanistan Campaign Medal 
or the Iraq Campaign Medal as authorized by Public Law 108-234 (10 
U.S.C. 1121 note), and Executive Order No. 13363.

``SEC. 11. COORDINATION.

    ``(a) Relationship Between Institutions of Higher Education, 
States, and Federal Government.--Nothing in this Act--
            ``(1) impairs or modifies the legal relationship existing 
        between any of the institutions of higher education under whose 
        direction a program is established with funds provided under 
        this Act and the government of the State in which the 
        institution of higher education is located; or
            ``(2) authorizes Federal control or direction of education 
        at any institution of higher education.
    ``(b) Other Federal Agencies.--
            ``(1) Purposes.--The purposes of this Act are--
                    ``(A) to enhance the petroleum, mining, and mineral 
                engineering education programs of the United States;
                    ``(B) to enhance educational programs in petroleum 
                and mining exploration; and
                    ``(C) to increase the number of individuals 
                enrolled in and completing those programs.
            ``(2) Cooperation.--To achieve those purposes, each Federal 
        agency concerned shall provide to the Secretary and the 
        Committee advice and cooperation with the identification, 
        exploration, and development of energy and mineral resources.
    ``(c) Relationship to Other Federal Agencies.--Nothing in this 
Act--
            ``(1) provides the Secretary with any authority over mining 
        and mineral resources research conducted by any agency of the 
        Federal Government; or
            ``(2) repeals or diminishes existing authorities or 
        responsibilities of any agency of the Federal Government to 
        plan and conduct, contract for, or assist in research in the 
        area of responsibility and concern of the agency with regard to 
        mining and mineral resources.
    ``(d) Reports and Results of Institutions of Higher Education.--
            ``(1) Reports.--
                    ``(A) In general.--The institutions of higher 
                education receiving funding under this Act shall make 
                detailed reports to the Office on projects completed, 
                in progress, or planned with funds provided under this 
                Act.
                    ``(B) Availability.--All reports under subparagraph 
                (A) shall be available to the public on not less than 
                an annual basis through the Office.
            ``(2) Results.--All uses, products, processes, and other 
        developments resulting from any research, demonstration, or 
        experiment funded in whole or in part under this Act shall be 
        made available promptly to the general public, subject to 
        exception or limitation, if any, as the Secretary may find 
        necessary in the interest of national security, and subject to 
        the applicable Federal law governing patents.

``SEC. 12. COMMITTEE ON PETROLEUM, MINING, AND MINERAL ENGINEERING AND 
              ENERGY AND MINERAL RESOURCE EDUCATION.

    ``(a) Establishment.--The Secretary shall establish a Committee on 
Petroleum, Mining, and Mineral Engineering and Energy and Mineral 
Resource Education.
    ``(b) Composition.--
            ``(1) In general.--The Committee shall be composed of--
                    ``(A) the Assistant Secretary of the Interior 
                responsible for land and minerals management, who shall 
                serve as Chairperson of the Committee; and
                    ``(B) not more than 16 other individuals appointed 
                by the Secretary who are knowledgeable in the fields of 
                mining and mineral resources research, including--
                            ``(i) 2 university administrators, at least 
                        1 of whom shall be from a covered school;
                            ``(ii) a community, technical, or tribal 
                        college administrator;
                            ``(iii) a career technical education 
                        educator;
                            ``(iv) 6 representatives equally 
                        distributed of the petroleum, mining, and 
                        aggregate industries;
                            ``(v) an actively employed miner;
                            ``(vi) an actively employed oilfield 
                        worker;
                            ``(vii) a representative of the Interstate 
                        Oil and Gas Compact Commission;
                            ``(viii) a representative from the 
                        Interstate Mining Compact Commission;
                            ``(ix) a representative from the Western 
                        Governors' Association;
                            ``(x) a representative of State geologists; 
                        and
                            ``(xi) a representative of a State mining 
                        and reclamation agency.
            ``(2) Consultation.--In making appointments under paragraph 
        (1)(B), the Secretary shall consult with interested groups.
            ``(3) Technical advisors.--
                    ``(A) In general.--The Assistant Secretary of the 
                Interior responsible for land and minerals management 
                may have present during meetings of the Committee 
                representatives of Federal agencies with responsibility 
                for--
                            ``(i) energy and minerals resources 
                        management;
                            ``(ii) energy and mineral resource 
                        investigations;
                            ``(iii) energy and mineral commodity 
                        information;
                            ``(iv) international trade in energy and 
                        mineral commodities;
                            ``(v) mining safety regulation and mine 
                        safety research; and
                            ``(vi) research into the development, 
                        production, and use of energy and mineral 
                        commodities.
                    ``(B) Duties.--The representatives described in 
                subparagraph (A) shall--
                            ``(i) serve as technical advisors to the 
                        Committee; and
                            ``(ii) have no voting responsibilities on 
                        the Committee.
    ``(c) Duties.--
            ``(1) In general.--The Committee shall consult with, and 
        make recommendations to, the Secretary on policy matters 
        related to carrying out this Act.
            ``(2) Secretary.--The Secretary shall consult with and 
        carefully consider recommendations of the Committee on matters 
        described in paragraph (1).
    ``(d) Compensation.--Each Committee member, other than an officer 
or employee of the Federal Government, or a State or local government, 
shall be, for each day (including traveltime) during which the member 
is performing Committee business--
            ``(1) paid at a rate fixed by the Secretary but not in 
        excess of the daily equivalent of the maximum rate of pay for 
        level IV of the Executive Schedule under section 5136 of title 
        5, United States Code; and
            ``(2) fully reimbursed for travel, subsistence, and related 
        expenses.
    ``(e) Vice Chairperson; Subcommittees.--
            ``(1) Vice chairperson.--
                    ``(A) In general.--The Committee shall elect a Vice 
                Chairperson from among the members appointed under 
                subsection (b)(1)(B).
                    ``(B) Duties.--The Vice Chairperson shall perform 
                such duties as are determined to be appropriate by the 
                Committee, except that the Chairperson of the Committee 
                shall personally preside at each meetings of the full 
                Committee.
            ``(2) Subcommittees.--The Committee may establish such 
        subcommittees as the Committee determines appropriate.
    ``(f) Fiscal Resources Plan.--
            ``(1) In general.--Following completion of the report 
        required by section 385 of the Energy Policy Act of 2005 
        (Public Law 109-58; 119 Stat. 744), the Committee shall--
                    ``(A) consider the recommendations of the report 
                with respect to ongoing efforts by--
                            ``(i) institutions of higher education 
                        receiving funding under this Act;
                            ``(ii) the Federal Government and State 
                        governments; and
                            ``(iii) the private sector; and
                    ``(B) formulate and recommend to the Secretary a 
                national plan for a program using the fiscal resources 
                provided under this Act.
            ``(2) Approval.--The Committee shall submit the plan to the 
        Secretary for approval.
            ``(3) Guidance.--On approval, the Secretary and the 
        Committee shall use the plan as a guide in carrying out this 
        Act.
    ``(g) Administration.--Section 10 of the Federal Advisory Committee 
Act (5 U.S.C. App.) shall not apply to the Committee.

``SEC. 13. CAREER TECHNICAL EDUCATION.

    ``(a) In General.--The Secretary may use up to 25 percent of the 
amount of funds provided each fiscal year under section 222(d) of the 
American Affordable Fuels Act of 2008 to provide funds to--
            ``(1) eligible institutions of higher education, other than 
        institutions of higher education described in sections 4 
        through 7; and
            ``(2) jointly sponsored apprenticeship and training 
        programs that are authorized by Federal law.
    ``(b) Eligibility.--The Secretary shall determine the eligibility 
of an institution of higher education to receive funding under this 
section using criteria that include--
            ``(1) the presence of a State-approved program in mining 
        engineering technology, petroleum engineering technology, 
        industrial engineering technology, or industrial technology 
        that--
                    ``(A) is focused on technology and the use of 
                technology in energy and mineral production and related 
                maintenance, operational safety, or energy 
                infrastructure protection and security;
                    ``(B) prepares students for advanced or supervisory 
                roles in the mining or petroleum industry; and
                    ``(C) grants an associate's degree or a 
                baccalaureate degree in 1 of the subjects described in 
                subparagraph (A);
            ``(2) the presence of a program, including a secondary 
        school vocational education program or career academy, that 
        provides training for individuals entering the petroleum, coal 
        mining, or mineral mining industries; or
            ``(3) the presence of a State-approved program of career 
        technical education at a secondary school, offered 
        cooperatively with a community college in 1 of the industrial 
        sectors of--
                    ``(A) agriculture, forestry, or fisheries;
                    ``(B) utilities;
                    ``(C) construction;
                    ``(D) manufacturing; and
                    ``(E) transportation and warehousing.
    ``(c) Institutional Commitment.--To be eligible to receive funds 
under this section, an institution of higher education shall provide to 
the Secretary--
            ``(1) evidence of an institutional commitment for the 
        purposes of career technical education; and
            ``(2) evidence that the institution of higher education has 
        received or will receive industry cooperation in the form of 
        equipment, employee time, or donations of funds to support the 
        activities that are within the scope of this section.
    ``(d) Duration.--To be eligible to receive funds under this 
section, an institution of higher education shall agree to maintain the 
programs for which the funding is sought for a period of at least 10 
years beginning on the date the school or institution receives the 
funds, unless the Secretary finds that a shorter period of time is 
appropriate for the local labor market or is required by State 
authorities.
    ``(e) Other Funds.--
            ``(1) In general.--Subject to paragraph (2), an institution 
        of higher education that receives funds under this section may 
        combine those funds with State funds, and other Federal funds 
        (to the extent permitted by law), to carry out programs 
        described in this section.
            ``(2) Report.--If an institution of higher education 
        combines funds in accordance with paragraph (1), the 
        institution of higher education shall report to the Secretary 
        not less than annually on the combined use of the funds.
    ``(f) Consultation on Criteria.--The Secretary shall seek the 
advice of the Committee in determining the criteria used to carry out 
this section.

``SEC. 14. DEPARTMENT WORKFORCE ENHANCEMENT.

    ``(a) Definitions.--In this section:
            ``(1) Alaska native-serving institution.--The term `Alaska 
        Native-serving institution' has the meaning given the term in 
        section 317 of the Higher Education Act of 1965 (20 U.S.C. 
        1059d).
            ``(2) Hispanic-serving institution.--The term `Hispanic-
        serving institution' has the meaning given the term in section 
        502(a) of the Higher Education Act of 1965 (20 U.S.C. 
        1101a(a)).
            ``(3) Historically black college or university.--The term 
        `historically Black college or university' has the meaning 
        given the term `part B institution' in section 322 of the 
        Higher Education Act of 1965 (20 U.S.C. 1061).
            ``(4) Insular area school.--The term `insular area school' 
        means an institution of higher education in--
                    ``(A) Guam;
                    ``(B) American Samoa;
                    ``(C) the Commonwealth of the Northern Mariana 
                Islands;
                    ``(D) the United States Virgin Islands; or
                    ``(E) any other territory or possession of the 
                United States.
            ``(5) Minority-serving institution.--The term `minority-
        serving institution' means--
                    ``(A) a Hispanic-serving institution;
                    ``(B) a historically Black college or university;
                    ``(C) an Alaska Native-serving institution;
                    ``(D) a tribal college or university; and
                    ``(E) an insular area school.
            ``(6) Tribal college or university.--The term `tribal 
        college or university' has the meaning given the term `Tribal 
        College or University' in section 316(b) of the Higher 
        Education Act of 1965 (20 U.S.C. 1059c(b)).
    ``(b) Physical Science, Engineering, and Technology Scholarship 
Program.--
            ``(1) In general.--From the amount of funds made available 
        for each fiscal year to carry out this section, the Secretary 
        shall use 30 percent of the amount to provide financial 
        assistance for education in physical sciences, engineering, and 
        engineering or industrial technology and disciplines that, as 
        determined by the Secretary, are critical to the functions of 
        the Department and are needed in the Department workforce.
            ``(2) Eligibility.--The Secretary may award a scholarship 
        under this subsection to an individual who--
                    ``(A) is a citizen of the United States;
                    ``(B) is pursuing an undergraduate or advanced 
                degree in a critical skill or discipline described in 
                paragraph (1) at an institution of higher education; 
                and
                    ``(C) enters into a service agreement with the 
                Secretary as described in subsection (e).
            ``(3) Amount.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                amount of the financial assistance provided under a 
                scholarship awarded to an individual under this 
                subsection shall be the amount determined by the 
                Secretary as being necessary to pay all educational 
                expenses incurred by the individual, including tuition, 
                fees, cost of books, laboratory expenses, and expenses 
                of room and board.
                    ``(B) Normal educational expenses.--The expenses 
                covered by subparagraph (A) shall be limited to 
                educational expenses that are normally incurred by 
                students at the institution of higher education 
                involved.
    ``(c) Scholarship Program for Students Attending Minority-Serving 
Institutions.--
            ``(1) In general.--From the amount of funds made available 
        for each fiscal year to carry out this section, the Secretary 
        shall use 35 percent of the amount to award scholarships in 
        accordance with this section to eligible individuals.
            ``(2) Eligibility.--The Secretary may award a scholarship 
        under this subsection to an individual who--
                    ``(A) is enrolled in a minority-serving 
                institution;
                    ``(B) is a citizen or national of the United 
                States;
                    ``(C) is pursuing an undergraduate or advanced 
                degree in agriculture, engineering, engineering or 
                industrial technology, or physical sciences, or other 
                discipline that is found by the Secretary to be 
                critical to the functions of the Department and are 
                needed in the Department workforce; and
                    ``(D) enters into a service agreement with the 
                Secretary as described in subsection (e).
            ``(3) Amount.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                amount of the financial assistance provided under a 
                scholarship awarded to an individual under this 
                subsection shall be the amount determined by the 
                Secretary as being necessary to pay all educational 
                expenses incurred by the individual, including tuition, 
                fees, cost of books, laboratory expenses, and expenses 
                of room and board.
                    ``(B) Normal educational expenses.--The expenses 
                covered by subparagraph (A) shall be limited to 
                educational expenses that are normally incurred by 
                students at the institution of higher education 
                involved.
    ``(d) Education Partnerships With Minority-Serving Institutions.--
            ``(1) In general.--The Secretary shall require the director 
        of each bureau and office of the Department to foster the 
        participation of minority-serving institutions in any 
        regulatory activity, land management activity, science 
        activity, engineering or industrial technology activity, or 
        engineering activity carried out by the Department.
            ``(2) Activities.--From the amount of funds made available 
        for each fiscal year to carry out this section, the Secretary 
        shall use 35 percent of the amount to support activities at 
        minority-serving institutions by--
                    ``(A) funding faculty and students in those 
                minority-serving institutions in collaborative research 
                projects that are directly related to the mission of 
                the Department;
                    ``(B) allowing equipment transfer to minority-
                serving institutions as a part of a collaborative 
                research program directly related to the mission of the 
                Department;
                    ``(C) allowing faculty and students at those 
                minority-serving institutions to participate in 
                training activities of the Department;
                    ``(D) funding paid internships in facilities of the 
                Department for students at minority-serving 
                institutions; and
                    ``(E) assigning personnel of the Department to 
                positions located at minority-serving institutions to 
                serve as mentors to students interested in a science, 
                technology, or engineering disciplines related to the 
                mission of the Department.
    ``(e) Service Agreement for Recipients of Assistance.--
            ``(1) In general.--To receive financial assistance under 
        subsection (b) or (c)--
                    ``(A) in the case of an employee of the Department, 
                the employee shall enter into a written agreement to 
                continue in the employment of the Department for the 
                period of obligated service determined under paragraph 
                (2); and
                    ``(B) in the case of an individual who is not an 
                employee of the Department, the individual shall enter 
                into a written agreement to accept and continue 
                employment in the Department for the period of 
                obligated service determined under paragraph (2).
            ``(2) Period of obligated service.--
                    ``(A) In general.--For the purposes of this 
                section, the period of obligated service for a 
                recipient of a scholarship under this section shall be 
                the period determined by the Secretary as being 
                appropriate to obtain adequate service in exchange for 
                the financial assistance provided under the 
                scholarship.
                    ``(B) Minimum period.--The period of service 
                required of a recipient shall not be less than the 
                total period of pursuit of a degree that is covered by 
                the scholarship.
                    ``(C) Additional service.--The period of obligated 
                service shall be in addition to any other period for 
                which the recipient is obligated to serve in the civil 
                service of the United States.
            ``(3) Terms and conditions.--An agreement entered into 
        under this subsection by an individual pursuing an academic 
        degree shall include any terms and conditions that the 
        Secretary determines necessary to protect the interests of the 
        United States or otherwise appropriate for carrying out this 
        section.
    ``(f) Refund for Period of Unserved Obligated Service.--
            ``(1) In general.--An individual who voluntarily terminates 
        service before the end of the period of obligated service 
        required under an agreement entered into under subsection (e) 
        shall refund to the United States an amount determined by the 
        Secretary as being appropriate to obtain adequate service in 
        exchange for financial assistance.
            ``(2) Debt to united states.--An obligation to reimburse 
        the United States imposed under paragraph (1) shall be 
        considered a debt owed to the United States.
            ``(3) Waiver.--The Secretary may waive, in whole or in 
        part, a refund required under paragraph (1) if the Secretary 
        determines that recovery would be against equity and good 
        conscience or would be contrary to the best interests of the 
        United States.
            ``(4) Bankruptcy.--A discharge in bankruptcy under title 
        11, United States Code, that is entered less than 5 years after 
        the date of termination of an agreement under this section 
        shall not discharge the individual signing the agreement from a 
        debt arising under the agreement or this subsection.
    ``(g) Relationship to Other Programs.--The Secretary shall 
coordinate the provision of financial assistance under this section 
with the provision of financial assistance under this Act in order to 
maximize the benefits derived by the Department from this Act.
    ``(h) Annual Report.--
            ``(1) In general.--Not later than September 1 of each year, 
        the Secretary shall submit to Congress a report on the status 
        of the assistance program carried out under this section.
            ``(2) Contents.--The report shall describe the programs 
        within the Department that are designed to recruit and retain a 
        workforce on a short-term basis and on a long-term basis.
    ``(i) Funding.--The Secretary shall use 3 percent of the amount of 
funds provided each fiscal year under section 222(d) of the American 
Affordable Fuels Act of 2008 to carry out this section.''.
    (b) Funding for Energy Research.--
            (1) In general.--The Secretary of Energy shall use 20 
        percent of the amount of funds provided each fiscal year under 
        subsection (d) to carry a program (through the energy supply 
        research and development programs of the Department of Energy 
        and in consultation with the Office of Science of the 
        Department of Energy) to award grants to institutions of higher 
        education (as defined in section 101(a) of the Higher Education 
        Act of 1965 (20 U.S.C. 1001(a))) on the basis of competitive, 
        merit-based review, for the purpose of conducting research on 
        advanced energy technologies with the potential to transform 
        the energy systems of the United States--
                    (A) to reduce dependence on foreign energy 
                supplies;
                    (B) to reduce or eliminate emissions of greenhouse 
                gases;
                    (C) to reduce negative environmental effects 
                associated with energy production, storage, and use; 
                and
                    (D) to enhance the competitiveness of United States 
                energy technology exports.
            (2) Awards.--Awards made under this subsection may include 
        funding for--
                    (A) energy efficiency;
                    (B) renewable energy, including solar, wind, and 
                biofuels; and
                    (C) nuclear, hydrogen, and any other energy 
                research that could accomplish the purposes described 
                in paragraph (1).
            (3) Partnerships.--The Secretary may require or authorize 
        grantees under this subsection to partner with industry, but 
        only to the extent that such a requirement does not prevent 
        long-range, potentially innovative research from being funded 
        under this subsection.
            (4) Application.--An institution of higher education 
        seeking funding under this subsection shall submit to the 
        Secretary an application at such time, in such manner, and 
        containing such information as the Secretary may require.
    (c) Funding for Energy Scholarships.--
            (1) In general.--The Secretary of Energy shall use 5 
        percent of the amount of funds provided each fiscal year under 
        subsection (d) to carry a program (through the energy supply 
        research and development programs of the Department of Energy 
        and in consultation with the Office of Science of the 
        Department of Energy) to award grants to institutions of higher 
        education (as defined in section 101(a) of the Higher Education 
        Act of 1965 (20 U.S.C. 1001(a))) on the basis of competitive, 
        merit-based review, to grant graduate traineeships to post-
        doctorate students who are citizens of the United States and 
        who carry out research on advanced energy technologies to 
        accomplish a purpose described in subsection (b)(1).
            (2) Activities.--Awards made under this subsection may 
        include funding for--
                    (A) energy efficiency;
                    (B) renewable energy, including solar, wind, and 
                biofuels; and
                    (C) nuclear, hydrogen, and any other energy 
                research that would accomplish the purpose set forth in 
                subsection (b)(1) that is not eligible for funding 
                under section 8 of the Energy and Mineral Schools 
                Reinvestment Act.
            (3) Application.--An institution of higher education 
        seeking funding under this subsection shall submit to the 
        Secretary an application at such time, in such manner, and 
        containing such information as the Secretary may require.
    (d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section and the amendment made by this 
section $150,000,000 for fiscal year 2009 and each fiscal year 
thereafter.

SEC. 223. ONSHORE AND OFFSHORE MINERAL LEASE FEES.

    Except as otherwise provided in this Act and notwithstanding any 
other provision of law, the Secretary of the Interior may not charge 
fees applicable to bidding or actions for Federal onshore or offshore 
oil, gas, coal, geothermal, or other mineral lease (including 
transportation of any production from a lease) if the fees were not 
established in final regulations promulgated prior to the date of 
issuance of the lease.

SEC. 224. OCS REGIONAL HEADQUARTERS.

    (a) In General.--Not later than July 1, 2010, the Secretary of the 
Interior shall establish the headquarters for the Atlantic OCS Region, 
the headquarters for the Gulf of Mexico OCS Region, and the 
headquarters for the Pacific OCS Region within a State bordering the 
Atlantic OCS Region, a State bordering the Gulf of Mexico OCS Region, 
and a State bordering the Pacific OCS Region, respectively, from among 
the States bordering those Regions that petition by not later than 
January 1, 2010, for leasing, for oil and gas or natural gas, covering 
at least 40 percent of the area of the Adjacent Zone of the Region 
within 100 miles of the coastline of the State.
    (b) Administration.--In carrying out this section, the Secretary 
shall ensure that--
            (1) the Atlantic and Pacific OCS Regions headquarters are 
        located within 25 miles of the coastline;
            (2) each OCS regional headquarters of the Minerals 
        Management Service 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 the time of the 
        personnel in the 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; and
            (3) each OCS Region shall each be led by a Regional 
        Director who shall be an employee within the Senior Executive 
        Service.

SEC. 225. NATIONAL GEO FUND ACT OF 2008.

    (a) Short Title.--This section may be cited as the ``National Geo 
Fund Act of 2006''.
    (b) Purposes.--The purposes of this section are--
            (1) to provide for the management of geologic programs, 
        geologic mapping, geophysical and other seismic studies, and 
        seismic monitoring programs; and
            (2) to provide for the preservation and use of geologic and 
        geophysical data, geothermal and geopressure energy resource 
        management, unconventional energy resources management, and 
        renewable energy management associated with ocean wave, 
        current, and thermal resources.
    (c) Definitions.--In this section:
            (1) Coal-to-liquids front-end engineering and design; 
        feed.--The terms ``coal-to-liquids front-end engineering and 
        design'' and ``FEED'' mean expenditures necessary to engineer, 
        design, and obtain permits for a facility for a particular 
        geographic location that will use a process or technique to 
        produce liquid fuels from coal resources.
            (2) Low-rank coal water fuel.--The term ``low-rank coal 
        water fuel'' means a liquid fuel produced from hydrothermal 
        treatment of lignite and subbituminous coals.
            (3) In situ extraction methods.--
                    (A) In general.--The term ``in situ extraction 
                methods'' means recovery techniques that are--
                            (i) applied to the resources while the 
                        resources are still in the ground; and
                            (ii) in commercial use or advanced stages 
                        of development.
                    (B) Inclusions.--The term ``in situ extraction 
                methods'' includes--
                            (i) steam flooding;
                            (ii) steam-assisted gravity drainage 
                        (including combination with electric power 
                        generation if appropriate);
                            (iii) cyclic steam stimulation;
                            (iv) air injection; and
                            (v) chemical treatment.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.
            (5) State.--The term ``State'' means the agency of a State 
        designated by the Governor of the State or State law to perform 
        the functions and activities described in subsection (b).
            (6) Strategic unconventional resources.--The term 
        ``strategic unconventional resources'' means hydrocarbon 
        resources (including heavy oil, oil shale, tar sands, and coal 
        deposits) from which liquid fuels may be produced.
    (d) Strategic Unconventional Resources.--
            (1) In general.--The Secretary shall establish a program 
        for production of--
                    (A) fuels from strategic unconventional resources; 
                and
                    (B) oil and gas resources using carbon dioxide 
                enhanced recovery.
            (2) Program.--The program shall--
                    (A) focus initially on activities and domestic 
                resources that are most likely to result in significant 
                production in the near future; and
                    (B) include--
                            (i) work necessary to improve extraction 
                        techniques, including surface and in situ 
                        operations;
                            (ii) characterization and assessment of 
                        potential resources;
                            (iii) a sampling program;
                            (iv) appropriate laboratory and other 
                        analyses and testing; and
                            (v) assessment of methods for exploration 
                        and development of the strategic unconventional 
                        resources.
            (3) Pilot projects.--
                    (A) In general.--The program established under this 
                subsection shall include pilot projects for--
                            (i) the Maverick Basin heavy oil and tar 
                        sands formations of State of Texas, including 
                        the San Miguel deposits;
                            (ii) the Greater Green River Basin heavy 
                        oil, oil shale, tar sands, and coal deposits of 
                        the States of Colorado, Utah, and Wyoming;
                            (iii) the shale, tar sands, heavy oil, and 
                        coal deposits in the Alabama-Mississippi-
                        Tennessee region;
                            (iv) the shale, tar sands, heavy oil, and 
                        coal deposits in the Ohio River valley; and
                            (v) strategic unconventional resources in 
                        the State of California.
                    (B) Incentives.--
                            (i) In general.--The Secretary shall 
                        identify and report to Congress on feasible 
                        incentives to foster recovery of unconventional 
                        fuels by private industry within the United 
                        States.
                            (ii) Form.--The incentives may include--
                                    (I) long-term contracts for the 
                                purchase of unconventional fuels for 
                                defense purposes;
                                    (II) Federal grants and loan 
                                guarantees for necessary capital 
                                expenditures; and
                                    (III) favorable terms for the 
                                leasing of land of the Federal 
                                Government containing unconventional 
                                resources.
            (4) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $35,000,000 for 
        each of fiscal years 2009 through 2018, of which each pilot 
        project described in paragraph (3)(A) shall be allocated not 
        less than $4,000,000 for each fiscal year.
    (e) Support of Geothermal and Geopressure Oil and Gas Energy 
Production.--
            (1) In general.--The Secretary shall carry out a grant 
        program in support of geothermal and geopressure oil and gas 
        energy production.
            (2) Assessments.--The program shall include grants for a 
        total of not less than--
                    (A) 3 assessments of the use of innovative 
                geothermal techniques, such as organic rankine cycle 
                systems at marginal, unproductive, and productive oil 
                and gas wells; and
                    (B) 1 assessment of the use of innovative 
                geopressure techniques.
            (3) Awards.--The Secretary shall, to the maximum extent 
        practicable and in the public interest, make awards under this 
        subsection that--
                    (A) include not less than 5 oil or gas well sites 
                per project award;
                    (B) use a range of oil or gas well hot water source 
                temperatures from 150 to 300 degrees Fahrenheit;
                    (C) use existing or new oil or gas wells;
                    (D) cover a range of sizes from 175 kilowatts to 1 
                megawatt;
                    (E) are located at a range of sites, including 
                tribal land, Federal leased land, State land, or 
                privately-owned sites;
                    (F) can be replicated at a wide range of sites;
                    (G) facilitate identification of optimum techniques 
                among competing alternatives;
                    (H) include business commercialization plans that 
                have the potential for production of equipment at high 
                volumes and operation and support at a large number of 
                sites; and
                    (I) satisfy other criteria that the Secretary 
                determines are necessary to carry out the program.
            (4) Multiple elements.--The Secretary shall give preference 
        to assessments that address multiple elements described in 
        paragraph (3).
            (5) Grant awards.--
                    (A) In general.--Each grant award for assessment of 
                innovative geothermal or geopressure technology (such 
                as organic rankine cycle systems at oil and gas wells) 
                made by the Secretary under this subsection shall 
                include--
                            (i) necessary and appropriate site 
                        engineering studies;
                            (ii) a detailed economic assessment of site 
                        specific conditions;
                            (iii) appropriate feasibility studies to 
                        determine the ability for replication;
                            (iv) design or adaptation of existing 
                        technology for site specific circumstances or 
                        conditions;
                            (v) installation of equipment, service, and 
                        support; and
                            (vi) monitoring for a minimum of 1 year 
                        after the date of commissioning.
            (6) Competitive grant selection.--
                    (A) In general.--Not later than 180 days after the 
                date of enactment of this Act, the Secretary shall 
                conduct a national solicitation for applications for 
                grants under the program.
                    (B) Selection.--Grant recipients shall be selected 
                on a competitive basis based on criteria described in 
                paragraph (3).
            (7) Federal share.--
                    (A) In general.--The Federal share of the costs of 
                grants under this subsection shall be provided from 
                funds made available to carry out this section.
                    (B) Share.--The Federal share of the cost of a 
                project carried out with such a grant shall not exceed 
                50 percent of the cost.
            (8) New wells.--No funds made available under this 
        subsection may be used for the purposes of drilling new wells
            (9) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $5,000,000 for 
        each of fiscal years 2009 through 2018.
            (10) Geothermal resources coproduced with mineral.--Section 
        4 of the Geothermal Steam Act of 1970 (30 U.S.C. 1003) is 
        amended by adding at the end the following:
    ``(h) Geothermal Resources Coproduced With Minerals.--
            ``(1) In general.--Any person that holds a lease or who 
        operates a cooperative or unit plan under the Mineral Leasing 
        Act (30 U.S.C. 181 et seq.), in the absence of an existing 
        lease for geothermal resources under this Act, shall (on notice 
        to the Secretary) have the right to use any geothermal 
        resources coproduced with the minerals for which the lease was 
        issued during the operation of the lease or cooperative or unit 
        plan, for the generation of electricity to operate the lease.
            ``(2) Excess electricity.--Any electricity that is produced 
        in excess of that which is required to operate the lease and 
        that is sold for purposes outside of the boundary of the lease 
        shall be subject to section 5.''.
    (f) Liquid Fuels Grant Program.--
            (1) In general.--The Secretary shall establish a program 
        under which grants are provided to facilities to pay the 
        Federal share of the cost of--
                    (A) promoting coal-to-liquids, petroleum coke-to-
                liquids, oil shale, tar sands, heavy oil, and Alaska 
                natural gas-to-liquids; and
                    (B) assessing the production of low-rank coal water 
                fuel.
            (2) Grant provisions.--
                    (A) Federal share.--The Federal share of a grant 
                provided under this subsection shall be 50 percent.
                    (B) Repayment of feed grants.--Of the recipients of 
                grants under paragraph (1)(A) who receive full project 
                construction financing commitments (based on the 
                earliest calendar date)--
                            (i) the first 4 recipients shall not be 
                        required to repay any of the grants;
                            (ii) the next 4 recipients shall be 
                        required to repay 25 percent of the grant;
                            (iii) the next 4 recipients shall be 
                        required to repay 50 percent of the grant; and
                            (iv) the remaining recipients shall be 
                        required to repay 75 percent of the grant.
                    (C) Repayment of lrcwf grants.--The recipient of a 
                grant under paragraph (1)(B) shall not be required to 
                repay the grant.
                    (D) Timing of repayment.--Any required repayment 
                shall be paid as part of the closing process for any 
                construction financing relating to the grant.
                    (E) Interest.--No repayment of a grant under this 
                paragraph shall require the payment of interest if the 
                grant is repaid within 5 years of the issuance of the 
                grant.
                    (F) Maximum amount of feed grants.--The amount of a 
                grant under paragraph (1)(A) shall not exceed--
                            (i) $1,000,000 per 1,000 barrels for any 
                        day of liquid fuels production capacity; or
                            (ii) $25,000,000 for any fiscal year.
            (3) Authorization of appropriations.--
                    (A) In general.--Subject to subparagraph (B), there 
                are authorized to be appropriated to carry out this 
                subsection--
                            (i) $65,000,000 for fiscal year 2009; and
                            (ii) $37,500,000 for each of fiscal years 
                        2010 through 2018.
                    (B) Low-rank coal water fuel.--Of the amount of 
                funds that are made available for each fiscal year 
                under subparagraph (A), the Secretary shall use not 
                less than $15,000,000 to provides grants to assess the 
                production of low-rank coal water fuel.
    (g) Renewable Energy From Ocean Wave, Tide, Current, and Thermal 
Resources.--
            (1) In general.--The Secretary shall establish a grant 
        program to pay the Federal share of the costs of projects to 
        promote the production of renewable energy from ocean waves, 
        tides, currents, and thermal resources.
            (2) Federal share.--The Federal share of a grant provided 
        under this subsection shall be 50 percent.
            (3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $20,000,000 for 
        each of fiscal years 2009 through 2018.
    (h) Liability for Maps.--Section 507 of the Surface Mining Control 
and Reclamation Act of 1977 (30 U.S.C. 1267) is amended by adding at 
the end the following:
    ``(i) Liability for Maps.--Any person who provides the regulatory 
authority with a map under paragraph (13) or (14) of subsection (b) 
shall not be liable to any other person in any way for the accuracy or 
completeness of any map that was not prepared and certified by or on 
behalf of the person.''.

SEC. 226. LEASES FOR AREAS LOCATED WITHIN 100 MILES OF CALIFORNIA OR 
              FLORIDA.

    (a) Definitions.--In this section:
            (1) Existing oil and gas lease.--The term ``existing oil 
        and gas lease'' means an oil and gas lease in effect on the 
        date of enactment of this Act.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.
    (b) Authorization To Cancel and Exchange Certain Existing Oil and 
Gas Leases; Prohibition on Submittal of Exploration Plans for Certain 
Leases Prior to June 30, 2012.--
            (1) In general.--Not later than 2 years after the date of 
        enactment of this Act, the lessee of an existing oil and gas 
        lease for an area located completely within 100 miles of the 
        coastline within the California or Florida Adjacent Zones shall 
        have the option, without compensation, of exchanging the lease 
        for a new oil and gas lease having a primary term of 5 years.
            (2) Tracts.--For the area subject to the new lease, the 
        lessee may select any unleased tract on the outer Continental 
        Shelf that is in an area available for leasing.
            (3) Conversion to natural gas lease.--With the permission 
        of the relevant Governor, the lessee may convert an existing 
        oil and gas lease into a natural gas lease having a primary 
        term of 5 years and covering the same area as the existing oil 
        and gas lease or another area within the same Adjacent Zone of 
        the State within 100 miles of the coastline.
            (4) Administrative process.--
                    (A) In general.--The Secretary shall establish an 
                administrative process for carrying out this 
                subsection.
                    (B) Relationship to other laws.--An exchange, 
                conversion, or other action under this subsection 
                (including the issuance of a new lease)--
                            (i) shall not be considered to be major 
                        Federal actions for purposes of the National 
                        Environmental Policy Act of 1969 (42 U.S.C. 
                        4321 et seq.); and
                            (ii) shall be in compliance with the Outer 
                        Continental Shelf Lands Act (43 U.S.C. 1331 et 
                        seq.).
            (5) Operating restrictions.--A new lease issued in exchange 
        for an existing oil and gas lease under this subsection shall 
        be subject to any national defense operating stipulations on 
        the outer Continental Shelf tract that applied to the existing 
        oil and gas lease.
            (6) Priority.--
                    (A) In general.--The Secretary shall give priority 
                in the lease exchange process under this subsection 
                based on the amount of the original bonus bid paid for 
                the issuance of each lease to be exchanged.
                    (B) Partial tracts.--The Secretary shall allow 
                leases covering partial tracts to be exchanged for 
                leases covering full tracts conditioned on payment of 
                additional bonus bids on a per-acre basis as determined 
                by the average per acre of the original bonus bid per 
                acre for the partial tract being exchanged.
            (7) Exploration plans.--Any exploration plan submitted to 
        the Secretary during the period beginning on the date of 
        enactment of this Act and ending on June 30, 2012, for an oil 
        and gas lease for an area wholly within 100 miles of the 
        coastline within the California Adjacent Zone or Florida 
        Adjacent Zone shall not be treated as received by the Secretary 
        until the earlier of--
                    (A) July 1, 2012; or
                    (B) the date on which a petition by the adjacent 
                State for oil and gas leasing covering the area within 
                which is located the area subject to the oil and gas 
                lease was approved.
    (c) Lease Cancellations and Exchanges.--
            (1) Cancellation of lease.--As part of the lease exchange 
        process under this section, the Secretary shall cancel a lease 
        that is exchanged under this section.
            (2) Consent of lessees.--To cancel or exchange a lease 
        under this section, each lessee holding an interest in the 
        lease shall consent to cancellation of the leasehold interest 
        of the lessee.
            (3) Waiver of rights.--To exchange a lease under this 
        section, the lessee shall waive any rights to bring any action 
        against the United States related to the transaction.
            (4) Plugging and abandonment.--To cancel or exchange a 
        lease under this section, a lessee shall comply with any 
        plugging and abandonment requirements for any wells located on 
        any lease to be cancelled and exchanged prior to the 
        cancellation and exchange.
    (d) Area Partially Within 100 Miles of Florida.--
            (1) In general.--Subject to paragraph (2), an existing oil 
        and gas lease for an area located partially within 100 miles of 
        the coastline within the Florida Adjacent Zone may only be 
        developed and produced using wells drilled from well-head 
        locations that are at least 100 miles from the coastline to any 
        bottom-hole location on the area of the lease.
            (2) Nonapplication.--This subsection shall not apply if the 
        State of Florida petitions the Secretary to allow leasing 
        closer to the coastline than 100 miles.

SEC. 227. COASTAL IMPACT ASSISTANCE.

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

SEC. 228. OIL SHALE AND TAR SANDS.

    (a) Repeal of Requirement To Establish Payments.--Section 369 of 
the Energy Policy Act of 2005 (42 U.S.C. 15927) is amended--
            (1) by striking subsection (o); and
            (2) by redesignating subsections (p) through (s) as 
        subsections (o) through (r), respectively.
    (b) Treatment of Revenues.--Section 21 of the Mineral Leasing Act 
(30 U.S.C. 241) is amended--
            (1) by redesignating subsections (c) and (d) (as added by 
        section 318 of Public Law 97-394; 96 Stat. 1999) as subsections 
        (d) and (e), respectively; and
            (2) by adding at the end the following:
    ``(f) Revenues.--
            ``(1) 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.
            ``(2) Disposition of revenues.--Notwithstanding section 35, 
        all revenues received from and under an oil shale or tar sands 
        lease shall be disposed of in accordance with this subsection.
            ``(3) Royalty rates for commercial leases.--
                    ``(A) Royalty rates.--The Secretary shall model the 
                royalty schedule for oil shale and tar sands leases 
                based on the royalty program in effect on the date of 
                enactment of this subsection for the production of 
                synthetic crude oil from oil sands in the Province of 
                Alberta, Canada.
                    ``(B) Reduction.--The Secretary shall reduce any 
                royalty otherwise required to be paid under 
                subparagraph (A) under any oil shale or tar sands lease 
                on a sliding scale based on market price, with--
                            ``(i) a 10 percent reduction if the average 
                        futures price of light sweet crude oil on the 
                        New York Mercantile Exchange (NYMEX), or a 
                        similar index, drops, for the previous quarter 
                        year, below $50 (in January 1, 2006, dollars); 
                        and
                            ``(ii) an 80 percent reduction if the 
                        average price drops below $30 (in January 1, 
                        2006, dollars) for the quarter previous to the 
                        quarter in which the production is sold.
            ``(4) Disposition of revenues.--
                    ``(A) Deposit.--The Secretary shall deposit into a 
                separate account in the Treasury all revenues derived 
                from any oil shale or tar sands lease.
                    ``(B) Allocations to states and local political 
                subdivisions.--The Secretary shall allocate 50 percent 
                of the revenues deposited into the account established 
                under subparagraph (A) to the State within the 
                boundaries of which the leased land is located, with a 
                portion of that amount to be paid directly by the 
                Secretary to the local political subdivisions of the 
                State 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 are received, the Secretary 
                        shall transmit--
                                    ``(I)(aa) to each State \2/3\ of 
                                the allocation of the State under 
                                subparagraph (B) (together with accrued 
                                interest); and
                                    ``(bb) in accordance with clauses 
                                (ii) and (iii), to certain county-
                                equivalent political subdivisions and 
                                municipal political subdivisions of the 
                                State a total of \1/3\ of the 
                                allocation of the State under 
                                subparagraph (B) (together with accrued 
                                interest); and
                                    ``(II) the remaining balance of 
                                such revenues deposited into the 
                                account that are not allocated under 
                                subparagraph (B) (together with accrued 
                                interest), to the miscellaneous 
                                receipts account of the Treasury, 
                                except that until a lease has been in 
                                production for 20 years 50 percent of 
                                the 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 make equitable allocations of 
                        the revenues under clause (i)(I) 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.--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.--
                            ``(i) In general.--A recipient of funds 
                        under this subsection may use the funds for any 
                        lawful purpose as determined by State law.
                            ``(ii) Matching funds for federal 
                        programs.--Funds allocated under this 
                        subsection to States and local political 
                        subdivisions may be used as matching funds for 
                        other Federal programs without limitation.
                            ``(iii) Payments in lieu of taxes.--Funds 
                        allocated to local political subdivisions under 
                        this subsection shall not be considered 
                        payments to the 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 the funds, except as otherwise may be required by 
                law.''.

SEC. 229. AVAILABILITY OF OCS RECEIPTS TO PROVIDE PAYMENTS UNDER SECURE 
              RURAL SCHOOLS AND COMMUNITY SELF-DETERMINATION ACT OF 
              2000.

    Section 9 of the Outer Continental Shelf Lands Act (43 U.S.C. 1338) 
(as amended by section 209) is amended by adding at the end the 
following:
    ``(j) Conditional Availability of Funds for Payments Under Secure 
Rural Schools and Community Self-Determination Act of 2000.--
            ``(1) Availability of funds.--Subject to paragraphs (2) and 
        (3) and notwithstanding any other provision of this section, 
        $50,000,000 of OCS Receipts shall be available to the Secretary 
        of the Treasury for each of fiscal years 2009 through 2014 to 
        make payments under sections 102 and 103 of the Secure Rural 
        Schools and Community Self-Determination Act of 2000 (16 U.S.C. 
        500 note; Public Law 106-393).
            ``(2) Other funds.--The Secretary of the Treasury shall use 
        the funds made available by this subsection to make payments 
        described in paragraph (1) in lieu of using funds in the 
        Treasury not otherwise appropriated, as otherwise authorized by 
        sections 102(b)(3) and 103(b)(2) of the Secure Rural Schools 
        and Community Self-Determination Act of 2000 (16 U.S.C. 500 
        note; Public Law 106-393).
            ``(3) Condition on availability.--OCS Receipts shall be 
        available under paragraph (1) for a fiscal year only if--
                    ``(A) title I of the Secure Rural Schools and 
                Community Self-Determination Act of 2000 (16 U.S.C. 500 
                note; Public Law 106-393) has been reauthorized through 
                at least that fiscal year; and
                    ``(B) the authority to initiate projects under 
                titles II and III of that Act has been extended through 
                at least that fiscal year.''.

SEC. 230. SENSE OF CONGRESS TO BUY AND BUILD AMERICAN.

    (a) Buy and Build American.--It is the sense of Congress that--
            (1) this Act and the amendments made by this Act should 
        result in a healthy and growing industrial, manufacturing, 
        transportation, and service sector in the United States 
        employing the vast talents of the workforce of the United 
        States to assist in the development of affordable energy from 
        the outer Continental Shelf; and
            (2) Congress intends to monitor the deployment of personnel 
        and material in the outer Continental Shelf to encourage--
                    (A) the development of technology and manufacturing 
                in the United States to enable workers of the United 
                States to benefit from this Act and the amendments made 
                by this Act by securing good jobs and careers; and
                    (B) the establishment of important industrial 
                facilities to support expanded access to resources of 
                the United States.
    (b) Safeguard for Extraordinary Ability.--Section 30 of the Outer 
Continental Shelf Lands Act (43 U.S.C. 1356) is amended by adding at 
the end the following:
    ``(d) Relationship to Other Laws.--Regulations issued under this 
section 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), except insofar as 
those 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.''.

SEC. 231. REPEAL OF THE GULF OF MEXICO ENERGY SECURITY ACT OF 2006.

    (a) In General.--The Gulf of Mexico Energy Security Act of 2006 (43 
U.S.C. 1331 note; Public Law 109-432) is repealed.
    (b) Effective Date.--The repeal made by subsection (a) takes effect 
on October 1, 2008.

       Subtitle B--Leasing Program for Land Within Coastal Plain

SEC. 241. DEFINITIONS.

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

SEC. 242. LEASING PROGRAM FOR LAND WITHIN THE COASTAL PLAIN.

    (a) In General.--
            (1) Authorization.--Congress authorizes the exploration, 
        leasing, development, production, and economically feasible and 
        prudent transportation of oil and gas in and from the Coastal 
        Plain.
            (2) Actions.--The Secretary shall take such actions as are 
        necessary--
                    (A) to establish and implement, in accordance with 
                this subtitle, a competitive oil and gas leasing 
                program that will result in an environmentally sound 
                program for the exploration, development, and 
                production of the oil and gas resources of the Coastal 
                Plain while taking into consideration the interests and 
                concerns of residents of the Coastal Plain, which is 
                the homeland of the Kaktovikmiut Inupiat; and
                    (B) to administer this subtitle through 
                regulations, lease terms, conditions, restrictions, 
                prohibitions, stipulations, and other provisions that--
                            (i) ensure the oil and gas exploration, 
                        development, and production activities on the 
                        Coastal Plain will result in no significant 
                        adverse effect on fish and wildlife, their 
                        habitat, subsistence resources, and the 
                        environment; and
                            (ii) require the application of the best 
                        commercially available technology for oil and 
                        gas exploration, development, and production to 
                        all exploration, development, and production 
                        operations under this subtitle in a manner that 
                        ensures the receipt of fair market value by the 
                        public for the mineral resources to be leased.
    (b) Repeal.--
            (1) Repeal.--Section 1003 of the Alaska National Interest 
        Lands Conservation Act (16 U.S.C. 3143) is repealed.
            (2) Conforming amendment.--The table of contents contained 
        in section 1 of that Act (16 U.S.C. 3101 note) is amended by 
        striking the item relating to section 1003.
    (c) Compliance With Requirements Under Certain Other Laws.--
            (1) Compatibility.--For purposes of the National Wildlife 
        Refuge System Administration Act of 1966 (16 U.S.C. 668dd et 
        seq.)--
                    (A) the oil and gas pre-leasing and leasing 
                program, and activities authorized by this section in 
                the Coastal Plain, shall be considered to be compatible 
                with the purposes for which the Arctic National 
                Wildlife Refuge was established; and
                    (B) no further findings or decisions shall be 
                required to implement that program and those 
                activities.
            (2) Adequacy of the department of the interior's 
        legislative environmental impact statement.--The Final 
        Statement shall be considered to satisfy the requirements under 
        the National Environmental Policy Act of 1969 (42 U.S.C. 4321 
        et seq.) that apply with respect to pre-leasing activities, 
        including exploration programs and actions authorized to be 
        taken by the Secretary to develop and promulgate the 
        regulations for the establishment of a leasing program 
        authorized by this subtitle before the conduct of the first 
        lease sale.
            (3) Compliance with nepa for other actions.--
                    (A) In general.--Before conducting the first lease 
                sale under this subtitle, the Secretary shall prepare 
                an environmental impact statement in accordance with 
                the National Environmental Policy Act of 1969 (42 
                U.S.C. 4321 et seq.) with respect to the actions 
                authorized by this subtitle that are not referred to in 
                paragraph (2).
                    (B) Identification and analysis.--Notwithstanding 
                any other provision of law, in carrying out this 
                paragraph, the Secretary shall not be required--
                            (i) to identify nonleasing alternative 
                        courses of action; or
                            (ii) to analyze the environmental effects 
                        of those courses of action.
                    (C) Identification of preferred action.--Not later 
                than 18 months after the date of enactment of this Act, 
                the Secretary shall--
                            (i) identify only a preferred action and a 
                        single leasing alternative for the first lease 
                        sale authorized under this subtitle; and
                            (ii) analyze the environmental effects and 
                        potential mitigation measures for those 2 
                        alternatives.
                    (D) Public comments.--In carrying out this 
                paragraph, the Secretary shall consider only public 
                comments that are filed not later than 20 days after 
                the date of publication of a draft environmental impact 
                statement.
                    (E) Effect of compliance.--Notwithstanding any 
                other provision of law, compliance with this paragraph 
                shall be considered to satisfy all requirements for the 
                analysis and consideration of the environmental effects 
                of proposed leasing under this subtitle.
    (d) Relationship to State and Local Authority.--Nothing in this 
subtitle expands or limits any State or local regulatory authority.
    (e) Special Areas.--
            (1) Designation.--
                    (A) In general.--The Secretary, after consultation 
                with the State of Alaska, the North Slope Borough, 
                Alaska, and the City of Kaktovik, Alaska, may designate 
                not more than 45,000 acres of the Coastal Plain as a 
                special area if the Secretary determines that the 
                special area would be of such unique character and 
                interest as to require special management and 
                regulatory protection.
                    (B) Sadlerochit spring area.--The Secretary shall 
                designate as a special area in accordance with 
                subparagraph (A) the Sadlerochit Spring area, 
                comprising approximately 4,000 acres as depicted on the 
                map.
            (2) Management.--The Secretary shall manage each special 
        area designated under this subsection in a manner that--
                    (A) respects and protects the Native people of the 
                area; and
                    (B) preserves the unique and diverse character of 
                the area, including fish, wildlife, subsistence 
                resources, and cultural values of the area.
            (3) Exclusion from leasing or surface occupancy.--
                    (A) In general.--The Secretary may exclude any 
                special area designated under this subsection from 
                leasing.
                    (B) No surface occupancy.--If the Secretary leases 
                all or a portion of a special area for the purposes of 
                oil and gas exploration, development, production, and 
                related activities, there shall be no surface occupancy 
                of the land comprising the special area.
            (4) Directional drilling.--Notwithstanding any other 
        provision of this subsection, the Secretary may lease all or a 
        portion of a special area under terms that permit the use of 
        horizontal drilling technology from sites on leases located 
        outside the special area.
    (f) Limitation on Closed Areas.--The Secretary may not close land 
within the Coastal Plain to oil and gas leasing or to exploration, 
development, or production except in accordance with this subtitle.
    (g) Regulations.--
            (1) In general.--Not later than 15 months after the date of 
        enactment of this Act, in consultation with appropriate 
        agencies of the State of Alaska, the North Slope Borough, 
        Alaska, and the City of Kaktovik, Alaska, the Secretary shall 
        issue such regulations as are necessary to carry out this 
        subtitle, including rules and regulations relating to 
        protection of the fish and wildlife, fish and wildlife habitat, 
        and subsistence resources of the Coastal Plain.
            (2) Revision of regulations.--The Secretary may 
        periodically review and, as appropriate, revise the rules and 
        regulations issued under paragraph (1) to reflect any 
        significant scientific or engineering data that come to the 
        attention of the Secretary.

SEC. 243. LEASE SALES.

    (a) In General.--Land may be leased pursuant to this subtitle to 
any person qualified to obtain a lease for deposits of oil and gas 
under the Mineral Leasing Act (30 U.S.C. 181 et seq.).
    (b) Procedures.--The Secretary shall, by regulation, establish 
procedures for--
            (1) receipt and consideration of sealed nominations for any 
        area in the Coastal Plain for inclusion in, or exclusion (as 
        provided in subsection (c)) from, a lease sale;
            (2) the holding of lease sales after that nomination 
        process; and
            (3) public notice of and comment on designation of areas to 
        be included in, or excluded from, a lease sale.
    (c) Lease Sale Bids.--Bidding for leases under this subtitle shall 
be by sealed competitive cash bonus bids.
    (d) Acreage Minimum in First Sale.--For the first lease sale under 
this subtitle, the Secretary shall offer for lease those tracts the 
Secretary considers to have the greatest potential for the discovery of 
hydrocarbons, taking into consideration nominations received pursuant 
to subsection (b)(1), but in no case less than 200,000 acres.
    (e) Timing of Lease Sales.--The Secretary shall--
            (1) not later than 22 months after the date of enactment of 
        this Act, conduct the first lease sale under this subtitle;
            (2) not later than September 30, 2012, conduct a second 
        lease sale under this subtitle; and
            (3) conduct additional sales at appropriate intervals if 
        sufficient interest in exploration or development exists to 
        warrant the conduct of the additional sales.

SEC. 244. GRANT OF LEASES BY THE SECRETARY.

    (a) In General.--Upon payment by a lessee of such bonus as may be 
accepted by the Secretary, the Secretary may grant to the highest 
responsible qualified bidder in a lease sale conducted pursuant to 
section 243 a lease for any land on the Coastal Plain.
    (b) Subsequent Transfers.--
            (1) In general.--No lease issued under this subtitle may be 
        sold, exchanged, assigned, sublet, or otherwise transferred 
        except with the approval of the Secretary.
            (2) Condition for approval.--Before granting any approval 
        described in paragraph (1), the Secretary shall consult with 
        and give due consideration to the opinion of the Attorney 
        General.

SEC. 245. LEASE TERMS AND CONDITIONS.

    An oil or gas lease issued pursuant to this subtitle shall--
            (1) provide for the payment of a royalty of not less than 
        16\1/2\ percent of the amount or value of the production 
        removed or sold from the lease, as determined by the Secretary 
        in accordance with regulations applicable to other Federal oil 
        and gas leases;
            (2) provide that the Secretary may close, on a seasonal 
        basis, such portions of the Coastal Plain to exploratory 
        drilling activities as are necessary to protect caribou calving 
        areas and other species of fish and wildlife;
            (3) require that each lessee of land within the Coastal 
        Plain shall be fully responsible and liable for the reclamation 
        of land within the Coastal Plain and any other Federal land 
        that is adversely affected in connection with exploration, 
        development, production, or transportation activities within 
        the Coastal Plain conducted by the lessee or by any of the 
        subcontractors or agents of the lessee;
            (4) provide that the lessee may not delegate or convey, by 
        contract or otherwise, that reclamation responsibility and 
        liability to another person without the express written 
        approval of the Secretary;
            (5) provide that the standard of reclamation for land 
        required to be reclaimed under this subtitle shall be, to the 
        maximum extent practicable--
                    (A) a condition capable of supporting the uses that 
                the land was capable of supporting prior to any 
                exploration, development, or production activities; or
                    (B) upon application by the lessee, to a higher or 
                better standard, as approved by the Secretary;
            (6) contain terms and conditions relating to protection of 
        fish and wildlife, fish and wildlife habitat, subsistence 
        resources, and the environment as required under section 
        242(a)(2);
            (7) provide that each lessee, and each agent and contractor 
        of a lessee, use their best efforts to provide a fair share of 
        employment and contracting for Alaska Natives and Alaska Native 
        Corporations from throughout the State of Alaska, as determined 
        by the level of obligation previously agreed to in the Federal 
        Agreement; and
            (8) contain such other provisions as the Secretary 
        determines to be necessary to ensure compliance with this 
        subtitle and regulations issued under this subtitle.

SEC. 246. COASTAL PLAIN ENVIRONMENTAL PROTECTION.

    (a) No Significant Adverse Effect Standard To Govern Authorized 
Coastal Plain Activities.--In accordance with section 242, the 
Secretary shall administer this subtitle through regulations, lease 
terms, conditions, restrictions, prohibitions, stipulations, or other 
provisions that--
            (1) ensure, to the maximum extent practicable, that oil and 
        gas exploration, development, and production activities on the 
        Coastal Plain will result in no significant adverse effect on 
        fish and wildlife, fish and wildlife habitat, and the 
        environment;
            (2) require the application of the best commercially 
        available technology for oil and gas exploration, development, 
        and production on all new exploration, development, and 
        production operations; and
            (3) ensure that the maximum surface acreage covered in 
        connection with the leasing program by production and support 
        facilities, including airstrips and any areas covered by gravel 
        berms or piers for support of pipelines, does not exceed 2,000 
        acres on the Coastal Plain.
    (b) Site-Specific Assessment and Mitigation.--The Secretary shall 
require, with respect to any proposed drilling and related activities 
on the Coastal Plain, that--
            (1) a site-specific environmental analysis be made of the 
        probable effects, if any, that the drilling or related 
        activities will have on fish and wildlife, fish and wildlife 
        habitat, subsistence resources, subsistence uses, and the 
        environment;
            (2) a plan be implemented to avoid, minimize, and mitigate 
        (in that order and to the maximum extent practicable) any 
        significant adverse effect identified under paragraph (1); and
            (3) the development of the plan occur after consultation 
        with--
                    (A) each agency having jurisdiction over matters 
                mitigated by the plan;
                    (B) the State of Alaska;
                    (C) North Slope Borough, Alaska; and
                    (D) the City of Kaktovik, Alaska.
    (c) Regulations To Protect Coastal Plain Fish and Wildlife 
Resources, Subsistence Users, and the Environment.--Before implementing 
the leasing program authorized by this subtitle, the Secretary shall 
prepare and issue regulations, lease terms, conditions, restrictions, 
prohibitions, stipulations, or other measures designed to ensure, to 
the maximum extent practicable, that the activities carried out on the 
Coastal Plain under this subtitle are conducted in a manner consistent 
with the purposes and environmental requirements of this subtitle.
    (d) Compliance With Federal and State Environmental Laws and Other 
Requirements.--The proposed regulations, lease terms, conditions, 
restrictions, prohibitions, and stipulations for the leasing program 
under this subtitle shall require--
            (1) compliance with all applicable provisions of Federal 
        and State environmental law (including regulations);
            (2) implementation of and compliance with--
                    (A) standards that are at least as effective as the 
                safety and environmental mitigation measures, as 
                described in items 1 through 29 on pages 167 through 
                169 of the Final Statement, on the Coastal Plain;
                    (B) seasonal limitations on exploration, 
                development, and related activities, as necessary, to 
                avoid significant adverse effects during periods of 
                concentrated fish and wildlife breeding, denning, 
                nesting, spawning, and migration;
                    (C) design safety and construction standards for 
                all pipelines and any access and service roads that 
                minimize, to the maximum extent practicable, adverse 
                effects on--
                            (i) the passage of migratory species (such 
                        as caribou); and
                            (ii) the flow of surface water by requiring 
                        the use of culverts, bridges, or other 
                        structural devices;
                    (D) prohibitions on general public access to, and 
                use of, all pipeline access and service roads;
                    (E) stringent reclamation and rehabilitation 
                requirements in accordance with this subtitle for the 
                removal from the Coastal Plain of all oil and gas 
                development and production facilities, structures, and 
                equipment on completion of oil and gas production 
                operations, except in a case in which the Secretary 
                determines that those facilities, structures, or 
                equipment--
                            (i) would assist in the management of the 
                        Arctic National Wildlife Refuge; and
                            (ii) are donated to the United States for 
                        that purpose;
                    (F) appropriate prohibitions or restrictions on--
                            (i) access by all modes of transportation;
                            (ii) sand and gravel extraction; and
                            (iii) use of explosives;
                    (G) reasonable stipulations for protection of 
                cultural and archaeological resources;
                    (H) measures to protect groundwater and surface 
                water, including--
                            (i) avoidance, to the maximum extent 
                        practicable, of springs, streams, and river 
                        systems;
                            (ii) the protection of natural surface 
                        drainage patterns and wetland and riparian 
                        habitats; and
                            (iii) the regulation of methods or 
                        techniques for developing or transporting 
                        adequate supplies of water for exploratory 
                        drilling; and
                    (I) research, monitoring, and reporting 
                requirements;
            (3) that exploration activities (except surface geological 
        studies) be limited to the period between approximately 
        November 1 and May 1 of each year and be supported, if 
        necessary, by ice roads, winter trails with adequate snow 
        cover, ice pads, ice airstrips, and air transport methods 
        (except that those exploration activities may be permitted at 
        other times if the Secretary determines that the exploration 
        will have no significant adverse effect on fish and wildlife, 
        fish and wildlife habitat, subsistence resources, and the 
        environment of the Coastal Plain);
            (4) consolidation of facility siting;
            (5) avoidance or reduction of air traffic-related 
        disturbance to fish and wildlife;
            (6) treatment and disposal of hazardous and toxic wastes, 
        solid wastes, reserve pit fluids, drilling muds and cuttings, 
        and domestic wastewater, including, in accordance with 
        applicable Federal and State environmental laws (including 
        regulations)--
                    (A) preparation of an annual waste management 
                report;
                    (B) development and implementation of a hazardous 
                materials tracking system; and
                    (C) prohibition on the use of chlorinated solvents;
            (7) fuel storage and oil spill contingency planning;
            (8) conduct of periodic field crew environmental briefings;
            (9) avoidance of significant adverse effects on subsistence 
        hunting, fishing, and trapping;
            (10) compliance with applicable air and water quality 
        standards;
            (11) appropriate seasonal and safety zone designations 
        around well sites, within which subsistence hunting and 
        trapping shall be limited; and
            (12) development and implementation of such other 
        protective environmental requirements, restrictions, terms, or 
        conditions as the Secretary, after consultation with the State 
        of Alaska, North Slope Borough, Alaska, and the City of 
        Kaktovik, Alaska, determines to be necessary.
    (e) Considerations.--In preparing and issuing regulations, lease 
terms, conditions, restrictions, prohibitions, or stipulations under 
this section, the Secretary shall take into consideration--
            (1) the stipulations and conditions that govern the 
        National Petroleum Reserve--Alaska leasing program, as set 
        forth in the 1999 Northeast National Petroleum Reserve--Alaska 
        Final Integrated Activity Plan/Environmental Impact Statement;
            (2) the environmental protection standards that governed 
        the initial Coastal Plain seismic exploration program under 
        parts 37.31 through 37.33 of title 50, Code of Federal 
        Regulations (or successor regulations); and
            (3) the land use stipulations for exploratory drilling on 
        the KIC-ASRC private land described in Appendix 2 of the 
        agreement between Arctic Slope Regional Corporation and the 
        United States dated August 9, 1983.
    (f) Facility Consolidation Planning.--
            (1) In general.--After providing for public notice and 
        comment, the Secretary shall prepare and periodically update a 
        plan to govern, guide, and direct the siting and construction 
        of facilities for the exploration, development, production, and 
        transportation of oil and gas resources from the Coastal Plain.
            (2) Objectives.--The objectives of the plan shall be--
                    (A) the avoidance of unnecessary duplication of 
                facilities and activities;
                    (B) the encouragement of consolidation of common 
                facilities and activities;
                    (C) the location or confinement of facilities and 
                activities to areas that will minimize impact on fish 
                and wildlife, fish and wildlife habitat, subsistence 
                resources, and the environment;
                    (D) the use of existing facilities, to the maximum 
                extent practicable; and
                    (E) the enhancement of compatibility between 
                wildlife values and development activities.
    (g) Access to Public Land.--The Secretary shall--
            (1) manage public land in the Coastal Plain in accordance 
        with subsections (a) and (b) of section 811 of the Alaska 
        National Interest Lands Conservation Act (16 U.S.C. 3121); and
            (2) ensure that local residents shall have reasonable 
        access to public land in the Coastal Plain for traditional 
        uses.

SEC. 247. EXPEDITED JUDICIAL REVIEW.

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

SEC. 248. RIGHTS-OF-WAY AND EASEMENTS ACROSS COASTAL PLAIN.

    For purposes of section 1102(4)(A) of the Alaska National Interest 
Lands Conservation Act (16 U.S.C. 3162(4)(A)), any rights-of-way or 
easements across the Coastal Plain for the exploration, development, 
production, or transportation of oil and gas shall be considered to be 
established incident to the management of the Coastal Plain under this 
section.

SEC. 249. CONVEYANCE.

    Notwithstanding section 1302(h)(2) of the Alaska National Interest 
Lands Conservation Act (16 U.S.C. 3192(h)(2)), to remove any cloud on 
title to land, and to clarify land ownership patterns in the Coastal 
Plain, the Secretary shall--
            (1) to the extent necessary to fulfill the entitlement of 
        the Kaktovik Inupiat Corporation under sections 12 and 14 of 
        the Alaska Native Claims Settlement Act (43 U.S.C. 1611, 1613), 
        as determined by the Secretary, convey to that Corporation the 
        surface estate of the land described in paragraph (1) of Public 
        Land Order 6959, in accordance with the terms and conditions of 
        the agreement between the Secretary, the United States Fish and 
        Wildlife Service, the Bureau of Land Management, and the 
        Kaktovik Inupiat Corporation, dated January 22, 1993; and
            (2) convey to the Arctic Slope Regional Corporation the 
        remaining subsurface estate to which that Corporation is 
        entitled under the agreement between that corporation and the 
        United States, dated August 9, 1983.

SEC. 250. LOCAL GOVERNMENT IMPACT AID AND COMMUNITY SERVICE ASSISTANCE.

    (a) Establishment of Fund.--
            (1) In general.--As a condition on the receipt of funds 
        under section 252(2), the State of Alaska shall establish in 
        the treasury of the State, and administer in accordance with 
        this section, a fund to be known as the ``Coastal Plain Local 
        Government Impact Aid Assistance Fund'' (referred to in this 
        section as the ``Fund'').
            (2) Deposits.--Subject to paragraph (1), the Secretary of 
        the Treasury shall deposit into the Fund, $35,000,000 each year 
        from the amount available under section 252(2)(A).
            (3) Investment.--The Governor of the State of Alaska 
        (referred to in this section as the ``Governor'') shall invest 
        amounts in the Fund in interest-bearing securities of the 
        United States or the State of Alaska.
    (b) Assistance.--The Governor, in cooperation with the Mayor of the 
North Slope Borough, shall use amounts in the Fund to provide 
assistance to North Slope Borough, Alaska, the City of Kaktovik, 
Alaska, and any other borough, municipal subdivision, village, or other 
community in the State of Alaska that is directly impacted by 
exploration for, or the production of, oil or gas on the Coastal Plain 
under this subtitle, or any Alaska Native Regional Corporation acting 
on behalf of the villages and communities within its region whose lands 
lie along the right of way of the Trans Alaska Pipeline System, as 
determined by the Governor.
    (c) Application.--
            (1) In general.--To receive assistance under subsection 
        (b), a community or Regional Corporation described in that 
        subsection shall submit to the Governor, or to the Mayor of the 
        North Slope Borough, an application in such time, in such 
        manner, and containing such information as the Governor may 
        require.
            (2) Action by north slope borough.--The Mayor of the North 
        Slope Borough shall submit to the Governor each application 
        received under paragraph (1) as soon as practicable after the 
        date on which the application is received.
            (3) Assistance of governor.--The Governor shall assist 
        communities in submitting applications under this subsection, 
        to the maximum extent practicable.
    (d) Use of Funds.--A community or Regional Corporation that 
receives funds under subsection (b) may use the funds--
            (1) to plan for mitigation, implement a mitigation plan, or 
        maintain a mitigation project to address the potential effects 
        of oil and gas exploration and development on environmental, 
        social, cultural, recreational, and subsistence resources of 
        the community;
            (2) to develop, carry out, and maintain--
                    (A) a project to provide new or expanded public 
                facilities; or
                    (B) services to address the needs and problems 
                associated with the effects described in paragraph (1), 
                including firefighting, police, water and waste 
                treatment, first responder, and other medical services;
            (3) to compensate residents of the Coastal Plain for 
        significant damage to environmental, social, cultural, 
        recreational, or subsistence resources; and
            (4) in the City of Kaktovik, Alaska--
                    (A) to develop a mechanism for providing members of 
                the Kaktovikmiut Inupiat community an opportunity to--
                            (i) monitor development on the Coastal 
                        Plain; and
                            (ii) provide information and 
                        recommendations to the Governor based on 
                        traditional aboriginal knowledge of the natural 
                        resources, flora, fauna, and ecological 
                        processes of the Coastal Plain; and
                    (B) to establish a local coordination office, to be 
                managed by the Mayor of the North Slope Borough, in 
                coordination with the City of Kaktovik, Alaska--
                            (i) to coordinate with and advise 
                        developers on local conditions and the history 
                        of areas affected by development;
                            (ii) to provide to the Committee on 
                        Resources of the House of Representatives and 
                        the Committee on Energy and Natural Resources 
                        of the Senate annual reports on the status of 
                        the coordination between developers and 
                        communities affected by development;
                            (iii) to collect from residents of the 
                        Coastal Plain information regarding the impacts 
                        of development on fish, wildlife, habitats, 
                        subsistence resources, and the environment of 
                        the Coastal Plain; and
                            (iv) to ensure that the information 
                        collected under clause (iii) is submitted to--
                                    (I) developers; and
                                    (II) any appropriate Federal 
                                agency.

SEC. 251. PROHIBITION ON EXPORTS.

    An oil or gas lease issued under this subtitle shall prohibit the 
exportation of oil or gas produced under the lease.

SEC. 252. ALLOCATION OF REVENUES.

    Notwithstanding the Mineral Leasing Act (30 U.S.C. 181 et seq.) or 
any other provision of law, of the adjusted bonus, rental, and royalty 
receipts from Federal oil and gas leasing and operations authorized 
under this subtitle:
            (1) 50 percent shall be deposited in the general fund of 
        the Treasury.
            (2) The remainder shall be available as follows:
                    (A) $35,000,000 shall be deposited by the Secretary 
                of the Treasury into the fund created under section 
                250(a)(1).
                    (B) The remainder shall be disbursed to the State 
                of Alaska.

                         Subtitle C--Oil Shale

SEC. 261. REMOVAL OF PROHIBITION ON FINAL REGULATIONS FOR COMMERCIAL 
              LEASING PROGRAM FOR OIL SHALE RESOURCES ON PUBLIC LAND.

    Section 433 of the Department of the Interior, Environment, and 
Related Agencies Appropriations Act, 2008 (Public Law 110-161; 121 
Stat. 2152) is repealed.

     Subtitle D--Alternative Fuels and Fuels Derived From Tar Sands

SEC. 271. PROCUREMENT AND ACQUISITION OF ALTERNATIVE FUELS AND FUELS 
              DERIVED FROM TAR SANDS.

    Section 526 of the Energy Independence and Security Act of 2007 (42 
U.S.C. 17142) is repealed.

          Subtitle E--Percentage Depletion From Marginal Wells

SEC. 281. ELIMINATION OF TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION 
              FOR OIL AND NATURAL GAS PRODUCED FROM MARGINAL WELLS.

    (a) In General.--Subparagraph (H) of section 613A(c)(6) of the 
Internal Revenue Code of 1986 (relating to oil and natural gas produced 
from marginal properties) is amended to read as follows:
                    ``(H) Nonapplication of taxable income limit with 
                respect to marginal production.--The second sentence of 
                subsection (a) of section 613 shall not apply to so 
                much of the allowance for depletion as is determined 
                under subparagraph (A).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2007.

  TITLE III--EXPANDING NATURAL GAS AS A MAINSTREAM TRANSPORTATION FUEL

SEC. 301. RENEWABLE FUEL PROGRAM.

    (a) Definition of Renewable Fuel.--Effective January 1, 2009, 
section 211(o)(1) of the Clean Air Act (42 U.S.C. 7545(o)(1)) is 
amended by striking subparagraph (J) and inserting the following:
                    ``(J) Renewable fuel.--
                            ``(i) In general.--The term `renewable 
                        fuel' means fuel that--
                                    ``(I) is produced from renewable 
                                biomass; and
                                    ``(II) is used to replace or reduce 
                                the quantity of fossil fuel present in 
                                a transportation fuel.
                            ``(ii) Renewable fuel standard.--For 
                        purposes of the renewable fuel standard under 
                        paragraph (2), the term `renewable fuel' 
                        includes renewable and nonrenewable natural 
                        gas, including compressed natural and liquefied 
                        natural gas when used as transportation 
                        fuel.''.
    (b) Credit Program.--Effective January 1, 2009, section 
211(o)(5)(A) of the Clean Air Act (42 U.S.C. 7545(o)(5)(A)) is 
amended--
            (1) in clause (ii), by striking ``and'' at the end;
            (2) in clause (iii), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                            ``(iv) for the generation of an appropriate 
                        quantity of credits for renewable and 
                        nonrenewable natural gas, including compressed 
                        natural and liquefied natural gas when used as 
                        a transportation fuel.''.

SEC. 302. NEW QUALIFIED ALTERNATIVE FUEL MOTOR VEHICLE CREDIT ALLOWED 
              FOR DUAL FUELED AUTOMOBILES.

    (a) In General.--Clause (i) of section 30B(e)(4)(A) of the Internal 
Revenue Code of 1986 (relating to definition of new qualified 
alternative fuel motor vehicle) is amended to read as follows:
                            ``(i) which--
                                    ``(I) is only capable of operating 
                                on an alternative fuel, or
                                    ``(II) is capable of operating on 
                                an alternative fuel and gasoline or 
                                diesel fuel,''.
    (b) Conforming Amendment.--Section 30B(e) of the Internal Revenue 
Code of 1986 is amended by striking paragraph (5).
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 303. NATURAL GAS VEHICLE RESEARCH, DEVELOPMENT, AND DEMONSTRATION 
              PROJECTS.

    (a) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Natural gas.--The term ``natural gas'' means compressed 
        natural gas, liquefied natural gas, biomethane, and mixtures of 
        hydrogen and methane or natural gas.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
    (b) Program.--The Secretary, in coordination with the 
Administrator, shall conduct a program of natural gas vehicle research, 
development, and demonstration.
    (c) Purpose.--The program under this section shall focus on--
            (1) the continued improvement and development of new, 
        cleaner, more efficient light-duty, medium-duty, and heavy-duty 
        natural gas vehicle engines;
            (2) the integration of those engines into light-duty, 
        medium-duty, and heavy-duty natural gas vehicles for onroad and 
        offroad applications;
            (3) expanding product availability by assisting 
        manufacturers with the certification of the engines or vehicles 
        described in paragraph (1) or (2) to Federal or California 
        certification requirements and in-use emission standards;
            (4) the demonstration and proper operation and use of the 
        vehicles described in paragraph (2) under all operating 
        conditions;
            (5) the development and improvement of nationally 
        recognized codes and standards for the continued safe operation 
        of natural gas vehicles and components;
            (6) improvement in the reliability and efficiency of 
        natural gas fueling station infrastructure;
            (7) the certification of natural gas fueling station 
        infrastructure to nationally recognized and industry safety 
        standards;
            (8) the improvement in the reliability and efficiency of 
        onboard natural gas fuel storage systems;
            (9) the development of new natural gas fuel storage 
        materials;
            (10) the certification of onboard natural gas fuel storage 
        systems to nationally recognized and industry safety standards; 
        and
            (11) the use of natural gas engines in hybrid vehicles.
    (d) Certification of Conversion Systems.--The Secretary shall 
coordinate with the Administrator on issues related to streamlining the 
certification of natural gas conversion systems to the appropriate 
Federal certification requirements and in-use emission standards.
    (e) Cooperation and Coordination With Industry.--In developing and 
carrying out the program under this section, the Secretary shall 
coordinate with the natural gas vehicle industry to ensure cooperation 
between the public and the private sector.
    (f) Conduct of Program.--The program under this section shall be 
conducted in accordance with sections 3001 and 3002 of the Energy 
Policy Act of 1992 (42 U.S.C. 13541, 13542).
    (g) Report.--Not later than 2 years after the date of enactment of 
this Act, the Secretary shall submit to Congress a report on the 
implementation of this section.
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such sums as are necessary to carry out 
this section.

SEC. 304. DEVELOPMENT OF LOW-EMISSION NATURAL GAS TRANSPORTATION-FUELED 
              VEHICLES.

    Part C of title II of the Clean Air Act (42 U.S.C. 7581 et seq.) is 
amended by adding at the end the following:

``SEC. 251. DEVELOPMENT OF LOW-EMISSION NATURAL GAS TRANSPORTATION-
              FUELED VEHICLES.

    ``(a) Definitions.--In this section:
            ``(1) Alternative fuel.--The term `alternative fuel' means 
        compressed or liquid natural gas.
            ``(2) Alternative-fueled vehicle.--The term `alternative-
        fueled vehicle' means a vehicle that is manufactured or 
        converted to operate using alternative fuel.
            ``(3) Bi-fueled vehicle.--The term `bi-fueled vehicle' 
        means a vehicle that is capable of operating on gasoline or an 
        alternative fuel, but not both at the same time.
            ``(4) Convert.--The term `convert', with respect to a 
        vehicle, means to modify the engine and other applicable 
        components of the vehicle to enable the vehicle to operate 
        using an alternative fuel (including compressed natural gas).
            ``(5) OBD system.--The term `OBD system' means an on-board, 
        computer-based diagnostic system built into certain vehicles to 
        monitor the performance of certain primary engine components of 
        the vehicle (including components responsible for controlling 
        emissions).
            ``(6) Program.--The term `program' means the alternative-
        fueled vehicle development demonstration program established 
        under subsection (b).
            ``(7) Small volume manufacturer.--
                    ``(A) In general.--The term `small volume 
                manufacturer' means a manufacturer of vehicles 
                described in section 86.001-1(e) of title 40, Code of 
                Federal Regulations (or a successor regulation) that is 
                approved and certified in accordance with part 86 of 
                subchapter C of chapter I of title 40, Code of Federal 
                Regulations (or successor regulations).
                    ``(B) Inclusion.--The term `small volume 
                manufacturer' includes a manufacturer of kits or 
                equipment used to convert vehicles.
    ``(b) Program.--
            ``(1) Establishment.--For the period of fiscal years 2009 
        through 2013, the Administrator shall establish and carry out a 
        demonstration program to assist States in facilitating the 
        development of alternative-fueled vehicles.
            ``(2) Application.--A State may participate in the program 
        by submitting to the Administrator an application at such time, 
        in such form, and containing such information as the 
        Administrator shall specify.
            ``(3) Benefits available to participating small volume 
        manufacturers.--Under the program, with respect to small volume 
        manufacturers located in States participating in the program, 
        the Administrator shall, by regulation--
                    ``(A) waive all fees applicable to small volume 
                manufacturers for the certification and conversion of 
                alternative-fueled vehicles;
                    ``(B) waive requirements for recertification of 
                kits for the conversion of vehicles in any case in 
                which, as determined by the Administrator--
                            ``(i) the kit has been previously certified 
                        for the model of vehicle to be converted; and
                            ``(ii) neither the kit nor the design and 
                        specifications of the model of vehicle to be 
                        converted have substantially changed;
                    ``(C) modify such regulatory requirements relating 
                to OBD systems as the Administrator determines to be 
                appropriate to provide flexibility to small volume 
                manufacturers in reprogramming OBD systems to be 
                compatible with the use of alternative fuel;
                    ``(D) permit small volume manufacturers to include 
                more vehicles and engines in a single engine category 
                to improve the cost-efficiency of emission testing of 
                converted vehicles;
                    ``(E) waive the liability of small volume 
                manufacturers, in the case of a bi-fueled vehicle 
                capable of operating on gasoline or compressed natural 
                gas, for the compliance of the gasoline system of the 
                bi-fueled vehicle with applicable emission 
                requirements;
                    ``(F) provide additional guidance to small volume 
                manufacturers with respect to the conversion of older 
                models of vehicles; and
                    ``(G) revise and streamline certification 
                requirements applicable to small volume manufacturers.
            ``(4) State responsibility.--As a condition of 
        participating in the program, during the period of fiscal years 
        2009 through 2013, a State shall--
                    ``(A) develop regulations for (as compared to 
                Federal requirements in effect as of the date of 
                enactment of this section) an equally effective but 
                less burdensome system of certifying and verifying 
                emissions of alternative-fueled vehicles and equipment 
                used for conversions; and
                    ``(B) not later than December 31, 2012, submit the 
                proposed regulations of the State to the Administrator 
                for review.
    ``(c) State Programs.--Upon receipt of proposed regulations of a 
State under subsection (b)(4), the Administrator shall--
            ``(1) review the regulations; and
            ``(2) if the Administrator determines that the 
        implementation of the regulations would result in (as compared 
        to Federal requirements in effect as of the date of enactment 
        of this section) an equally effective but less burdensome 
        system of certifying and verifying emissions of alternative-
        fueled vehicles and equipment used for conversions, authorize 
        the State to implement the regulations with respect to small 
        volume manufacturers in the State for the period of fiscal 
        years 2014 through 2018, subject to--
                    ``(A) the submission of annual reports to the 
                Administrator; and
                    ``(B) such periodic inspection and other oversight 
                requirements as the Administrator determines to be 
                appropriate.
    ``(d) Duration of Program.--The program and all authority under the 
program (other than the authority of the Administrator described in 
subsection (c)) shall terminate on December 31, 2013, unless the 
Administrator--
            ``(1) in consultation with the States, elects to continue 
        the program; and
            ``(2) promulgates such regulations as are necessary to 
        continue the program.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.''.

SEC. 305. NATURAL GAS CONVERSION EMISSION CERTIFICATIONS.

    Part C of title II of the Clean Air Act (42 U.S.C. 7581 et seq.) 
(as amended by section 304) is amended by adding at the end the 
following:

``SEC. 252. NATURAL GAS CONVERSION EMISSION CERTIFICATIONS.

    ``(a) In General.--The Administrator shall waive requirements for 
recertification of kits for the conversion of vehicles into vehicles 
that are powered by natural gas in any case in which, as determined by 
the Administrator--
            ``(1) the kit has been previously certified for the model 
        of vehicle to be converted; and
            ``(2) neither the kit nor the design and specifications of 
        the model of vehicle to be converted have substantially 
        changed.
    ``(b) Older Vehicles.--The Administrator shall waive emission 
certification system requirements for a vehicle that is over 10 years 
old or has over 120,000 miles that is powered by natural gas.''.
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