[House Report 112-601]
[From the U.S. Government Publishing Office]


112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     112-601

======================================================================

 
 TO ESTABLISH IN THE DEPARTMENT OF THE INTERIOR AN UNDER SECRETARY FOR 
  ENERGY, LANDS, AND MINERALS AND A BUREAU OF OCEAN ENERGY, AN OCEAN 
ENERGY SAFETY SERVICE, AND AN OFFICE OF NATURAL RESOURCES REVENUE, AND 
                           FOR OTHER PURPOSES

                                _______
                                

 July 17, 2012.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Hastings of Washington, from the Committee on Natural Resources, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 3404]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 3404) to establish in the Department of the 
Interior an Under Secretary for Energy, Lands, and Minerals and 
a Bureau of Ocean Energy, an Ocean Energy Safety Service, and 
an Office of Natural Resources Revenue, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. ESTABLISHMENT OF UNDER SECRETARY FOR ENERGY, LANDS, AND 
                    MINERALS AND ASSISTANT SECRETARY OF OCEAN ENERGY 
                    AND SAFETY.

  There shall be in the Department of the Interior--
          (1) an Under Secretary for Energy, Lands, and Minerals, who 
        shall--
                  (A) be appointed by the President, by and with the 
                advise and consent of the Senate;
                  (B) report to the Secretary of the Interior, or to 
                the Deputy Secretary of the Interior if ordered by the 
                Secretary;
                  (C) be paid at the rate payable for level III of the 
                Executive Schedule; and
                  (D) be responsible for--
                          (i) the safe and responsible development of 
                        our energy and mineral resources on Federal 
                        lands in appropriate accordance with United 
                        States energy demands, including administration 
                        of the Office of Surface Mining and the Bureau 
                        of Land Management as separate, independent 
                        agencies of the Department under the Assistant 
                        Secretary of Land and Minerals Management; and
                          (ii) ensuring multiple-use missions of the 
                        Department of the Interior that promote the 
                        safe and sustained development of energy and 
                        minerals resources on public lands (as that 
                        term is defined in the Federal Land Policy and 
                        Management Act of 1976 (43 U.S.C. 1701 et 
                        seq.));
          (2) an Assistant Secretary of Ocean Energy and Safety, who 
        shall--
                  (A) be appointed by the President, by and with the 
                advise and consent of the Senate;
                  (B) report to the Under Secretary for Energy, Lands, 
                and Minerals;
                  (C) be paid at the rate payable for level IV of the 
                Executive Schedule; and
                  (D) be responsible for ensuring safe and efficient 
                development of energy and minerals on the Outer 
                Continental Shelf of the United States; and
          (3) an Assistant Secretary of Land and Minerals Management, 
        who shall--
                  (A) be appointed by the President, by and with the 
                advise and consent of the Senate;
                  (B) report to the Under Secretary for Energy, Lands, 
                and Minerals;
                  (C) be paid at the rate payable for level IV of the 
                Executive Schedule; and
                  (D) be responsible for ensuring safe and efficient 
                development of energy and minerals on public lands and 
                other Federal onshore lands under the jurisdiction of 
                the Department of the Interior, including 
                implementation of the Mineral Leasing Act (30 U.S.C. 
                181 et seq.) and the Surface Mining Control and 
                Reclamation Act (30 U.S.C. 1201 et seq.) and 
                administration of the Office of Surface Mining.

SEC. 2. BUREAU OF OCEAN ENERGY.

  (a) Establishment.--There is established in the Department of the 
Interior a Bureau of Ocean Energy (referred to in this section as the 
``Bureau''), which shall--
          (1) be headed by a Director of Ocean Energy (referred to in 
        this section as the ``Director''); and
          (2) be administered under the direction of the Assistant 
        Secretary of Ocean Energy and Safety.
  (b) Director.--
          (1) Appointment.--The Director shall be appointed by the 
        Secretary of the Interior.
          (2) Compensation.--The Director shall be compensated at the 
        rate provided for Level V of the Executive Schedule under 
        section 5316 of title 5, United States Code.
  (c) Duties.--
          (1) In general.--The Secretary of the Interior shall carry 
        out through the Bureau all functions, powers, and duties vested 
        in the Secretary relating to the administration of a 
        comprehensive program of offshore mineral and renewable energy 
        resources management.
          (2) Specific authorities.--The Director shall promulgate and 
        implement regulations--
                  (A) for the proper issuance of leases for the 
                exploration, development, and production of 
                nonrenewable and renewable energy and mineral resources 
                on the Outer Continental Shelf;
                  (B) relating to resource identification, access, 
                evaluation, and utilization;
                  (C) for development of leasing plans, lease sales, 
                and issuance of leases for such resources;
                  (D) regarding issuance of environmental impact 
                statements related to leasing and post leasing 
                activities including exploration, development, and 
                production, and the use of third party contracting for 
                necessary environmental analysis for the development of 
                such resources; and
                  (E) for the processing of exploration plans and 
                development plans.
          (3) Limitation.--The Secretary shall not carry out through 
        the Bureau any function, power, or duty that is--
                  (A) required by section 3 to be carried out through 
                the Ocean Energy Safety Service; or
                  (B) required by section 4 to be carried out through 
                the Office of Natural Resources Revenue.
  (d) Responsibilities of Land Management Agencies.--Nothing in this 
section shall affect the authorities of the Bureau of Land Management 
under the Federal Land Policy and Management Act of 1976 (43 U.S.C. 
1701 et seq.) or of the Forest Service under the National Forest 
Management Act of 1976 (Public Law 94-588).

SEC. 3. OCEAN ENERGY SAFETY SERVICE.

  (a) Establishment.--There is established in the Department of the 
Interior an Ocean Energy Safety Service (referred to in this section as 
the ``Service''), which shall--
          (1) be headed by a Director of Energy Safety (referred to in 
        this section as the ``Director''); and
          (2) be administered under the direction of the Assistant 
        Secretary of Ocean Energy and Safety.
  (b) Director.--
          (1) Appointment.--The Director shall be appointed by the 
        Secretary of the Interior.
          (2) Compensation.--The Director shall be compensated at the 
        rate provided for Level V of the Executive Schedule under 
        section 5316 of title 5, United States Code.
  (c) Duties.--
          (1) In general.--The Secretary of the Interior shall carry 
        out through the Service all functions, powers, and duties 
        vested in the Secretary relating to the administration of 
        safety and environmental enforcement activities related to 
        offshore mineral and renewable energy resources on the Outer 
        Continental Shelf pursuant to the Outer Continental Shelf Lands 
        Act (43 U.S.C. 1331 et seq.) including the authority to 
        develop, promulgate, and enforce regulations to ensure the safe 
        and sound exploration, development, and production of mineral 
        and renewable energy resources on the Outer Continental Shelf 
        in a timely fashion.
          (2) Specific authorities.--The Director shall be responsible 
        for all safety activities related to exploration and 
        development of renewable and mineral resources on the Outer 
        Continental Shelf, including--
                  (A) exploration, development, production, and ongoing 
                inspections of infrastructure;
                  (B) the suspending or prohibiting, on a temporary 
                basis, any operation or activity, including production 
                under leases held on the Outer Continental Shelf, in 
                accordance with section 5(a)(1) of the Outer 
                Continental Shelf Lands Act (43 U.S.C. 1334(a)(1));
                  (C) cancelling any lease, permit, or right-of-way on 
                the Outer Continental Shelf, in accordance with section 
                5(a)(2) of the Outer Continental Shelf Lands Act (43 
                U.S.C. 1334(a)(2));
                  (D) compelling compliance with applicable Federal 
                laws and regulations relating to worker safety and 
                other matters;
                  (E) requiring comprehensive safety and environmental 
                management programs for persons engaged in activities 
                connected with the exploration, development, and 
                production of mineral or renewable energy resources;
                  (F) developing and implementing regulations for 
                Federal employees to carry out any inspection or 
                investigation to ascertain compliance with applicable 
                regulations, including health, safety, or environmental 
                regulations;
                  (G) implementing the Offshore Technology Research and 
                Risk Assessment Program under section 21 of the Outer 
                Continental Shelf Lands Act (43 U.S.C. 1347);
                  (H) summoning witnesses and directing the production 
                of evidence;
                  (I) levying fines and penalties and disqualifying 
                operators;
                  (J) carrying out any safety, response, and removal 
                preparedness functions; and
                  (K) the processing of permits.
  (d) Employees.--
          (1) In general.--The Secretary shall ensure that the 
        inspection force of the Bureau consists of qualified, trained 
        employees who meet qualification requirements and adhere to the 
        highest professional and ethical standards.
          (2) Qualifications.--The qualification requirements referred 
        to in paragraph (1)--
                  (A) shall be determined by the Secretary, subject to 
                subparagraph (B); and
                  (B) shall include--
                          (i) three years of practical experience in 
                        oil and gas exploration, development, or 
                        production; or
                          (ii) a degree in an appropriate field of 
                        engineering from an accredited institution of 
                        higher learning.
          (3) Assignment.--In assigning oil and gas inspectors to the 
        inspection and investigation of individual operations, the 
        Secretary shall give due consideration to the extent possible 
        to their previous experience in the particular type of oil and 
        gas operation in which such inspections are to be made.
          (4) Background checks.--The Director shall require that an 
        individual to be hired as an inspection officer undergo an 
        employment investigation (including a criminal history record 
        check).
          (5) Language requirements.--Individuals hired as inspectors 
        must be able to read, speak, and write English well enough to--
                  (A) carry out written and oral instructions regarding 
                the proper performance of inspection duties; and
                  (B) write inspection reports and statements and log 
                entries in the English language.
          (6) Annual proficiency review.--
                  (A) Annual proficiency review.--The Director shall 
                provide that an annual evaluation of each individual 
                assigned inspection duties is conducted and documented.
                  (B) Continuation of employment.--An individual 
                employed as an inspector may not continue to be 
                employed in that capacity unless the evaluation 
                demonstrates that the individual--
                          (i) continues to meet all qualifications and 
                        standards;
                          (ii) has a satisfactory record of performance 
                        and attention to duty based on the standards 
                        and requirements in the inspection program; and
                          (iii) demonstrates the current knowledge and 
                        skills necessary to courteously, vigilantly, 
                        and effectively perform Inspection functions.
          (7) Limitation on right to strike.--Any individual that 
        conducts permitting or inspections under this section may not 
        participate in a strike, or assert the right to strike.
          (8) Personnel authority.--Notwithstanding any other provision 
        of law, the Director may employ, appoint, discipline and 
        terminate for cause, and fix the compensation, terms, and 
        conditions of employment of Federal service for individuals as 
        the employees of the Service in order to restore and maintain 
        the trust of the people of the United States in the 
        accountability of the management of our Nation's energy safety 
        program.
          (9) Training academy.--
                  (A) In general.--The Secretary shall establish and 
                maintain a National Offshore Energy Health and Safety 
                Academy (referred to in this paragraph as the 
                ``Academy'') as an agency of the Ocean Energy Safety 
                Service.
                  (B) Functions of academy.--The Secretary, through the 
                Academy, shall be responsible for--
                          (i) the initial and continued training of 
                        both newly hired and experienced offshore oil 
                        and gas inspectors in all aspects of health, 
                        safety, environmental, and operational 
                        inspections;
                          (ii) the training of technical support 
                        personnel of the Bureau;
                          (iii) any other training programs for 
                        offshore oil and gas inspectors, Bureau 
                        personnel, Department personnel, or other 
                        persons as the Secretary shall designate; and
                          (iv) certification of the successful 
                        completion of training programs for newly hired 
                        and experienced offshore oil and gas 
                        inspectors.
                  (C) Cooperative agreements.--
                          (i) In general.--In performing functions 
                        under this paragraph, and subject to clause 
                        (ii), the Secretary may enter into cooperative 
                        educational and training agreements with 
                        educational institutions, related Federal 
                        academies, other Federal agencies, State 
                        governments, safety training firms, and oil and 
                        gas operators and related industries.
                          (ii) Training requirement.--Such training 
                        shall be conducted by the Academy in accordance 
                        with curriculum needs and assignment of 
                        instructional personnel established by the 
                        Secretary.
          (10) Use of department personnel.--In performing functions 
        under this subsection, the Secretary shall use, to the extent 
        practicable, the facilities and personnel of the Department of 
        the Interior. The Secretary may appoint or assign to the 
        Academy such officers and employees as the Secretary considers 
        necessary for the performance of the duties and functions of 
        the Academy.
          (11) Additional training programs.--
                  (A) In general.--The Secretary shall work with 
                appropriate educational institutions, operators, and 
                representatives of oil and gas workers to develop and 
                maintain adequate programs with educational 
                institutions and oil and gas operators that are 
                designed--
                          (i) to enable persons to qualify for 
                        positions in the administration of this Act; 
                        and
                          (ii) to provide for the continuing education 
                        of inspectors or other appropriate Department 
                        of the Interior personnel.
                  (B) Financial and technical assistance.--The 
                Secretary may provide financial and technical 
                assistance to educational institutions in carrying out 
                this paragraph.
  (e) Limitation.--The Secretary shall not carry out through the 
Service any function, power, or duty that is--
          (1) required by section 2 to be carried out through Bureau of 
        Ocean Energy; or
          (2) required by section 4 to be carried out through the 
        Office of Natural Resources Revenue.

SEC. 4. OFFICE OF NATURAL RESOURCES REVENUE.

  (a) Establishment.--There is established in the Department of the 
Interior an Office of Natural Resources Revenue (referred to in this 
section as the ``Office'') to be headed by a Director of Natural 
Resources Revenue (referred to in this section as the ``Director'').
  (b) Appointment and Compensation.--
          (1) In general.--The Director shall be appointed by the 
        Secretary of the Interior.
          (2) Compensation.--The Director shall be compensated at the 
        rate provided for Level V of the Executive Schedule under 
        section 5316 of title 5, United States Code.
  (c) Duties.--
          (1) In general.--The Secretary of the Interior shall carry 
        out, through the Office, all functions, powers, and duties 
        vested in the Secretary and relating to the administration of 
        offshore royalty and revenue management functions.
          (2) Specific authorities.--The Secretary shall carry out, 
        through the Office, all functions, powers, and duties 
        previously assigned to the Minerals Management Service 
        (including the authority to develop, promulgate, and enforce 
        regulations) regarding offshore royalty and revenue collection; 
        royalty and revenue distribution; auditing and compliance; 
        investigation and enforcement of royalty and revenue 
        regulations; and asset management for onshore and offshore 
        activities.
  (d) Limitation.--The Secretary shall not carry out through the Office 
any function, power, or duty that is--
          (1) required by section 2 to be carried out through Bureau of 
        Ocean Energy; or
          (2) required by section 3 to be carried out through the Ocean 
        Energy Safety Service.

SEC. 5. ETHICS AND DRUG TESTING.

  (a) Certification.--The Secretary of the Interior shall certify 
annually that all Department of the Interior officers and employees 
having regular, direct contact with lessees, contractors, 
concessionaires, and other businesses interested before the Government 
as a function of their official duties, or conducting investigations, 
issuing permits, or responsible for oversight of energy programs, are 
in full compliance with all Federal employee ethics laws and 
regulations under the Ethics in Government Act of 1978 (5 U.S.C. App.) 
and part 2635 of title 5, Code of Federal Regulations, and all guidance 
issued under subsection (c).
  (b) Drug Testing.--The Secretary shall conduct a random drug testing 
program of all Department of the Interior personnel referred to in 
subsection (a).
  (c) Guidance.--Not later than 90 days after the date of enactment of 
this Act, the Secretary shall issue supplementary ethics and drug 
testing guidance for the employees for which certification is required 
under subsection (a). The Secretary shall update the supplementary 
ethics guidance not less than once every 3 years thereafter.

SEC. 6. ABOLISHMENT OF MINERALS MANAGEMENT SERVICE.

  (a) Abolishment.--The Minerals Management Service is abolished.
  (b) Completed Administrative Actions.--
          (1) In general.--Completed administrative actions of the 
        Minerals Management Service shall not be affected by the 
        enactment of this Act, but shall continue in effect according 
        to their terms until amended, modified, superseded, terminated, 
        set aside, or revoked in accordance with law by an officer of 
        the United States or a court of competent jurisdiction, or by 
        operation of law.
          (2) Completed administrative action defined.--For purposes of 
        paragraph (1), the term ``completed administrative action'' 
        includes orders, determinations, memoranda of understanding, 
        memoranda of agreements, rules, regulations, personnel actions, 
        permits, agreements, grants, contracts, certificates, licenses, 
        registrations, and privileges.
  (c) Pending Proceedings.--Subject to the authority of the Secretary 
of the Interior and the officers of the Department of the Interior 
under this Act--
          (1) pending proceedings in the Minerals Management Service, 
        including notices of proposed rulemaking, and applications for 
        licenses, permits, certificates, grants, and financial 
        assistance, shall continue, notwithstanding the enactment of 
        this Act or the vesting of functions of the Service in another 
        agency, unless discontinued or modified under the same terms 
        and conditions and to the same extent that such discontinuance 
        or modification could have occurred if this Act had not been 
        enacted; and
          (2) orders issued in such proceedings, and appeals therefrom, 
        and payments made pursuant to such orders, shall issue in the 
        same manner and on the same terms as if this Act had not been 
        enacted, and any such orders shall continue in effect until 
        amended, modified, superseded, terminated, set aside, or 
        revoked by an officer of the United States or a court of 
        competent jurisdiction, or by operation of law.
  (d) Pending Civil Actions.--Subject to the authority of the Secretary 
of the Interior or any officer of the Department of the Interior under 
this Act, pending civil actions shall continue notwithstanding the 
enactment of this Act, and in such civil actions, proceedings shall be 
had, appeals taken, and judgments rendered and enforced in the same 
manner and with the same effect as if such enactment had not occurred.
  (e) References.--References relating to the Minerals Management 
Service in statutes, Executive orders, rules, regulations, directives, 
or delegations of authority that precede the effective date of this Act 
are deemed to refer, as appropriate, to the Department, to its 
officers, employees, or agents, or to its corresponding organizational 
units or functions. Statutory reporting requirements that applied in 
relation to the Minerals Management Service immediately before the 
effective date of this Act shall continue to apply.

SEC. 7. CONFORMING AMENDMENTS TO EXECUTIVE SCHEDULE PAY RATES.

  (a) Under Secretary for Energy, Lands, and Minerals.--Section 5314 of 
title 5, United States Code, is amended by inserting after the item 
relating to ``Under Secretaries of the Treasury (3)'' the following:
           ``Under Secretary for Energy, Lands, and Minerals, 
        Department of the Interior.''.
  (b) Assistant Secretaries.--Section 5315 of title 5, United States 
Code, is amended by striking ``Assistant Secretaries of the Interior 
(6).'' and inserting the following:
           ``Assistant Secretaries of the Interior (7).''.
  (c) Directors.--Section 5316 of title 5, United States Code, is 
amended by striking ``Director, Bureau of Mines, Department of the 
Interior.'' and inserting the following new items:
           ``Director, Bureau of Ocean Energy, Department of the 
        Interior.
           ``Director, Ocean Energy Safety Service, Department of the 
        Interior.
           ``Director, Office of Natural Resources Revenue, Department 
        of the Interior.''.

SEC. 8. OUTER CONTINENTAL SHELF ENERGY SAFETY ADVISORY BOARD.

  (a) Establishment.--The Secretary of the Interior shall establish, 
under the Federal Advisory Committee Act, an Outer Continental Shelf 
Energy Safety Advisory Board (referred to in this section as the 
``Board'')--
          (1) to provide the Secretary and the Directors established by 
        this Act with independent scientific and technical advice on 
        safe, responsible, and timely mineral and renewable energy 
        exploration, development, and production activities; and
          (2) to review operations of the National Offshore Energy 
        Health and Safety Academy established under section 3(d), 
        including submitting to the Secretary recommendations of 
        curriculum to ensure training scientific and technical 
        advancements.
  (b) Membership.--
          (1) Size.--The Board shall consist of not more than 11 
        members, who--
                  (A) shall be appointed by the Secretary based on 
                their expertise in oil and gas drilling, well design, 
                operations, well containment and oil spill response; 
                and
                  (B) must have significant scientific, engineering, 
                management, and other credentials and a history of 
                working in the field related to safe energy 
                exploration, development, and production activities.
          (2) Consultation and nominations.--The Secretary shall 
        consult with the National Academy of Sciences and the National 
        Academy of Engineering to identify potential candidates for the 
        Board and shall take nominations from the public.
          (3) Term.--The Secretary shall appoint Board members to 
        staggered terms of not more than 4 years, and shall not appoint 
        a member for more than 2 consecutive terms.
          (4) Balance.--In appointing members to the Board, the 
        Secretary shall ensure a balanced representation of industry 
        and research interests.
  (c) Chair.--The Secretary shall appoint the Chair for the Board from 
among its members.
  (d) Meetings.--The Board shall meet not less than 3 times per year 
and shall host, at least once per year, a public forum to review and 
assess the overall energy safety performance of Outer Continental Shelf 
mineral and renewable energy resource activities.
  (e) Offshore Drilling Safety Assessments and Recommendations.--As 
part of its duties under this section, the Board shall, by not later 
than 180 days after the date of enactment of this section and every 5 
years thereafter, submit to the Secretary a report that--
          (1) assesses offshore oil and gas well control technologies, 
        practices, voluntary standards, and regulations in the United 
        States and elsewhere; and
          (2) as appropriate, recommends modifications to the 
        regulations issued under this Act to ensure adequate protection 
        of safety and the environment, including recommendations on how 
        to reduce regulations and administrative actions that are 
        duplicative or unnecessary.
  (f) Reports.--Reports of the Board shall be submitted by the Board to 
the Committee on Natural Resources of the House or Representatives and 
the Committee on Energy and Natural Resources of the Senate and made 
available to the public in electronically accessible form.
  (g) Travel Expenses.--Members of the Board, other than full-time 
employees of the Federal Government, while attending meeting of the 
Board or while otherwise serving at the request of the Secretary or the 
Director while serving away from their homes or regular places of 
business, may be allowed travel expenses, including per diem in lieu of 
subsistence, as authorized by section 5703 of title 5, United States 
Code, for individuals in the Government serving without pay.

SEC. 9. VETERANS PREFERENCE.

  Consistent with existing law, the Under Secretary for Energy, Lands, 
and Minerals shall, in administering the programs and authorities 
referenced under this Act, provide a hiring preference to eligible 
members listed under section 2108 of title 5, United States Code.

                          Purpose of the Bill

    The purpose of H.R. 3404, as ordered reported, is to 
establish in the Department of the Interior an Under Secretary 
for Energy, Lands, and Minerals and a Bureau of Ocean Energy, 
an Ocean Energy Safety Service, and an Office of Natural 
Resources Revenue.

                  Background and Need for Legislation

    The Minerals Management Service (MMS) had long been the 
agency directly responsible for overseeing the safe planning, 
leasing, and production of our nation's energy and mineral 
resources on Outer Continental Shelf (OCS) lands, including the 
collection of related revenues. MMS had been organizationally 
aligned within the Department of the Interior under the 
Assistant Secretary of Land and Minerals Management.
    Oversight problems with certain programs within the 
Department as well as ethical lapses and ensuing 
investigations, led to general concerns with the existing MMS 
management structure. The Deepwater Horizon explosion and 
subsequent oil spill in the Gulf of Mexico brought the issue of 
MMS reorganization to a critical juncture. As a result, the 
Secretary of the Interior executed a reorganization by 
Secretarial Order. The reorganization commenced in 2010, with 
the separation of the revenue arm of the former MMS into a 
separate agency, the Office of Natural Resources Revenue. The 
remaining functions of MMS were reorganized temporarily as the 
Bureau of Ocean Energy Management, Regulation and Enforcement 
(BOEMRE), which was ultimately further separated into the 
Bureau of Ocean Energy Management (BOEM) and the Bureau of 
Safety and Environmental Enforcement (BSEE).
    On July 15, 2011, the Committee on Natural Resources 
conducted an oversight hearing regarding the ongoing 
reorganization effort by the then-Director of BOEMRE, Michael 
Bromwich. The committee explored the progress of the then-
Director to preserve the efficiency of the agency's mission 
while ensuring a seamless transition to create two separate 
agencies.
    On September 15, 2011, the Subcommittee on Energy and 
Mineral Resources held a legislative hearing on a proposed bill 
later introduced as H.R. 3404. This hearing again explored the 
progress of the ongoing reorganization and the impact the 
reorganization had on the effective, efficient, and responsible 
production of our nation's offshore energy resources. 
Additionally, of note, both Interior Secretary Ken Salazar and 
then-Director of the BSEE, Michael Bromwich, have called for 
organic legislation to codify the reorganization.
    This bill echoes the reorganization put forward by then-
Director Bromwich and Secretary Salazar, though it includes 
important differences that the Committee believes to be 
integral to preserving continued efficient development of our 
nation's offshore resources.
    This legislation creates three completely separate agencies 
with clearly defined missions. The bill also creates an Under 
Secretary for Energy, Lands and Minerals--with a direct line to 
the Secretary of the Interior unless the Secretary delegates 
that authority. This new role elevates the principle of 
multiple use on federal lands--something the Committee on 
Natural Resources has continually needed to emphasize to the 
Obama Administration. This new position also increases 
oversight of safe energy development on all federal lands, 
including the OCS.
    This bill includes other differences as well, such as 
different agency names; the Bureau of Land Management and the 
Office of Surface Mining moved under the new Under Secretary to 
further encourage energy development both onshore and offshore; 
limiting the ability for safety inspectors to walk off the job 
to strike; ethics and drug testing requirements; and an OCS 
board that has the ability to provide recommendations on 
regulatory measures that are duplicative or unnecessary.
    In 2011, production on our nation's OCS lands was 
responsible for roughly 25 percent of domestic oil production 
and about 8 percent of domestic natural gas production--and 
revenues generated from such production on average provide 
roughly $13 billion to the federal treasury. It is pivotal that 
the federal agencies which bear responsibility to develop our 
nation's OCS resources are able to move forward in an efficient 
manner while also ensuring the safety of offshore operations. 
Their efficient operations have a direct effect on domestic 
energy production, nationwide job creation, and significant 
revenue streams upon which the federal government relies.
    Most Americans wish to see our nation's domestic energy 
resources produced safely to promote job growth and energy 
security. It is in our nation's best interest to ensure that 
the Department of the Interior is prioritizing multiple-use 
missions by developing American energy resources. It is equally 
important that the reorganization of these agencies within the 
Department provides effective oversight of these operations 
without tying up the processes in more bureaucratic red tape.
    While this balance is undoubtedly a goal that may not 
easily be achieved, it can be done. Offshore oil and gas 
development does not have to come at the cost of safe 
operations--American workers have conducted these operations 
safely for decades. This legislation seeks to add common sense 
to the Administration's reorganization plan to achieve a 
balance of increased yet safe energy production.

                            Committee Action

    H.R. 3404 was introduced on November 14, 2011, by 
Congressman Doc Hastings (R-WA). The bill was referred to the 
Committee on Natural Resources. On September 15, 2011, the 
Subcommittee on Energy and Mineral Resources held a hearing on 
a draft version of the bill. On November 17, 2011, the Full 
Natural Resources Committee met to consider H.R. 3404. 
Congressman Doc Hastings (R-WA) offered amendment designated 
Hastings.001 to the bill; the amendment was adopted by voice 
vote. Congressman Doug Lamborn (R-CO) offered amendment 
designated .002 to the bill; the amendment was adopted by voice 
vote. Congressman Bill Johnson (R-OH) offered amendment 
designated Johnson.004 to the bill; the amendment was adopted 
by voice vote. Congressman Jon Runyan (R-NJ) offered an 
amendment to the bill; the amendment was adopted by voice vote. 
Congressman Niki Tsongas (D-MA) offered amendment designated 
Tsongsas.004 to the bill; the amendment was not adopted by a 
bipartisan roll call vote of 14 to 27, as follows:


    Congressman John Garamendi (D-CA) offered amendment 
designated Garamendi.001 to the bill; the amendment was not 
adopted by a rollcall vote of 14 to 28, as follows:


    The bill was then adopted and ordered favorably reported to 
the House of Representatives by a bipartisan rollcall vote of 
28 to 14, as follows:


            Committee Oversight Findings and Recommendations

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

                    Compliance with House Rule XIII

    1. Cost of Legislation. Clause 3(d)(1) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(2)(B) 
of that Rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974. Under clause 3(c)(3) of rule 
XIII of the Rules of the House of Representatives and section 
403 of the Congressional Budget Act of 1974, the Committee has 
received the following cost estimate for this bill from the 
Director of the Congressional Budget Office:

H.R. 3404--A bill to establish in the Department of the Interior an 
        Under Secretary for Energy, Lands, and Minerals and a Bureau of 
        Ocean Energy, an Ocean Energy Safety Service, and an Office for 
        Natural Resources Revenue, and for other purposes

    H.R. 3404 would establish two new executive positions 
within the Department of the Interior (DOI) and require the 
agency to conduct a drug testing program for certain employees. 
The bill also would codify certain DOI reforms related to 
managing mineral resources on federal lands and the Outer 
Continental Shelf. Assuming appropriation of the necessary 
amounts, CBO estimates that implementing the legislation would 
cost roughly $1 million a year over the 2012-2017 period. 
Enacting H.R. 3404 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    H.R. 3404 would establish two new executive positions at 
DOI, an Under Secretary and an Assistant Secretary, who would 
oversee the development of mineral resources on federal lands. 
The bill also would require the agency to administer drug tests 
for certain employees who do work related to DOI energy 
programs. Based on information regarding the salaries for 
executive positions and support staff within the federal 
government and the cost of providing drug tests at other 
federal agencies, CBO estimates that implementing those 
provisions would cost about $1 million a year over the 2012-
2017 period, assuming appropriation of the necessary amounts.
    In 2010, DOI initiated a reorganization of the Minerals 
Management Service (MMS) that was completed at the beginning of 
fiscal year 2012. Under that reorganization, MMS was abolished, 
and three new entities--the Office of Natural Resources 
Revenue, the Bureau of Ocean Energy Management, and the Bureau 
of Safety and Environmental Enforcement--were created to 
perform activities formerly conducted by MMS. DOI also 
established a training center for oil rig inspectors and an 
advisory board to provide guidance on improving practices 
related to offshore drilling. Because certain provisions of 
H.R. 3404 would codify those reforms, which have been 
completed, CBO estimates that implementing those provisions 
would have no significant impact on the federal budget.
    The CBO staff contact for this estimate is Jeff LaFave. 
This estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.
    2. Section 308(a) of Congressional Budget Act. As required 
by clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives and section 308(a) of the Congressional Budget 
Act of 1974, this bill does not contain any new budget 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures. Assuming appropriation of the 
necessary amounts, CBO estimates that implementing the 
legislation would cost roughly $1 million a year over the 2012-
2017 period.
    3. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill, as ordered reported, is to establish in 
the Department of the Interior an Under Secretary for Energy, 
Lands, and Minerals and a Bureau of Ocean Energy, an Ocean 
Energy Safety Service, and an Office of Natural Resources 
Revenue.

                           Earmark Statement

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                    Compliance with Public Law 104-4

    This bill contains no unfunded mandates.

                Preemption of State, Local or Tribal Law

    This bill is not intended to preempt any State, local or 
tribal law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

TITLE 5, UNITED STATES CODE

           *       *       *       *       *       *       *



PART III--EMPLOYEES

           *       *       *       *       *       *       *


SUBPART D--PAY AND ALLOWANCES

           *       *       *       *       *       *       *


CHAPTER 53--PAY RATES AND SYSTEMS

           *       *       *       *       *       *       *



SUBCHAPTER II--EXECUTIVE SCHEDULE PAY RATES

           *       *       *       *       *       *       *



Sec. 5314. Positions at level III

  Level III of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2, as adjusted by section 5318 of this title:
          Solicitor General of the United States.

           *       *       *       *       *       *       *

          Under Secretary for Energy, Lands, and Minerals, 
        Department of the Interior.

           *       *       *       *       *       *       *


Sec. 5315. Positions at level IV

  Level IV of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2, as adjusted by section 5318 of this title:
          Deputy Administrator of General Services.

           *       *       *       *       *       *       *

          [Assistant Secretaries of the Interior (6).]
          Assistant Secretaries, Department of the Interior 
        (7).

           *       *       *       *       *       *       *


Sec. 5316. Positions at level V

  Level V of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2, as adjusted by section 5318 of this title:
          Administrator, Bonneville Power Administration, 
        Department of the Interior.

           *       *       *       *       *       *       *

          [Director, Bureau of Mines, Department of the 
        Interior.]
          Director, Bureau of Ocean Energy, Department of the 
        Interior.
          Director, Ocean Energy Safety Service, Department of 
        the Interior.
          Director, Office of Natural Resources Revenue, 
        Department of the Interior.

           *       *       *       *       *       *       *


                            DISSENTING VIEWS

H.R. 3404: To establish in the Department of the Interior an Under 
        Secretary for Energy, Lands, and Minerals and a Bureau of Ocean 
        Energy, an Ocean Energy Safety Service, and an Office of 
        Natural Resources Revenue, and for other purposes.
    Less than two months after the Deepwater Horizon oil spill 
began, Secretary Salazar and the Obama Administration began the 
process of dividing the former offshore regulator, the Minerals 
Management Service, into three separate agencies to oversee the 
leasing, revenue collection and safety of offshore drilling.
    On October 1, 2011 the Department completed that 
reorganization, thereby implementing a key recommendation of 
the independent BP Spill Commission that these conflicting 
functions should be housed in separate agencies at the Interior 
Department.
    Secretary Salazar and the Administration have requested 
organic legislation to codify the reorganization and the BP 
Commission has similarly recommended that Congress pass an 
organic act for the new agencies.
    However, while passing organic legislation for the new 
Interior Department agencies in charge of regulating offshore 
drilling is an important step, we believe it is only one of 
many reforms that are needed to ensure that we never have a 
similar disaster again. The BP Commission found that the causes 
of the Deepwater Horizon Disaster were ``systemic'' to the 
entire industry. The Commission recommended sweeping reforms to 
improve the safety of offshore drilling, yet more than a year 
and a half since the spill began the Congress has still not 
enacted a single legislative reform.
    The Majority rejected multiple Democratic amendments to 
H.R. 3404 that would have improved the safety of offshore 
drilling, including an amendment offered by Representative 
Tsongas (D-MA) that would have elevated specific safety 
requirements as part of the duties of the position of Assistant 
Secretary of Ocean Energy Safety that H.R. 3404 would 
establish. The Majority also rejected an amendment offered by 
Representative Garamendi (D-CA) that would have allowed the 
Interior Department to increase the inspection fees they 
collect on offshore oil rigs in order to fund the Department's 
inspection activities. The Garamendi amendment would have 
implemented a reform called for by the independent blue-ribbon 
BP Commission, which recommended increasing the $10 million the 
oil and gas industry pays each year in inspection fees 
``significantly'' to fund the Department's regulatory efforts.
    The Majority has not taken any action on legislation 
introduced by Natural Resources Committee Democrats (H.R. 501) 
to implement the Commission's recommendations. We oppose H.R. 
3404 because we believe that codification of the reorganization 
of the former Minerals Management Service should come as part 
of a broader reform of the offshore oil and gas industry in the 
United States to ensure that we can protect the workers, 
economy and environment of the Gulf and that we never have a 
spill like this again.

                                   Edward J. Markey.
                                   Rush D. Holt.
                                   Madeleine Z. Bordallo.
                                   John Garamendi.
                                   Frank Pallone, Jr.
                                   Raul M. Grijalva.
                                   Grace F. Napolitano.
                                   Niki Tsongas.
                                   Dale E. Kildee.
                                   Gregorio Kilili Camacho Sablan.
                                   Ben Ray Lujan.

                                  
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