[House Report 115-1083]
[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-1083
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DOMESTIC OFFSHORE ENERGY REINVESTMENT ACT OF 2018
_______
December 19, 2018.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Bishop of Utah, from the Committee on Natural Resources, submitted
the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 6771]
[Including cost estimate of the Congressional Budget Office]
The Committee on Natural Resources, to whom was referred
the bill (H.R. 6771) to amend the Gulf of Mexico Energy
Security Act of 2006, 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. SHORT TITLE.
This Act may be cited as the ``Domestic Offshore Energy Reinvestment
Act of 2018''.
SEC. 2. AMENDMENTS TO THE GULF OF MEXICO ENERGY SECURITY ACT OF 2006.
(a) In General.--Section 105(a) of the Gulf of Mexico Energy Security
Act of 2006 (43 U.S.C. 1331 note) is amended--
(1) in paragraph (1), by striking ``50'' and inserting
``37.5''; and
(2) in paragraph (2)--
(A) in the matter preceding subparagraph (A), by
striking ``50'' and inserting ``62.5'';
(B) in subparagraph (A), by striking ``75'' and
inserting ``80''; and
(C) in subparagraph (B), by striking ``25'' and
inserting ``20''.
(b) Limitations on Authorized Uses.--Section 105(d) of the Gulf of
Mexico Energy Security Act of 2006 (43 U.S.C. 1331 note) is amended--
(1) in paragraph (1), by adding at the end the following:
``(F) Planning, engineering, design, construction,
operations, and maintenance of one or more projects
that are specifically authorized by any other Act for
ecosystem restoration, hurricane protection, or flood
damage prevention.''; and
(2) by striking paragraph (2) and inserting the following:
``(2) Limitation.--Of the amounts received by a Gulf
producing State or coastal political subdivision under
subsection (b)--
``(A) not more than 3 percent may be used for the
purposes described in paragraph (1)(E); and
``(B) not less than 25 percent may be used for the
purposes described in paragraph (1)(F), and shall be
applied proportionally to the applicable Federal and
non-Federal share pursuant to such specific project
authorization.''.
(c) Repeal of Limitation.--Section 105(f) of the Gulf of Mexico
Energy Security Act of 2006 (43 U.S.C. 1331 note) is amended--
(1) by striking paragraph (1); and
(2) by redesignating paragraphs (2) and (3) as paragraphs (1)
and (2), respectively.
SEC. 3. CONVEYANCE TO STATES OF PROPERTY INTEREST IN STATE SHARE OF
ROYALTIES AND OTHER PAYMENTS.
(a) In General.--Section 35 of the Mineral Leasing Act (30 U.S.C.
191) is amended--
(1) in the first sentence of subsection (a), by striking
``shall be paid into the Treasury'' and inserting ``shall,
except as provided in subsection (b), be paid into the
Treasury'';
(2) by striking subsection (b) and inserting the following:
``(b) Conveyance to States of Property Interest in State Share.--
``(1) In general.--Notwithstanding any other provision of
law, on request of a State and in lieu of any payments to the
State under subsection (a), the Secretary of the Interior shall
convey to the State all right, title, and interest in and to
the percentage specified in that subsection for that State of
all amounts otherwise required to be paid into the Treasury
under that subsection from sales, bonuses, royalties (including
interest charges), and rentals for all public land or deposits
located in the State.
``(2) Amount.--Notwithstanding any other provision of law,
after a conveyance to a State under paragraph (1), any person
shall pay directly to the State any amount owed by the person
for which the right, title, and interest has been conveyed to
the State under this subsection.
``(3) Notice.--The Secretary of the Interior shall promptly
provide to each holder of a lease of public land to which
subsection (a) applies that are located in a State to which
right, title, and interest is conveyed under this subsection
notice that--
``(A) the Secretary of the Interior has conveyed to
the State all right, title, and interest in and to the
amounts referred to in paragraph (1); and
``(B) the leaseholder is required to pay the amounts
directly to the State.''; and
(3) in subsection (c)(1), by inserting ``and except as
provided in subsection (b)'' before ``, any rentals''.
(b) Conforming Amendments.--
(1) Section 6(a) of the Mineral Leasing Act for Acquired
Lands (30 U.S.C. 355(a)) is amended--
(A) in the first sentence, by striking ``Subject to
the provisions of section 35(b) of the Mineral Leasing
Act (30 U.S.C. 191(b)), all'' and inserting ``All'';
and
(B) in the second sentence, by striking ``of the Act
of February 25, 1920 (41 Stat. 450; 30 U.S.C. 191)''
and inserting ``of the Mineral Leasing Act (30 U.S.C.
191)''.
(2) Section 20(a) of the Geothermal Steam Act of 1970 (30
U.S.C. 1019(a)) is amended in the matter preceding paragraph
(1), in the second sentence, by striking ``the provisions of
subsection (b) of section 35 of the Mineral Leasing Act (30
U.S.C. 191(b)) and''.
(3) Section 205(f) of the Federal Oil and Gas Royalty
Management Act of 1982 (30 U.S.C. 1735(f)) is amended by
striking the fourth, fifth, and sixth sentences.
Purpose of the Bill
The purpose of H.R. 6771 is to amend the Gulf of Mexico
Energy Security Act of 2006.
Background and Need for Legislation
For decades, the Gulf of Mexico coast has served as the
home for one of the most prolific oil and gas basins in the
world. In 2017 alone, it averaged nearly 1.7 million barrels of
oil per day, resulting in $3.8 billion in revenue to the U.S.
Treasury.\1\ Coupled with the millions of barrels imported and
exported through the Texas port districts of Port Arthur and
Houston-Galveston, Gulf coast oil and gas operations play a key
role in the economic health of this country.\2\
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\1\U.S. Department of the Interior, Office of Natural Resource
Revenue, Natural Resources Revenue Data, Explore Data--Gulf of Mexico
(https://revenuedata.doi.gov/explore/offshore-gulf/).
\2\George, Rebecca. ``The port district of Houston-Galveston became
a net exporter of crude oil in April.'' U.S. Energy Information
Administration. Aug 20, 2018. (https://www.eia.gov/todayinenergy/
detail.php?id=36932).
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Despite the national and international importance of this
region, the Gulf coastline faces an environmental crisis,
precipitated by river control systems, severe weather, and
hydrocarbon infrastructure development. H.R. 6771, the Domestic
Offshore Energy Reinvestment Act of 2018, will increase
revenues shared with Gulf States to restore the health of the
Gulf coast and support the offshore energy industry into the
future.
Gulf communities must contend with mounting environmental
and infrastructure vulnerabilities. These vulnerabilities, as
highlighted by the 2005 hurricane season, are constantly
stressed by land subsidence and major storm events. If left
unchecked, land loss and storm damage threaten up to $136
billion in economic activity,\3\ and could result in the
exposure of 610 miles of pipeline by 2040.\4\ Although thick
swamp, natural marshland, and barrier islands collectively
absorb severe flooding and storm surges, human engineering has
resulted in the weakening of these systems.\5\
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\3\``Louisiana fights the sea, and loses,'' The Economist, Aug 26,
2017 (https://www.economist.com/news/united-states/21727099-has-
lessons-americas-climate-change-policy-louisiana-fights-sea-and-loses).
\4\``Economic Evaluation of Coastal Land Loss in Louisiana,''
Louisiana State University--E.J. Ourso College of Business, Dec 2015
(http://coastal.la.gov/wp-content/uploads/2015/12/LSU-
Rand_Report_on_Economics_of_Land_Loss-2.pdf), p.33.
\5\``Louisiana's Comprehensive Master Plan for a Sustainable
Coast.'' Coastal Protection and Restoration Authority of Louisiana,
State of Louisiana. P. ES-2. June 2, 2017. (http://coastal.la.gov/wp-
content/uploads/2017/04/2017-Coastal-Master-Plan_Web-Single-
Page_CFinal-with-Effective-Date-06092017.pdf).
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In 2006, Congress recognized the needs of the Gulf by
enacting the Gulf of Mexico Energy Security Act of 2006
(GOMESA, Public Law 109-432),\6\ which established a revenue
sharing program for the Gulf energy-producing States of Texas,
Louisiana, Mississippi, and Alabama. Under GOMESA, revenues
shared with the Gulf producing States must be used for coastal
restoration and related purposes. Louisiana has taken this
mandate even further, dedicating all GOMESA revenues towards
coastal restoration, to be performed by the State's Coastal
Protection and Restoration Authority (CPRA).\7\ According to
the CPRA Master Plan, $17.7 billion will be dedicated towards
marsh creation, $19 billion towards structural reinforcements,
and $5.1 billion towards sediment diversion.\8\ Louisiana
planned on GOMESA serving as the long-term funding mechanism
for the lion's share of coastal restoration,\9\ but due to the
nature of qualified revenues under GOMESA, it has served as an
unreliable source of revenue.
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\6\43 U.S.C. 1331 note.
\7\``Coastal Protection and Restoration Authority Gulf of Mexico
Energy Security Act- Infrastructure Funding Program'', (http://
coastal.la.gov/wp-content/uploads/2016/08/Final-GOMESA-Infrastructure-
Process.pdf).
\8\Supra note 5.P. ES-16.
\9\Id., p.128.
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GOMESA requires 37.5% of all qualified Gulf revenues to be
directed to the four States in accordance with a formula based
on OCS lease block distance from each State's coast. The
qualifications for revenue disbursements are associated with
two phases under GOMESA. Phase I, which began in fiscal year
2007, limited disbursements to revenues generated by select
leases. Phase II, which began in fiscal year 2017, expands the
definition of revenues eligible for disbursement to include all
revenues generated by leases issued after 2006.\10\
Consequently while Gulf States received only minor
disbursements under Phase I, Phase II is anticipated to produce
much larger revenues to the Gulf States.\11\
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\10\Bureau of Ocean Energy Management, Gulf of Mexico Energy
Security Act (GOMESA), (https://www.boem.gov/Revenue-Sharing/).
\11\``States get $188 million as GOMESA revenue-sharing enters 2nd
phase.'' Oil & Gas Journal. May 8, 2018. (https://www.ogj.com/articles/
print/volume-116/issue-5/general-interest/states-get-188-million-as-
gomesa-revenue-sharing-enters-2nd-phase.html).
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Additionally, GOMESA directs 12.5% of those qualified
offshore revenues to the Land and Water Conservation Fund
(LWCF, 54 U.S.C. 200301 et seq.) to be used for State
recreation programs by all 50 States. It should be noted that
the $900 million annual authorization level of the LWCF Fund is
met almost exclusively by offshore energy revenues, and the
GOMESA monies are on top of the $900 million annual
authorization.\12\ Unlike other monies in the LWCF, the GOMESA
money is not subject to appropriation.\13\
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\12\Hardy-Vincent, Carol, ``Land and Water Conservation Fund:
Overview, Funding History, and Issues,'' Sep 6, 2016 (http://
www.crs.gov/Reports/
RL33531?source=search&guid=995b8347d35543cba6a9650d2f3da87b&index=2).
\13\GOMESA, Sec. 105(e).
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The Outer Continental Shelf Lands Act (OCSLA, 43 U.S.C.
1331 et seq.) governs the management of the minerals within
federal offshore territory. However, unlike this statute's
onshore equivalent, the Minerals Leasing Act (MLA, 30 U.S.C.
181 et seq.), OCSLA did not establish a revenue-sharing scheme
for mineral revenues to affected States. Under the MLA, 50% of
revenues generated from hydrocarbon production are shared with
the producing State.\14\ Due to the phase-ins and statutory
caps of GOMESA (and the lack of a historic revenue sharing
structure under OCSLA), a disparity exists between the revenues
received by States for onshore production and offshore
production.\15\
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\14\30 U.S.C. 191.
\15\The Department of the Interior, Office of Natural Resource
Revenue, ``Analysis of NR disbursements FY2003-2017''; Comay, Laura,
``Louisiana FY2017 OCS Revenues`` Email Correspondence, Apr 20, 2018.
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Furthermore, payments under GOMESA to Gulf producing States
and LWCF are currently capped at $500 million per year.\16\
Therefore, Gulf producing States are only eligible to receive
up to $375 million per year, split among the four Gulf
producing States, with the remaining $125 million disbursed to
LWCF. Although GOMESA disbursements have not remotely
approached the levels envisioned by the cap, there have been
numerous legislative efforts to raise or eliminate these caps
to establish parity with the onshore revenue sharing structure.
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\16\Public Law 109-432.
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With so much offshore revenue directed away from the coast,
ongoing restoration projects are severely threatened. Amending
GOMESA's revenue sharing structure to increase support to
producing States will ensure the long-term health of the Gulf
and will help secure this critical federal income stream into
the future.
Section-by-Section Analysis of the Bill as Ordered Reported
Section 2. Amendments to the Gulf of Mexico Energy Security Act of 2006
Amends GOMESA to increase the percentage of
revenues shared with Gulf producing States from 50% to 62.5%.
Preserves the allocation of 12.5% of qualified
revenues to the Land and Water Conservation Fund.
Expands authorized uses of shared revenues to
include the design and planning of ecosystem restoration,
hurricane protection, or flood damage prevention.
Requires not less than 25% of revenues shared be
dedicated towards planning, engineering, design, construction,
operations, and maintenance of one or more projects that are
specifically authorized by any other Acts for ecosystem
restoration, hurricane protection, or flood damage prevention.
Eliminates the cap on revenues distributed to Gulf
producing States and LWCF.
Section 3. Conveyance to States of property interest in State share of
royalties and other payments
Amends the MLA to allow the Secretary of the
Interior to convey a property interest in the revenues that
States are allocated under the MLA from onshore oil and gas
development.
If the property interest is conveyed to the State,
then the holder of a lease will pay the amount owed directly to
the State, rather than to the Secretary for distribution to the
State.
The intent behind this provision is to eliminate
the need for administrative costs to be deducted by the
Secretary before the State share is distributed.
Committee Action
H.R. 6771 was introduced on September 12, 2018, by
Congressman Garret Graves (R-LA). The bill was referred to the
Committee on Natural Resources. On September 13, 2018, the
Natural Resources Committee met to consider the bill.
Congressman Raul M. Grijalva (D-AZ) offered an amendment
designated #1; it was not adopted by voice vote. Congresswoman
Liz Cheney (R-WY) offered an amendment designated 083; it was
adopted by voice vote. No amendments further were offered, and
the bill, as amended, was ordered favorably reported to the
House of Representatives by voice vote.
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 and Congressional Budget Act
1. Cost of Legislation and the Congressional Budget Act.
With respect to the requirements of clause 3(c)(2) and (3) of
rule XIII of the Rules of the House of Representatives and
sections 308(a) and 402 of the Congressional Budget Act of
1974, the Committee has received the following estimate for the
bill from the Director of the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, December 17, 2018.
Hon. Rob Bishop,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 6771, the Domestic
Offshore Energy Reinvestment Act of 2018.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Kathleen
Gramp.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 6771--Domestic Offshore Energy Reinvestment Act of 2018
Summary: H.R. 6771 would change the disposition of the
proceeds from federal oil and gas leases in the Outer
Continental Shelf (OCS) and other federal lands. Under the Gulf
of Mexico Energy Security Act of 2006, half of the proceeds
from OCS leases issued after 2006 are deposited in the Treasury
and the remainder is available for spending without further
appropriation, subject to annual caps on spending that expire
after 2055. This bill would repeal the annual spending limits
and would increase the portion of OCS receipts available for
spending to 62.5 percent. In addition, the bill would increase
the share of proceeds paid to states from onshore mineral
leases from 49 percent to 50 percent.
CBO estimates that enacting H.R. 6771 would increase direct
spending by $2.5 billion over the 2019-2028 period, largely as
a result of provisions increasing the portion of OCS receipts
that could be spent without further appropriation.
Because enacting H.R. 6771 would affect direct spending,
pay-as-you-go procedures apply. The bill would not affect
revenues.
CBO estimates that enacting H.R. 6771 would increase net
direct spending and on-budget deficits by more than $5 billion
in each of the four consecutive 10-year periods beginning in
2029.
H.R. 6771 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would benefit states by increasing the share of proceeds
they receive from oil and gas production in the OCS and other
federal lands.
Estimated cost to the Federal Government: The estimated
budgetary effect of H.R. 6771 is shown in the following table.
The costs of the legislation fall within budget functions 300
(natural resources and the environment) and 800 (general
government).
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By fiscal year, in millions of dollars----
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2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2019-2023 2019-2028
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INCREASES IN DIRECT SPENDINGa
Outer Continental Shelf Oil and Gas Receipts
Estimated Budget Authority...................... 0 50 130 145 190 190 230 315 400 575 515 2,225
Estimated Outlays............................... 0 60 130 140 175 180 220 295 375 530 505 2,105
Onshore Oil and Gas Receipts
Estimated Budget Authority...................... 24 32 33 34 35 36 37 38 38 38 158 345
Estimated Outlays............................... 24 32 33 34 35 36 37 38 38 38 158 345
Total.......................................
Estimated Budget Authority...................... 24 82 163 179 225 226 267 353 438 613 673 2,570
Estimated Outlays............................... 24 92 163 174 210 216 257 333 413 568 663 2,450
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a. H.R. 6771 would increase the portion of receipts paid to states. Because those payment are disbursed more quickly than payments from the Land and
Water Conservation Fund, the net effect of the bill on outlays in 2020 is estimated to be larger than the net change in budget authority.
Basis of estimate: CBO estimates that enacting H.R. 6771
would increase direct spending by $2.5 billion over the 2019-
2028 period, with $2.1 billion of that cost stemming from
provisions that would increase the portion of OCS receipts that
could be spent without further appropriation. For this
estimate, CBO assumes the legislation will be enacted by the
end of 2018.
Outer Continental Shelf Oil and Gas Receipts
Federally owned oil and gas resources are developed under a
system of leasing that requires companies to pay bonus bids
when leases are issued, annual rental payments on nonproducing
leases, and royalty payments based on the value of any oil and
gas production. Those payments are recorded in the budget as
offsetting receipts or as reduction in direct spending. Under
current law, 50 percent of the offsetting receipts from leases
issued after 2006 in the Central and Western Gulf of Mexico are
paid to certain states and spent by the Land and Water
Conservation Fund (LWCF) without further appropriation, subject
to certain limits. CBO estimates that such spending will total
$4.8 billion over the 2019-2028 period, reflecting provisions
in current law that generally cap total spending at $500
million a year through 2055.\1\
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\1\There are some statutory exceptions to the $500 million limit on
annual spending. The cap on the spending of proceeds from post-2006
leases is $650 million in each of the years 2020 and 2021. In addition,
spending of receipts from two specific geographic areas is exempt from
the annual caps.
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H.R. 6771 would increase such spending by repealing the
caps on annual spending and by increasing the portion that may
be paid to certain states and spent by the LWCF from 50 percent
to 62.5 percent. The bill also would change the share of the
proceeds allocated to states and the LWCF.
Under the technical and economic assumptions in the April
2018 baseline, CBO projects that offsetting receipts from oil
and gas leases in the OCS will total about $52 billion over the
2019-2028 period. CBO estimates that the receipts attributable
to post-2006 leases will equal roughly 25 percent of the total
over the next 10 years, as more projects produce oil and gas
and pay additional royalties.\2\
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\2\By comparison, CBO estimates that leases issued after 2006
accounted for about 17 percent of the OCS receipts collected over the
previous 10-year period. CBO expects that the share of receipts
attributable to those leases will increase in the future, because most
of the production from OCS leases occurs more than 10 years after the
parcel is leased. For more information, see Congressional Budget
Office, Options for increasing Federal Income from crude Oil and
Natural Gas on Federal Land, (April, 2016), www.cbo.gov/publication/
51421.
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Because payments derived from OCS leases are made the year
after income is collected, CBO expects that the new formulas in
the bill would apply to receipts accrued from January, 2019
through the end of fiscal year 2027. After adjusting for the
timing of payments to states and spending patterns of the LWCF
program, CBO estimates that enacting H.R. 6771 would increase
direct spending of OCS receipts by $2.1 billion over the 2019-
2028 period.
Onshore Oil and Gas Receipts
Under the Mineral Leasing Act, states receive 49 percent of
all royalties, rents, and bonus bids from onshore mineral
leases. Those payments are made on a monthly basis and in the
same year that the receipts are collected. H.R. 6771 would
direct the Department of the Interior to convey to states an
additional 1 percent of those receipts upon request by a state.
CBO expects that all states would request that additional
payment upon enactment. Using CBO's April 2018 baseline
estimates of receipts from onshore oil and gas leases, we
estimate that implementing the provision would increase direct
spending by $345 million over the 2019-2028 period.
Uncertainty: In estimating the effects of H.R. 6771, CBO
had to account for several sources of uncertainty:
CBO does not know how much oil and gas will
be produced from OCS leases issued after 2006. Spending
could be higher or lower than estimated depending the
technical and economic characteristics of each parcel.
CBO cannot predict the timing of bonus
payments or royalties from leases issued after 2006,
which depend on investment decisions made by private
companies. Differences in the timing of payments could
affect the years in which costs are incurred.
CBO cannot predict future oil or gas prices,
which affect royalties and bonus payments for both
offshore and onshore leases. Differences between
estimated and actual prices would have a corresponding
effect on the cost of the legislation.
Pay-As-You-Go Considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 6771, THE DOMESTIC OFFSHORE ENERGY REINVESTMENT ACT OF 2018, AS ORDERED REPORTED BY THE HOUSE COMMITTEE
ON NATURAL RESOURCES ON SEPTEMBER 13, 2018.
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By fiscal year, in millions of dollars--
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2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2019-2023 2019-2028
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NET INCREASE IN THE DEFICIT
Statutory Pay-As-You-Go Effect.................... 24 92 163 174 210 216 257 333 413 568 663 2,450
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Increase in long-term direct spending and deficits: CBO
estimates that enacting H.R. 6771 would increase net direct
spending and on-budget deficits by more than $5 billion in each
of the four consecutive 10-year periods beginning in 2029.
Mandates: H.R. 6771 contains no intergovernmental or
private-sector mandates as defined in UMRA. The bill would
benefit states--primarily those along the Gulf Coast--by
increasing the share of proceeds they receive from oil and gas
production in the OCS and from other federal lands. Over the
2019-2028 period, CBO estimates those states would receive
about $2.5 billion more in proceeds, relative to current law,
as a result of the legislation. Most of that amount would come
from increasing the share of production proceeds, but states
would also receive a small portion of those proceeds in the
form of federal grants through the Land and Water Conservation
Fund.
Estimate prepared by: Federal Costs: Kathleen Gramp and
Janani Shankaran; Mandates: Jon Sperl.
Estimate reviewed by: Kim P. Cawley, Unit Chief, Natural
Resources Cost Estimate Unit; H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
2. General Performance Goals and Objectives. As required by
clause 3(c)(4) of rule XIII, the general performance goal or
objective of this bill is to amend the Gulf of Mexico Energy
Security Act of 2006.
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.
Compliance With H. Res. 5
Directed Rule Making. This bill does not contain any
directed rule makings.
Duplication of Existing Programs. This bill does not
establish or reauthorize a program of the federal government
known to be duplicative of another program. Such program was
not included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-139
or identified in the most recent Catalog of Federal Domestic
Assistance published pursuant to the Federal Program
Information Act (Public Law 95-220, as amended by Public Law
98-169) as relating to other programs.
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, and existing law in which no
change is proposed is shown in roman):
GULF OF MEXICO ENERGY SECURITY ACT OF 2006
* * * * * * *
DIVISION C--OTHER PROVISIONS
TITLE I--GULF OF MEXICO ENERGY SECURITY
* * * * * * *
SEC. 105. DISPOSITION OF QUALIFIED OUTER CONTINENTAL SHELF REVENUES
FROM 181 AREA, 181 SOUTH AREA, AND 2002-2007
PLANNING AREAS OF GULF OF MEXICO.
(a) In General.--Notwithstanding section 9 of the Outer
Continental Shelf Lands Act (43 U.S.C. 1338) and subject to the
other provisions of this section, for each applicable fiscal
year, the Secretary of the Treasury shall deposit--
(1) [50] 37.5 percent of qualified outer Continental
Shelf revenues in the general fund of the Treasury; and
(2) [50] 62.5 percent of qualified outer Continental
Shelf revenues in a special account in the Treasury
from which the Secretary shall disburse--
(A) [75] 80 percent to Gulf producing States
in accordance with subsection (b); and
(B) [25] 20 percent to provide financial
assistance to States in accordance with section
200305 of title 54, UnitedStates Code, which
shall be considered income to the Land and
Water Conservation Fund for purposes of section
200302 of that title.
(b) Allocation Among Gulf Producing States and Coastal
Political Subdivisions.--
(1) Allocation among gulf producing states for fiscal
years 2007 through 2016.--
(A) In general.--Subject to subparagraph (B),
effective for each of fiscal years 2007 through
2016, the amount made available under
subsection (a)(2)(A) shall be allocated to each
Gulf producing State in amounts (based on a
formula established by the Secretary by
regulation) that are inversely proportional to
the respective distances between the point on
the coastline of each Gulf producing State that
is closest to the geographic center of the
applicable leased tract and the geographic
center of the leased tract.
(B) Minimum allocation.--The amount allocated
to a Gulf producing State each fiscal year
under subparagraph (A) shall be at least 10
percent of the amounts available under
subsection (a)(2)(A).
(2) Allocation among gulf producing states for fiscal
year 2017 and thereafter.--
(A) In general.--Subject to subparagraphs (B)
and (C), effective for fiscal year 2017 and
each fiscal year thereafter--
(i) the amount made available under
subsection (a)(2)(A) from any lease
entered into within the 181 Area or the
181 South Area shall be allocated to
each Gulf producing State in amounts
(based on a formula established by the
Secretary by regulation) that are
inversely proportional to the
respective distances between the point
on the coastline of each Gulf producing
State that is closest to the geographic
center of the applicable leased tract
and the geographic center of the leased
tract; and
(ii) the amount made available under
subsection (a)(2)(A) from any lease
entered into within the 2002-2007
planning area shall be allocated to
each Gulf producing State in amounts
that are inversely proportional to the
respective distances between the point
on the coastline of each Gulf producing
State that is closest to the geographic
center of each historical lease site
and the geographic center of the
historical lease site, as determined by
the Secretary.
(B) Minimum allocation.--The amount allocated
to a Gulf producing State each fiscal year
under subparagraph (A) shall be at least 10
percent of the amounts available under
subsection (a)(2)(A).
(C) Historical lease sites.--
(i) In general.--Subject to clause
(ii), for purposes of subparagraph
(A)(ii), the historical lease sites in
the 2002-2007 planning area shall
include all leases entered into by the
Secretary for an area in the Gulf of
Mexico during the period beginning on
October 1, 1982 (or an earlier date if
practicable, as determined by the
Secretary), and ending on December 31,
2015.
(ii) Adjustment.--Effective January
1, 2022, and every 5 years thereafter,
the ending date described in clause (i)
shall be extended for an additional 5
calendar years.
(3) Payments to coastal political subdivisions.--
(A) In general.--The Secretary shall pay 20
percent of the allocable share of each Gulf
producing State, as determined under paragraphs
(1) and (2), to the coastal political
subdivisions of the Gulf producing State.
(B) Allocation.--The amount paid by the
Secretary to coastal political subdivisions
shall be allocated to each coastal political
subdivision in accordance with subparagraphs
(B), (C), and (E) of section 31(b)(4) of the
Outer Continental Shelf Lands Act (43 U.S.C.
1356a(b)(4)).
(c) Timing.--The amounts required to be deposited under
paragraph (2) of subsection (a) for the applicable fiscal year
shall be made available in accordance with that paragraph
during the fiscal year immediately following the applicable
fiscal year.
(d) Authorized Uses.--
(1) In general.--Subject to paragraph (2), each Gulf
producing State and coastal political subdivision shall
use all amounts received under subsection (b) in
accordance with all applicable Federal and State laws,
only for 1 or more of the following purposes:
(A) Projects and activities for the purposes
of coastal protection, including conservation,
coastal restoration, hurricane protection, and
infrastructure directly affected by coastal
wetland losses.
(B) Mitigation of damage to fish, wildlife,
or natural resources.
(C) Implementation of a federally-approved
marine, coastal, or comprehensive conservation
management plan.
(D) Mitigation of the impact of outer
Continental Shelf activities through the
funding of onshore infrastructure projects.
(E) Planning assistance and the
administrative costs of complying with this
section.
(F) Planning, engineering, design,
construction, operations, and maintenance of
one or more projects that are specifically
authorized by any other Act for ecosystem
restoration, hurricane protection, or flood
damage prevention.
[(2) Limitation.--Not more than 3 percent of amounts
received by a Gulf producing State or coastal political
subdivision under subsection (b) may be used for the
purposes described in paragraph (1)(E).]
(2) Limitation.--Of the amounts received by a Gulf
producing State or coastal political subdivision under
subsection (b)--
(A) not more than 3 percent may be used for
the purposes described in paragraph (1)(E); and
(B) not less than 25 percent may be used for
the purposes described in paragraph (1)(F), and
shall be applied proportionally to the
applicable Federal and non-Federal share
pursuant to such specific project
authorization.
(e) Administration.--Amounts made available under subsection
(a)(2) shall--
(1) be made available, without further appropriation,
in accordance with this section;
(2) remain available until expended; and
(3) be in addition to any amounts appropriated
under--
(A) the Outer Continental Shelf Lands Act (43
U.S.C. 1331 et seq.);
(B) chapter 2003 of title 54, United States
Code; or
(C) any other provision of law.
(f) Limitations on Amount of Distributed Qualified Outer
Continental Shelf Revenues.--
[(1) In general.--Subject to paragraph (2), the total
amount of qualified outer Continental Shelf revenues
made available under subsection (a)(2) shall not
exceed--
[(A) $500,000,000 for each of fiscal years
2016 through2019;
[(B) $650,000,000 for each of fiscal years
2020 and2021; and
[(C) $500,000,000 for each of fiscal years
2022 through2055.
[(2)] (1) Expenditures.--For the purpose of paragraph
(1), for each of fiscal years 2016 through 2055,
expenditures under subsection (a)(2) shall be net of
receipts from that fiscal year from any area in the 181
Area in the Eastern Planning Area and the 181 South
Area.
[(3)] (2) Pro rata reductions.--If paragraph (1)
limits the amount of qualified outer Continental Shelf
revenue that would be paid under subparagraphs (A) and
(B) of subsection (a)(2)--
(A) the Secretary shall reduce the amount of
qualified outer Continental Shelf revenue
provided to each recipient on a pro rata basis;
and
(B) any remainder of the qualified outer
Continental Shelf revenues shall revert to the
general fund of the Treasury.
----------
MINERAL LEASING ACT
* * * * * * *
Sec. 35. (a) All money received from sales, bonuses,
royalties including interest charges collected under the
Federal Oil and Gas Royalty Management Act of 1982, and rentals
of the public lands under the provisions of this Act and the
Geothermal Steam Act of 1970, [shall be paid into the Treasury]
shall, except as provided in subsection (b), be paid into the
Treasury of the United States; 50 per centum thereof shall be
paid by the Secretary of the Treasury to the State other than
Alaska within the boundaries of which the leased lands or
deposits are or were located; said moneys paid to any of such
States on or after January 1, 1976, to be used by such State
and its subdivisions, as the legislature of the State may
direct giving priority to those subdivisions of the State
socially or economically impacted by development of minerals
leased under this Act, for (i) planning, (ii) construction and
maintenance of public facilities, and (iii) provision of public
service; and excepting those from Alaska, 40 per centum thereof
shall be paid into, reserved, appropriated, as part of the
reclamation fund created by the Act of Congress known as the
Reclamation Act, approved June 17, 1902, and of those from
Alaska as soon as practicable after March 31 and September 30
of each year, 90 per centum thereof shall be paid to the State
of Alaska for disposition by the legislature thereof: Provided,
That all moneys which may accrue to the United States under the
provisions of this Act and the Geothermal Steam Act of 1970
from lands within the naval petroleum reserves shall be
deposited in the Treasury as ``miscellaneous receipts'', as
provided by section 8733(b) of title 10, United States Code.
All moneys received under the provisions of this Act and the
Geothermal Steam Act of 1970 not otherwise disposed of by this
section shall be credited to miscellaneous receipts. Payments
to States under this section with respect to any moneys
received by the United States, shall be made not later than the
last business day of the month in which such moneys are
warranted by the United States Treasury to the Secretary as
having been received, except for any portion of such moneys
which is under challenge and placed in a suspense account
pending resolution of a dispute. Such warrants shall be issued
by the United States Treasury not later than 10 days after
receipt of such moneys by the Treasury. Moneys placed in a
suspense account which are determined to be payable to a State
shall be made not later than the last business day of the month
in which such dispute is resolved. Any such amount placed in a
suspense account pending resolution shall bear interest until
the dispute is resolved.
[(b) Deduction for Administrative Costs.--In determining the
amount of payments to the States under this section, beginning
in fiscal year 2014 and for each year thereafter, the amount of
such payments shall be reduced by 2 percent for any
administrative or other costs incurred by the United States in
carrying out the program authorized by this Act, and the amount
of such reduction shall be deposited to miscellaneous receipts
of the Treasury.]
(b) Conveyance to States of Property Interest in State
Share.--
(1) In general.--Notwithstanding any other provision
of law, on request of a State and in lieu of any
payments to the State under subsection (a), the
Secretary of the Interior shall convey to the State all
right, title, and interest in and to the percentage
specified in that subsection for that State of all
amounts otherwise required to be paid into the Treasury
under that subsection from sales, bonuses, royalties
(including interest charges), and rentals for all
public land or deposits located in the State.
(2) Amount.--Notwithstanding any other provision of
law, after a conveyance to a State under paragraph (1),
any person shall pay directly to the State any amount
owed by the person for which the right, title, and
interest has been conveyed to the State under this
subsection.
(3) Notice.--The Secretary of the Interior shall
promptly provide to each holder of a lease of public
land to which subsection (a) applies that are located
in a State to which right, title, and interest is
conveyed under this subsection notice that--
(A) the Secretary of the Interior has
conveyed to the State all right, title, and
interest in and to the amounts referred to in
paragraph (1); and
(B) the leaseholder is required to pay the
amounts directly to the State.
(c)(1) Notwithstanding the first sentence of subsection (a)
and except as provided in subsection (b), any rentals received
from leases in any State (other than the State of Alaska) on or
after the date of enactment of this subsection shall be
deposited in the Treasury, to be allocated in accordance with
paragraph (2).
(2) Of the amounts deposited in the Treasury under paragraph
(1)--
(A) 50 percent shall be paid by the Secretary of the
Treasury to the State within the boundaries of which
the leased land is located or the deposits were
derived; and
(B) 50 percent shall be deposited in a special fund
in the Treasury, to be known as the ``BLM Permit
Processing Improvement Fund'' (referred to in this
subsection as the ``Fund'').
(3) Use of fund.--
(A) In general.--The Fund shall be available
to the Secretary of the Interior for
expenditure, without further appropriation and
without fiscal year limitation, for the
coordination and processing of oil and gas use
authorizations on onshore Federal and Indian
trust mineral estate land.
(B) Accounts.--The Secretary shall divide the
Fund into--
(i) a Rental Account (referred to in
this subsection as the ``Rental
Account'') comprised of rental receipts
collected under this section; and
(ii) a Fee Account (referred to in
this subsection as the ``Fee Account'')
comprised of fees collected under
subsection (d).
(4) Rental account.--
(A) In general.--The Secretary shall use the
Rental Account for--
(i) the coordination and processing
of oil and gas use authorizations on
onshore Federal and Indian trust
mineral estate land under the
jurisdiction of the Project offices
identified under section 365(d) of the
Energy Policy Act of 2005 (42 U.S.C.
15924(d)); and
(ii) training programs for
development of expertise related to
coordinating and processing oil and gas
use authorizations.
(B) Allocation.--In determining the
allocation of the Rental Account among Project
offices for a fiscal year, the Secretary shall
consider--
(i) the number of applications for
permit to drill received in a Project
office during the previous fiscal year;
(ii) the backlog of applications
described in clause (i) in a Project
office;
(iii) publicly available industry
forecasts for development of oil and
gas resources under the jurisdiction of
a Project office; and
(iv) any opportunities for
partnership with local industry
organizations and educational
institutions in developing training
programs to facilitate the coordination
and processing of oil and gas use
authorizations.
(5) Fee account.--
(A) In general.--The Secretary shall use the
Fee Account for the coordination and processing
of oil and gas use authorizations on onshore
Federal and Indian trust mineral estate land.
(B) Allocation.--The Secretary shall transfer
not less than 75 percent of the revenues
collected by an office for the processing of
applications for permits to the State office of
the State in which the fees were collected.
(d), BLM Oil and Gas Permit Processing Fee.--
(1) In general.--Notwithstanding any other provision
of law, for each of fiscal years 2016 through 2026, the
Secretary, acting through the Director of the Bureau of
Land Management, shall collect a fee for each new
application for a permit to drill that is submitted to
the Secretary.
(2) Amount.--The amount of the fee shall be $9,500
for each new application, as indexed for United States
dollar inflation from October 1, 2015 (as measured by
the Consumer Price Index).
(3) Use.--Of the fees collected under this subsection
for a fiscal year, the Secretary shall transfer--
(A) for each of fiscal years 2016 through
2019--
(i) 15 percent to the field offices
that collected the fees and used to
process protests, leases, and permits
under this Act, subject to
appropriation; and
(ii) 85 percent to the BLM Permit
Processing Improvement Fund established
under subsection (c)(2)(B) (referred to
in this subsection as the ``Fund'');
and
(B) for each of fiscal years 2020 through
2026, all of the fees to the Fund.
(4) Additional costs.--During each of fiscal years of
2016 through 2026, the Secretary shall not implement a
rulemaking that would enable an increase in fees to
recover additional costs related to processing
applications for permits to drill.
* * * * * * *
----------
MINERAL LEASING ACT FOR ACQUIRED LANDS
* * * * * * *
Sec. 6. (a) [Subject to the provisions of section 35(b) of
the Mineral Leasing Act (30 U.S.C. 191(b)), all] All receipts
derived from leases issued under the authority of this Act
shall be paid into the same funds or accounts in the Treasury
and shall be distributed in the same manner as prescribed for
other receipts from the lands affected by the lease, the
intention of this provision being that this Act shall not
affect the distribution of receipts pursuant to legislation
applicable to such lands: Provided, however, That receipts from
leases or permits for minerals in lands set apart for Indian
use, including lands the jurisdiction of which has been
transferred to the Department of the Interior by the Executive
order for Indian use, shall be deposited in a special fund in
the Treasury until final disposition thereof by the Congress.
Notwithstanding the preceding provisions of this section, all
receipts derived from leases on lands acquired for military or
naval purposes, except the naval petroleum reserves and
national oil shale reserves, shall be paid into the Treasury of
the United States and disposed of in the same manner as
provided under section 35 [of the Act of February 25, 1920 (41
Stat. 450; 30 U.S.C. 191)] of the Mineral Leasing Act (30
U.S.C. 191), in the case of receipts from sales, bonuses,
royalties, and rentals of the public lands under that Act.
(b) Notwithstanding any other provision of law, any payment
to a State under this section shall be made by the Secretary of
the Interior and shall be made not later than the last business
day of the month following the month in which such moneys or
associated reports are received by the Secretary of the
Interior, whichever is later. The preceding sentence shall also
apply to any payment to a State derived from a lease for
mineral resources issued by the Secretary of the Interior under
the last paragraph under the heading ``forest service.'' in the
Act of March 4, 1917 (Chapter 179; 16 U.S.C. 520). The
Secretary shall pay interest to a State on any amount not paid
to the State within that time at the rate prescribed under
section 111 of the Federal Oil and Gas Royalty Management Act
of 1982 from the date payment was required to be made under
this subsection until the date payment is made.
* * * * * * *
----------
GEOTHERMAL STEAM ACT OF 1970
* * * * * * *
SEC. 20. DISPOSAL OF MONEYS FROM SALES, BONUSES, RENTALS, AND
ROYALTIES.
(a) In General.--Except with respect to lands in the State of
Alaska, all monies received by the United States from sales,
bonuses, rentals, and royalties under this Act shall be paid
into the Treasury of the United States. Of amounts deposited
under this subsection, subject to [the provisions of subsection
(b) of section 35 of the Mineral Leasing Act (30 U.S.C. 191(b))
and] section 5(a)(2) of this Act--
(1) 50 percent shall be paid to the State within the
boundaries of which the leased lands or geothermal
resources are or were located; and
(2) 25 percent shall be paid to the county within the
boundaries of which the leased lands or geothermal
resources are or were located.
(b) Use of Payments.--Amounts paid to a State or county under
subsection (a) shall be used consistent with the terms of
section 35 of the Mineral Leasing Act (30 U.S.C. 191).
* * * * * * *
----------
FEDERAL OIL AND GAS ROYALTY MANAGEMENT ACT OF 1982
* * * * * * *
TITLE II--STATES AND INDIAN TRIBES
* * * * * * *
SEC. 205. DELEGATION OF ROYALTY COLLECTIONS AND RELATED ACTIVITIES.
(a) Upon written request of any State, the Secretary
is authorized to delegate, in accordance with the
provisions of this section, all or part of the
authorities and responsibilities of the Secretary under
this Act to:
(1) conduct inspections, audits, and
investigations;
(2) receive and process production and
financial reports;
(3) correct erroneous report data;
(4) perform automated verification; and
(5) issue demands, subpoenas, and orders to
perform restructured accounting, for royalty
management enforcement purposes,
to any State with respect to all Federal land within the State.
(b) After notice and opportunity for a hearing, the Secretary
is authorized to delegate such authorities and responsibilities
granted under this section as the State has requested, if the
Secretary finds that--
(1) it is likely that the State will provide adequate
resources to achieve the purposes of this Act;
(2) the State has demonstrated that it will
effectively and faithfully administer the rules and
regulations of the Secretary under this Act in
accordance with the requirements of subsections (c) and
(d) of this section;
(3) such delegation will not create an unreasonable
burden on any lessee;
(4) the State agrees to adopt standardized reporting
procedures prescribed by the Secretary for royalty and
production accounting purposes, unless the State and
all affected parties (including the Secretary)
otherwise agree;
(5) the State agrees to follow and adhere to
regulations and guidelines issued by the Secretary
pursuant to the mineral leasing laws regarding
valuation of production; and
(6) where necessary for a State to have authority to
carry out and enforce a delegated activity, the State
agrees to enact such laws and promulgate such
regulations as are consistent with relevant Federal
laws and regulations
with respect to the Federal lands within the State.
(c) After notice and opportunity for hearing, the Secretary
shall issue a ruling as to the consistency of a State's
proposal with the provisions of this section and regulations
under subsection (d) within 90 days after submission of such
proposal. In any unfavorable ruling, the Secretary shall set
forth the reasons therefor and state whether the Secretary will
agree to delegate to the State if the State meets the
conditions set forth in such ruling.
(d) After consultation with State authorities, the Secretary
shall by rule promulgate, within 12 months after the date of
enactment of this section, standards and regulations pertaining
to the authorities and responsibilities to be delegated under
subsection (a), including standards and regulations pertaining
to--
(1) audits to be performed;
(2) records and accounts to be maintained;
(3) reporting procedures to be required by States
under this section;
(4) receipt and processing of production and
financial reports;
(5) correction of erroneous report data;
(6) performance of automated verification;
(7) issuance of standards and guidelines in order to
avoid duplication of effort;
(8) transmission of report data to the Secretary; and
(9) issuance of demands, subpoenas, and orders to
perform restructured accounting, for royalty management
enforcement purposes.
Such standards and regulations shall be designed to provide
reasonable assurance that a uniform and effective royalty
management system will prevail among the States. The records
and accounts under paragraph (2) shall be sufficient to allow
the Secretary to monitor the performance of any State under
this section.
(e) If, after notice and opportunity for a hearing, the
Secretary finds that any State to which any authority or
responsibility of the Secretary has been delegated under this
section is in violation of any requirement of this section or
any rule thereunder, or that an affirmative finding by the
Secretary under subsection (b) can no longer be made, the
Secretary may revoke such delegation. If, after providing
written notice to a delegated State and a reasonable
opportunity to take corrective action requested by the
Secretary, the Secretary determines that the State has failed
to issue a demand or order to a Federal lessee within the
State, that such failure may result in an underpayment of an
obligation due the United States by such lessee, and that such
underpayment may be uncollected without Secretarial
intervention, the Secretary may issue such demand or order in
accordance with the provisions of this Act prior to or absent
the withdrawal of delegated authority.
(f) Subject to appropriations, the Secretary shall compensate
any State for those costs which may be necessary to carry out
the delegated activities under this Section. Payment shall be
made no less than every quarter during the fiscal year.
Compensation to a State may not exceed the Secretary's
reasonably anticipated expenditure for performance of such
delegated activities by the Secretary. [Such costs shall be
allocable for the purposes of section 35(b) of the Act entitled
``An act to promote the mining of coal, phosphate, oil, oil
shale, gas and sodium on the public domain'', approved February
25, 1920 (commonly known as the Mineral Leasing Act) (30 U.S.C.
191 (b)) to the administration and enforcement of laws
providing for the leasing of any onshore lands or interests in
land owned by the United States. Any further allocation of
costs under section 35(b) made by the Secretary for oil and gas
activities, other than those costs to compensate States for
delegated activities under this Act, shall be only those costs
associated with onshore oil and gas activities and may not
include any duplication of costs allocated pursuant to the
previous sentence. Nothing in this section affects the
Secretary's authority to make allocations under section 35(b)
for non-oil and gas mineral activities.] All moneys received
from sales, bonuses, rentals, royalties, assessments and
interest, including money claimed to be due and owing pursuant
to a delegation under this section, shall be payable and paid
to the Treasury of the United States.
(g) Any action of the Secretary to approve or disapprove a
proposal submitted by a State under this section shall be
subject to judicial review in the United States district court
which includes the capital of the State submitting the
proposal.
(h) Any State operating pursuant to a delegation existing on
the date of enactment of this Act may continue to operate under
the terms and conditions of the delegation, except to the
extent that a revision of the existing agreement is adopted
pursuant to this section.
* * * * * * *
DISSENTING VIEWS
H.R. 6771 would unfairly direct billions of dollars of
offshore oil and gas revenue to just four states' on the Gulf
of Mexico, instead of having that money benefit all the
American people, as it does now. Although the sponsor of the
legislation repeatedly attempts to draw a parallel with onshore
drilling on federal lands--where states in which the drilling
occurs receive roughly half of the revenue from mineral
production--to insist that Louisiana and the other Gulf states
are being treated unfairly, the situation is not analogous.
The obvious difference is that onshore drilling on federal
lands occurs within the borders of a state, whereas drilling on
the Outer Continental Shelf is in federal waters that are
outside state borders. In fact, Congress has already been quite
generous with respect to coastal states. In multiple cases, the
Supreme Court ruled that states had no ownership of the
submerged lands, nor the resources contained in them, seaward
of the low-water mark of the coast.\1\ Congress passed the
Submerged Lands Act of 1953\2\ to give coastal states title to
the first three miles seaward of the coast; since then,
Louisiana has received the royalty and tax revenue from over
1.7 billion barrels of oil that have been produced from its
state waters.\3\ In 1978, Congress amended the Outer
Continental Shelf Lands Act to provide coastal states with 27
percent of revenues for production from the first three miles
of federal waters,\4\ and in 2006 the Gulf of Mexico Energy
Security Act (GOMESA) gave the states of Louisiana, Texas,
Alabama, and Mississippi an additional 37.5 percent of revenues
generated from new leases in the Gulf of Mexico, up to a
maximum of $375 million per year.\5\ In Public Law 115-97, that
maximum was increased to $487.5 million for Fiscal Years 2020
and 2021.\6\ Due to GOMESA, the four Gulf states will receive
considerably more funding from offshore oil and gas production
in federal waters than other states where such production is
occurring, such as California and Alaska.
---------------------------------------------------------------------------
\1\U.S. v. California, 332 U.S. 19 (1947); U.S. v. Texas, 339 U.S.
707 (1950); U.S. v. Louisiana, 339 U.S. 399 (1950).
\2\43 U.S.C. 1301-1315.
\3\Louisiana Department of Natural Resources, Louisiana Energy
Facts Annual 2017, Table 3 (from http://www.dnr.louisiana.gov/assets/
TAD/OGTables/Table03.pdf, with data back to 1945).
\4\43 U.S.C. 1337(g).
\5\43 U.S.C. 1331 note.
\6\Section 20002, P.L. 115-97.
---------------------------------------------------------------------------
We support Louisiana's dedication of GOMESA revenues to
coastal restoration and hurricane protection through its
Coastal Master Plan. However, the State of Louisiana is only
projected to receive approximately 27 percent of GOMESA funds.
Coastal parishes and the other three Gulf of Mexico states, and
their coastal counties, receive the remainder, and those
entities may use that funding for a variety of uses, including
``onshore infrastructure projects'' to ``mitigate the impact of
outer Continental Shelf activities''--a very broad category
that does not require the projects to mitigate ``direct
impacts'' of those activities, despite the claims made by the
sponsor during markup. Laudably, H.R. 6771 does require that at
least 25 percent of all GOMESA revenues be used for ecosystem
restoration, hurricane protection, or flood damage prevention
projects, but that still allows for the bulk of the funding to
be used on potentially less-worthy projects.
As we have seen repeatedly in recent years, coastal
hurricane protection is becoming increasingly critical as
climate change drives an increase in the average strength of
storms. But this need is not limited to four states in the Gulf
of Mexico. Ranking Member Grijalva offered an amendment in
markup that would have made all coastal states and territories
eligible for ecosystem restoration and hurricane protection
funding under GOMESA. Unfortunately, the amendment was opposed
by the Majority.
It is important to note that the Gulf Coast states, and
their representatives in Congress, are among the most energetic
champions of expanded drilling and deepening our dependence on
fossil fuels. These same delegations are also among the most
active opponents of any steps toward a cleaner energy economy.
To cheerlead for increased greenhouse gas emissions, and then
demand increased federal funding to deal with the harmful
impacts of those emissions, is hypocritical at best.
By raising the percentage of federal offshore oil and gas
revenues that the Gulf states receive, and eliminating the cap
on those revenues, H.R. 6771 would transfer billions of
dollars, if not tens of billions, from the Treasury to just
four states over the life of GOMESA. We believe this is not
equitable and not warranted, and therefore oppose this
legislation.
Raul M. Grijalva,
Ranking Member, Committee on
Natural Resources.
Grace F. Napolitano.
Alan Lowenthal.
[all]