[House Report 117-632]
[From the U.S. Government Publishing Office]


117th Congress    }                                   {        Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                   {       117-632

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



 
     ENDING TAXPAYER WELFARE FOR OIL AND GAS COMPANIES ACT OF 2021

                                _______
                                

 December 14, 2022.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. Grijalva, from the Committee on Natural Resources, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 1517]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 1517) to amend the Mineral Leasing Act to make 
certain adjustments to the fiscal terms for fossil fuel 
development and to make other reforms to improve returns to 
taxpayers for the development of Federal energy resources, and 
for other purposes, having considered the same, reports 
favorably thereon with an amendment and recommends 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 ``Ending Taxpayer Welfare for Oil and 
Gas Companies Act of 2021''.

SEC. 2. TABLE OF CONTENTS.

  The table of contents for this Act is the following:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Onshore fossil fuel royalty rates.
Sec. 4. Minimum bid amount.
Sec. 5. Onshore oil and gas rental rates.
Sec. 6. Inspection fee.
Sec. 7. Penalties.
Sec. 8. Royalty relief.
Sec. 9. Royalty in kind.
Sec. 10. Amendments to definitions.
Sec. 11. Compliance reviews.
Sec. 12. Liability for royalty payments.
Sec. 13. Recordkeeping.
Sec. 14. Adjustments and refunds.
Sec. 15. Obligation period.
Sec. 16. Tolling agreements and subpoenas.
Sec. 17. Appeals.
Sec. 18. Assessments.
Sec. 19. Pilot project on automatic data transfer.
Sec. 20. Penalty for late or incorrect reporting of data.
Sec. 21. Required recordkeeping for natural gas plants.
Sec. 22. Shared penalties.
Sec. 23. Applicability to other minerals.
Sec. 24. Entitlements.
Sec. 25. Royalties on all extracted methane.

SEC. 3. ONSHORE FOSSIL FUEL ROYALTY RATES.

  The Mineral Leasing Act (30 U.S.C. 181 et seq.) is amended--
          (1) in section 7--
                  (A) by striking ``12\1/2\'' and inserting ``18.75''; 
                and
                  (B) by adding at the end the following:
  ``(d) Periodic Evaluation of Royalty Rates.--The Secretary shall 
establish a periodic process of evaluating increases in royalty rates 
to achieve a fair market value return for the public. The process 
should include:
          ``(1) publishing annually the average, weighted by relative 
        production per State, of the top fossil fuel royalty rates 
        charged by States for fossil fuels production on State-owned 
        public lands;
          ``(2) evaluating triennially increases in the Federal fossil 
        fuel royalty rates above the minimum rates required under this 
        Act to match the production-weighted average of State royalty 
        rates. The triennial review shall include and benefit from 
        public participation through written comment, public hearings 
        and other meetings open to all interested parties; and
          ``(3) submitting the triennial evaluation to Congress, 
        including a summary of the views expressed in the public 
        participation processes related to the evaluation.''.
          (2) in section 17, by--
                  (A) striking ``12.5'' each place such term appears 
                and inserting ``18.75''; and
                  (B) striking ``12\1/2\'' each place such term appears 
                and inserting ``18.75''; and
          (3) in section 31(e), by striking ``16\2/3\'' both places 
        such term appears and inserting ``25''.

SEC. 4. MINIMUM BID AMOUNT.

  Section 17 of the Mineral Leasing Act (30 U.S.C. 226) is amended--
          (1) in subsection (b)(1)(B)--
                  (A) by striking ``$2 per acre'' and inserting ``$10 
                per acre, except as otherwise provided by this 
                paragraph''; and
                  (B) by striking ``Federal Onshore Oil and Gas Leasing 
                Reform Act of 1987'' and inserting ``Ending Taxpayer 
                Welfare for Oil and Gas Companies Act of 2021'';
          (2) in subsection (b)(2)(C), by striking ``$2 per acre'' and 
        inserting ``$10 per acre''; and
          (3) by adding at the end the following:
  ``(q) Inflation Adjustment.--The Secretary shall--
          ``(1) by regulation, at least once every 4 years, adjust each 
        of the dollar amounts that apply under subsections (b)(1)(B), 
        (b)(2)(C), and (d) to reflect the change in the Consumer Price 
        Index for All Urban Consumers published by the Bureau of Labor 
        Statistics; and
          ``(2) publish each such regulation in the Federal 
        Register.''.

SEC. 5. ONSHORE OIL AND GAS RENTAL RATES.

  The Mineral Leasing Act (30 U.S.C. 181 et seq.) is amended--
          (1) in section 17(d)--
                  (A) by striking ``$1.50 per acre'' and inserting ``$3 
                per acre''; and
                  (B) by striking ``$2 per acre'' and inserting ``$5 
                per acre''; and
          (2) in section 31(e), by striking ``$10'' and inserting 
        ``$20''.

SEC. 6. INSPECTION FEE.

  (a) In General.--Section 108 of the Federal Oil and Gas Royalty 
Management Act of 1982 (30 U.S.C. 1718) is amended by adding at the end 
the following:
  ``(d) Inspection Fee.--
          ``(1) In general.--The designated operator under each oil and 
        gas lease on Federal or Indian lands, or each unit and 
        communitization agreement that includes one or more such 
        Federal or Indian leases, that is subject to inspection under 
        subsection (b) and that is in force at the start of fiscal year 
        2021, shall pay a nonrefundable inspection fee in an amount 
        that, except as provided in paragraph (2), is established by 
        the Secretary by regulation and is sufficient to recover the 
        full costs incurred by the United States for inspection and 
        enforcement with respect to such leases.
          ``(2) Amount.--Until the effective date of regulations under 
        paragraph (1), the amount of the fee shall be--
                  ``(A) $700 for each lease or unit or communitization 
                agreement with no active or inactive wells, but with 
                surface use, disturbance or reclamation;
                  ``(B) $1,225 for each lease or unit or 
                communitization agreement with 1 to 10 wells, with any 
                combination of active or inactive wells;
                  ``(C) $4,900 for each lease or unit or 
                communitization agreement with 11 to 50 wells, with any 
                combination of active or inactive wells; and
                  ``(D) $9,800 for each lease or unit or 
                communitization agreement with more than 50 wells, with 
                any combination of active or inactive wells.
          ``(3) Due date.--Payment of the fee under this section shall 
        be due not later than 30 days after the Secretary provides 
        notice of the assessment of the fee.
          ``(4) Penalty.--If the designated operator fails to pay the 
        full amount of the fee as prescribed in this section, the 
        Secretary may, in addition to utilizing any other applicable 
        enforcement authority, assess civil penalties against the 
        operator under section 109 in the same manner as if this 
        section were a mineral leasing law.
          ``(5) Exemption for tribal operators.--An operator that is a 
        Tribe or is controlled by a Tribe is not subject to paragraph 
        (1) with respect to a lease, unit, or communitization agreement 
        that is located entirely on the lands of such Tribe.''.
  (b) Assessment for Fiscal Year 2020.--The Secretary of the Interior 
shall assess the fee under the amendment made by subsection (a) for 
fiscal year 2020, and provide notice of such assessment to each 
designated operator who is liable for such fee, by not later than 60 
days after the date of the enactment of this Act.

SEC. 7. PENALTIES.

  (a) Mineral Leasing Act.--Section 41 of the Mineral Leasing Act (30 
U.S.C. 195) is amended--
          (1) in subsection (b), by striking ``$500,000'' and inserting 
        ``$1,000,000''; and
          (2) in subsection (c), by striking ``$100,000'' and inserting 
        ``$250,000''.
  (b) Federal Oil and Gas Royalty Management Act of 1982.--The Federal 
Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1701 et seq.) is 
amended--
          (1) in section 109--
                  (A) in subsection (a), by striking ``$500'' and 
                inserting ``$1,500'';
                  (B) in subsection (b), by striking ``$5,000'' and 
                inserting ``$15,000'';
                  (C) in subsection (c), by striking ``$10,000'' and 
                inserting ``$25,000''; and
                  (D) in subsection (d), by striking ``$25,000'' and 
                inserting ``$75,000''; and
          (2) in section 110, by striking ``$50,000'' and inserting 
        ``$150,000''.
  (c) Outer Continental Shelf Lands Act.--
          (1) Civil penalty, generally.--Section 24(b) of the Outer 
        Continental Shelf Lands Act (43 U.S.C. 1350(b)) is amended to 
        read as follows:
  ``(b) Civil Penalties.--
          ``(1) In general.--Except as provided in paragraph (2), any 
        person who fails to comply with any provision of this Act, or 
        any term of a lease, license, or permit issued pursuant to this 
        Act, or any regulation or order issued under this Act, shall be 
        liable for a civil administrative penalty of not more than 
        $75,000 for each day of the continuance of such failure. The 
        Secretary may assess, collect, and compromise any such penalty.
          ``(2) Opportunity for a hearing.--No penalty shall be 
        assessed until the person charged with a violation has been 
        given an opportunity for a hearing.
          ``(3) Adjustment for inflation.--The Secretary shall, by 
        regulation at least every 3 years, adjust the penalty specified 
        in this paragraph to reflect any increases in the Consumer 
        Price Index (all items, United States city average) as prepared 
        by the Department of Labor.
          ``(4) Threat of harm.--If a failure described in paragraph 
        (1) constitutes or constituted a threat of harm or damage to 
        life, property, any mineral deposit, or the marine, coastal, or 
        human environment, a civil penalty of not more than $150,000 
        shall be assessed for each day of the continuance of the 
        failure.''.
          (2) Knowing and willful violations.--Section 24(c) of the 
        Outer Continental Shelf Lands Act (43 U.S.C. 1350(c)) is 
        amended by striking ``$100,000'' and inserting ``$1,000,000''.
          (3) Officers and agents of corporations.--Section 24(d) of 
        the Outer Continental Shelf Lands Act (43 U.S.C. 1350(d)) is 
        amended by striking ``knowingly and willfully authorized, 
        ordered, or carried out'' and inserting ``authorized, ordered, 
        carried out, or through reckless disregard of the law caused''.

SEC. 8. ROYALTY RELIEF.

  (a) Gulf of Mexico Royalty Relief.--The following provisions of the 
Energy Policy Act of 2005 (42 U.S.C. 15801 et seq.) are hereby 
repealed:
          (1) Section 344 (42 U.S.C. 15904) (relating to incentives for 
        natural gas production from deep wells in the shallow waters of 
        the Gulf of Mexico).
          (2) Section 345 (42 U.S.C. 15905) (relating to royalty relief 
        for deep water production).
  (b) Alaska Royalty Relief.--
          (1) Provisions relating to planning areas offshore alaska.--
        Section 8(a)(3)(B) of the Outer Continental Shelf Lands Act (43 
        U.S.C. 1337(a)(3)(B)) is amended by striking ``and in the 
        Planning Areas offshore Alaska'' after ``West longitude''.
          (2) Provisions relating to naval petroleum reserve in 
        alaska.--Section 107 of the Naval Petroleum Reserves Production 
        Act of 1976 (42 U.S.C. 6506a) is amended--
                  (A) in subsection (i)--
                          (i) by striking ``(1) In general''; and
                          (ii) by striking paragraphs (2) through (6); 
                        and
                  (B) by striking subsection (k).

SEC. 9. ROYALTY IN KIND.

  (a) Onshore Oil and Gas Lease Royalties.--Section 36 of the Mineral 
Leasing Act (30 U.S.C. 192) is amended by inserting ``, except that the 
Secretary may not demand such payment in oil or gas if the amount of 
such payment would exceed the amount necessary to fill the strategic 
petroleum reserve'' after ``in oil or gas''.
  (b) Offshore Oil and Gas Lease Royalties.--Section 27(a)(1) of the 
Outer Continental Shelf Lands Act (43 U.S.C. 1353(a)) is amended by 
striking the period at the end and inserting ``, except that the 
Secretary may not demand such payment in oil or gas if the amount of 
such payment would exceed the amount necessary to fill the strategic 
petroleum reserve.''.

SEC. 10. AMENDMENTS TO DEFINITIONS.

  Section 3 of the Federal Oil and Gas Royalty Management Act of 1982 
(30 U.S.C. 1702) is amended--
          (1) in paragraph (20)(A), by striking ``: Provided, That'' 
        and all that follows through ``subject of the judicial 
        proceeding'';
          (2) in paragraph (20)(B), by striking ``(with written notice 
        to the lessee who designated the designee)'';
          (3) in paragraph (23)(A), by striking ``(with written notice 
        to the lessee who designated the designee)'';
          (4) by amending paragraph (24) to read as follows:
          ``(24) `designee' means a person who pays, offsets, or 
        credits monies, makes adjustments, requests and receives 
        refunds, or submits reports with respect to payments a lessee 
        must make pursuant to section 102(a);'';
          (5) in paragraph (25), in subparagraph (B)--
                  (A) by striking ``(subject to the provisions of 
                section 102(a) of this Act)''; and
                  (B) in clause (ii), by striking subclause (IV) and 
                all that follows through the end of the subparagraph 
                and inserting the following:
                                  ``(IV) any assignment,
                        that arises from or relates to any lease, 
                        easement, right-of-way, permit, or other 
                        agreement regardless of form administered by 
                        the Secretary for, or any mineral leasing law 
                        related to, the exploration, production, and 
                        development of oil and gas or other energy 
                        resource on Federal lands or the Outer 
                        Continental Shelf;'';
          (6) in paragraph (29), by inserting ``or permit'' after 
        ``lease''; and
          (7) by striking ``and'' after the semicolon at the end of 
        paragraph (32), by striking the period at the end of paragraph 
        (33) and inserting a semicolon, and by adding at the end the 
        following new paragraphs:
          ``(34) `compliance review' means an examination of a lessee's 
        lease accounts to compare one or all elements of the royalty 
        equation (volume, value, royalty rate, and allowances) against 
        anticipated elements of the royalty equation to test for 
        variances; and
          ``(35) `marketing affiliate' means an affiliate of a lessee 
        whose function is to acquire the lessee's production and to 
        market that production.''.

SEC. 11. COMPLIANCE REVIEWS.

  Section 101 of the Federal Oil and Gas Royalty Management Act of 1982 
(30 U.S.C. 1711) is amended by adding at the end the following new 
subsection:
  ``(d) The Secretary may, as an adjunct to audits of accounts for 
leases, conduct compliance reviews of accounts. Such reviews shall not 
constitute nor substitute for audits of lease accounts. The Secretary 
shall immediately refer any disparity uncovered in such a compliance 
review to a program auditor. The Secretary shall, before completion of 
a compliance review, provide notice of the review to designees whose 
obligations are the subject of the review.''.

SEC. 12. LIABILITY FOR ROYALTY PAYMENTS.

  Section 102(a) of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1712(a)) is amended to read as follows:
  ``(a) Liability for Royalty Payments.--
          ``(1) Time and manner of payment.--In order to increase 
        receipts and achieve effective collections of royalty and other 
        payments, a lessee who is required to make any royalty or other 
        payment under a lease, easement, right-of-way, permit, or other 
        agreement, regardless of form, or under the mineral leasing 
        laws, shall make such payment in the time and manner as may be 
        specified by the Secretary or the applicable delegated State.
          ``(2) Designee.--Any person who pays, offsets, or credits 
        monies, makes adjustments, requests and receives refunds, or 
        submits reports with respect to payments the lessee must make 
        is the lessee's designee under this Act.
          ``(3) Liability.--Notwithstanding any other provision of this 
        Act, a designee shall be liable for any payment obligation of 
        any lessee on whose behalf the designee pays royalty under the 
        lease. The person owning operating rights in a lease and a 
        person owning legal record title in a lease shall be liable for 
        that person's pro rata share of payment obligations under the 
        lease.''.

SEC. 13. RECORDKEEPING.

  Section 103(b) of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1713(b)) is amended by striking ``6'' and inserting 
``7''.

SEC. 14. ADJUSTMENTS AND REFUNDS.

  Section 111A of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1721a) is amended--
          (1) in subsection (a)--
                  (A) by amending paragraph (3) to read as follows:
          ``(3)(A) An adjustment or a request for a refund for an 
        obligation may be made after the adjustment period only upon 
        written notice to and approval by the Secretary or the 
        applicable delegated State, as appropriate, during an audit of 
        the period which includes the production month for which the 
        adjustment is being made.
          ``(B) Except as provided in subparagraph (C), no adjustment 
        may be made with respect to an obligation after the completion 
        of an audit or compliance review of such obligation unless such 
        adjustment is approved by the Secretary or the applicable 
        delegated State, as appropriate.
          ``(C) If an overpayment is identified during an audit, the 
        Secretary shall allow a credit in the amount of the 
        overpayment.''; and
                  (B) in paragraph (4)--
                          (i) by striking ``six-year'' and inserting 
                        ``four-year''; and
                          (ii) by striking ``period shall'' and 
                        inserting ``period may''; and
          (2) in subsection (b)(1)--
                  (A) in subparagraph (C), by striking ``and'';
                  (B) in subparagraph (D), by striking the period and 
                inserting ``; and''; and
                  (C) by adding at the end the following:
                  ``(E) is made within the adjustment period for that 
                obligation.''.

SEC. 15. OBLIGATION PERIOD.

  Section 115(c) of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1724(c)) is amended by adding at the end the following 
new paragraph:
          ``(3) Adjustments.--In the case of an adjustment under 
        section 111A(a) in which a recoupment by the lessee results in 
        an underpayment of an obligation, the obligation becomes due on 
        the date the lessee or its designee makes the adjustment.''.

SEC. 16. TOLLING AGREEMENTS AND SUBPOENAS.

  (a) Tolling Agreements.--Section 115(d)(1) of the Federal Oil and Gas 
Royalty Management Act of 1982 (30 U.S.C. 1724(d)(1)) is amended by 
striking ``(with notice to the lessee who designated the designee)''.
  (b) Subpoenas.--Section 115(d)(2)(A) of the Federal Oil and Gas 
Royalty Management Act of 1982 (30 U.S.C. 1724(d)(2)(A)) is amended by 
striking ``(with notice to the lessee who designated the designee, 
which notice shall not constitute a subpoena to the lessee)''.

SEC. 17. APPEALS.

  Section 115(h) of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1724(h)) is amended--
          (1) in paragraph (1), in the heading, by striking ``33-
        month'' and inserting ``48-month'';
          (2) by striking ``33 months'' each place it appears and 
        inserting ``48 months''; and
          (3) by striking ``33-month'' each place it appears and 
        inserting ``48-month''.

SEC. 18. ASSESSMENTS.

  Section 116 of the Federal Oil and Gas Royalty Management Act of 1982 
(30 U.S.C. 1724) is repealed.

SEC. 19. PILOT PROJECT ON AUTOMATIC DATA TRANSFER.

  (a) Pilot Project.--Not later than 2 years after the date of 
enactment of this Act, the Secretary of the Interior shall complete a 
pilot project with willing operators of oil and gas leases on the outer 
Continental Shelf (as such term is defined in the Outer Continental 
Shelf Lands Act (43 U.S.C. 1331 et seq.)) that assesses the costs and 
benefits of automatic transmission of data regarding the volume and 
quality of oil and gas produced under Federal leases on the outer 
Continental Shelf in order to improve the production verification 
systems used to ensure accurate royalty collection and audit.
  (b) Report.--The Secretary shall submit to Congress a report on 
findings and recommendations based on the pilot project not later than 
3 years after the date of enactment of this Act.

SEC. 20. PENALTY FOR LATE OR INCORRECT REPORTING OF DATA.

  (a) In General.--The Secretary of the Interior shall issue 
regulations by not later than 1 year after the date of enactment of 
this Act that establish a civil penalty for late or incorrect reporting 
of data under the Federal Oil and Gas Royalty Management Act of 1982 
(30 U.S.C. 1701 et seq.).
  (b) Amount.--The amount of the civil penalty shall be--
          (1) an amount (subject to paragraph (2)) that the Secretary 
        determines is sufficient to ensure filing of data in accordance 
        with that Act; and
          (2) not less than $10 for each failure to file correct data 
        in accordance with that Act.
  (c) Content of Regulations.--Except as provided in subsection (b), 
the regulations issued under this section shall be substantially 
similar to section 216.40 of title 30, Code of Federal Regulations, as 
most recently in effect before the date of enactment of this Act.

SEC. 21. REQUIRED RECORDKEEPING FOR NATURAL GAS PLANTS.

  Not later than 1 year after the date of enactment of this Act, the 
Secretary of the Interior shall publish final regulations with respect 
to required recordkeeping of natural gas measurement data as set forth 
in section 250.1203 of title 30, Code of Federal Regulations (as in 
effect on the date of enactment of this Act), to include operators and 
other persons involved in the transporting, purchasing, or selling of 
gas under the requirements of that rule, under the authority provided 
in section 103 of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1713).

SEC. 22. SHARED PENALTIES.

  Section 206 of the Federal Oil and Gas Royalty Management Act of 1982 
(30 U.S.C. 1736) is amended by striking ``Any payments under this 
section shall be reduced by an amount equal to any payments provided or 
due to such State or Indian tribe under the cooperative agreement or 
delegation, as applicable, during the fiscal year in which the civil 
penalty is received, up to the total amount provided or due for that 
fiscal year.''.

SEC. 23. APPLICABILITY TO OTHER MINERALS.

  Section 304 of the Federal Oil and Gas Royalty Management Act of 1982 
(30 U.S.C. 1753) is amended by adding at the end the following new 
subsection:
  ``(e) Applicability to Other Minerals.--
          ``(1) Notwithstanding any other provision of law, sections 
        107, 109, and 110 of this Act and the regulations duly 
        promulgated with respect thereto shall apply to any lease 
        authorizing the development of coal or any other solid mineral 
        on any Federal lands or Indian lands, to the same extent as if 
        such lease were an oil and gas lease, on the same terms and 
        conditions as those authorized for oil and gas leases.
          ``(2) Notwithstanding any other provision of law, sections 
        107, 109, and 110 of this Act and the regulations issued under 
        such sections shall apply with respect to any lease, easement, 
        right-of-way, or other agreement, regardless of form (including 
        any royalty, rent, or other payment due thereunder)--
                  ``(A) under section 8(k) or 8(p) of the Outer 
                Continental Shelf Lands Act (43 U.S.C. 1337(k) and 
                1337(p)); or
                  ``(B) under the Geothermal Steam Act (30 U.S.C. 1001 
                et seq.), to the same extent as if such lease, 
                easement, right-of-way, or other agreement were an oil 
                and gas lease on the same terms and conditions as those 
                authorized for oil and gas leases.
          ``(3) For the purposes of this subsection, the term `solid 
        mineral' means any mineral other than oil, gas, and geo-
        pressured-geothermal resources, that is authorized by an Act of 
        Congress to be produced from public lands (as that term is 
        defined in section 103 of the Federal Land Policy and 
        Management Act of 1976 (43 U.S.C. 1702)).''.

SEC. 24. ENTITLEMENTS.

  (a) Directed Rulemaking.--Not later than 180 days after the date of 
enactment of this Act, the Secretary of the Interior shall publish 
final regulations prescribing when a Federal lessee or designee must 
report and pay royalties on--
          (1) the volume of oil and gas such lessee or designee 
        produces or takes under a Federal lease or Indian lease; or
          (2) the volume of oil and gas that such lessee or designee is 
        entitled to based on its ownership interest under a unitization 
        agreement for Federal leases or Indian leases.
  (b) 100 Percent Entitlement Reporting and Paying.--The Secretary 
shall give consideration to requiring 100 percent entitlement reporting 
and paying based on Federal or Indian oil and gas lease ownership.

SEC. 25. ROYALTIES ON ALL EXTRACTED METHANE.

  (a) Assessment on All Production.--
          (1) In general.--Except as provided in paragraph (2), 
        royalties otherwise authorized or required under the mineral 
        leasing laws (as that term is defined in the Federal Oil and 
        Gas Royalty Management Act of 1982 (30 U.S.C. 1701 et seq.)) to 
        be paid for gas shall be assessed on all gas produced under the 
        mineral leasing laws, including--
                  (A) gas used or consumed within the area of the lease 
                tract for the benefit of the lease; and
                  (B) all gas that is consumed or lost by venting, 
                flaring, or fugitive releases through any equipment 
                during upstream operations.
          (2) Exception.--Paragraph (1) shall not apply with respect 
        to--
                  (A) gas vented or flared for not longer than 48 hours 
                in an acute emergency situation that poses a danger to 
                human health;
                  (B) gas injected into the ground on a lease tract in 
                order to enhance production of an oil or gas well or 
                for some other purpose; and
                  (C) gas used or consumed within the area of the lease 
                tract for the benefit of the lease when the operator is 
                a Tribe or is controlled by a Tribe that is located 
                entirely on the lands of such Tribe.
  (b) Conforming Amendments.--
          (1) Mineral leasing act.--The Mineral Leasing Act is 
        amended--
                  (A) in section 14 (30 U.S.C. 223), by adding at the 
                end the following: ``Notwithstanding any other 
                provision of this Act (including this section), royalty 
                shall be assessed with respect to oil and gas, other 
                than gas described in section 124(a)(2) of the Ending 
                Taxpayer Welfare for Oil and Gas Companies Act of 2021, 
                without regard to whether oil or gas is removed or sold 
                from the leased land.'';
                  (B) in section 17 (30 U.S.C. 226), by striking 
                ``removed or sold'' each place it appears;
                  (C) in section 22 (30 U.S.C. 251), by striking ``sold 
                or removed''; and
                  (D) in section 31 (30 U.S.C. 188), by striking 
                ``removed or sold'' each place it appears.
          (2) Outer continental shelf lands act.--The Outer Continental 
        Shelf Lands Act is amended--
                  (A) in section 6(a)(8) (43 U.S.C. 1335(a)(8)), by 
                striking ``saved, removed, or sold'' each place it 
                appears; and
                  (B) in section 8(a) (43 U.S.C. 1337(a))--
                          (i) in paragraph (1), by striking ``saved, 
                        removed, or sold'' each place it appears; and
                          (ii) by adding at the end the following:
          ``(9) Notwithstanding any other provision of this Act 
        (including this section), royalty under this Act shall be 
        assessed with respect to oil and gas, other than gas described 
        in section 124(a)(2) of the Ending Taxpayer Welfare for Oil and 
        Gas Companies Act of 2021, without regard to whether oil or gas 
        is removed or sold from the leased land.''.
  (c) Application.--The provisions of this section and the amendments 
made by this section shall apply only with respect to leases issued on 
or after the date of the enactment of this Act.

                          Purpose of the Bill

    The purpose of H.R. 1517 is to make certain adjustments to 
the fiscal terms for fossil fuel development and to make other 
reforms to improve returns to taxpayers for the development of 
federal energy resources.

                  Background and Need for Legislation

    The Mineral Leasing Act (MLA) of 1920 authorizes the 
Department of the Interior (DOI) to lease the rights to develop 
oil and gas resources on public land.\1\ The Bureau of Land 
Management (BLM) within DOI is the federal agency primarily 
responsible for managing oil and gas resources on U.S. public 
land. The BLM administers more than 247 million acres of land 
and 700 million acres of subsurface mineral estate. The U.S. 
Forest Service (USFS) cooperates with BLM in coordinating 
access to federal oil and gas resources on approximately one-
third of the over 150 national forests and grasslands. Most 
onshore public oil and gas resources are located and developed 
in the western United States, particularly California, 
Colorado, New Mexico, Utah, and Wyoming.
---------------------------------------------------------------------------
    \1\30 U.S.C. 181, et seq.
---------------------------------------------------------------------------
    The Federal Land Policy and Management Act of 1976 requires 
that ``the United States receive the fair market value of the 
use of public lands and their resources unless otherwise 
provided by statute.''\2\ The MLA does not contain an explicit 
``fair market value'' requirement for oil and gas but does 
state that the Secretary of the Interior can include lease 
terms necessary to protect U.S. interests and safeguard public 
welfare.\3\
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    \2\43 U.S.C. Sec. 1701(a)(9).
    \3\30 U.S.C. Sec. 187.
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    The MLA established a minimum royalty rate of 12.5 percent 
for onshore oil and gas. In 2008, the Government Accountability 
Office (GAO) published a report that found that ``the 
inflexibility of royalty rates to changing oil and gas prices 
has cost the federal government billions of dollars in foregone 
revenues.''\4\ In 2017, GAO published another report that 
concluded raising the royalty rate would increase revenues and 
lead to only a minor decrease in production.\5\ A 2016 
Congressional Budget Office study estimated that raising the 
onshore oil and gas royalty rate to 18.75 percent would 
increase net federal revenue by $200 million over the first ten 
years, and potentially by much more over the following decade, 
depending on market conditions.\6\
---------------------------------------------------------------------------
    \4\``Oil and Gas Royalties: The Federal System for Collecting Oil 
and Gas Revenues Needs Comprehensive Reassessment.'' U.S. Government 
Accountability Office. September 2008. https://www.gao.gov/assets/280/
279991.pdf.
    \5\``Oil, Gas, and Coal Royalties: Raising Federal Rates Could 
Decrease Production on Federal Lands but Increase Federal Revenue.'' 
U.S. Government Accountability Office. June 2017. https://www.gao.gov/
assets/690/685335.pdf.
    \6\ ``Options for Increasing Federal Income From Crude Oil and 
Natural Gas on Federal Lands.'' Congressional Budget Office. April 
2016. https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/
reports/51421-oil_and_gas_options-OneCol-3.pdf.
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    In September 2020, the non-profit organization Resources 
for the Future published a working paper that modeled the 
emissions, revenue, and production implications of several 
federal fossil fuel leasing policies, including increasing the 
onshore oil and gas royalty rate to 18.75 percent.\7\ According 
to the analysis, increasing the royalty rate would not 
significantly impact federal production, but would raise 
between $1-3 billion in revenue annually depending on the price 
of oil and gas.
---------------------------------------------------------------------------
    \7\Prest, Brian. ``Working Paper (20-16) Supply-Side Reforms to Oil 
and Gas Production on Federal Lands: Modeling the Implications for 
Climate Emissions, Revenues, and Production Shifts.'' Resources for the 
Future. Sept. 16, 2020. https://www.rff.org/publications/working-
papers/supply-side-reforms-oil-and-gas-production-federal-lands/.
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    From 1920 to 2022, the Department of the Interior failed to 
update the federal royalty rate from 12.5 percent. Over the 
same period, state governments increased the royalties 
operators pay to produce on state lands: Colorado increased its 
maximum rate from 16.67 percent to 20 percent in 2016, New 
Mexico increased from 18.75 percent to 20 percent, and in 
recent years considered increasing the rate to 25% to match 
neighboring Texas.8}9 The federal onshore royalty 
rate increased in 2022 to 16.67% as part of the Inflation 
Reduction Act (IRA), signed into law in August 2022.
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    \8\ U.S. General Accountability Office, ``Oil, Gas, and Coal 
Royalties: Raising Federal Rates Could Decrease Production on Federal 
Lands but Increase Federal Revenue,'' GAO-17-540, June 2017, pp 21-22.
    \9\``New Mexico shuns proposal to raise royalty rates on oil.'' 
Associated Press. February 15, 2019. https://apnews.com/article/
15d16d7fc01945dba75a5e7bc57d54e1.

 FEDERAL ONSHORE OIL AND GAS ROYALTY RATES LAG BEHIND STATE RATES; RATES
                      APPLICABLE TO NEW LEASES\10\
------------------------------------------------------------------------
                                                                Maximum
                         Jurisdiction                           rate (%)
------------------------------------------------------------------------
Texas........................................................         25
Colorado.....................................................         20
New Mexico...................................................         20
North Dakota.................................................      18.75
Montana......................................................      16.67
Utah.........................................................      16.67
Wyoming......................................................      16.67
Federal Onshore\11\..........................................      16.67
------------------------------------------------------------------------

    Not all natural gas produced on federal lands is assessed 
for royalty payments. Gas produced and used within the lands of 
a lease is not counted towards royalty payments, and until the 
passage of the IRA, natural gas that was intentionally released 
(vented), intentionally burned (flared), or leaked from oil and 
gas facilities on federal and tribal land were not subject to 
royalty payments either.\12\ For years, GAO faulted BLM for 
failing to accurately measure the amount of natural gas lost 
through venting and flaring on public land. In 2011, the GAO 
designated BLM's management of oil and gas resources as a 
program at high risk for fraud, waste, abuse, and mismanagement 
in part because of this issue. As of 2022, BLM's oil and gas 
program was still on GAO's high-risk list.\13\
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    \10\All state maximum royalty rates are current as of 2017. See: 
U.S. General Accountability Office, ``Oil, Gas, and Coal Royalties: 
Raising Federal Rates Could Decrease Production on Federal Lands but 
Increase Federal Revenue,'' GAO-17-540, June 2017, p 9.
    \11\Inflation Reduction Act of 2022, Pub. L. No. 117-169 (2022). 
https://www.congress.gov/bill/117th-congress/house-bill/5376/text.
    \12\30 U.S.C. Sec. 181 et seq.
    \13\``High Risk List.'' U.S. Government Accountability Office. 
https://www.gao.gov/high-risk-list. Accessed October 19, 2022.
---------------------------------------------------------------------------
    Rental rates--paid by companies on leases that aren't 
producing oil or gas--had also not been updated in years until 
the IRA, depriving taxpayers of hundreds of millions of 
dollars. The MLA first set the rental rate at ``not less than 
$1 per acre'' per year. Congress reduced the rate to $0.25 per 
acre in 1935, increased it to $0.50 in 1960, and increased it 
$1.50 per year for the first five years and $2 per year 
afterwards in 1987.\14\ Had Congress simply indexed the 1987 
rental rate to inflation, BLM could have collected nearly $30 
million in additional revenues in FY 2017, and more than $440 
million in additional revenues between FY 2008-2017.\15\
---------------------------------------------------------------------------
    \14\``Federal Oil and Gas Leasing: Getting a Fair Return from 
Rental Rates.'' Taxpayers for Common Sense. Nov. 2018. https://
www.taxpayer.net/energy-natural-resources/intro-to-oil-and-gas-leasing-
rental-rates/.
    \15\Id.
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    H.R. 1517 would update the fiscal terms for fossil fuel 
development on federal lands. Section 3 raises the minimum 
onshore royalty rates to 18.75 percent for all new oil and gas 
and coal leases. Section 4 raises the current onshore oil and 
gas minimum bid from $2 to $5 and requires it to be indexed to 
inflation. Section 5 raises per-acre onshore rental rates for 
oil and gas leases from their current values of $1.50 for the 
first 5 years and $2 for the second five years, to $3 for the 
first 5 years and $5 for the second 5 years. Section 6 requires 
companies to pay annual user fees to cover the cost of the BLM 
oil and gas inspection program. Section 7 raises civil and 
criminal penalties for operators on public lands and waters. 
Sections 8 through 25 make a variety of largely technical 
reforms to improve royalty collection oversight and 
enforcement.
    The IRA made significant updates to oil and gas royalties, 
rental rates, and minimum bids. It raised the onshore oil and 
gas royalty rate from 12.5 to 16.67 percent and set the royalty 
rate for reinstated leases at 20%; increased the minimum bid 
from $2 to $10 per acre; and raised the rental rate for unused 
leases to $3 per acre for the first 2 years, $5 per acre for 
the next 6 years, and $15 per acre thereafter. It also 
increased the rent in reinstated leases from $10 to $20. The 
IRA also required royalties on all gas produced on a lease; 
including gas that is vented, flared, or leaked; but does not 
charge royalties on gas produced and used beneficially on the 
same lease.\16\
---------------------------------------------------------------------------
    \16\Inflation Reduction Act of 2022, Pub. L. No. 117-169 (2022). 
https://www.congress.gov/bill/117th-congress/house-bill/5376/text.
---------------------------------------------------------------------------

                            Committee Action

    H.R. 1517 was introduced on March 2, 2021, by 
Representative Katie Porter (D-CA). The bill was referred 
solely to the Committee on Natural Resources, and within the 
Committee to the Subcommittee on Energy and Mineral Resources. 
On March 9, 2021, the Subcommittee held a hearing on the bill. 
On May 5, 2021, the Natural Resources Committee met to consider 
the bill. The Subcommittee was discharged by unanimous consent. 
Rep. Porter offered an amendment designated Porter #2. The 
amendment was agreed to by a roll call vote of 24 yeas and 15 
nays, as follows:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    By unanimous consent, Rep. Pete Stauber (R-MN) offered an 
amendment on behalf of Rep. Lauren Boebert (R-CO) designated 
Boebert #1. The amendment was not agreed to by a roll call vote 
of 15 yeas and 24 nays, as follows:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Rep. Matt Rosendale (R-MT) offered an amendment designated 
Rosendale #1. The amendment was not agreed to by voice vote. 
Rep. Rosendale offered an amendment designated Rosendale #2. 
The amendment was not agreed to by voice vote. Rep. Rosendale 
offered an amendment designated Rosendale #3. The amendment was 
not agreed to by a roll call vote of 15 yeas and 22 nays, as 
follows:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Rep. Stauber offered an amendment designated Stauber #1. 
The amendment was not agreed to by voice vote. Rep. Garret 
Graves (R-LA) offered an amendment designated Graves #7. The 
amendment was not agreed to by a roll call vote of 15 yeas and 
23 nays, as follows:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    By unanimous consent, Rep. Graves offered amendments 
designated Graves #8 and Graves #12 en bloc. The en bloc 
amendments were not agreed to by a voice vote. By unanimous 
consent, Rep. Graves offered amendments designated Graves #10 
and Graves #11 en bloc. The en bloc amendments were not agreed 
to by voice vote. Rep. Graves offered an amendment designated 
Graves #6. The amendment was not agreed to by a roll call vote 
of 15 yeas and 23 nays, as follows:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    By unanimous consent, Ranking Member Bruce Westerman (R-AR) 
offered an amendment on behalf of Rep. Boebert designated 
Boebert #2. The amendment was not agreed to by a roll call vote 
of 14 yeas and 22 nays, as follows:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The bill, as amended, was adopted and ordered favorably 
reported to the House of Representatives by a roll call vote of 
23 yeas and 14 nays, as follows:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                Hearings

    For the purposes of clause 3(c)(6) of House rule XIII, the 
following hearing was used to develop or consider this measure: 
hearing by the Subcommittee on Energy and Mineral Resources 
held on March 9, 2021.

                      Section-by-Section Analysis


Section 1. Short title

    This section provides the short title of the bill, the 
``Ending Taxpayer Welfare for Oil and Gas Companies Act of 
2021.''

Section 2. Table of contents

Section 3. Onshore fossil fuel royalty rates

    Section 3 amends the Mineral Leasing Act (30 U.S.C. 181) to 
raise the onshore royalty rates from 12.5 percent to 18.75 
percent for all new oil, gas, and coal leases. This section 
also establishes a process the Secretary of the Interior will 
use to periodically re-evaluate royalty rates to ensure 
taxpayers are getting a fair market value for oil, gas, and 
coal leases.

Section 4. Minimum bid amount

    This section raises the minimum bid amount for onshore oil 
and gas leases from $2 to $5 per acre and indexes the minimum 
bid amount to inflation, requiring minimum bid amounts to be 
updated at least every four years.

Section 5. Onshore oil and gas rental rates

    This section raises the per-acre onshore rental rates for 
oil and gas leases to $3 per acre for the first five years and 
$5 per acre for the second five years and raises the rental 
rate for reinstated leases from $10 to $20 per acre.

Section 6. Inspection fee

    This section modifies the Federal Oil and Gas Royalty 
Management Act of 1982 to charge companies user fees to cover 
the cost of the onshore oil and gas inspection program. These 
fees are set at $700 for leases without wells but with some oil 
and gas-related land use or disturbance, $1,225 for leases with 
1-10 wells, $4,900 for leases with 11-50 wells, and $9,800 for 
leases with more than 50 wells.

Section 7. Penalties

    This section increases civil and criminal penalties in the 
Mineral Leasing Act, the Federal Oil and Gas Royalty Management 
Act of 1982, and the Outer Continental Shelf Lands Act.

Section 8. Royalty relief

    This section repeals royalty relief provisions for deep gas 
wells in shallow water and deep water production in the Energy 
Policy Act of 2005. This section amends the Outer Continental 
Shelf Lands Act to repeal royalty relief for oil and gas 
development in Alaska's Outer Continental Shelf, and amends the 
Naval Petroleum Reserves Production Act by altering the lengths 
of leases in the Reserve and revoking the subsidies for oil and 
gas production within the Reserve.

Section 9. Royalty in kind

    This section amends the Mineral Leasing Act to revoke the 
Secretary of the Interior's authority to take in-kind oil and 
gas royalties except to as needed to fill the strategic energy 
reserve.

Section 10. Amendments to definitions

    This section amends and adds definitions in the Federal Oil 
and Gas Royalty Management Act of 1982, simplifying and 
strengthening royalty payment oversight.

Section 11. Compliance reviews

    This section amends the Federal Oil and Gas Royalty 
Management Act to give the Secretary of the Interior statutory 
authority to conduct compliance reviews of royalty payments and 
requires the Secretary to report any discrepancies discovered 
to an auditor.

Section 12. Liability for royalty payments

    This section modifies the Federal Oil and Gas Royalty 
Management Act to clarify responsibilities for lease payments. 
It gives the Secretary the power to specify how and when 
lessees must pay their royalties, makes designees liable for 
lease royalties, and makes lease owners and operators liable 
for their pro-rated share of payment obligations under said 
lease.

Section 13. Recordkeeping

    This section amends the Federal Oil and Gas Royalty 
Management Act by requiring payors to keep oil and gas records 
for seven years instead of six. This aligns record-keeping 
requirements with the statute of limitations for the government 
to collect unpaid royalties established under the Royalty 
Fairness and Simplification Act of 1995.

Section 14. Adjustments and refunds

    This section amends the Federal Oil and Gas Royalty 
Management Act so that lessees cannot adjust a lease's royalty 
obligations after an audit or compliance review has been 
completed on the lease in question. It also shortens the amount 
of time lessees have to make adjustments to their royalty 
obligations from six years to four years after the date 
royalties were initially due.

Section 15. Obligation period

    This section modifies the Federal Oil and Gas Royalty 
Management Act so that if an adjustment made by a lessee 
results in an underpayment of royalties, that lessee must repay 
that amount, with interest, from the date the lessee made the 
adjustment.

Section 16. Tolling agreements and subpoenas

    This section amends the Federal Oil and Gas Royalty 
Management Act to allow the Secretary of the Interior to 
communicate directly with lease designees instead of individual 
lessees in the case of subpoenas or agreements to pause the 
statute of limitations (tolling agreements).

Section 17. Appeals

    This section amends the Federal Oil and Gas Royalty 
Management Act to give the Secretary more time to issue final 
decisions on appeals on demands or orders to pay royalties or 
penalties, extending the timeframe from 33 months to 48.

Section 18. Assessments

    This section repeals section 116 of the Federal Oil and Gas 
Royalty Management Act, which prohibits the Secretary from 
imposing assessments on payors who repeatedly submit erroneous 
royalty reports.

Section 19. Pilot project on automatic data transfer

    This section creates a pilot project to automate 
transmission of electronic data from offshore wellheads and 
meters to the federal government, to improve the accuracy and 
efficiency of data and royalty collection. The Secretary will 
report the outcomes of the pilot project and make 
recommendations to Congress within 3 years after this law is 
enacted.

Section 20. Penalty for late or incorrect reporting of data

    This section establishes a civil penalty for companies that 
file late or incorrect data. The Secretary will determine a 
penalty level that will ensure that companies file correct data 
on time, with a minimum penalty of $10 per incorrect line of 
data.

Section 21. Required recordkeeping for natural gas plants

    This section requires the Secretary to promulgate a 
regulation requiring transporters, purchasers, and sellers of 
federal natural gas to maintain and provide records, following 
the Federal Oil and Gas Royalty Management Act's recordkeeping 
requirements for oil and gas lessees and operators.

Section 22. Shared penalties

    Under Section 206 of the Federal Oil and Gas Royalty 
Management Act, states and Indian tribes receive 50 percent of 
civil penalties they collect on behalf of the federal 
government. This section of this bill strikes a portion of 
section 206 that reduces those penalty payments by the amount 
of other payments due to that state or tribe under said state 
or tribe's cooperative or delegation agreement with the federal 
government.

Section 23. Applicability to other minerals

    This section extends the civil and criminal authority in 
the Federal Oil and Gas Royalty Management Act to coal and 
other solid minerals on Federal and Indian lands, and to other 
solid minerals and alternative energy development on the Outer 
Continental Shelf.

Section 24. Entitlements

    This section requires the Secretary of the Interior to 
publish final regulations for reporting and paying royalties on 
oil and gas production, including for entitled shares of 
production from unitized leases when lessees do not sell their 
share of production from that lease.

Section 25. Royalties on all extracted methane

    This section eliminates the royalty waiver for natural gas 
produced and subsequently used on the lease and requires 
royalties to be paid on all gas vented, flared, or lost through 
leakage.

            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) of rule XIII 
of the Rules of the House of Representatives and section 308(a) 
of the Congressional Budget Act of 1974 and with respect to 
requirements of clause (3)(c)(3) and clause 3(d) of rule XIII 
of the Rules of the House of Representatives and section 402 of 
the Congressional Budget Act of 1974, the Committee has 
requested but not received a cost estimate for this bill from 
the Director of Congressional Budget Office. The Committee 
adopts as its own cost estimate the forthcoming cost estimate 
of the Director of the Congressional Budget Office, should such 
cost estimate be made available before House passage of the 
bill.
    The Committee has requested but not received from the 
Director of the Congressional Budget Office a statement as to 
whether this bill contains any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.
    2. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goals and 
objectives of this bill are to make certain adjustments to the 
fiscal terms for fossil fuel development and to make other 
reforms to improve returns to taxpayers for the development of 
federal energy resources.

                           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.

                 Unfunded Mandates Reform Act Statement

    An estimate of federal mandates prepared by the Director of 
the Congressional Budget Office pursuant to section 423 of the 
Unfunded Mandates Reform Act was not made available to the 
Committee in time for the filing of this report. The Chair of 
the Committee shall cause such estimate to be printed in the 
Congressional Record upon its receipt by the Committee, if such 
estimate is not publicly available on the Congressional Budget 
Office website.

                           Existing Programs

    This bill does not establish or reauthorize a program of 
the federal government known to be duplicative of another 
program.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

               Preemption of State, Local, or Tribal Law

    Any preemptive effect of this bill over state, local, or 
tribal law is intended to be consistent with the bill's 
purposes and text and the Supremacy Clause of Article VI of the 
U.S. Constitution.

         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 italics, and existing law in which no 
change is proposed is shown in roman):

                          MINERAL LEASING ACT



           *       *       *       *       *       *       *
  Sec. 7. (a) A coal lease shall be for a term of twenty years 
and for so long thereafter as coal is produced annually in 
commercial quantities from that lease. Any lease which is not 
producing in commercial quantities at the end of ten years 
shall be terminated. The Secretary shall by regulation 
prescribe annual rentals on leases. A lease shall require 
payment of a royalty in such amount as the Secretary shall 
determine of not less than [12\1/2\] 18.75 per centum of the 
value of coal as defined by regulation, except the Secretary 
may determine a lesser amount in the case of coal recovered by 
underground mining operations. The lease shall include such 
other terms and conditions as the Secretary shall determine. 
Such rentals and royalties and other terms and conditions of 
the lease will be subject to readjustment at the end of its 
primary term of twenty years and at the end of each ten-year 
period thereafter if the lease is extended.
  (b)(1) Each lease shall be subject to the conditions of 
diligent development and continued operation of the mine or 
mines, except where operations under the lease are interrupted 
by strikes, the elements, or casualties not attributable to the 
lessee.
  (2) The Secretary of the Interior, upon determining that the 
public interest will be served thereby, may suspend the 
condition of continued operation upon the payment of advance 
royalties.
  (3) Advance royalties described in paragraph (2) shall be no 
less than the production royalty which would otherwise be paid 
and shall be computed on a fixed reserve to production ratio 
(determined by the Secretary).
  (4) Advance royalties described in paragraph (2) shall be 
computed--
          (A) based on--
                  (i) the average price in the spot market for 
                sales of comparable coal from the same region 
                during the last month of each applicable 
                continued operation year; or
                  (ii) in the absence of a spot market for 
                comparable coal from the same region, by using 
                a comparable method established by the 
                Secretary of the Interior to capture the 
                commercial value of coal; and
          (B) based on commercial quantities, as defined by 
        regulation by the Secretary of the Interior.
  (5) The aggregate number of years during the period of any 
lease for which advance royalties may be accepted in lieu of 
the condition of continued operation shall not exceed 20 years.
  (6) The amount of any production royalty paid for any year 
shall be reduced (but not below 0) by the amount of any advance 
royalties paid under a lease described in paragraph (5) to the 
extent that the advance royalties have not been used to reduce 
production royalties for a prior year.
  (6) The Secretary may, upon six months' notification to the 
lessee cease to accept advance royalties in lieu of the 
requirement of continued operation.
  (7) Nothing in this subsection shall be construed to affect 
the requirement contained in the second sentence of subsection 
(a) relating to commencement of production at the end of ten 
years.
  (c) Prior to taking any action on a leasehold which might 
cause a significant disturbance of the environment, the lessee 
shall submit for the Secretary's approval an operation and 
reclamation plan. The Secretary shall approve or disapprove the 
plan or require that it be modified. Where the land involved is 
under the surface jurisdiction of another Federal agency, that 
other agency must consent to the terms of such approval.
  (d) Periodic Evaluation of Royalty Rates.--The Secretary 
shall establish a periodic process of evaluating increases in 
royalty rates to achieve a fair market value return for the 
public. The process should include:
          (1) publishing annually the average, weighted by 
        relative production per State, of the top fossil fuel 
        royalty rates charged by States for fossil fuels 
        production on State-owned public lands;
          (2) evaluating triennially increases in the Federal 
        fossil fuel royalty rates above the minimum rates 
        required under this Act to match the production-
        weighted average of State royalty rates. The triennial 
        review shall include and benefit from public 
        participation through written comment, public hearings 
        and other meetings open to all interested parties; and
          (3) submitting the triennial evaluation to Congress, 
        including a summary of the views expressed in the 
        public participation processes related to the 
        evaluation.

           *       *       *       *       *       *       *

  Sec. 14. That upon establishing to the satisfaction of the 
Secretary of the Interior that valuable deposits of oil or gas 
have been discovered within the limits of the land embraced in 
any permit, the permittee shall be entitled to a lease for one-
fourth of the land embraced in the prospecting permit: 
Provided, That the permittee shall be granted a lease for as 
much as one hundred and sixty acres of said lands, if there be 
that number of acres within the permit. The area to be selected 
by the permittee, shall be in reasonably compact form and, if 
surveyed, to be described by the legal subdivisions of the 
public-land surveys; if unsurveyed, to be surveyed by the 
Government at the expense of the applicant for lease in 
accordance with rules and regulations to be prescribed by the 
Secretary of the Interior, and the lands leased shall be 
conformed to and be taken in accordance with the legal 
subdivisions of such surveys; deposits made to cover expense of 
surveys shall be deemed appropriated for that purpose, and any 
excess deposits may be repaid to the person or persons making 
such deposit or their legal representatives. Such leases shall 
be for a term of twenty years upon a royalty of 5 per centum in 
amount or value of the production and the annual payment in 
advance of a rental of $1 per acre, the rental paid for any one 
year to be credited against the royalties as they accrue for 
that year, and shall continue in force otherwise as prescribed 
in section 17 hereof for leases issued prior to the effective 
date of this amendatory Act. The permittee shall also be 
entitled to a preference right to a lease for the remainder of 
the land in his prospecting permit at a royalty of not less 
than 12\1/2\ per centum in amount or value of the production 
nor more than the royalty rate prescribed by regulation in 
force on January 1, 1935, for secondary leases issued under 
this section, and under such other conditions as are fixed for 
oil or gas leases issued under section 17 of this Act the 
royalty to be determined by competitive bidding or fixed by 
such other method as the Secretary may by regulations 
prescribe: Provided further, That the Secretary shall have the 
right to reject any or all bids. Notwithstanding any other 
provision of this Act (including this section), royalty shall 
be assessed with respect to oil and gas, other than gas 
described in section 124(a)(2) of the Ending Taxpayer Welfare 
for Oil and Gas Companies Act of 2021, without regard to 
whether oil or gas is removed or sold from the leased land.

           *       *       *       *       *       *       *

  Sec. 17. (a) All lands subject to disposition under this Act 
which are known or believed to contain oil or gas deposits may 
be leased by the Secretary.
  (b)(1)(A) All lands to be leased which are not subject to 
leasing under paragraphs (2) and (3) of this subsection shall 
be leased as provided in this paragraph to the highest 
responsible qualified bidder by competitive bidding under 
general regulations in units of not more than 2,560 acres, 
except in Alaska, where units shall be not more than 5,760 
acres. Such units shall be as nearly compact as possible. Lease 
sales shall be conducted by oral bidding, except as provided in 
subparagraph (C). Lease sales shall be held for each State 
where eligible lands are available at least quarterly and more 
frequently if the Secretary of the Interior determines such 
sales are necessary. A lease shall be conditioned upon the 
payment of a royalty at a rate of not less than [12.5] 18.75 
percent in amount or value of the production [removed or sold] 
from the lease. The Secretary shall accept the highest bid from 
a responsible qualified bidder which is equal to or greater 
than the national minimum acceptable bid, without evaluation of 
the value of the lands proposed for lease. Leases shall be 
issued within 60 days following payment by the successful 
bidder of the remainder of the bonus bid, if any, and the 
annual rental for the first lease year. All bids for less than 
the national minimum acceptable bid shall be rejected. Lands 
for which no bids are received or for which the highest bid is 
less than the national minimum acceptable bid shall be offered 
promptly within 30 days for leasing under subsection (c) of 
this section and shall remain available for leasing for a 
period of 2 years after the competitive lease sale.
  (B) The national minimum acceptable bid shall be [$2 per 
acre] $10 per acre, except as otherwise provided by this 
paragraph for a period of 2 years from the date of enactment of 
the [Federal Onshore Oil and Gas Leasing Reform Act of 1987] 
Ending Taxpayer Welfare for Oil and Gas Companies Act of 2021. 
Thereafter, the Secretary, subject to paragraph (2)(B), may 
establish by regulation a higher national minimum acceptable 
bid for all leases based upon a finding that such action is 
necessary: (i) to enhance financial returns to the United 
States; and (ii) to promote more efficient management of oil 
and gas resources on Federal lands. Ninety days before the 
Secretary makes any change in the national minimum acceptable 
bid, the Secretary shall notify the Committee on Natural 
Resources of the United States House of Representatives and the 
Committee on Energy and Natural Resources of the United States 
Senate. The proposal or promulgation of any regulation to 
establish a national minimum acceptable bid shall not be 
considered a major Federal action subject to the requirements 
of section 102(2)(C) of the National Environmental Policy Act 
of 1969.
  (C) In order to diversify and expand the Nation's onshore 
leasing program to ensure the best return to the Federal 
taxpayer, reduce fraud, and secure the leasing process, the 
Secretary may conduct onshore lease sales through Internet-
based bidding methods. Each individual Internet-based lease 
sale shall conclude within 7 days.
  (2)(A)(i) If the lands to be leased are within a special tar 
sand area, they shall be leased to the highest responsible 
qualified bidder by competitive bidding under general 
regulations in units of not more than 5,760 acres, which shall 
be as nearly compact as possible, upon the payment by the 
lessee of such bonus as may be accepted by the Secretary.
  (ii) Royalty shall be [12\1/2\] 18.75 per centum in amount of 
value of production [removed or sold] from the lease subject to 
section 17(k)(1)(c).
  (iii) The Secretary may lease such additional lands in 
special tar sand areas as may be required in support of any 
operations necessary for the recovery of tar sands.
          (iv) No lease issued under this paragraph shall be 
        included in any chargeability limitation associated 
        with oil and gas leases.
  (B) For any area that contains any combination of tar sand 
and oil or gas (or both), the Secretary may issue under this 
Act, separately--
          (i) a lease for exploration for and extraction of tar 
        sand; and
          (ii) a lease for exploration for and development of 
        oil and gas.
  (C) A lease issued for tar sand shall be issued using the 
same bidding process, annual rental, and posting period as a 
lease issued for oil and gas, except that the minimum 
acceptable bid required for a lease issued for tar sand shall 
be [$2 per acre] $10 per acre.
  (D) The Secretary may waive, suspend, or alter any 
requirement under section 26 that a permittee under a permit 
authorizing prospecting for tar sand must exercise due 
diligence, to promote any resource covered by a combined 
hydrocarbon lease.
  (3)(A) If the United States held a vested future interest in 
a mineral estate that, immediately prior to becoming a vested 
present interest, was subject to a lease under which oil or gas 
was being produced, or had a well capable of producing, in 
paying quantities at an annual average production volume per 
well per day of either not more than 15 barrels per day of oil 
or condensate, or not more than 60,000 cubic feet of gas, the 
holder of the lease may elect to continue the lease as a 
noncompetitive lease under subsection (c)(1).
  (B) An election under this paragraph is effective--
          (i) in the case of an interest which vested after 
        January 1, 1990, and on or before the date of enactment 
        of this paragraph, if the election is made before the 
        date that is 1 year after the date of enactment of this 
        paragraph;
          (ii) in the case of an interest which vests within 1 
        year after the date of enactment of this paragraph, if 
        the election is made before the date that is 2 years 
        after the date of enactment of this paragraph; and
          (iii) in any case other than those described in 
        clause (i) or (ii), if the election is made prior to 
        the interest becoming a vested present interest.
  (C) Notwithstanding the consent requirement referenced in 
section 3 of the Mineral Leasing Act for Acquired Lands (30 
U.S.C. 352), the Secretary shall issue a noncompetitive lease 
under subsection (c)(1) to a holder who makes an election under 
subparagraph (A) and who is qualified to hold a lease under 
this Act. Such lease shall be subject to all terms and 
conditions under this Act that are applicable to leases issued 
under subsection (c)(1).
  (D) A lease issued pursuant to this paragraph shall continue 
so long as oil or gas continues to be produced in paying 
quantities.
  (E) This paragraph shall apply only to those lands under the 
administration of the Secretary of Agriculture where the United 
States acquired an interest in such lands pursuant to the Act 
of March 1, 1911 (36 Stat. 961 and following).
  (c)(1) If the lands to be leased are not leased under 
subsection (b)(1) of this section or are not subject to 
competitive leasing under subsection (b)(2) of this section, 
the person first making application for the lease who is 
qualified to hold a lease under this Act shall be entitled to a 
lease of such lands without competitive bidding, upon payment 
of a non-refundable application fee of at least $75. A lease 
under this subsection shall be conditioned upon the payment of 
a royalty at a rate of [12.5] 18.75 percent in amount or value 
of the production [removed or sold] from the lease. Leases 
shall be issued within 60 days of the date on which the 
Secretary identifies the first responsible qualified applicant.
  (2)(A) Lands (i) which were posted for sale under subsection 
(b)(1) of this section but for which no bids were received or 
for which the highest bid was less than the national minimum 
acceptable bid and (ii) for which, at the end of the period 
referred to in subsection (b)(1) of this section no lease has 
been issued and no lease application is pending under paragraph 
(1) of this subsection, shall again be available for leasing 
only in accordance with subsection (b)(1) of this section.
  (B) The land in any lease which is issued under paragraph (1) 
of this subsection or under subsection (b)(1) of this section 
which lease terminates, expires, is cancelled or is 
relinquished shall again be available for leasing only in 
accordance with subsection (b)(1) of this section.
  (d) All leases issued under this section, as amended by the 
Federal Onshore Oil and Gas Leasing Reform Act of 1987, shall 
be conditioned upon payment by the lessee of a rental of not 
less than [$1.50 per acre] $3 per acre per year for the first 
through fifth years of the lease and not less than [$2 per 
acre] $5 per acre per year for each year thereafter. A minimum 
royalty in lieu of rental of not less than the rental which 
otherwise would be required for that lease year shall be 
payable at the expiration of each lease year beginning on or 
after a discovery of oil or gas in paying quantities on the 
lands leased.
  (e) Competitive and noncompetitive leases issued under this 
section shall be for a primary term of 10 years: Provided, 
however, That competitive leases issued in special tar sand 
areas shall also be for a primary term of ten years. Each such 
lease shall continue so long after its primary term as oil or 
gas is produced in paying quantities. Any lease issued under 
this section for land on which, or for which under an approved 
cooperative or unit plan of development or operation, actual 
drilling operations were commenced prior to the end of its 
primary term and are being diligently prosecuted at that time 
shall be extended for two years and so long thereafter as oil 
or gas is produced in paying quantities.
  (f) At least 45 days before offering lands for lease under 
this section, and at least 30 days before approving 
applications for permits to drill under the provisions of a 
lease or substantially modifying the terms of any lease issued 
under this section, the Secretary shall provide notice of the 
proposed action. Such notice shall be posted in the appropriate 
local office of the leasing and land management agencies. Such 
notice shall include the terms or modified lease terms and maps 
or a narrative description of the affected lands. Where the 
inclusion of maps in such notice is not practicable, maps of 
the affected lands shall be made available to the public for 
review. Such maps shall show the location of all tracts to be 
leased, and of all leases already issued in the general area. 
The requirements of this subsection are in addition to any 
public notice required by other law.
  (g) The Secretary of the Interior, or for National Forest 
lands, the Secretary of Agriculture, shall regulate all 
surface-disturbing activities conducted pursuant to any lease 
issued under this Act, and shall determine reclamation and 
other actions as required in the interest of conservation of 
surface resources. No permit to drill on an oil and gas lease 
issued under this Act may be granted without the analysis and 
approval by the Secretary concerned of a plan of operations 
covering proposed surface-disturbing activities within the 
lease area. The Secretary concerned shall, by rule or 
regulation, establish such standards as may be necessary to 
ensure that an adequate bond, surety, or other financial 
arrangement will be established prior to the commencement of 
surface-disturbing activities on any lease, to ensure the 
complete and timely reclamation of the lease tract, and the 
restoration of any lands or surface waters adversely affected 
by lease operations after the abandonment or cessation of oil 
and gas operations on the lease. The Secretary shall not issue 
a lease or leases or approve the assignment of any lease or 
leases under the terms of this section to any person, 
association, corporation, or any subsidiary, affiliate, or 
person controlled by or under common control with such person, 
association, or corporation, during any period in which, as 
determined by the Secretary of the Interior or Secretary of 
Agriculture, such entity has failed or refused to comply in any 
material respect with the reclamation requirements and other 
standards established under this section for any prior lease to 
which such requirements and standards applied. Prior to making 
such determination with respect to any such entity the 
concerned Secretary shall provide such entity with adequate 
notification and an opportunity to comply with such reclamation 
requirements and other standards and shall consider whether any 
administrative or judicial appeal is pending. Once the entity 
has complied with the reclamation requirement or other standard 
concerned an oil or gas lease may be issued to such entity 
under this Act.
  (h) The Secretary of the Interior may not issue any lease on 
National Forest System Lands reserved from the public domain 
over the objection of the Secretary of Agriculture.
  (i) No lease issued under this section which is subject to 
termination because of cessation of production shall be 
terminated for this cause so long as reworking or drilling 
operations which were commenced on the land prior to or within 
sixty days after cessation of production are conducted thereon 
with reasonable diligence, or so long as oil or gas is produced 
in paying quantities as a result of such operations. No lease 
issued under this section shall expire because operations or 
production is suspended under any order, or with the consent, 
of the Secretary. No lease issued under this section covering 
lands on which there is a well capable of producing oil or gas 
in paying quantities shall expire because the lessee fails to 
produce the same unless the lessee is allowed a reasonable 
time, which shall be not less than sixty days after notice by 
registered or certified mail, within which to place such well 
in producing status or unless, after such status is 
established, production is discontinued on the leased premises 
without permission granted by the Secretary under the 
provisions of this Act.
  (j) Whenever it appears to the Secretary that lands owned by 
the United States are being drained of oil or gas by wells 
drilled on adjacent lands, he may negotiate agreements whereby 
the United States, or the United States and its lessees, shall 
be compensated for such drainage. Such agreements shall be made 
with the consent of the lessees, if any, affected thereby. If 
such agreement is entered into, the primary term of any lease 
for which compensatory royalty is being paid, or any extension 
of such primary term, shall be extended for the period during 
which such compensatory royalty is paid and for a period of one 
year from discontinuance of such payment and so long thereafter 
as oil or gas is produced in paying quantities.
  (k) If, during the primary term or any extended term of any 
lease issued under this section, a verified statement is filed 
by any mining claimant pursuant to subsection (c) of section 7 
of the Multiple Mineral Development Act of August 13, 1954 (68 
Stat. 708), as amended (30 U.S.C. 527), whether such filing 
occur prior to enactment of the Mineral Leasing Act Revision of 
1960 or thereafter, asserting the existence of a conflicting 
unpatented mining claim or claims upon which diligent work is 
being prosecuted as to any lands covered by the lease, the 
running of time under such lease shall be suspended as to the 
lands involved from the first day of the month following the 
filing of such verified statement until a final decision is 
rendered in the matter.
  (l) The Secretary of the Interior shall, upon timely 
application therefor, issue a new lease in exchange for any 
lease issued for a term of twenty years, or any renewal 
thereof, or any lease issued prior to August 8, 1946, in 
exchange for a twenty-year lease, such new lease to be for a 
primary term of five years and so long thereafter as oil or gas 
is produced in paying quantities and at a royalty rate of not 
less than [12\1/2\] 18.75 per centum in amount of value of the 
production [removed or sold] from such leases, except that the 
royalty rate shall be [12\1/2\] 18.75 per centum in amount or 
value of the production [removed or sold] from said leases as 
to (1) such leases, or such parts of the lands subject thereto 
and the deposits underlying the same, as are not believed to be 
within the productive limits of any producing oil or gas 
deposit, as such productive limits are found by the Secretary 
to have existed on August 8, 1946; and (2) any production on a 
lease from an oil or gas deposit which was discovered after May 
27, 1941, by a well or wells drilled within the boundaries of 
the lease, and which is determined by the Secretary to be a new 
deposit; and (3) any production on or allocated to a lease 
pursuant to an approved cooperative or unit plan of development 
or operation from an oil or gas deposit which was discovered 
after May 27, 1941, on land committed to such plan, and which 
is determined by the Secretary to be a new deposit, where such 
lease, or a lease for which it is exchanged, was included in 
such plan at the time of discovery or was included in a duly 
executed and filed application for the approval of such plan at 
the time of discovery.
  (m) For the purpose of more properly conserving the natural 
resources of any oil or gas pool, field, or like area, or any 
part thereof (whether or not any part of said oil or gas pool, 
field, or like area, is then subject to any cooperative or unit 
plan of development or operation), lessees thereof and their 
representatives may unite with each other, or jointly or 
separately with others, in collective adopting and operating 
under a cooperative or unit plan of development or operation of 
such pool, field, or like area, or any part thereof, whenever 
determined and certified by the Secretary of the Interior to be 
necessary or advisable in the public interest. The Secretary is 
thereunto authorized, in his discretion, with the consent of 
the holders of leases involved, to establish, alter, change, or 
revoke drilling, producing, rental, minimum royalty, and 
royalty requirements of such leases and to make such 
regulations with reference to such leases, with like consent on 
the part of the lessees, in connection with the institution and 
operation of any such cooperative or unit plan as he may deem 
necessary or proper to secure the proper protection of the 
public interest. The Secretary may provide that oil and gas 
leases hereafter issued under this Act shall contain a 
provision requiring the lessee to operate under such a 
reasonable cooperative or unit plan, and he may prescribe such 
a plan under which such lessee shall operate, which shall 
adequately protect the rights of all parties in interest, 
including the United States.
  Any plan authorized by the preceding paragraph which includes 
lands owned by the United States may, in the discretion of the 
Secretary, contain a provision whereby authority is vested in 
the Secretary of the Interior, or any such person, committee, 
or State or Federal officer or agency as may be designated in 
the plan, to alter or modify from time to time the rate of 
prospecting and development and the quantity and rate of 
production under such plan. All leases operated under any such 
plan approved or prescribed by the Secretary shall be excepted 
in determining holdings or control under the provisions of any 
section of this Act.
  When separate tracts cannot be independently developed and 
operated in conformity with an established well-spacing or 
development program, any lease, or a portion thereof, may be 
pooled with other lands, whether or not owned by the United 
States, under a communitization or drilling agreement providing 
for an apportionment of production or royalties among the 
separate tracts of land comprising the drilling or spacing unit 
when determined by the Secretary of the Interior to be in the 
public interest, and operations or production pursuant to such 
an agreement shall be deemed to be operations or production as 
to each such lease committed thereto.
  Any lease issued for a term of twenty years, or any renewal 
thereof, or any portion of such lease that has become the 
subject of a cooperative or unit plan of development or 
operation of a pool, field, or like area, which plan has the 
approval of the Secretary of the Interior, shall continue in 
force until the termination of such plan. Any other lease 
issued under any section of this Act which has heretofore or 
may hereafter be committed to any such plan that contains a 
general provision for allocation of oil or gas shall continue 
in force and effect as to the land committed so long as the 
lease remains subject to the plan: Provided, That production is 
had in paying quantities under the plan prior to the expiration 
date of the term of such lease. Any lease heretofore or 
hereafter committed to any such plan embracing lands that are 
in part within and in part outside of the area covered by any 
such plan shall be segregated into separate leases as to the 
lands committed and the lands not committed as of the effective 
date of unitization: Provided, however, That any such lease as 
to the nonunitized portion shall continue in force and effect 
for the term thereof but for not less than two years from the 
date of such segregation and so long thereafter as oil or gas 
is produced in paying quantities. The minimum royalty or 
discovery rental under any lease that has become subject to any 
cooperative or unit plan of development or operation, or other 
plan that contains a general provision for allocation of oil or 
gas, shall be payable only with respect to the lands subject to 
such lease to which oil or gas shall be allocated under such 
plan. Any lease which shall be eliminated from any such 
approved or prescribed plan, or from any communitization or 
drilling agreement authorized by this section, and any lease 
which shall be in effect at the termination of any such 
approved or prescribed plan, or at the termination of any such 
communitization or drilling agreement, unless relinquished, 
shall continue in effect for the original term thereof, but for 
not less than two years, and so long thereafter as oil or gas 
is produced in paying quantities.
  The Secretary of the Interior is hereby authorized, on such 
conditions as he may prescribe, to approve operating, drilling, 
or development contracts made by one or more lessees of oil or 
gas leases, with one or more persons, associations, or 
corporations whenever, in his discretion, the conservation of 
natural products or the public convenience or necessity may 
require it or the interests of the United States may be best 
subserved thereby. All leases operated under such approved 
operating, drilling, or development contracts, and interests 
thereunder, shall be excepted in determining holdings or 
control under the provisions of this Act.
  The Secretary of the Interior, to avoid waste or to promote 
conservation of natural resources, may authorize the subsurface 
storage of oil or gas, whether or not produced from federally 
owned lands, in lands leased or subject to lease under this 
Act. Such authorization may provide for the payment of a 
storage fee or rental on such stored oil or gas or, in lieu of 
such fee or rental, for a royalty other than that prescribed in 
the lease when such stored oil or gas is produced in 
conjunction with oil or gas not previously produced. Any lease 
on which storage is so authorized shall be extended at least 
for the period of storage and so long thereafter as oil or gas 
not previously produced is produced in paying quantities.
  (n)(1)(A) The owner of (1) an oil and gas lease issued prior 
to the date of enactment of the Combined Hydrocarbon Leasing 
Act of 1981 or (2) a valid claim to any hydrocarbon resources 
leasable under this section based on a mineral location made 
prior to January 21, 1926, and located within a special tar 
sand area shall be entitled to convert such lease or claim to a 
combined hydrocarbon lease for a primary term of ten years upon 
the filing of an application within two years from the date of 
enactment of that Act containing an acceptable plan of 
operations which assures reasonable protection of the 
environment and diligent development of those resources 
requiring enhanced recovery methods of development or mining. 
For purposes of conversion, no claim shall be deemed invalid 
solely because it was located as a placer location rather than 
a lode location or vice versa, notwithstanding any previous 
adjudication on that issue.
  (B) The Secretary shall issue final regulations to implement 
this section within six months of the effective date of this 
Act. If any oil and gas lease eligible for conversion under 
this section would otherwise expire after the date of this Act 
and before six months following the issuance of implementing 
regulations, the lessee may preserve his conversion right under 
such lease for a period ending six months after the issuance of 
implementing regulations by filing with the Secretary, before 
the expiration of the lease, a notice of intent to file an 
application for conversion. Upon submission of a complete plan 
of operations in substantial compliance with the regulations 
promulgated by the Secretary for the filing of such plans, the 
Secretary shall suspend the running of the term of any oil and 
gas lease proposed for conversion until the plan is finally 
approved or disapproved. The Secretary shall act upon a 
proposed plan of operations within fifteen months of its 
submittal.
  (C) When an existing oil and gas lease is converted to a 
combined hydrocarbon lease, the royalty shall be that provided 
for in the original oil and gas lease and for a converted 
mining claim, [12\1/2\] 18.75 per centum in amount or value of 
production [removed or sold] from the lease.
  (2) Except as provided in this section, nothing in the 
Combined Hydrocarbon Leasing Act of 1981 shall be construed to 
diminish or increase the rights of any lessee under any oil and 
gas lease issued prior to the enactment of such Act.
  (o) Certain Outstanding Oil and Gas.--(1) Prior to the 
commencement of surface-disturbing activities relating to the 
development of oil and gas deposits on lands described under 
paragraph (5), the Secretary of Agriculture shall require, 
pursuant to regulations promulgated by the Secretary, that such 
activities be subject to terms and conditions as provided under 
paragraph (2).
  (2) The terms and conditions referred to in paragraph (1) 
shall require that reasonable advance notice be furnished to 
the Secretary of Agriculture at least 60 days prior to the 
commencement of surface disturbing activities.
  (3) Advance notice under paragraph (2) shall include each of 
the following items of information:
          (A) A designated field representative.
          (B) A map showing the location and dimensions of all 
        improvements, including but not limited to, well sites 
        and road and pipeline accesses.
          (C) A plan of operations, of an interim character if 
        necessary, setting forth a schedule for construction 
        and drilling.
          (D) A plan of erosion and sedimentation control.
          (E) Proof of ownership of mineral title.
Nothing in this subsection shall be construed to affect any 
authority of the State in which the lands concerned are located 
to impose any requirements with respect to such oil and gas 
operations.
  (4) The person proposing to develop oil and gas deposits on 
lands described under paragraph (5) shall either--
          (A) permit the Secretary to market merchantable 
        timber owned by the United States on lands subject to 
        such activities; or
          (B) arrange to purchase merchantable timber on lands 
        subject to such surface disturbing activities from the 
        Secretary of Agriculture, or otherwise arrange for the 
        disposition of such merchantable timber, upon such 
        terms and upon such advance notice of the items 
        referred to in subparagraphs (A) through (E) of 
        paragraph (3) as the Secretary may accept.
  (5)(A) The lands referred to in this subsection are those 
lands referenced in subparagraph (B) which are under the 
administration of the Secretary of Agriculture where the United 
States acquired an interest in such lands pursuant to the Act 
of March 1, 1911 (36 Stat. 961 and following), but does not 
have an interest in oil and gas deposits that may be present 
under such lands. This subsection does not apply to any such 
lands where, under the provisions of its acquisition of an 
interest in the lands, the United States is to acquire any oil 
and gas deposits that may be present under such lands in the 
future but such interest has not yet vested with the United 
States.
  (B) This subsection shall only apply in the Allegheny 
National Forest.
  (p) Deadlines for Consideration of Applications for 
Permits.--
          (1) In general.--Not later than 10 days after the 
        date on which the Secretary receives an application for 
        any permit to drill, the Secretary shall--
                  (A) notify the applicant that the application 
                is complete; or
                  (B) notify the applicant that information is 
                missing and specify any information that is 
                required to be submitted for the application to 
                be complete.
          (2) Issuance or deferral.--Not later than 30 days 
        after the applicant for a permit has submitted a 
        complete application, the Secretary shall--
                  (A) issue the permit, if the requirements 
                under the National Environmental Policy Act of 
                1969 and other applicable law have been 
                completed within such timeframe; or
                  (B) defer the decision on the permit and 
                provide to the applicant a notice--
                          (i) that specifies any steps that the 
                        applicant could take for the permit to 
                        be issued; and
                          (ii) a list of actions that need to 
                        be taken by the agency to complete 
                        compliance with applicable law together 
                        with timelines and deadlines for 
                        completing such actions.
          (3) Requirements for deferred applications.--
                  (A) In general.--If the Secretary provides 
                notice under paragraph (2)(B), the applicant 
                shall have a period of 2 years from the date of 
                receipt of the notice in which to complete all 
                requirements specified by the Secretary, 
                including providing information needed for 
                compliance with the National Environmental 
                Policy Act of 1969.
                  (B) Issuance of decision on permit.--If the 
                applicant completes the requirements within the 
                period specified in subparagraph (A), the 
                Secretary shall issue a decision on the permit 
                not later than 10 days after the date of 
                completion of the requirements described in 
                subparagraph (A), unless compliance with the 
                National Environmental Policy Act of 1969 and 
                other applicable law has not been completed 
                within such timeframe.
                  (C) Denial of permit.--If the applicant does 
                not complete the requirements within the period 
                specified in subparagraph (A) or if the 
                applicant does not comply with applicable law, 
                the Secretary shall deny the permit.
  (q) Inflation Adjustment.--The Secretary shall--
          (1) by regulation, at least once every 4 years, 
        adjust each of the dollar amounts that apply under 
        subsections (b)(1)(B), (b)(2)(C), and (d) to reflect 
        the change in the Consumer Price Index for All Urban 
        Consumers published by the Bureau of Labor Statistics; 
        and
          (2) publish each such regulation in the Federal 
        Register.

           *       *       *       *       *       *       *


                           alaska oil proviso

  Sec. 22. That any bona fide occupant or claimant of oil or 
gas bearing lands in the Territory of Alaska, who, or whose 
predecessors in interest, prior to withdrawal had complied 
otherwise with the requirements of the mining laws, but had 
made no discovery of oil or gas in wells and who prior to 
withdrawal had made substantial improvements for the discovery 
of oil or gas on or for each location or had prior to the 
passage of this Act expended not less than $250 in improvements 
on or for each location shall be entitled, upon relinquishment 
or surrender to the United States within one year from the date 
of this Act, or within six months after final denial or 
withdrawal of application for patent, to a lease or leases, 
under this Act covering such lands, not exceeding five leases 
in number and not exceeding an aggregate of one thousand two 
hundred and eighty acres in each: Provided, That the annual 
lease rentals for lands in the Territory of Alaska not within 
any known geological structure of a producing oil or gas field 
and the royalty payments from production of oil or gas [sold or 
removed] from such lands shall be identical with those 
prescribed for such leases covering similar lands in the States 
of the United States, except that leases which may issue 
pursuant to applications or offers to lease such lands, which 
applications or offers were filed prior to and were pending on 
May 3, 1958, shall require the payment of 25 cents per acre as 
lease rental for the first year of such leases; but the 
aforesaid exception shall not apply in any way to royalties to 
be required under leases which may issue pursuant to offers or 
applications filed prior to May 3, 1958.
   The Secretary of the Interior shall neither prescribe nor 
approve any cooperative or unit plan of development or 
operation nor any operating, drilling, or development contract 
establishing different royalty or rental rates for Alaska lands 
than for similar lands within the States of the United States.
   No claimant for a lease who has been guilty of any fraud or 
who had knowledge or reasonable grounds to know of any fraud, 
or who has not acted honestly and in good faith, shall be 
entitled to any of the benefits of this section.

           *       *       *       *       *       *       *

  Sec. 31. (a) Except as otherwise herein provided, any lease 
issued under the provisions of this Act may be forfeited and 
canceled by an appropriate proceeding in the United States 
district court for the district in which the property, or some 
part thereof, is located whenever the lessee fails to comply 
with any of the provisions of this Act, of the lease, or of the 
general regulations promulgated under this Act and in force at 
the date of the lease; and the lease may provide for resort to 
appropriate methods for the settlement of disputes or for 
remedies for breach of specified conditions thereof.
  (b) Any lease issued after August 21, 1935, under the 
provisions of section 17 of this Act shall be subject to 
cancellation by the Secretary of the Interior after 30 days 
notice upon the failure of the lessee to comply with any of the 
provisions of the lease, unless or until the leasehold contains 
a well capable of production of oil or gas in paying 
quantities, or the lease is committed to an approved 
cooperative or unit plan or communitization agreement under 
section 17(m) of this Act which contains a well capable of 
production of unitized substances in paying quantities. Such 
notice in advance of cancellation shall be sent the lease owner 
by registered letter directed to the lease owner's record post-
office address, and in case such letter shall be returned as 
undelivered, such notice shall also be posted for a period of 
thirty days in the United States land office for the district 
in which the land covered by such lease is situated, or in the 
event that there is no district land office for such district, 
then in the post office nearest such land. Notwithstanding the 
provisions of this section, however, upon failure of a lessee 
to pay rental on or before the anniversary date of the lease, 
for any lease on which there is no well capable of producing 
oil or gas in paying quantities, the lease shall automatically 
terminate by operation of law: Provided, however, That when the 
time for payment falls upon any day in which the proper office 
for payment is not open, payment may be received the next 
official working day and shall be considered as timely made: 
Provided, That if the rental payment due under a lease is paid 
on or before the anniversary date but either (1) the amount of 
the payment has been or is hereafter deficient and the 
deficiency is nominal, as determined by the Secretary by 
regulation, or (2) the payment was calculated in accordance 
with the acreage figure stated in the lease, or in any decision 
affecting the lease, or made in accordance with a bill or 
decision which has been rendered by him and such figure, bill, 
or decision is found to be in error resulting in a deficiency, 
such lease shall not automatically terminate unless (1) a new 
lease had been issued prior to the date of this Act or (2) the 
lessee fails to pay the deficiency within a period prescribed 
in a notice of deficiency sent to him by the Secretary.
  (c) Where any lease has been or is hereafter terminated 
automatically by operation of law under this section for 
failure to pay on or before the anniversary date the full 
amount of rental due, but such rental was paid on or tendered 
within twenty days thereafter, and it is shown to the 
satisfaction of the Secretary of the Interior that such failure 
was either justifiable or not due to a lack of reasonable 
diligence on the part of the lessee, the Secretary may 
reinstate the lease if--
          (1) a petition for reinstatement, together with the 
        required rental, including back rental accruing from 
        the date of termination of the lease, is filed with the 
        Secretary; and
          (2) no valid lease has been issued affecting any of 
        the lands covered by the terminated lease prior to the 
        filing of said petition. The Secretary shall not issue 
        any new lease affecting any of the lands covered by 
        such terminated lease for a reasonable period, as 
        determined in accordance with regulations issued by 
        him. In any case where a reinstatement of a terminated 
        lease is granted under this subsection and the 
        Secretary finds that the reinstatement of such lease 
        will not afford the lessee a reasonable opportunity to 
        continue operations under the lease, the Secretary may, 
        at his discretion, extend the term of such lease for 
        such period as he deems reasonable: Provided, That (A) 
        such extension shall not exceed a period equivalent to 
        the time beginning when the lessee knew or should have 
        known of the termination and ending on the date the 
        Secretary grants such petition; (B) such extension 
        shall not exceed a period equal to the unexpired 
        portion of the lease or any extension thereof remaining 
        at the date of termination; and (C) when the 
        reinstatement occurs after the expiration of the term 
        or extension thereof the lease may be extended from the 
        date the Secretary grants the petition.
  (d)(1) Where any oil and gas lease issued pursuant to section 
17(b) or section 17(c) of this Act or the Mineral Leasing Act 
for Acquired Lands (30 U.S.C. 351 et seq.) has been, or is 
hereafter, terminated automatically by operation of law under 
this section for failure to pay on or before the anniversary 
date the full amount of the rental due, and such rental is not 
paid or tendered within twenty days thereafter, and it is shown 
to the satisfaction of the Secretary of the Interior that such 
failure was justifiable or not due to lack of reasonable 
diligence on the part of the lessee, or, no matter when the 
rental is paid after termination, it is shown to the 
satisfaction of the Secretary that such failure was 
inadvertent, the Secretary may reinstate the lease as of the 
date of termination for the unexpired portion of the primary 
term of the original lease or any extension thereof remaining 
at the date of termination, and so long thereafter as oil or 
gas is produced in paying quantities. In any case where a lease 
is reinstated under this subsection and the Secretary finds 
that the reinstatement of such lease (A) occurs after the 
expiration of the primary term or any extension thereof, or (B) 
will not afford the lessee a reasonable opportunity to continue 
operations under the lease, the Secretary may, at his 
discretion, extend the term of such lease for such period as he 
deems reasonable, but in no event for more than two years from 
the date the Secretary authorizes the reinstatement and so long 
thereafter as oil or gas is produced in paying quantities.
  (2) No lease shall be reinstated under paragraph (1) of this 
subsection unless--
          (A) with respect to any lease that terminated under 
        subsection (b) on or before the date of the enactment 
        of the Energy Policy Act of 2005, a petition for 
        reinstatement (together with the required back rental 
        and royalty accruing after the date of termination) is 
        filed on or before the earlier of--
                  (i) 60 days after the lessee receives from 
                the Secretary notice of termination, whether by 
                return of check or by any other form of actual 
                notice; or
                  (ii) 15 months after the termination of the 
                lease; or
          (B) with respect to any lease that terminates under 
        subsection (b) after the date of the enactment of the 
        Energy Policy Act of 2005, a petition for reinstatement 
        (together with the required back rental and royalty 
        accruing after the date of termination) is filed on or 
        before the earlier of--
                  (i) 60 days after receipt of the notice of 
                termination sent by the Secretary by certified 
                mail to all lessees of record; or
                  (ii) 24 months after the termination of the 
                lease.
  (e) Any reinstatement under subsection (d) of this section 
shall be made only if these conditions are met:
          (1) no valid lease, whether still in existence or 
        not, shall have been issued affecting any of the lands 
        covered by the terminated lease prior to the filing of 
        such petition: Provided, however, That after receipt of 
        a petition for reinstatement, the Secretary shall not 
        issue any new lease affecting any of the lands covered 
        by such terminated lease for a reasonable period, as 
        determined in accordance with regulations issued by 
        him;
          (2) payment of back rentals and either the inclusion 
        in a reinstated lease issued pursuant to the provisions 
        of section 17(b) of this Act of a requirement for 
        future rentals at a rate of not less than [$10] $20 per 
        acre per year, or the inclusion in a reinstated lease 
        issued pursuant to the provisions of section 17(c) of 
        this Act of a requirement that future rentals shall be 
        at a rate not less than $5 per acre per year, all as 
        determined by the Secretary;
          (3)(A) payment of back royalties and the inclusion in 
        a reinstated lease issued pursuant to the provisions of 
        section 17(b) of this Act of a requirement for future 
        royalties at a rate of not less than [16\2/3\] 25 
        percent computed on a sliding scale based upon the 
        average production per well per day, at a rate which 
        shall be not less than 4 percentage points greater than 
        the competitive royalty schedule then in force and used 
        for royalty determination for competitive leases issued 
        pursuant to such section as determined by the 
        Secretary: Provided, That royalty on such reinstated 
        lease shall be paid on all production [removed or sold] 
        from such lease subsequent to the termination of the 
        original lease;
          (B) payment of back royalties and inclusion in a 
        reinstated lease issued pursuant to the provisions of 
        section 17(c) of this Act of a requirement for future 
        royalties at a rate not less than [16\2/3\] 25 percent: 
        Provided, That royalty on such reinstated lease shall 
        be paid on all production [removed or sold] from such 
        lease subsequent to the cancellation or termination of 
        the original lease; and
          (4) notice of the proposed reinstatement of a 
        terminated lease, including the terms and conditions of 
        reinstatement, shall be published in the Federal 
        Register at least thirty days in advance of the 
        reinstatement.
A copy of said notice, together with information concerning 
rental, royalty, volume of production, if any, and any other 
matter which the Secretary deemed significant in making this 
determination to reinstate, shall be furnished to the Committee 
on Natural Resources of the House of Representatives and the 
Committee on Energy and Natural Resources of the Senate at 
least thirty days in advance of the reinstatement. The lessee 
of a reinstated lease shall reimburse the Secretary for the 
administrative costs of reinstating the lease, but not to 
exceed $500. In addition the lessee shall reimburse the 
Secretary for the cost of publication in the Federal Register 
of the notice of proposed reinstatement.
  (f) Where an unpatented oil placer mining claim validly 
located prior to February 24, 1920, which has been or is 
currently producing or is capable of producing oil or gas, has 
been or is hereafter deemed conclusively abandoned for failure 
to file timely the required instruments or copies of 
instruments required by section 314 of the Federal Land Policy 
and Management Act of 1976 (43 U.S.C. 1744), and it is shown to 
the satisfaction of the Secretary that such failure was 
inadvertent, justifiable, or not due to lack of reasonable 
diligence on the part of the owner, the Secretary may issue, 
for the lands covered by the abandoned unpatented oil placer 
mining claim, a noncompetitive oil and gas lease, consistent 
with the provisions of section 17(e) of this Act, to be 
effective from the statutory date the claim was deemed 
conclusively abandoned. Issuance of such a lease shall be 
conditioned upon:
          (1) a petition for issuance of a noncompetitive oil 
        and gas lease, together with the required rental and 
        royalty, including back rental and royalty accruing 
        from the statutory date of abandonment of the oil 
        placer mining claim, being filed with the Secretary--
                  (A) with respect to any claim deemed 
                conclusively abandoned on or before the date of 
                enactment of the Federal Oil and Gas Royalty 
                Management Act of 1982, on or before the one 
                hundred and twentieth day after such date of 
                enactment, or
                  (B) with respect to any claim deemed 
                conclusively abandoned after such date of 
                enactment, on or before the one hundred and 
                twentieth day after final notification by the 
                Secretary or a court of competent jurisdiction 
                of the determination of the abandonment of the 
                oil placer mining claim;
          (2) a valid lease not having been issued affecting 
        any of the lands covered by the abandoned oil placer 
        mining claim prior to the filing of such petition: 
        Provided, however, That after the filing of a petition 
        for issuance of a lease under this subsection, the 
        Secretary shall not issue any new lease affecting any 
        of the lands covered by such abandoned oil placer 
        mining claim for a reasonable period, as determined in 
        accordance with regulations issued by him;
          (3) a requirement in the lease for payment of rental, 
        including back rentals accruing from the statutory date 
        of abandonment of the oil placer mining claim, of not 
        less than $5 per acre per year;
          (4) a requirement in the lease for payment of royalty 
        on production [removed or sold] from the oil placer 
        mining claim, including all royalty on production made 
        subsequent to the statutory date the claim was deemed 
        conclusively abandoned, of not less than 12\1/2\ 
        percent; and
          (5) compliance with the notice and reimbursement of 
        costs provisions of paragraph (4) of subsection (e) but 
        addressed to the petition covering the conversion of an 
        abandoned unpatented oil placer mining claim to a 
        noncompetitive oil and gas lease.
  (g)(1) Except as otherwise provided in this section, a 
reinstated lease shall be treated as a competitive or a 
noncompetitive oil and gas lease in the same manner as the 
original lease issued pursuant to section 17(b) or 17(c) of 
this Act.
  (2) Except as otherwise provided in this section, the 
issuance of a lease in lieu of an abandoned patented oil placer 
mining claim shall be treated as a noncompetitive oil and gas 
lease issued pursuant to section 17(c) of this Act.
  (3) Notwithstanding any other provision of law, any lease 
issued pursuant to section 14 of this Act shall be eligible for 
reinstatement under the terms and conditions set forth in 
subsections (c), (d), and (e) of this section, applicable to 
leases issued under subsection 17(c) of this Act (30 U.S.C. 
226(c)) except, that, upon reinstatement, such lease shall 
continue for twenty years and so long thereafter as oil or gas 
is produced in paying quantities.
  (4) Notwithstanding any other provision of law, any lease 
issued pursuant to section 14 of the Act shall, upon renewal on 
or after enactment of this paragraph, continue for twenty years 
and so long thereafter as oil or gas is produced in paying 
quantities.
  (h) The minimum royalty provisions of section 17(m) and the 
provisions of section 39 of this Act shall be applicable to 
leases issued pursuant to subsections (d) and (f) of this 
section.
  (i)(1) In acting on a petition to issue a noncompetitive oil 
and gas lease, under subsection (f) of this section or in 
response to a request filed after issuance of such a lease, or 
both, the Secretary is authorized to reduce the royalty on such 
lease if in his judgment it is equitable to do so or the 
circumstances warrant such relief due to uneconomic or other 
circumstances which could cause undue hardship or premature 
termination of production.
  (2) In acting on a petition for reinstatement pursuant to 
subsection (d) of this section or in response to a request 
filed after reinstatement, or both, the Secretary is authorized 
to reduce the royalty in that reinstated lease on the entire 
leasehold or any tract or portion thereof segregated for 
royalty purposes if, in his judgment, there are uneconomic or 
other circumstances which could cause undue hardship or 
premature termination of production; or because of any written 
action of the United States, its agents or employees, which 
preceded, and was a major consideration in, the lessee's 
expenditure of funds to develop the property under the lease 
after the rent had become due and had not been paid; or if in 
the judgment of the Secretary it is equitable to do so for any 
reason.
  (j) Where, in the judgment of the Secretary of the Interior, 
drilling operations were being diligently conducted on the last 
day of the primary term of the lease, and, except for 
nonpayment or rental, the lessee would have been entitled to 
extension of his lease, pursuant to section 4(d) of the Act of 
September 2, 1960 (74 Stat. 790), the Secretary of the Interior 
may reinstate such lease notwithstanding the failure of the 
lessee to have made payment of the next year's rental, provided 
the conditions of subparagraphs (1) and (2) of section (c) are 
satisfied.

           *       *       *       *       *       *       *

  Sec. 36. That all royalty accruing to the United States under 
any oil or gas lease or permit under this Act on demand of the 
Secretary of the Interior shall be paid in oil or gas, except 
that the Secretary may not demand such payment in oil or gas if 
the amount of such payment would exceed the amount necessary to 
fill the strategic petroleum reserve.
   Upon granting any oil or gas lease under this Act, and from 
time to time thereafter during said lease, the Secretary of the 
Interior shall, except whenever in his judgment it is desirable 
to retain the same for the use of the United States, offer for 
sale for such period as he may determine, upon notice and 
advertisement on sealed bids or at public auction, all royalty 
oil and gas accruing or reserved to the United States under 
such lease. Such advertisement and sale shall reserve to the 
Secretary of the Interior the right to reject all bids whenever 
within his judgment the interest of the United States demands; 
and in cases where no satisfactory bid is received or where the 
accepted bidder fails to complete the purchase, or where the 
Secretary of the Interior shall determine that it is unwise in 
the public interest to accept the offer of the highest bidder, 
the Secretary of the Interior, within his discretion, may 
readvertise such royalty for sale, or sell at private sale at 
not less than the market price for such period, or accept the 
value thereof from the lessee: Provided, That inasmuch as the 
public interest will be served by the sale of royalty oil to 
refineries not having their own source of supply for crude oil, 
the Secretary of the Interior, when he determines that 
sufficient supplies of crude oil are not available in the open 
market to such refineries, is authorized and directed to grant 
preference to such refineries in the sale of oil under the 
provisions of this section, for processing or use in such 
refineries and not for resale in kind, and in so doing may sell 
to such refineries at private sale at not less than the market 
price any royalty oil accruing or reserved to the United States 
under leases issued pursuant to this Act, as amended: Provided 
further, That in selling such royalty oil the Secretary of the 
Interior may at his discretion prorate such oil among such 
refineries in the area in which the oil is produced: Provided, 
however, That pending the making of a permanent contract for 
the sale of any royalty, oil or gas as herein provided, the 
Secretary of the Interior may sell the current product at 
private sale, at not less than the market price: And provided 
further, That any royalty, oil, or gas may be sold at not less 
than the market price at private sale to any department or 
agency of the United States.

           *       *       *       *       *       *       *


SEC. 41. ENFORCEMENT.

  (a) Violations.--It shall be unlawful for any person:
          (1) to organize or participate in any scheme, 
        arrangement, plan, or agreement to circumvent or defeat 
        the provisions of this Act or its implementing 
        regulations, or
          (2) to seek to obtain or to obtain any money or 
        property by means of false statements of material facts 
        or by failing to state material facts concerning:
                  (A) the value of any lease or portion thereof 
                issued or to be issued under this Act;
                  (B) the availability of any land for leasing 
                under this Act;
                  (C) the ability of any person to obtain 
                leases under this Act; or
                  (D) the provisions of this Act and its 
                implementing regulations.
  (b) Penalty.--Any person who knowingly violates the 
provisions of subsection (a) of this section shall be punished 
by a fine of not more than [$500,000] $1,000,000, imprisonment 
for not more than five years, or both.
  (c) Civil Actions.--Whenever it shall appear that any person 
is engaged, or is about to engage, in any act which constitutes 
or will constitute a violation of subsection (a) of this 
section, the Attorney General may institute a civil action in 
the district court of the United States for the judicial 
district in which the defendant resides or in which the 
violation occurred or in which the lease or land involved is 
located, for a temporary restraining order, injunction, civil 
penalty of not more than [$100,000] $250,000 for each 
violation, or other appropriate remedy, including but not 
limited to, a prohibition from participation in exploration, 
leasing, or development of any Federal mineral, or any 
combination of the foregoing.
  (d) Corporations.--(1) Whenever a corporation or other entity 
is subject to civil or criminal action under this section, any 
officer, employee, or agent of such corporation or entity who 
knowingly authorized, ordered, or carried out the proscribed 
activity shall be subject to the same action.
  (2) Whenever any officer, employee, or agent of a corporation 
or other entity is subject to civil or criminal action under 
this section for activity conducted on behalf of the 
corporation or other entity, the corporation or other entity 
shall be subject to the same action, unless it is shown that 
the officer, employee, or agent was acting without the 
knowledge or consent of the corporation or other entity.
  (e) Remedies, Fines, and Imprisonment.--The remedies, 
penalties, fines, and imprisonment prescribed in this section 
shall be concurrent and cumulative and the exercise of one 
shall not preclude the exercise of the others. Further, the 
remedies, penalties, fines, and imprisonment prescribed in this 
section shall be in addition to any other remedies, penalties, 
fines, and imprisonment afforded by any other law or 
regulation.
  (f) State Civil Actions.--(1) A State may commence a civil 
action under subsection (c) of this section against any person 
conducting activity within the State in violation of this 
section. Civil actions brought by a State shall only be brought 
in the United States district court for the judicial district 
in which the defendant resides or in which the violation 
occurred or in which the lease or land involved is located. The 
district court shall have jurisdiction, without regard to the 
amount in controversy or the citizenship of the parties, to 
order appropriate remedies and penalties as described in 
subsection (c) of this section.
  (2) A State shall notify the Attorney General of the United 
States of any civil action filed by the State under this 
subsection within 30 days of filing of the action. The Attorney 
General of the United States shall notify a State of any civil 
action arising from activity conducted within that State filed 
by the Attorney General under this subsection within 30 days of 
filing of the action.
  (3) Any civil penalties recovered by a State under this 
subsection shall be retained by the State and may be expended 
in such manner and for such purposes as the State deems 
appropriate. If a civil action is jointly brought by the 
Attorney General and a State, by more than one State or by the 
Attorney General and more than one State, any civil penalties 
recovered as a result of the joint action shall be shared by 
the parties bringing the action in the manner determined by the 
court rendering judgment in such action.
  (4) If a State has commenced a civil action against a person 
conducting activity within the State in violation of this 
section, the Attorney General may join in such action but may 
not institute a separate action arising from the same activity 
under this section. If the Attorney General has commenced a 
civil action against a person conducting activity within a 
State in violation of this section, that State may join in such 
action but may not institute a separate action arising from the 
same activity under this section.
  (5) Nothing in this section shall deprive a State of 
jurisdiction to enforce its own civil and criminal laws against 
any person who may also be subject to civil and criminal action 
under this section.

           *       *       *       *       *       *       *

                              ----------                              


           FEDERAL OIL AND GAS ROYALTY MANAGEMENT ACT OF 1982



           *       *       *       *       *       *       *
                              definitions

  Sec. 3. For the purposes of this Act, the term--
          (1) ``Federal land'' means all land and interests in 
        land owned by the United States which are subject to 
        the mineral leasing laws, including mineral resources 
        or mineral estates reserved to the United States in the 
        conveyance of a surface or nonmineral estate;
          (2) ``Indian allottee'' means any Indian for whom 
        land or an interest in land is held in trust by the 
        United States or who holds title subject to Federal 
        restriction against alienation;
          (3) ``Indian lands'' means any lands or interest in 
        lands of an Indian tribe or an Indian allottee held in 
        trust by the United States or which is subject to 
        Federal restriction against alienation or which is 
        administered by the United States pursuant to section 
        14(g) of Public Law 92-203, as amended, including 
        mineral resources and mineral estates reserved to an 
        Indian tribe or an Indian allottee in the conveyance of 
        a surface or nonmineral estate, except that such term 
        does not include any lands subject to the provisions of 
        section 3 of the Act of June 28, 1906 (34 Stat. 539);
          (4) ``Indian tribe'' means any Indian tribe, band, 
        nation, pueblo, community, rancheria, colony, or other 
        group of Indians, including the Metlakatla Indian 
        Community of Annette Island Reserve, for which any land 
        or interest in land is held by the United States in 
        trust or which is subject to Federal restriction 
        against alienation or which is administered by the 
        United States pursuant to section 14(g) of Public Law 
        92-203, as amended;
          (5) ``lease'' means any contract, profit-share 
        arrangement, joint venture, or other agreement issued 
        or approved by the United States under a mineral 
        leasing law that authorizes exploration for, extraction 
        of, or removal of oil or gas;
          (6) ``lease site'' means any lands or submerged 
        lands, including the surface of a severed mineral 
        estate, on which exploration for, or extraction or 
        removal of, oil or gas is authorized pursuant to a 
        lease;
          (7) ``lessee'' means any person to whom the United 
        States issues an oil and gas lease or any person to 
        whom operating rights in a lease have been assigned;
          (8) ``mineral leasing law'' means any Federal law 
        administered by the Secretary authorizing the 
        disposition under lease of oil or gas;
          (9) ``oil or gas'' means any oil or gas originating 
        from, or allocated to, the Outer Continental Shelf, 
        Federal, or Indian lands;
          (10) ``Outer Continental Shelf'' has the same meaning 
        as provided in the Outer Continental Shelf Lands Act 
        (Public Law 95-372);
          (11) ``operator'' means any person, including a 
        lessee, who has control of, or who manages operations 
        on, an oil and gas lease site on Federal or Indian 
        lands or on the Outer Continental Shelf;
          (12) ``person'' means any individual, firm, 
        corporation, association, partnership, consortium, or 
        joint venture;
          (13) ``production'' means those activities which take 
        place for the removal of oil or gas, including such 
        removal, field operations, transfer of oil or gas off 
        the lease site, operation monitoring, maintenance, and 
        workover drilling;
          (14) ``royalty'' means any payment based on the value 
        or volume of production which is due to the United 
        States or an Indian tribe or an Indian allottee on 
        production of oil or gas from the Outer Continental 
        Shelf, Federal, or Indian lands, or any minimum royalty 
        owed to the United States or an Indian tribe, or an 
        Indian allottee under any provision of a lease;
          (15) ``Secretary'' means the Secretary of the 
        Interior or his designee;
          (16) ``State'' means the several States of the Union, 
        the District of Columbia, Puerto Rico, the territories 
        and possessions of the United States, and the Trust 
        Territory of the Pacific Islands;
          (17) ``adjustment'' means an amendment to a 
        previously filed report on an obligation, and any 
        additional payment or credit, if any, applicable 
        thereto, to rectify an underpayment or overpayment on 
        an obligation;
          (18) ``administrative proceeding'' means any 
        Department of the Interior agency process in which a 
        demand, decision or order issued by the Secretary or a 
        delegated State is subject to appeal or has been 
        appealed;
          (19) ``assessment'' means any fee or charge levied or 
        imposed by the Secretary or a delegated State other 
        than--
                  (A) the principal amount of any royalty, 
                minimum royalty, rental bonus, net profit share 
                or proceed of sale;
                  (B) any interest; or
                  (C) any civil or criminal penalty;
          (20) ``commence'' means--
                  (A) with respect to a judicial proceeding, 
                the service of a complaint, petition, 
                counterclaim, cross claim, or other pleading 
                seeking affirmative relief or seeking credit or 
                recoupment[: Provided, That if the Secretary 
                commences a judicial proceeding against a 
                designee, the Secretary shall give notice of 
                that commencement to the lessee who designated 
                the designee, but the Secretary is not required 
                to give notice to other lessees who may be 
                liable pursuant to section 102(a) of this Act, 
                for the obligation that is the subject of the 
                judicial proceeding]; or
                  (B) with respect to a demand, the receipt by 
                the Secretary or a delegated State or a lessee 
                or its designee [(with written notice to the 
                lessee who designated the designee)] of the 
                demand;
          (21) ``credit'' means the application of an 
        overpayment (in whole or in part) against an obligation 
        which has become due to discharge, cancel or reduce the 
        obligation;
          (22) ``delegated State'' means a State which, 
        pursuant to an agreement or agreements under section 
        205 of this Act, performs authorities, duties, 
        responsibilities, or activities of the Secretary;
          (23) ``demand'' means--
                  (A) an order to pay issued by the Secretary 
                or the applicable delegated State to a lessee 
                or its designee [(with written notice to the 
                lessee who designated the designee)] that has a 
                reasonable basis to conclude that the 
                obligation in the amount of the demand is due 
                and owing; or
                  (B) a separate written request by a lessee or 
                its designee which asserts an obligation due 
                the lessee or its designee that provides a 
                reasonable basis to conclude that the 
                obligation in the amount of the demand is due 
                and owing, but does not mean any royalty or 
                production report, or any information contained 
                therein, required by the Secretary or a 
                delegated State;
          [(24) ``designee'' means the person designated by a 
        lessee pursuant to section 102(a) of this Act, with 
        such written designation effective on the date such 
        designation is received by the Secretary and remaining 
        in effect until the Secretary receives notice in 
        writing that the designation is modified or 
        terminated;]
          (24) ``designee'' means a person who pays, offsets, 
        or credits monies, makes adjustments, requests and 
        receives refunds, or submits reports with respect to 
        payments a lessee must make pursuant to section 102(a);
          (25) ``obligation'' means--
                  (A) any duty of the Secretary or, if 
                applicable, a delegated State--
                          (i) to take oil or gas royalty in 
                        kind; or
                          (ii) to pay, refund, offset, or 
                        credit monies including (but not 
                        limited to)--
                                  (I) the principal amount of 
                                any royalty, minimum royalty, 
                                rental, bonus, net profit share 
                                or proceed of sale; or
                                  (II) any interest; and
                  (B) any duty of a lessee or its designee 
                [(subject to the provisions of section 102(a) 
                of this Act)]--
                          (i) to deliver oil or gas royalty in 
                        kind; or
                          (ii) to pay, offset or credit monies 
                        including (but not limited to)--
                                  (I) the principal amount of 
                                any royalty, minimum royalty, 
                                rental, bonus, net profit share 
                                or proceed of sale;
                                  (II) any interest;
                                  (III) any penalty; or
                                  [(IV) any assessment,
                        which arises from or relates to any 
                        lease administered by the Secretary 
                        for, or any mineral leasing law related 
                        to, the exploration, production and 
                        development of oil or gas on Federal 
                        lands or the Outer Continental Shelf;]
                                  (IV) any assignment,
                        that arises from or relates to any 
                        lease, easement, right-of-way, permit, 
                        or other agreement regardless of form 
                        administered by the Secretary for, or 
                        any mineral leasing law related to, the 
                        exploration, production, and 
                        development of oil and gas or other 
                        energy resource on Federal lands or the 
                        Outer Continental Shelf;
          (26) ``order to pay'' means a written order issued by 
        the Secretary or the applicable delegated State to a 
        lessee or its designee (with notice to the lessee who 
        designated the designee) which--
                  (A) asserts a specific, definite, and 
                quantified obligation claimed to be due, and
                  (B) specifically identifies the obligation by 
                lease, production month and monetary amount of 
                such obligation claimed to be due and ordered 
                to be paid, as well as the reason or reasons 
                such obligation is claimed to be due, but such 
                term does not include any other communication 
                or action by or on behalf of the Secretary or a 
                delegated State;
          (27) ``overpayment'' means any payment by a lessee or 
        its designee in excess of an amount legally required to 
        be paid on an obligation and includes the portion of 
        any estimated payment for a production month that is in 
        excess of the royalties due for that month;
          (28) ``payment'' means satisfaction, in whole or in 
        part, of an obligation;
          (29) ``penalty'' means a statutorily authorized civil 
        fine levied or imposed for a violation of this Act, any 
        mineral leasing law, or a term or provision of a lease 
        or permit administered by the Secretary;
          (30) ``refund'' means the return of an overpayment;
          (31) ``State concerned'' means, with respect to a 
        lease, a State which receives a portion of royalties or 
        other payments under the mineral leasing laws from such 
        lease;
          (32) ``underpayment'' means any payment or nonpayment 
        by a lessee or its designee that is less than the 
        amount legally required to be paid on an obligation; 
        [and]
          (33) ``United States'' means the United States 
        Government and any department, agency, or 
        instrumentality thereof, the several States, the 
        District of Columbia, and the territories of the United 
        States[.];
          (34) ``compliance review'' means an examination of a 
        lessee's lease accounts to compare one or all elements 
        of the royalty equation (volume, value, royalty rate, 
        and allowances) against anticipated elements of the 
        royalty equation to test for variances; and
          (35) ``marketing affiliate'' means an affiliate of a 
        lessee whose function is to acquire the lessee's 
        production and to market that production.

          TITLE I--FEDERAL ROYALTY MANAGEMENT AND ENFORCEMENT

                        duties of the secretary

  Sec. 101. (a) The Secretary shall establish a comprehensive 
inspection, collection and fiscal and production accounting and 
auditing system to provide the capability to accurately 
determine oil and gas royalties, interest, fines, penalties, 
fees, deposits, and other payments owed, and to collect and 
account for such amounts in a timely manner.
  (b) The Secretary shall--
          (1) establish procedures to ensure that authorized 
        and properly identified representatives of the 
        Secretary will inspect at least once annually each 
        lease site producing or expected to produce significant 
        quantities of oil or gas in any year or which has a 
        history of noncompliance with applicable provisions of 
        law or regulations; and
          (2) establish and maintain adequate programs 
        providing for the training of all such authorized 
        representatives in methods and techniques of inspection 
        and accounting that will be used in the implementation 
        of this Act.
  (c)(1) The Secretary shall audit and reconcile, to the extent 
practicable, all current and past lease accounts for leases of 
oil or gas and take appropriate actions to make additional 
collections or refunds as warranted. The Secretary shall 
conduct audits and reconciliations of lease accounts in 
conformity with the business practices and recordkeeping 
systems which were required of the lessee by the Secretary for 
the period covered by the audit. The Secretary shall give 
priority to auditing those lease accounts identified by a State 
or Indian tribe as having significant potential for 
underpayment. The Secretary may also audit accounts and records 
of selected lessees and operators.
  (2) The Secretary may enter into contracts or other 
appropriate arrangements with independent certified public 
accountants to undertake audits of accounts and records of any 
lessee or operator relating to the lease of oil or gas. 
Selection of such independent certified public accountants 
shall be by competitive bidding in accordance with the Federal 
Property and Administrative Services Act of 1949 (41 U.S.C. 
252), except that the Secretary may not enter into a contract 
or other arrangement with any independent certified public 
accountant to audit any lessee or operator where such lessee or 
operator is a primary audit client of such certified public 
accountant.
  (3) All books, accounts, financial records, reports, files, 
and other papers of the Secretary, or used by the Secretary, 
which are reasonably necessary to facilitate the audits 
required under this section shall be made available to any 
person or governmental entity conducting audits under this Act.
  (d) The Secretary may, as an adjunct to audits of accounts 
for leases, conduct compliance reviews of accounts. Such 
reviews shall not constitute nor substitute for audits of lease 
accounts. The Secretary shall immediately refer any disparity 
uncovered in such a compliance review to a program auditor. The 
Secretary shall, before completion of a compliance review, 
provide notice of the review to designees whose obligations are 
the subject of the review.

      duties of lessees, operators, and motor vehicle transporters

  Sec. 102. [(a) In order to increase receipts and achieve 
effective collections of royalty and other payments, a lessee 
who is required to make any royalty or other payment under a 
lease or under the mineral leasing laws, shall make such 
payments in the time and manner as may be specified by the 
Secretary or the applicable delegated State. A lessee may 
designate a person to make all or part of the payments due 
under a lease on the lessee's behalf and shall notify the 
Secretary or the applicable delegated State in writing of such 
designation, in which event said designated person may, in its 
own name, pay, offset or credit monies, make adjustments, 
request and receive refunds and submit reports with respect to 
payments required by the lessee. Notwithstanding any other 
provision of this Act to the contrary, a designee shall not be 
liable for any payment obligation under the lease. The person 
owning operating rights in a lease shall be primarily liable 
for its pro rata share of payment obligations under the lease. 
If the person owning the legal record title in a lease is other 
than the operating rights owner, the person owning the legal 
record title shall be secondarily liable for its pro rata share 
of such payment obligations under the lease.]
  (a) Liability for Royalty Payments.--
          (1) Time and manner of payment.--In order to increase 
        receipts and achieve effective collections of royalty 
        and other payments, a lessee who is required to make 
        any royalty or other payment under a lease, easement, 
        right-of-way, permit, or other agreement, regardless of 
        form, or under the mineral leasing laws, shall make 
        such payment in the time and manner as may be specified 
        by the Secretary or the applicable delegated State.
          (2) Designee.--Any person who pays, offsets, or 
        credits monies, makes adjustments, requests and 
        receives refunds, or submits reports with respect to 
        payments the lessee must make is the lessee's designee 
        under this Act.
          (3) Liability.--Notwithstanding any other provision 
        of this Act, a designee shall be liable for any payment 
        obligation of any lessee on whose behalf the designee 
        pays royalty under the lease. The person owning 
        operating rights in a lease and a person owning legal 
        record title in a lease shall be liable for that 
        person's pro rata share of payment obligations under 
        the lease.
  (b) An operator shall--
          (1) develop and comply with a site security plan 
        designed to protect the oil or gas produced or stored 
        on an onshore lease site from theft, which plan shall 
        conform with such minimum standards as the Secretary 
        may prescribe by rule, taking into account the variety 
        of circumstances at lease sites;
          (2) develop and comply with such minimum site 
        security measures as the Secretary deems appropriate to 
        protect oil or gas produced or stored on a lease site 
        or on the Outer Continental Shelf from theft; and
          (3) not later than the 5th business day after any 
        well begins production anywhere on a lease site or 
        allocated to a lease site, or resumes production in the 
        case of a well which has been off of production for 
        more than 90 days, notify the Secretary, in the manner 
        prescribed by the Secretary, of the date on which such 
        production has begun or resumed.
  (c)(1) Any person engaged in transporting by motor vehicle 
any oil from any lease site, or allocated to any such lease 
site, shall carry, on his person, in his vehicle, or in his 
immediate control, documentation showing, at a minimum, the 
amount, origin, and intended first destination of the oil.
  (2) Any person engaged in transporting any oil or gas by 
pipeline from any lease site, or allocated to any lease site, 
on Federal or Indian lands shall maintain documentation 
showing, at a minimum, amount, origin, and intended first 
destination of such oil or gas.

                         required recordkeeping

  Sec. 103. (a) A lessee, operator, or other person directly 
involved in developing, producing, transporting, purchasing, or 
selling oil or gas subject to this Act through the point of 
first sale or the point of royalty computation, whichever is 
later, shall establish and maintain any records, make any 
reports, and provide any information that the Secretary may, by 
rule, reasonably require for the purposes of implementing this 
Act or determining compliance with rules or orders under this 
Act. Upon the request of any officer or employee duly 
designated by the Secretary or any State or Indian tribe 
conducting an audit or investigation pursuant to this Act, the 
appropriate records, reports, or information which may be 
required by this section shall be made available for inspection 
and duplication by such officer or employee, State, or Indian 
tribe.
  (b) Records required by the Secretary with respect to oil and 
gas leases from Federal or Indian lands or the Outer 
Continental Shelf shall be maintained for [6] 7 years after the 
records are generated unless the Secretary notifies the record 
holder that he has initiated an audit or investigation 
involving such records and that such records must be maintained 
for a longer period. In any case when an audit or investigation 
is underway, records shall be maintained until the Secretary 
releases the record holder of the obligation to maintain such 
records.

           *       *       *       *       *       *       *


                              inspections

  Sec. 108. (a)(1) On any lease site on Federal or Indian 
lands, any authorized and properly identified representative of 
the Secretary may stop and inspect any motor vehicle that he 
has probable cause to believe is carrying oil from a lease site 
on Federal or Indian lands or allocated to such a lease site, 
for the purpose of determining whether the driver of such 
vehicle has documentation related to such oil as required by 
law.
  (2) Any authorized and properly identified representative of 
the Secretary, accompanied by any appropriate law enforcement 
officer, or an appropriate law enforcement officer alone, may 
stop and inspect any motor vehicle which is not on a lease site 
if he has probable cause to believe the vehicle is carrying oil 
from a lease site on Federal or Indian lands or allocated to 
such a lease site. Such inspection shall be for the purpose of 
determining whether the driver of such vehicle has the 
documentation required by law.
  (b) Authorized and properly identified representatives of the 
Secretary may without advance notice, enter upon, travel across 
and inspect lease sites on Federal or Indian lands and may 
obtain from the operator immediate access to secured facilities 
on such lease sites, for the purpose of making any inspection 
or investigation for determining whether there is compliance 
with the requirements of the mineral leasing laws and this Act. 
The Secretary shall develop guidelines setting forth the 
coverage and the frequency of such inspections.
  (c) For the purpose of making any inspection or investigation 
under this Act, the Secretary shall have the same right to 
enter upon or travel across any lease site as the lessee or 
operator has acquired by purchase, condemnation, or otherwise.
  (d) Inspection Fee.--
          (1) In general.--The designated operator under each 
        oil and gas lease on Federal or Indian lands, or each 
        unit and communitization agreement that includes one or 
        more such Federal or Indian leases, that is subject to 
        inspection under subsection (b) and that is in force at 
        the start of fiscal year 2021, shall pay a 
        nonrefundable inspection fee in an amount that, except 
        as provided in paragraph (2), is established by the 
        Secretary by regulation and is sufficient to recover 
        the full costs incurred by the United States for 
        inspection and enforcement with respect to such leases.
          (2) Amount.--Until the effective date of regulations 
        under paragraph (1), the amount of the fee shall be--
                  (A) $700 for each lease or unit or 
                communitization agreement with no active or 
                inactive wells, but with surface use, 
                disturbance or reclamation;
                  (B) $1,225 for each lease or unit or 
                communitization agreement with 1 to 10 wells, 
                with any combination of active or inactive 
                wells;
                  (C) $4,900 for each lease or unit or 
                communitization agreement with 11 to 50 wells, 
                with any combination of active or inactive 
                wells; and
                  (D) $9,800 for each lease or unit or 
                communitization agreement with more than 50 
                wells, with any combination of active or 
                inactive wells.
          (3) Due date.--Payment of the fee under this section 
        shall be due not later than 30 days after the Secretary 
        provides notice of the assessment of the fee.
          (4) Penalty.--If the designated operator fails to pay 
        the full amount of the fee as prescribed in this 
        section, the Secretary may, in addition to utilizing 
        any other applicable enforcement authority, assess 
        civil penalties against the operator under section 109 
        in the same manner as if this section were a mineral 
        leasing law.
          (5) Exemption for tribal operators.--An operator that 
        is a Tribe or is controlled by a Tribe is not subject 
        to paragraph (1) with respect to a lease, unit, or 
        communitization agreement that is located entirely on 
        the lands of such Tribe.

                            civil penalties

  Sec. 109. (a) Any person who--
          (1) after due notice of violation or after such 
        violation has been reported under subparagraph (A), 
        fails or refuses to comply with any requirements of 
        this Act or any mineral leasing law, any rule or 
        regulation thereunder, or the terms of any lease or 
        permit issued thereunder; or
          (2) fails to permit inspection authorized in section 
        108 or fails to notify the Secretary of any assignment 
        under section 102(a)(2)
shall be liable for a penalty of up to [$500] $1,500 per 
violation for each day such violation continues, dating from 
the date of such notice or report. A penalty under this 
subsection may not be applied to any person who is otherwise 
liable for a violation of paragraph (1) if:
          
          (A) the violation was discovered and reported to the 
        Secretary or his authorized representative by the 
        liable person and corrected within 20 days after such 
        report or such longer time as the Secretary may agree 
        to; or
          (B) after the due notice of violation required in 
        paragraph (1) has been given to such person by the 
        Secretary or his authorized representative, such person 
        has corrected the violation within 20 days of such 
        notification or such longer time as the Secretary may 
        agree to.
  (b) If corrective action is not taken within 40 days or a 
longer period as the Secretary may agree to, after due notice 
or the report referred to in subsection (a)(1), such person 
shall be liable for a civil penalty of not more than [$5,000] 
$15,000 per violation for each day such violation continues, 
dating from the date of such notice or report.
  (c) Any person who--
          (1) knowingly or willfully fails to make any royalty 
        payment by the date as specified by statute, 
        regulation, order or terms of the lease;
          (2) fails or refuses to permit lawful entry, 
        inspection, or audit; or
          (3) knowingly or willfully fails or refuses to comply 
        with subsection 102(b)(3),
shall be liable for a penalty of up to [$10,000] $25,000 per 
violation for each day such violation continues.
  (d) Any person who--
          (1) knowingly or willfully prepares, maintains, or 
        submits false, inaccurate, or misleading reports, 
        notices, affidavits, records, data, or other written 
        information;
          (2) knowingly or willfully takes or removes, 
        transports, uses or diverts any oil or gas from any 
        lease site without having valid legal authority to do 
        so; or
          (3) purchases, accepts, sells, transports, or conveys 
        to another, any oil or gas knowing or having reason to 
        know that such oil or gas was stolen or unlawfully 
        removed or diverted.
shall be liable for a penalty of up to [$25,000] $75,000 per 
violation for each day such violation continues.
  (e) No penalty under this section shall be assessed until the 
person charged with a violation has been given the opportunity 
for a hearing on the record.
  (f) The amount of any penalty under this section, as finally 
determined may be deducted from any sums owing by the United 
States to the person charged.
  (g) On a case-by-case basis the Secretary may compromise or 
reduce civil penalties under this section.
  (h) Notice under this subsection (a) shall be by personal 
service by an authorized representative of the Secretary or by 
registered mail. Any person may, in the manner prescribed by 
the Secretary, designate a representative to receive any notice 
under this subsection.
  (i) In determining the amount of such penalty, or whether it 
should be remitted or reduced, and in what amount, the 
secretary shall state on the record the reasons for his 
determinations.
  (j) Any person who has requested a hearing in accordance with 
subsection (e) within the time the Secretary has prescribed for 
such a hearing and who is aggrieved by a final order of the 
Secretary under this section may seek review of such order in 
the United States district court for the judicial district in 
which the violation allegedly took place. Review by the 
district court shall be only on the administrative record and 
not de novo. Such an action shall be barred unless filed within 
90 days after the Secretary's final order.
  (k) If any person fails to pay an assessment of a civil 
penalty under this Act--
          (1) after the order making the assessment has become 
        a final order and if such person does not file a 
        petition for judicial review of the order in accordance 
        with subsection (j), or
          (2) after a court in an action brought under 
        subsection (j) has entered a final judgment in favor of 
        the Secretary.
the court shall have jurisdiction to award the amount assessed 
plus interest from the date of the expiration of the 90-day 
period referred to in subsection (j). Judgment by the court 
shall include an order to pay.
  (l) No person shall be liable for a civil penalty under 
subsection (a) or (b) for failure to pay any rental for any 
lease automatically terminated pursuant to section 31 of the 
Mineral Leasing Act of 1920.

                           criminal penalties

  Sec. 110. Any person who commits an act for which a civil 
penalty is provided in section 109(d) shall, upon conviction, 
be punished by a fine or not more than [$50,000] $150,000, or 
by imprisonment for not more than 2 years, or both.

           *       *       *       *       *       *       *


SEC. 111A. ADJUSTMENTS AND REFUNDS.

  (a) Adjustments to Royalties Paid to the Secretary or a 
Delegated State.--
          (1) If, during the adjustment period, a lessee or its 
        designee determines that an adjustment or refund 
        request is necessary to correct an underpayment or 
        overpayment of an obligation, the lessee or its 
        designee shall make such adjustment or request a refund 
        within a reasonable period of time and only during the 
        adjustment period. The filing of a royalty report which 
        reflects the underpayment or overpayment of an 
        obligation shall constitute prior written notice to the 
        Secretary or the applicable delegated State of an 
        adjustment.
          (2)(A) For any adjustment, the lessee or its designee 
        shall calculate and report the interest due 
        attributable to such adjustment at the same time the 
        lessee or its designee adjusts the principle amount of 
        the subject obligation, except as provided by 
        subparagraph (B).
          (B) In the case of a lessee or its designee who 
        determines that subparagraph (A) would impose a 
        hardship, the Secretary or such delegated State shall 
        calculate the interest due and notify the lessee or its 
        designee within a reasonable time of the amount of 
        interest due, unless such lessee or its designee elects 
        to calculate and report interest in accordance with 
        subparagraph (A).
          [(3) An adjustment or a request for a refund for an 
        obligation may be made after the adjustment period only 
        upon written notice to and approval by the Secretary or 
        the applicable delegated State, as appropriate, during 
        an audit of the period which includes the production 
        month for which the adjustment is being made. If an 
        overpayment is identified during an audit, then the 
        Secretary or the applicable delegated State, as 
        appropriate, shall allow a credit or refund in the 
        amount of the overpayment.]
          (3)(A) An adjustment or a request for a refund for an 
        obligation may be made after the adjustment period only 
        upon written notice to and approval by the Secretary or 
        the applicable delegated State, as appropriate, during 
        an audit of the period which includes the production 
        month for which the adjustment is being made.
          (B) Except as provided in subparagraph (C), no 
        adjustment may be made with respect to an obligation 
        after the completion of an audit or compliance review 
        of such obligation unless such adjustment is approved 
        by the Secretary or the applicable delegated State, as 
        appropriate.
          (C) If an overpayment is identified during an audit, 
        the Secretary shall allow a credit in the amount of the 
        overpayment.
          (4) For purposes of this section, the adjustment 
        period for any obligation shall be the [six-year] four-
        year period following the date on which an obligation 
        became due. The adjustment [period shall] period may be 
        suspended, tolled, extended, enlarged, or terminated by 
        the same actions as the limitation period in section 
        115.
  (b) Refunds.--
          (1) In general.--A request for refund is sufficient 
        if it--
                  (A) is made in writing to the Secretary and, 
                for purposes of section 115, is specifically 
                identified as a demand;
                  (B) identifies the person entitled to such 
                refund;
                  (C) provides the Secretary information that 
                reasonably enables the Secretary to identify 
                the overpayment for which such refund is 
                sought; [and]
                  (D) provides the reasons why the payment was 
                an overpayment[.]; and
                  (E) is made within the adjustment period for 
                that obligation.
          (2) Payment by secretary of the treasury.--The 
        Secretary shall certify the amount of the refund to be 
        paid under paragraph (1) to the Secretary of the 
        Treasury who shall make such refund. Such refund shall 
        be paid from amounts received as current receipts from 
        sales, bonuses, royalties (including interest charges 
        collected under this section) and rentals of the public 
        lands and the Outer Continental Shelf under the 
        provisions of the Mineral Leasing Act and the Outer 
        Continental Shelf Lands Act, which are not payable to a 
        State or the Reclamation Fund. The portion of any such 
        refund attributable to any amounts previously disbursed 
        to a State, the Reclamation Fund, or any recipient 
        prescribed by law shall be deducted from the next 
        disbursements to that recipient made under the 
        applicable law. Such amounts deducted from subsequent 
        disbursements shall be credited to miscellaneous 
        receipts in the Treasury.
          (3) Payment period.--A refund under this subsection 
        shall be paid or denied (with an explanation of the 
        reasons for the denial) within 120 days of the date on 
        which the request for refund is received by the 
        Secretary. Such refund shall be subject to later audit 
        by the Secretary or the applicable delegated State and 
        subject to the provisions of this Act.
          (4) Prohibition against reduction of refunds or 
        credits.--In no event shall the Secretary or any 
        delegated State directly or indirectly claim or offset 
        any amount or amounts against, or reduce any refund or 
        credit (or interest accrued thereon) by the amount of 
        any obligation the enforcement of which is barred by 
        section 115 of this Act.

           *       *       *       *       *       *       *


SEC. 115. SECRETARIAL AND DELEGATED STATES' ACTIONS AND LIMITATION 
                    PERIODS.

  (a) In General.--The respective duties, responsibilities, and 
activities with respect to a lease shall be performed by the 
Secretary, delegated States, and lessees or their designees in 
a timely manner.
  (b) Limitation Period.--
          (1) In general.--A judicial proceeding or demand 
        which arises from, or relates to an obligation, shall 
        be commenced within seven years from the date on which 
        the obligation becomes due and if not so commenced 
        shall be barred. If commencement of a judicial 
        proceeding or demand for an obligation is barred by 
        this section, the Secretary, a delegated State, or a 
        lessee or its designee (A) shall not take any other or 
        further action regarding that obligation, including 
        (but not limited to) the issuance of any order, 
        request, demand or other communication seeking any 
        document, accounting, determination, calculation, 
        recalculation, payment, principal, interest, 
        assessment, or penalty or the initiation, pursuit or 
        completion of an audit with respect to that obligation; 
        and (B) shall not pursue any other equitable or legal 
        remedy, whether under statute or common law, with 
        respect to an action on or an enforcement of said 
        obligation.
          (2) Rule of construction.--A judicial proceeding or 
        demand that is timely commenced under paragraph (1) 
        against a designee shall be considered timely commenced 
        as to any lessee who is liable pursuant to section 
        102(a) of this Act for the obligation that is the 
        subject of the judicial proceeding or demand.
          (3) Application of certain limitations.--The 
        limitations set forth in sections 2401, 2415, 2416, and 
        2462 of title 28, United States Code, and section 42 of 
        the Mineral Leasing Act (30 U.S.C. 226-2) shall not 
        apply to any obligation to which this Act applies. 
        Section 3716 of title 31, United States Code, may be 
        applied to an obligation the enforcement of which is 
        not barred by this Act, but may not be applied to any 
        obligation the enforcement of which is barred by this 
        Act.
  (c) Obligation Becomes Due.--
          (1) In general.--For purposes of this Act, an 
        obligation becomes due when the right to enforce the 
        obligation is fixed.
          (2) Royalty obligations.--The right to enforce any 
        royalty obligation for any given production month for a 
        lease is fixed for purposes of this Act on the last day 
        of the calendar month following the month in which oil 
        or gas is produced.
          (3) Adjustments.--In the case of an adjustment under 
        section 111A(a) in which a recoupment by the lessee 
        results in an underpayment of an obligation, the 
        obligation becomes due on the date the lessee or its 
        designee makes the adjustment.
  (d) Tolling of Limitation Period.--The running of the 
limitation period under subsection (b) shall not be suspended, 
tolled, extended, or enlarged for any obligation for any reason 
by any action, including an action by the Secretary or a 
delegated State, other than the following:
          (1) Tolling agreement.--A written agreement executed 
        during the limitation period between the Secretary or a 
        delegated State and a lessee or its designee [(with 
        notice to the lessee who designated the designee)] 
        shall toll the limitation period for the amount of time 
        during which the agreement is in effect.
          (2) Subpoena.--
                  (A) The issuance of a subpoena to a lessee or 
                its designee [(with notice to the lessee who 
                designated the designee, which notice shall not 
                constitute a subpoena to the lessee)] in 
                accordance with the provisions of subparagraph 
                (B)(i) shall toll the limitation period with 
                respect to the obligation which is the subject 
                of a subpoena only for the period beginning on 
                the date the lessee or its designee receives 
                the subpoena and ending on the date on which 
                (i) the lessee or its designee has produced 
                such subpoenaed records for the subject 
                obligation, (ii) the Secretary or a delegated 
                State receives written notice that the 
                subpoenaed records for the subject obligation 
                are not in existence or are not in the lessee's 
                or its designee's possession or control, or 
                (iii) a court has determined in a final 
                decision that such records are not required to 
                be produced, whichever occurs first.
                  (B)(i) A subpoena for the purposes of this 
                section which requires a lessee or its designee 
                to produce records necessary to determine the 
                proper reporting and payment of an obligation 
                due the Secretary may be issued only by an 
                Assistant Secretary of the Interior or an 
                Acting Assistant Secretary of the Interior who 
                is a schedule C employee (as defined by section 
                213.3301 of title 5, Code of Federal 
                Regulations), or the Director or Acting 
                Director of the respective bureau or agency, 
                and may not be delegated to any other person. 
                If a State has been delegated authority 
                pursuant to section 205, the State, acting 
                through the highest State official having 
                ultimate authority over the collection of 
                royalties from leases on Federal lands within 
                the State, may issue such subpoena, but may not 
                delegate such authority to any other person.
                  (ii) A subpoena described in clause (i) may 
                only be issued against a lessee or its designee 
                during the limitation period provided in this 
                section and only after the Secretary or a 
                delegated State has in writing requested the 
                records from the lessee or its designee related 
                to the obligation which is the subject of the 
                subpoena and has determined that--
                          (I) the lessee or its designee has 
                        failed to respond within a reasonable 
                        period of time to the Secretary's or 
                        the applicable delegated State's 
                        written request for such records 
                        necessary for an audit, investigation 
                        or other inquiry made in accordance 
                        with the Secretary's or such delegated 
                        State's responsibilities under this 
                        Act; or
                          (II) the lessee or its designee has 
                        in writing denied the Secretary's or 
                        the applicable delegated State's 
                        written request to produce such records 
                        in the lessee's or its designee's 
                        possession or control necessary for an 
                        audit, investigation or other inquiry 
                        made in accordance with the Secretary's 
                        or such delegated State's 
                        responsibilities under this Act; or
                          (III) the lessee or its designee has 
                        unreasonably delayed in producing 
                        records necessary for an audit, 
                        investigation or other inquiry made in 
                        accordance with the Secretary's or the 
                        applicable delegated State's 
                        responsibilities under this Act after 
                        the Secretary's or delegated State's 
                        written request.
                  (C) In seeking records, the Secretary or the 
                applicable delegated State shall afford the 
                lessee or its designee a reasonable period of 
                time after a written request by the Secretary 
                or such delegated State in which to provide 
                such records prior to the issuance of any 
                subpoena.
          (3) Misrepresentation or concealment.--The 
        intentional misrepresentation or concealment of a 
        material fact for the purpose of evading the payment of 
        an obligation in which case the limitation period shall 
        be tolled for the period of such misrepresentation or 
        such concealment.
          (4) Order to perform restructured accounting.--A)(i) 
        The issuance of a notice under subparagraph (D) that 
        the lessee or its designee has not substantially 
        complied with the requirement to perform a restructured 
        accounting shall toll the limitation period with 
        respect to the obligation which is the subject of the 
        notice only for the period beginning on the date the 
        lessee or its designee receives the notice and ending 
        120 days after the date on which (I) the Secretary or 
        the applicable delegated State receives written notice 
        that the accounting or other requirement has been 
        performed, or (II) a court has determined in a final 
        decision that the lessee is not required to perform the 
        accounting, whichever occurs first.
                  
          (ii) If the lessee or its designee initiates an 
        administrative appeal or judicial proceeding to contest 
        an order to perform a restructured accounting issued 
        under subparagraph (B)(i), the limitation period in 
        subsection (b) shall be tolled from the date the lessee 
        or its designee received the order until a final, 
        nonappealable decision is issued in any such 
        proceeding.
          (B)(i) The Secretary or the applicable delegated 
        State may issue an order to perform a restructured 
        accounting to a lessee or its designee when the 
        Secretary or such delegated State determines during an 
        audit of a lessee or its designee that the lessee or 
        its designee should recalculate royalty due on an 
        obligation based upon the Secretary's or the delegated 
        State's finding that the lessee or its designee has 
        made identified underpayments or overpayments which are 
        demonstrated by the Secretary or the delegated State to 
        be based upon repeated, systemic reporting errors for a 
        significant number of leases or a single lease for a 
        significant number of reporting months with the same 
        type of error which constitutes a pattern of violations 
        and which are likely to result in either significant 
        underpayments or overpayments.
          (ii) The power of the Secretary to issue an order to 
        perform a restructured accounting may not be delegated 
        below the most senior career professional position 
        having responsibility for the royalty management 
        program, which position is currently designated as the 
        ``Associate Director for Royalty Management'', and may 
        not be delegated to any other person. If a State has 
        been delegated authority pursuant to section 205 of 
        this Act, the State, acting through the highest ranking 
        State official having ultimate authority over the 
        collection of royalties from leases on Federal lands 
        within the State, may issue such order to perform, 
        which may not be delegated to any other person. An 
        order to perform a restructured accounting shall--
                  (I) be issued within a reasonable period of 
                time from when the audit identifies the 
                systemic, reporting errors;
                  (II) specify the reasons and factual bases 
                for such order;
                  (III) be specifically identified as an 
                ``order to perform a restructured accounting'';
                  (IV) provide the lessee or its designee a 
                reasonable period of time (but not less than 60 
                days) within which to perform the restructured 
                accounting; and
                  (V) provide the lessee or its designee 60 
                days within which to file an administrative 
                appeal of the order to perform a restructured 
                accounting.
          (C) An order to perform a restructured accounting 
        shall not mean or be construed to include any other 
        action by or on behalf of the Secretary or a delegated 
        State.
          (D) If a lessee or its designee fails to 
        substantially comply with the requirement to perform a 
        restructured accounting pursuant to this subsection, a 
        notice shall be issued to the lessee or its designee 
        that the lessee or its designee has not substantially 
        complied with the requirements to perform a 
        restructured accounting. A lessee or its designee shall 
        be given a reasonable time within which to perform the 
        restructured accounting. Such notice may be issued 
        under this section only by an Assistant Secretary of 
        the Interior or an acting Assistant Secretary of the 
        Interior who is a schedule C employee (as defined by 
        section 213.3301 of title 5, Code of Federal 
        Regulations) and may not be delegated to any other 
        person. If a State has been delegated authority 
        pursuant to section 205, the State, acting through the 
        highest State official having ultimate authority over 
        the collection of royalties from leases on Federal 
        lands within the State, may issue such notice, which 
        may not be delegated to any other person.
  (e) Termination of Limitations Period.--An action or an 
enforcement of an obligation by the Secretary or delegated 
State or a lessee or its designee shall be barred under this 
section prior to the running of the seven-year period provided 
in subsection (b) in the event--
          (1) the Secretary or a delegated State has notified 
        the lessee or its designee in writing that a time 
        period is closed to further audit; or
          (2) the Secretary or a delegated State and a lessee 
        or its designee have so agreed in writing.
For purposes of this subsection, notice to, or an agreement by, 
the designee shall be binding on any lessee who is liable 
pursuant to section 102(a) for obligations that are the subject 
of the notice or agreement.
  (f) Records Required for Determining Collections.--Records 
required pursuant to section 103 of this Act by the Secretary 
or any delegated State for the purpose of determining 
obligations due and compliance with any applicable mineral 
leasing law, lease provision, regulation or order with respect 
to oil and gas leases from Federal lands or the Outer 
Continental Shelf shall be maintained for the same period of 
time during which a judicial proceeding or demand may be 
commenced under subsection (b). If a judicial proceeding or 
demand is timely commenced, the record holder shall maintain 
such records until the final nonappealable decision in such 
judicial proceeding is made, or with respect to that demand is 
rendered, unless the Secretary or the applicable delegated 
State authorizes in writing an earlier release of the 
requirement to maintain such records. Notwithstanding anything 
herein to the contrary, under no circumstance shall a record 
holder be required to maintain or produce any record relating 
to an obligation for any time period which is barred by the 
applicable limitation in this section. In connection with any 
hearing, administrative proceeding, inquiry, investigation, or 
audit by the Secretary or a delegated State under this Act, the 
Secretary or the delegated State shall minimize the submission 
of multiple or redundant information and make a good faith 
effort to locate records previously submitted by a lessee or a 
designee to the Secretary or the delegated State, prior to 
requiring the lessee or the designee to provide such records.
  (g) Timely Collections.--In order to most effectively utilize 
resources available to the Secretary to maximize the collection 
of oil and gas receipts from lease obligations to the Treasury 
within the seven-year period of limitations, and consequently 
to maximize the State share of such receipts, the Secretary 
should not perform or require accounting, reporting, or audit 
activities if the Secretary and the State concerned determine 
that the cost of conducting or requiring the activity exceeds 
the expected amount to be collected by the activity, based on 
the most current 12 months of activity. This subsection shall 
not provide a defense to a demand or an order to perform a 
restructured accounting. To the maximum extent possible, the 
Secretary and delegated States shall reduce costs to the United 
States Treasury and the States by discontinuing requirements 
for unnecessary or duplicative data and other information, such 
as separate allowances and payor information, relating to 
obligations due. If the Secretary and the State concerned 
determine that collection will result sooner, the Secretary or 
the applicable delegated State may waive or forego interest in 
whole or in part.
  (h) Appeals and Final Agency Action.--
          (1)  [33-month] 48-month period.--Demands or orders 
        issued by the Secretary or a delegated State are 
        subject to administrative appeal in accordance with the 
        regulations of the Secretary. No State shall impose any 
        conditions which would hinder a lessee's or its 
        designee's immediate appeal of an order to the 
        Secretary or the Secretary's designee. The Secretary 
        shall issue a final decision in any administrative 
        proceeding, including any administrative proceedings 
        pending on the date of enactment of this section, 
        within [33 months] 48 months from the date such 
        proceeding was commenced or [33 months] 48 months from 
        the date of such enactment, whichever is later. The 
        [33-month] 48-month period may be extended by any 
        period of time agreed upon in writing by the Secretary 
        and the appellant.
          (2) Effect of failure to issue decision.--If no such 
        decision has been issued by the Secretary within the 
        [33-month] 48-month period referred to in paragraph 
        (1)--
                  (A) the Secretary shall be deemed to have 
                issued and granted a decision in favor of the 
                appellant as to any nonmonetary obligation and 
                any monetary obligation the principal amount of 
                which is less than $10,000; and
                  (B) the Secretary shall be deemed to have 
                issued a final decision in favor of the 
                Secretary, which decision shall be deemed to 
                affirm those issues for which the agency 
                rendered a decision prior to the end of such 
                period, as to any monetary obligation the 
                principal amount of which is $10,000 or more, 
                and the appellant shall have a right to 
                judicial review of such deemed final decision 
                in accordance with title 5 of the United States 
                Code.
  (i) Collections of Disputed Amounts Due.--To expedite 
collections relating to disputed obligations due within the 
seven-year period beginning on the date the obligation became 
due, the parties shall hold not less than one settlement 
consultation and the Secretary and the State concerned may take 
such action as is appropriate to compromise and settle a 
disputed obligation, including waiving or reducing interest and 
allowing offsetting of obligations among leases.
  (j) Enforcement of a Claim for Judicial Review.--In the event 
a demand subject to this section is properly and timely 
commenced, the obligation which is the subject of the demand 
may be enforced beyond the seven-year limitations period 
without being barred by this statute of limitations. In the 
event a demand subject to this section is properly and timely 
commenced, a judicial proceeding challenging the final agency 
action with respect to such demand shall be deemed timely so 
long as such judicial proceeding is commenced within 180 days 
from receipt of notice by the lessee or its designee of the 
final agency action.
  (k) Implementation of Final Decision.--In the event a 
judicial proceeding or demand subject to this section is timely 
commenced and thereafter the limitation period in this section 
lapses during the pendency of such proceeding, any party to 
such proceeding shall not be barred from taking such action as 
is required or necessary to implement a final unappealable 
judicial or administrative decision, including any action 
required or necessary to implement such decision by the 
recovery or recoupment of an underpayment or overpayment by 
means of refund or credit.
  (l) Stay of Payment Obligation Pending Review.--Any person 
ordered by the Secretary or a delegated State to pay any 
obligation (other than an assessment) shall be entitled to a 
stay of such payment without bond or other surety instrument 
pending an administrative or judicial proceeding if the person 
periodically so demonstrates to the satisfaction of the 
Secretary that such person is financially solvent or otherwise 
able to pay the obligation. In the event the person is not able 
to demonstrate, the Secretary may require a bond or other 
surety instrument satisfactory to cover the obligation. Any 
person ordered by the Secretary or a delegated State to pay an 
assessment shall be entitled to a stay without bond or other 
surety instrument.

[SEC. 116. ASSESSMENTS.

  [Beginning eighteen months after the date of enactment of 
this section, to encourage proper royalty payment the Secretary 
or the delegated State shall impose assessments on a person who 
chronically submits erroneous reports under this Act. 
Assessments under this Act may only be issued as provided for 
in this section.]

           *       *       *       *       *       *       *


TITLE II--STATES AND INDIAN TRIBES

           *       *       *       *       *       *       *


                         shared civil penalties

  Sec. 206. An amount equal to 50 per centum of any civil 
penalty collected by the Federal Government under this Act 
resulting from activities conducted by a State or Indian tribe 
pursuant to a cooperative agreement under section 202 or a 
State under a delegation under section 205, shall be payable to 
such State or tribe. [Any payments under this section shall be 
reduced by an amount equal to any payments provided or due to 
such State or Indian tribe under the cooperative agreement or 
delegation, as applicable, during the fiscal year in which the 
civil penalty is received, up to the total amount provided or 
due for that fiscal year.]

TITLE III--GENERAL PROVISIONS

           *       *       *       *       *       *       *


                         relation to other laws

  Sec. 304. (a) The penalties and authorities provided in this 
Act are supplemental to, and not in derogation of, any 
penalties or authorities contained in any other provision of 
law.
  (b) Nothing in this Act shall be construed to reduce the 
responsibilities of the Secretary to ensure prompt and proper 
collection of revenues from coal, uranium and other energy and 
nonenergy minerals on Federal and Indian lands, or to restrain 
the Secretary from entering into cooperative agreements or 
other appropriate arrangements with States and Indian tribes to 
share royalty management responsibilities and activities for 
such minerals under existing authorities.
  (c) Nothing in this Act shall be construed to enlarge, 
diminish, or otherwise affect the authority or responsibility 
of the Inspector General of the Department of the Interior or 
of the Comptroller General of the United States.
  (d) No provisions of this Act impairs or affects lands and 
interests in land entrusted to the Tennessee Valley Authority.
  (e) Applicability to Other Minerals.--
          (1) Notwithstanding any other provision of law, 
        sections 107, 109, and 110 of this Act and the 
        regulations duly promulgated with respect thereto shall 
        apply to any lease authorizing the development of coal 
        or any other solid mineral on any Federal lands or 
        Indian lands, to the same extent as if such lease were 
        an oil and gas lease, on the same terms and conditions 
        as those authorized for oil and gas leases.
          (2) Notwithstanding any other provision of law, 
        sections 107, 109, and 110 of this Act and the 
        regulations issued under such sections shall apply with 
        respect to any lease, easement, right-of-way, or other 
        agreement, regardless of form (including any royalty, 
        rent, or other payment due thereunder)--
                  (A) under section 8(k) or 8(p) of the Outer 
                Continental Shelf Lands Act (43 U.S.C. 1337(k) 
                and 1337(p)); or
                  (B) under the Geothermal Steam Act (30 U.S.C. 
                1001 et seq.), to the same extent as if such 
                lease, easement, right-of-way, or other 
                agreement were an oil and gas lease on the same 
                terms and conditions as those authorized for 
                oil and gas leases.
          (3) For the purposes of this subsection, the term 
        ``solid mineral'' means any mineral other than oil, 
        gas, and geo-pressured-geothermal resources, that is 
        authorized by an Act of Congress to be produced from 
        public lands (as that term is defined in section 103 of 
        the Federal Land Policy and Management Act of 1976 (43 
        U.S.C. 1702)).

           *       *       *       *       *       *       *

                              ----------                              


                   OUTER CONTINENTAL SHELF LANDS ACT



           *       *       *       *       *       *       *
  Sec. 6. Maintenance of Leases on Outer Continental Shelf.--
(a) The provisions of this section shall apply to any mineral 
lease covering submerged lands of the outer Continental Shelf 
issued by any State (including any extension, renewal, or 
replacement thereof heretofore granted pursuant to such lease 
or under the laws of such State) if--
          (1) such lease, or a true copy thereof, is filed with 
        the Secretary by the lessee or his duly authorized 
        agent within ninety days from the effective date of 
        this Act, or within such further period or periods as 
        provided in section 7 hereof or as may be fixed from 
        time to time by the Secretary;
          (2) such lease was issued prior to December 21, 1948, 
        and would have been on June 5, 1950, in force and 
        effect in accordance with its terms and provisions and 
        the law of the State issuing it had the State had 
        authority to issue such lease;
          (3) there is filed with the Secretary, within the 
        period or periods specified in paragraph (1) of this 
        subsection, (A) a certificate issued by the State 
        official or agency having jurisdiction over such lease 
        stating that it would have been in force and effect as 
        required by the provisions of paragraph (2) of this 
        subsection, or (B) in the absence of such certificate, 
        evidence in the form of affidavits, receipts, canceled 
        checks, or other documents that may be required by the 
        Secretary, sufficient to prove that such lease would 
        have been so in force and effect;
          (4) except as otherwise provided in section 7 hereof, 
        all rents, royalties, and other sums payable under such 
        lease between June 5, 1950, and the effective date of 
        this Act, which have not been paid in accordance with 
        the provisions thereof, or to the Secretary or to the 
        Secretary of the Navy, are paid to the Secretary within 
        the period or periods specified in paragraph (1) of 
        this subsection, and all rents, royalties, and other 
        sums payable under such lease after the effective date 
        of this Act, are paid to the Secretary, who shall 
        deposit such payments in the Treasury in accordance 
        with section 9 of this Act;
          (5) the holder of such lease certifies that such 
        lease shall continue to be subject to the overriding 
        royalty obligations existing on the effective date of 
        this Act;
          (6) such lease was not obtained by fraud or 
        misrepresentation;
          (7) such lease, if issued on or after June 23, 1947, 
        was issued upon the basis of competitive bidding;
          (8) such lease provides for a royalty to the lessor 
        on oil and gas of not less than 12\1/2\ per centum and 
        on sulphur of not less than 5 per centum in amount or 
        value of the production [saved, removed, or sold] from 
        the lease, or, in any case in which the lease provides 
        for a lesser royalty, the holder thereof consents in 
        writing, filed with the Secretary, to the increase of 
        the royalty to the minimum herein specified;
          (9) the holder thereof pays to the Secretary within 
        the period or periods specified in paragraph (1) of 
        this subsection an amount equivalent to any severance, 
        gross production, or occupation taxes imposed by the 
        State issuing the lease on the production from the 
        lease, less the State's royalty interest in such 
        production, between June 5, 1950, and the effective 
        date of this Act and not heretofore paid to the State, 
        and thereafter pays to the Secretary as an additional 
        royalty on the production from the lease, less the 
        United States' royalty interest in such production, a 
        sum of money equal to the amount of the severance, 
        gross production, or occupation taxes which would have 
        been payable on such production to the State issuing 
        the lease under its laws as they existed on the 
        effective date of this Act;
          (10) such lease will terminate within a period of not 
        more than five years from the effective date of this 
        Act in the absence of production or operations for 
        drilling, or, in any case in which the lease provides 
        for a longer period, the holder thereof consents in 
        writing, filed with the Secretary, to the reduction of 
        such period so that it will not exceed the maximum 
        period herein specified; and
          (11) the holder of such lease furnishes such surety 
        bond, if any, as the Secretary may require and complies 
        with such other reasonable requirements as the 
        Secretary may deem necessary to protect the interests 
        of the United States.
  (b) Any person holding a mineral lease, which as determined 
by the Secretary meets the requirements of subsection (a) of 
this section, may continue to maintain such lease, and may 
conduct operations thereunder, in accordance with (1) its 
provisions as to the area, the minerals covered, rentals and, 
subject to the provisions of paragraphs (8), (9) and (10) of 
subsection (a) of this section, as to royalties and as to the 
term thereof and of any extensions, renewals, or replacements 
authorized therein or heretofore authorized by the laws of the 
State issuing such lease, or, if oil or gas was not being 
produced in paying quantities from such lease or or before 
December 11, 1950, or if production in paying quantities has 
ceased since June 5, 1950, or if the primary term of such lease 
has expired since December 11, 1950, then for a term from the 
effective date hereof equal to the term remaining unexpired on 
December 11, 1950, under the provisions of such lease or any 
extensions, renewals, or replacements authorized therein, or 
heretofore authorized by the laws of such State, and (2) such 
regulations as the Secretary may under section 5 of this Act 
prescribe within ninety days after making his determination 
that such lease meets the requirements of subsection (a) of 
this section: Provided, however, That any rights to sulphur 
under any lease maintained under the provisions of this 
subsection shall not extend beyond the primary term of such 
lease or any extension thereof under the provisions of such 
subsection (b) unless sulphur is being produced in paying 
quantities or drilling, well reworking, plant construction, or 
other operations for the production of sulphur, as approved by 
the Secretary, are being conducted on the area covered by such 
lease on the date of expiration of such primary term or 
extension: Provided further, That if sulphur is being produced 
in paying quantities on such date, then such rights shall 
continue to be maintained in accordance with such lease and the 
provisions of this Act: Provided further, That, if the primary 
term of a lease being maintained under subsection (b) hereof 
has expired prior to the effective date of this Act and oil or 
gas is being produced in paying quantities on such date, then 
such rights to sulphur as the lessee may have under such lease 
shall continue for twenty-four months from the effective date 
of this Act and as long thereafter as sulphur is produced in 
paying quantities, or drilling, well working, plant 
construction, or other operations for the production of 
sulphur, as approved by the Secretary, are being conducted on 
the area covered by the lease.
  (c) The permission granted in subsection (b) of this section 
shall not be construed to be a waiver of such claims, if any, 
as the United States may have against the lessor or the lessee 
or any other person respecting sums payable or paid for or 
under the lease, or respecting activities conducted under the 
lease, prior to the effective date of this Act.
  (d) Any person complaining of a negative determination by the 
Secretary of the Interior under this section may have such 
determination reviewed by the United States District Court for 
the District of Columbia by filing a petition for review within 
sixty days after receiving notice of such action by the 
Secretary.
  (e) In the event any lease maintained under this section 
covers lands beneath navigable waters, as that term is used in 
the Submerged Lands Act, as well as lands of the outer 
Continental Shelf, the provisions of this section shall apply 
to such lease only insofar as it covers lands of the outer 
Continental Shelf.

           *       *       *       *       *       *       *

  Sec. 8. Leases, Easements, and Rights-of-way on the Outer 
Continental Shelf.--(a)(1) The Secretary is authorized to grant 
to the highest responsible qualified bidder or bidders by 
competitive bidding, under regulations promulgated in advance, 
any oil and gas lease on submerged lands of the outer 
Continental Shelf which are not covered by leases meeting the 
requirements of subsection (a) of section 6 of this Act. Such 
regulations may provide for the deposit of cash bids in an 
interest-bearing account until the Secretary announces his 
decision on whether to accept the bids, with the interest 
earned thereon to be paid to the Treasury as to bids that are 
accepted and to the unsuccessful bidders as to bids that are 
rejected. The bidding shall be by sealed bid and, at the 
discretion of the Secretary, on the basis of--
          (A) cash bonus bid with a royalty at not less than 
        12\1/2\ per centum fixed by the Secretary in amount or 
        value of the production [saved, removed, or sold];
          (B) variable royalty bid based on a per centum in 
        amount or value of the production [saved, removed, or 
        sold], with either a fixed work commitment based on 
        dollar amount for exploration or a fixed cash bonus as 
        determined by the Secretary, or both;
          (C) cash bonus bid, or work commitment bid based on a 
        dollar amount for exploration with a fixed cash bonus, 
        and a diminishing or sliding royalty based on such 
        formulae as the Secretary shall determine as equitable 
        to encourage continued production from the lease area 
        as resources diminish, but not less than 12\1/2\ per 
        centum at the beginning of the lease period in amount 
        or value of the production [saved, removed, or sold];
          (D) cash bonus bid with a fixed share of the net 
        profits of no less than 30 per centum to be derived 
        from the production of oil and gas from the lease area;
          (E) fixed cash bonus with the net profit share 
        reserved as the bid variable;
          (F) cash bonus bid with a royalty at no less than 
        12\1/2\ per centum fixed by the Secretary in amount or 
        value of the production [saved, removed, or sold] and a 
        fixed per centum share of net profits of no less than 
        30 per centum to be derived from the production of oil 
        and gas from the lease area;
          (G) work commitment bid based on a dollar amount for 
        exploration with a fixed cash bonus and a fixed royalty 
        in amount or value of the production [saved, removed, 
        or sold];
          (H) cash bonus bid with royalty at no less than 12 
        and \1/2\ per centum fixed by the Secretary in amount 
        or value of production [saved, removed, or sold], and 
        with suspension of royalties for a period, volume, or 
        value of production determined by the Secretary, which 
        suspensions may vary based on the price of production 
        from the lease; or
          (I) subject to the requirements of paragraph (4) of 
        this subsection, any modification of bidding systems 
        authorized in subparagraphs (A) through (G), or any 
        other systems of bid variables, terms, and conditions 
        which the Secretary determines to be useful to 
        accomplish the purposes and policies of this Act, 
        except that no such bidding system or modification 
        shall have more than one bid variable.
  (2) The Secretary may, in his discretion, defer any part of 
the payment of the cash bonus, as authorized in paragraph (1) 
of this subsection, according to a schedule announced at the 
time of the announcement of the lease sale, but such payment 
shall be made in total no later than five years after the date 
of the lease sale.
  (3)(A) The Secretary may, in order to promote increased 
production on the lease area, through direct, secondary, or 
tertiary recovery means, reduce or eliminate any royalty or net 
profit share set forth in the lease for such area.
  (B) In the Western and Central Planning Areas of the Gulf of 
Mexico and the portion of the Eastern Planning Area of the Gulf 
of Mexico encompassing whole lease blocks lying west of 87 
degrees, 30 minutes West longitude [and in the Planning Areas 
offshore Alaska], the Secretary may, in order to--
          (i) promote development or increased production on 
        producing or non-producing leases; or
          (ii) encourage production of marginal resources on 
        producing or non-producing leases;
        through\3\ primary, secondary, or tertiary recovery 
        means, reduce or eliminate any royalty or net profit 
        share set forth in the lease(s). With the lessee's 
        consent, the Secretary may make other modifications to 
        the royalty or net profit share terms of the lease in 
        order to achieve these purposes.
---------------------------------------------------------------------------
    \3\Indentation so in original. Probably should be flush.
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  (C)(i) Notwithstanding the provisions of this Act other than 
this subparagraph, with respect to any lease or unit in 
existence on the date of enactment of the Outer Continental 
Shelf Deep Water Royalty Relief Act meeting the requirements of 
this subparagraph, no royalty payments shall be due on new 
production, as defined in clause (iv) of this subparagraph, 
from any lease or unit located in water depths of 200 meters or 
greater in the Western and Central Planning Areas of the Gulf 
of Mexico, including that portion of the Eastern Planning Area 
of the Gulf of Mexico encompassing whole lease blocks lying 
west of 87 degrees, 30 minutes West longitude, until such 
volume of production as determined pursuant to clause (ii) has 
been produced by the lessee.
  (ii) Upon submission of a complete application by the lessee, 
the Secretary shall determine within 180 days of such 
application whether new production from such lease or unit 
would be economic in the absence of the relief from the 
requirement to pay royalties provided for by clause (i) of this 
subparagraph. In making such determination, the Secretary shall 
consider the increased technological and financial risk of deep 
water development and all costs associated with exploring, 
developing, and producing from the lease. The lessee shall 
provide information required for a complete application to the 
Secretary prior to such determination. The Secretary shall 
clearly define the information required for a complete 
application under this section. Such application may be made on 
the basis of an individual lease or unit. If the Secretary 
determines that such new production would be economic in the 
absence of the relief from the requirement to pay royalties 
provided for by clause (i) of this subparagraph, the provisions 
of clause (i) shall not apply to such production. If the 
Secretary determines that such new production would not be 
economic in the absence of the relief from the requirement to 
pay royalties provided for by clause (i), the Secretary must 
determine the volume of production from the lease or unit on 
which no royalties would be due in order to make such new 
production economically viable; except that for new production 
as defined in clause (iv)(I), in no case will that volume be 
less than 17.5 million barrels of oil equivalent in water 
depths of 200 to 400 meters, 52.5 million barrels of oil 
equivalent in 400-800 meters of water, and 87.5 million barrels 
of oil equivalent in water depths greater than 800 meters. 
Redetermination of the applicability of clause (i) shall be 
undertaken by the Secretary when requested by the lessee prior 
to the commencement of the new production and upon significant 
change in the factors upon which the original determination was 
made. The Secretary shall make such redetermination within 120 
days of submission of a complete application. The Secretary may 
extend the time period for making any determination or 
redetermination under this clause for 30 days, or longer if 
agreed to by the applicant, if circumstances so warrant. The 
lessee shall be notified in writing of any determination or 
redetermination and the reasons for and assumptions used for 
such determination. Any determination or redetermination under 
this clause shall be a final agency action. The Secretary's 
determination or redetermination shall be judicially reviewable 
under section 10(a) of the Administrative Procedures Act (5 
U.S.C. 702), only for actions filed within 30 days of the 
Secretary's determination or redetermination.
  (iii) In the event that the Secretary fails to make the 
determination or redetermination called for in clause (ii) upon 
application by the lessee within the time period, together with 
any extension thereof, provided for by clause (ii), no royalty 
payments shall be due on new production as follows:
          (I) For new production, as defined in clause (iv)(I) 
        of this subparagraph, no royalty shall be due on such 
        production according to the schedule of minimum volumes 
        specified in clause (ii) of this subparagraph.
          (II) For new production, as defined in clause 
        (iv)(II) of this subparagraph, no royalty shall be due 
        on such production for one year following the start of 
        such production.
  (iv) For purposes of this subparagraph, the term ``new 
production'' is--
          (I) any production from a lease from which no 
        royalties are due on production, other than test 
        production, prior to the date of enactment of the Outer 
        Continental Shelf Deep Water Royalty Relief Act; or
          (II) any production resulting from lease development 
        activities pursuant to a Development Operations 
        Coordination Document, or supplement thereto that would 
        expand production significantly beyond the level 
        anticipated in the Development Operations Coordination 
        Document, approved by the Secretary after the date of 
        enactment of the Outer Continental Shelf Deep Water 
        Royalty Relief Act.
  (v) During the production of volumes determined pursuant to 
clauses (ii) or (iii) of this subparagraph, in any year during 
which the arithmetic average of the closing prices on the New 
York Mercantile Exchange for light sweet crude oil exceeds 
$28.00 per barrel, any production of oil will be subject to 
royalties at the lease stipulated royalty rate. Any production 
subject to this clause shall be counted toward the production 
volume determined pursuant to clause (ii) or (iii). Estimated 
royalty payments will be made if such average of the closing 
prices for the previous year exceeds $28.00. After the end of 
the calendar year, when the new average price can be 
calculated, lessees will pay any royalties due, with interest 
but without penalty, or can apply for a refund, with interest, 
of any overpayment.
  (vi) During the production of volumes determined pursuant to 
clause (ii) or (iii) of this subparagraph, in any year during 
which the arithmetic average of the closing prices on the New 
York Mercantile Exchange for natural gas exceeds $3.50 per 
million British thermal units, any production of natural gas 
will be subject to royalties at the lease stipulated royalty 
rate. Any production subject to this clause shall be counted 
toward the production volume determined pursuant to clauses 
(ii) or (iii). Estimated royalty payments will be made if such 
average of the closing prices for the previous year exceeds 
$3.50. After the end of the calendar year, when the new average 
price can be calculated, lessees will pay any royalties due, 
with interest but without penalty, or can apply for a refund, 
with interest, of any overpayment.
  (vii) The prices referred to in clauses (v) and (vi) of this 
subparagraph shall be changed during any calendar year after 
1994 by the percentage, if any, by which the implicit price 
deflator for the gross domestic product changed during the 
preceding calendar year.
  (4)(A) The Secretary of Energy shall submit any bidding 
system authorized in subparagraph (H) of paragraph (1) to the 
Senate and House of Representatives. The Secretary may 
institute such bidding system unless either the Senate or the 
House of Representatives passes a resolution of disapproval 
within thirty days after receipt of the bidding system.
  (B) Subparagraphs (C) through (J) of this paragraph are 
enacted by Congress--
          (i) as an exercise of the rulemaking power of the 
        Senate and the House of Representatives, respectively, 
        and as such they are deemed a part of the rules of each 
        House, respectively, but they are applicable only with 
        respect to the procedures to be followed in that House 
        in the case of resolutions described by this paragraph, 
        and they supersede other rules only to the extent that 
        they are inconsistent therewith; and
          (ii) with full recognition of the constitutional 
        right of either House to change the rules (so far as 
        relating to the procedure of that House) at any time, 
        in the same manner, and to the same extent as in the 
        case of any other rule of that House.
  (C) A resolution disapproving a bidding system submitted 
pursuant to this paragraph shall immediately be referred to a 
committee (and all resolutions with respect to the same request 
shall be referred to the same committee) by the President of 
the Senate or the Speaker of the House of Representative, as 
the case may be.
  (D) If the committee to which has been referred any 
resolution disapproving the bidding system of the Secretary has 
not reported the resolution at the end of ten calendar days 
after its referral, it shall be in order to move either to 
discharge the committee from further consideration of the 
resolution or to discharge the committee from further 
consideration of any other resolution with respect to the same 
bidding system which has been referred to the committee.
  (E) A motion to discharge may be made only by an individual 
favoring the resolution, shall be highly privileged (except 
that it may not be made after the committee has reported a 
resolution with respect to the same recommendation), and debate 
thereon shall be limited to not more than one hour, to be 
divided equally between those favoring and those opposing the 
resolution. An amendment to the motion shall not be in order, 
and it shall not be in order to move to reconsider the vote by 
which the motion is agreed to or disagreed to.
  (F) If the motion to discharge is agreed to or disagreed to, 
the motion may not be renewed, nor may another motion to 
discharge the committee be made with respect to any other 
resolution with respect to the same bidding system.
  (G) When the committee has reported, or has been discharged 
from further consideration of, a resolution as provided in this 
paragraph, it shall be at any time thereafter in order (even 
though a previous motion to the same effect has been disagreed 
to) to move to proceed to the consideration of the resolution. 
The motion shall be highly privileged and shall not be 
debatable. An amendment to the motion shall not be in order, 
and it shall not be in order to move to reconsider the vote by 
which the motion is agreed to or disagreed to.
  (H) Debate on the resolution is limited to not more than two 
hours, to be divided equally between those favoring and those 
opposing the resolution. A motion further to limit debate is 
not debatable. An amendment to, or motion to recommit, the 
resolution is not in order, and it is not in order to move to 
reconsider the vote by which the resolution is agreed to or 
disagreed to.
  (I) Motions to postpone, made with respect to the discharge 
from the committee, or the consideration of a resolution with 
respect to a bidding system, and motions to proceed to the 
consideration of other business, shall be decided without 
debate.
  (J) Appeals from the decisions of the Chair relating to the 
application of the rules of the Senate or the House of 
Representatives, as the case may be, to the procedure relating 
to a resolution with respect to a bidding system shall be 
decided without debate.
  (5)(A) During the five-year period commencing on the date of 
enactment of this subsection, the Secretary may, in order to 
obtain statistical information to determine which bidding 
alternatives will best accomplish the purposes and policies of 
this Act, require, as to no more than 10 per centum of the 
tracts offered each year, each bidder to submit bids for any 
area of the outer Continental Shelf in accordance with more 
than one of the bidding systems set forth in paragraph (1) of 
this subsection. For such statistical purposes, leases may be 
awarded using a bidding alternative selected at random for the 
acquisition of valid statistical data if such bidding 
alternative is otherwise consistent with the provisions of this 
Act.
  (B) The bidding systems authorized by paragraph (1) of this 
subsection, other than the system authorized by subparagraph 
(A), shall be applied to not less than 20 per centum and not 
more than 60 per centum of the total area offered for leasing 
each year during the five-year period beginning on the date of 
enactment of this subsection, unless the Secretary determines 
that the requirements set forth in this subparagraph are 
inconsistent with the purposes and policies of this Act.
  (6) At least ninety days prior to notice of any lease sale 
under subparagraph (D), (E), (F), or, if appropriate, (H) of 
paragraph (1), the Secretary shall by regulation establish 
rules to govern the calculation of net profits. In the event of 
any dispute between the United States and a lessee concerning 
the calculation of the net profits under the regulation issued 
pursuant to this paragraph, the burden of proof shall be on the 
lessee.
  (7) After an oil and gas lease is granted pursuant to any of 
the work commitment options of paragraph (1) of this 
subsection--
          (A) the lessee, at its option, shall deliver to the 
        Secretary upon issuance of the lease either (i) a cash 
        deposit for the full amount of the exploration work 
        commitment, or (ii) a performance bond in form and 
        substance and with a surety satisfactory to the 
        Secretary, in the principal amount of such exploration 
        work commitment assuring the Secretary that such 
        commitment shall be faithfully discharged in accordance 
        with this section, regulations, and the lease; and for 
        purposes of this subparagraph, the principal amount of 
        such cash deposit or bond may, in accordance with 
        regulations, be periodically reduced upon proof, 
        satisfactory to the Secretary, that a portion of the 
        exploration work commitment has been satisfied;
          (B) 50 per centum of all exploration expenditures on, 
        or directly related to, the lease, including, but not 
        limited to (i) geological investigations and related 
        activities, (ii) geophysical investigations including 
        seismic, geomagnetic, and gravity surveys, data 
        processing and interpretation, and (iii) exploratory 
        drilling, core drilling, redrilling, and well 
        completion or abandonment, including the drilling of 
        wells sufficient to determine the size and area extent 
        of any newly discovered field, and including the cost 
        of mobilization and demobilization of drilling 
        equipment, shall be included in satisfaction of the 
        commitment, except that the lessee's general overhead 
        cost shall not be so included against the work 
        commitment, but its cost (including employee benefits) 
        of employees directly assigned to such exploration work 
        shall be so included; and
          (C) if at the end of the primary term of the lease, 
        including any extension thereof, the full dollar amount 
        of the exploration work commitment has not been 
        satisfied, the balance shall then be paid in cash to 
        the Secretary.
  (8) Not later than thirty days before any lease sale, the 
Secretary shall submit to the Congress and publish in the 
Federal Register a notice--
          (A) identifying any bidding system which will be 
        utilized for such lease sale and the reasons for the 
        utilization of such bidding system; and
          (B) designating the lease tracts selected which are 
        to be offered in such sale under the bidding system 
        authorized by subparagraph (A) of paragraph (1) and the 
        lease tracts selected which are to be offered under any 
        one or more of the bidding systems authorized by 
        subparagraphs (B) through (H) of paragraph (1), and the 
        reasons such lease tracts are to be offered under a 
        particular bidding system.
          (9) Notwithstanding any other provision of this Act 
        (including this section), royalty under this Act shall 
        be assessed with respect to oil and gas, other than gas 
        described in section 124(a)(2) of the Ending Taxpayer 
        Welfare for Oil and Gas Companies Act of 2021, without 
        regard to whether oil or gas is removed or sold from 
        the leased land.
  (b) An oil and gas lease issued pursuant to this section 
shall--
          (1) be for a tract consisting of a compact area not 
        exceeding five thousand seven hundred and sixty acres, 
        as the Secretary may determine, unless the Secretary 
        finds that a larger area is necessary to comprise a 
        reasonable economic production unit;
          (2) be for an initial period of--
                  (A) five years; or
                  (B) not to exceed ten years where the 
                Secretary finds that such longer period is 
                necessary to encourage exploration and 
                development in areas because of unusually deep 
                water or other unusually adverse conditions,
        and as long after such initial period as oil or gas is 
        produced from the area in paying quantities, or 
        drilling or well reworking operations as approved by 
        the Secretary are conducted thereon;
          (3) require the payment of amount or value as 
        determined by one of the bidding systems set forth in 
        subsection (a) of this section;
          (4) entitle the lessee to explore, develop, and 
        produce the oil and gas contained within the lease 
        area, conditioned upon due diligence requirements and 
        the approval of the development and production plan 
        required by this Act;
          (5) provide for suspension or cancellation of the 
        lease during the initial lease term or thereafter 
        pursuant to section 5 of this Act;
          (6) contain such rental and other provisions as the 
        Secretary may prescribe at the time of offering the 
        area for lease; and
          (7) provide a requirement that the lessee offer 20 
        per centum of the crude oil, condensate, and natural 
        gas liquids produced on such lease, at the market value 
        and point of delivery applicable to Federal royalty 
        oil, to small or independent refiners as defined in the 
        Emergency Petroleum Allocation Act of 1973.
  (c)(1) Following each notice of a proposed lease sale and 
before the acceptance of bids and the issuance of leases based 
on such bids, the Secretary shall allow the Attorney General, 
in consultation with the Federal Trade Commission, thirty days 
to review the results of such lease sale, except that the 
Attorney General, after consultation with the Federal Trade 
Commission, may agree to a shorter review period.
  (2) The Attorney General may, in consultation with the 
Federal Trade Commission, conduct such antitrust review on the 
likely effects the issuance of such leases would have on 
competition as the Attorney General, after consultation with 
the Federal Trade Commission, deems appropriate and shall 
advise the Secretary with respect to such review. The Secretary 
shall provide such information as the Attorney General, after 
consultation with the Federal Trade Commission, may require in 
order to conduct any antitrust review pursuant to this 
paragraph and to make recommendations pursuant to paragraph (3) 
of this subsection.
  (3) The Attorney General, after consultation with the Federal 
Trade Commission, may make such recommendations to the 
Secretary, including the nonacceptance of any bid, as may be 
appropriate to prevent any situation inconsistent with the 
antitrust laws. If the Secretary determines, or if the Attorney 
General advises the Secretary, after consultation with the 
Federal Trade Commission and prior to the issuance of any 
lease, that such lease may create or maintain a situation 
inconsistent with the antitrust laws, the Secretary may--
          (A) refuse (i) to accept an otherwise qualified bid 
        for such lease, or (ii) to issue such lease, 
        notwithstanding subsection (a) of this section; or
          (B) issue such lease, and notify the lessee and the 
        Attorney General of the reason for such decision.
  (4)(A) Nothing in this subsection shall restrict the power 
under any other Act or the common law of the Attorney General, 
the Federal Trade Commission, or any other Federal department 
or agency to secure information, conduct reviews, make 
recommendations, or seek appropriate relief.
  (B) Neither the issuance of a lease nor anything in this 
subsection shall modify or abridge any private right of action 
under the antitrust laws.
  (d) No bid for a lease may be submitted if the Secretary 
finds, after notice and hearing, that the bidder is not meeting 
due diligence requirements on other leases.
  (e) No lease issued under this Act may be sold, exchanged, 
assigned, or otherwise transferred except with the approval of 
the Secretary. Prior to any such approval, the Secretary shall 
consult with and give due consideration to the views of the 
Attorney General.
  (f) Nothing in this Act shall be deemed to convey to any 
person, association, corporation, or other business 
organization immunity from civil or criminal liability, or to 
create defenses to actions, under any antitrust law.
  (g)(1) At the time of soliciting nominations for the leasing 
of lands containing tracts wholly or partially within three 
nautical miles of the seaward boundary of any coastal State, 
and subsequently as new information is obtained or developed by 
the Secretary, the Secretary, in addition to the information 
required by section 26 of this Act, shall provide the Governor 
of such State--
          (A) an identification and schedule of the areas and 
        regions proposed to be offered for leasing;
          (B) at the request of the Governor of such State, all 
        information from all sources concerning the 
        geographical, geological, and ecological 
        characteristics of such tracts;
          (C) an estimate of the oil and gas reserves in the 
        areas proposed for leasing; and
          (D) at the request of the Governor of such State, an 
        identification of any field, geological structure, or 
        trap located wholly or partially within three nautical 
        miles of the seaward boundary of such coastal State, 
        including all information relating to the entire field, 
        geological structure, or trap.
The provisions of the first sentence of subsection (c) and the 
provisions of subsections (e)-(h) of section 26 of this Act 
shall be applicable to the release by the Secretary of any 
information to any coastal State under this paragraph. In 
addition, the provisions of subsections (c) and (e)-(h) of 
section 26 of this Act shall apply in their entirety to the 
release by the Secretary to any coastal State of any 
information relating to Federal lands beyond three nautical 
miles of the seaward boundary of such coastal State.
  (2) Notwithstanding any other provision of this Act, the 
Secretary shall deposit into a separate account in the Treasury 
of the United States all bonuses, rents, and royalties, and 
other revenues (derived from any bidding system authorized 
under subsection (a)(1), excluding Federal income and windfall 
profits taxes, and derived from any lease issued after 
September 18, 1978 of any Federal tract which lies wholly (or, 
in the case of Alaska, partially until seven years from the 
date of settlement of any boundary dispute that is the subject 
of an agreement under section 7 of this Act entered into prior 
to January 1, 1986 or until April 15, 1993 with respect to any 
other tract) within three nautical miles of the seaward 
boundary of any coastal State, or, (except as provided above 
for Alaska) in the case where a Federal tract lies partially 
within three nautical miles of the seaward boundary, a 
percentage of bonuses, rents, royalties, and other revenues 
(derived from any bidding system authorized under subsection 
(a)(1), excluding Federal income and windfall profits taxes, 
and derived from any lease issued after September 18, 1978 of 
such tract equal to the percentage of surface acreage of the 
tract that lies within such three nautical miles. Except as 
provided in paragraph (5) of this subsection, not later than 
the last business day of the month following the month in which 
those revenues are deposited in the Treasury, the Secretary 
shall transmit to such coastal State 27 percent of those 
revenues, together with all accrued interest thereon. The 
remaining balance of such revenues shall be transmitted 
simultaneously to the miscellaneous receipts account of the 
Treasury of the United States.
  (3) Whenever the Secretary or the Governor of a coastal State 
determines that a common potentially hydrocarbon-bearing area 
may underlie the Federal and State boundary, the Secretary or 
the Governor shall notify the other party in writing of his 
determination and the Secretary shall provide to the Governor 
notice of the current and projected status of the tract or 
tracts containing the common potentially hydrocarbon-bearing 
area. If the Secretary has leased or intends to lease such 
tract or tracts, the Secretary and the Governor of the coastal 
State may enter into an agreement to divide the revenues from 
production of any common potentially hydrocarbon-bearing area, 
by unitization or other royalty sharing agreement, pursuant to 
existing law. If the Secretary and the Governor do not enter 
into an agreement, the Secretary may nevertheless proceed with 
the leasing of the tract or tracts. Any revenue received by the 
United States under such an agreement shall be subject to the 
requirements of paragraph (2).
  (4) The deposits in the Treasury account described in this 
section shall be invested by the Secretary of the Treasury in 
securities backed by the full faith and credit of the United 
States having maturities suitable to the needs of the account 
and yielding the highest reasonably available interest rates as 
determined by the Secretary of the Treasury.
  (5)(A) When there is a boundary dispute between the United 
States and a State which is subject to an agreement under 
section 7 of this Act, the Secretary shall credit to the 
account established pursuant to such agreement all bonuses, 
rents, and royalties, and other revenues (derived from any 
bidding system authorized under subsection (a)(1)), excluding 
Federal income and windfall profits taxes, and derived from any 
lease issued after September 18, 1978 of any Federal tract 
which lies wholly or partially within three nautical miles of 
the seaward boundary asserted by the State, if that money has 
not otherwise been deposited in such account. Proceeds of an 
escrow account established pursuant to an agreement under 
section 7 shall be distributed as follows:
          (i) Twenty-seven percent of all bonuses, rents, and 
        royalties, and other revenues (derived from any bidding 
        system authorized under subsection (a)(1)), excluding 
        Federal income and windfall profits taxes, and derived 
        from any lease issued after September 18, 1978, of any 
        tract which lies wholly within three nautical miles of 
        the seaward boundary asserted by the Federal Government 
        in the boundary dispute, together with all accrued 
        interest thereon, shall be paid to the State either--
                  (I) within thirty days of December 1, 1987, 
                or
                  (II) by the last business day of the month 
                following the month in which those revenues are 
                deposited in the Treasury, whichever date is 
                later.
          (ii) Upon the settlement of a boundary dispute which 
        is subject to a section 7 agreement between the United 
        States and a State, the Secretary shall pay to such 
        State any additional moneys due such State from amounts 
        deposited in or credited to the escrow account. If 
        there is insufficient money deposited in the escrow 
        account, the Secretary shall transmit, from any 
        revenues derived from any lease of Federal lands under 
        this Act, the remaining balance due such State in 
        accordance with the formula set forth in section 
        8004(b)(1)(B) of the Outer Continental Shelf Lands Act 
        Amendments of 1985.
  (B) This paragraph applies to all Federal oil and gas lease 
sales, under this Act, including joint lease sales, occurring 
after September 18, 1978.
  (6) This section shall be deemed to take effect on October 1, 
1985, for purposes of determining the amounts to be deposited 
in the separate account and the States' shares described in 
paragraph (2).
  (7) When the Secretary leases any tract which lies wholly or 
partially within three miles of the seaward boundary of two or 
more States, the revenues from such tract shall be distributed 
as otherwise provided by this section, except that the State's 
share of such revenues that would otherwise result under this 
section shall be divided equally among such States.
  (h) Nothing contained in this section shall be construed to 
alter, limit, or modify any claim of any State to any 
jurisdiction over, or any right, title or interest in, any 
submerged lands.
  (i) In order to meet the urgent need for further exploration 
and development of the sulphur deposits in the submerged lands 
of the outer Continental Shelf, the Secretary is authorized to 
grant to the qualified persons offering the highest cash 
bonuses on a basis of competitive bidding sulphur leases on 
submerged lands of the outer Continental Shelf, which are not 
covered by leases which include sulphur and meet the 
requirements of subsection (a) of section 6 of this Act, and 
which sulphur leases shall be offered for bid by sealed bids 
and granted on separate leases from oil and gas leases, and for 
a separate consideration, and without priority or preference 
accorded to oil and gas lessees on the same area.
  (j) A sulphur lease issued by the Secretary pursuant to this 
section shall (1) cover an area of such size and dimensions as 
the Secretary may determine, (2) be for a period of not more 
than ten years and so long thereafter as sulphur may be 
produced from the area in paying quantities or drilling, well 
reworking, plant construction, or other operations for the 
production of sulphur, as approved by the Secretary, are 
conducted thereon, (3) require the payment to the United States 
of such royalty as may be specified in the lease but not less 
than 5 per centum of the gross production of value of the 
sulphur at the wellhead, and (4) contained such rental 
provisions and such other terms and provisions as the Secretary 
may by regulation prescribe at the time of offering the area 
for lease.
  (k)(1) The Secretary is authorized to grant to the qualified 
persons offering the highest cash bonuses on a basis of 
competitive bidding leases of any mineral other than oil, gas, 
and sulphur in any area of the outer Continental Shelf not then 
under lease for such mineral upon such royalty, rental, and 
other terms and conditions as the Secretary may prescribe at 
the time of offering the area for lease.
  (2)(A) Notwithstanding paragraph (1), the Secretary may 
negotiate with any person an agreement for the use of Outer 
Continental Shelf sand, gravel and shell resources--
          (i) for use in a program of, or project for, shore 
        protection, beach restoration, or coastal wetlands 
        restoration undertaken by a Federal, State, or local 
        government agency; or
          (ii) for use in a construction project, other than a 
        project described in clause (i), that is funded in 
        whole or in part by or authorized by the Federal 
        Government.
  (B) In carrying out a negotiation under this paragraph, the 
Secretary may assess a fee based on an assessment of the value 
of the resources and the public interest served by promoting 
development of the resources. No fee shall be assessed directly 
or indirectly under this subparagraph against a Federal, State, 
or local government agency.
  (C) The Secretary may, through this paragraph and in 
consultation with the Secretary of Commerce, seek to facilitate 
projects in the coastal zone, as such term is defined in 
section 304 of the Coastal Zone Management Act of 1972 (16 
U.S.C. 1453), that promote the policy set forth in section 303 
of that Act (16 U.S.C. 1452).
  (D) Any Federal agency which proposes to make use of sand, 
gravel and shell resources subject to the provisions of this 
Act shall enter into a Memorandum of Agreement with the 
Secretary concerning the potential use of those resources. The 
Secretary shall notify the Committee on Merchant Marine and 
Fisheries and the Committee on Natural Resources of the House 
of Representatives and the Committee on Energy and Natural 
Resources of the Senate on any proposed project for the use of 
those resources prior to the use of those resources.
  (l) Notices of sale of leases, and the terms of bidding 
authorized by this section shall be published at least thirty 
days before the date of sale in accordance with rules and 
regulations promulgated by the Secretary.
  (m) All moneys paid to the Secretary for or under leases 
granted pursuant to this section shall be deposited in the 
Treasury in accordance with section 9 of this Act.
  (n) The issuance of any lease by the Secretary pursuant to 
this Act, or the making of any interim arrangements by the 
Secretary pursuant to section 7 of this Act shall not prejudice 
the ultimate settlement or adjudication of the question as to 
whether or not the area involved is in the outer Continental 
Shelf.
  (o) The Secretary may cancel any lease obtained by fraud or 
misrepresentation.
  (p) Leases, Easements, or Rights-of-way for Energy and 
Related Purposes.--
          (1) In general.--The Secretary, in consultation with 
        the Secretary of the Department in which the Coast 
        Guard is operating and other relevant departments and 
        agencies of the Federal Government, may grant a lease, 
        easement, or right-of-way on the outer Continental 
        Shelf for activities not otherwise authorized in this 
        Act, the Deepwater Port Act of 1974 (33 U.S.C. 1501 et 
        seq.), the Ocean Thermal Energy Conversion Act of 1980 
        (42 U.S.C. 9101 et seq.), or other applicable law, if 
        those activities--
                  (A) support exploration, development, 
                production, or storage of oil or natural gas, 
                except that a lease, easement, or right-of-way 
                shall not be granted in an area in which oil 
                and gas preleasing, leasing, and related 
                activities are prohibited by a moratorium;
                  (B) support transportation of oil or natural 
                gas, excluding shipping activities;
                  (C) produce or support production, 
                transportation, or transmission of energy from 
                sources other than oil and gas; or
                  (D) use, for energy-related purposes or for 
                other authorized marine-related purposes, 
                facilities currently or previously used for 
                activities authorized under this Act, except 
                that any oil and gas energy-related uses shall 
                not be authorized in areas in which oil and gas 
                preleasing, leasing, and related activities are 
                prohibited by a moratorium.
          (2) Payments and revenues.--(A) The Secretary shall 
        establish royalties, fees, rentals, bonuses, or other 
        payments to ensure a fair return to the United States 
        for any lease, easement, or right-of-way granted under 
        this subsection.
          (B) The Secretary shall provide for the payment of 27 
        percent of the revenues received by the Federal 
        Government as a result of payments under this section 
        from projects that are located wholly or partially 
        within the area extending three nautical miles seaward 
        of State submerged lands. Payments shall be made based 
        on a formula established by the Secretary by rulemaking 
        no later than 180 days after the date of enactment of 
        this section that provides for equitable distribution, 
        based on proximity to the project, among coastal states 
        that have a coastline that is located within 15 miles 
        of the geographic center of the project.
          (3) Competitive or noncompetitive basis.--Except with 
        respect to projects that meet the criteria established 
        under section 388(d) of the Energy Policy Act of 2005, 
        the Secretary shall issue a lease, easement, or right-
        of-way under paragraph (1) on a competitive basis 
        unless the Secretary determines after public notice of 
        a proposed lease, easement, or right-of-way that there 
        is no competitive interest.
          (4) Requirements.--The Secretary shall ensure that 
        any activity under this subsection is carried out in a 
        manner that provides for--
                  (A) safety;
                  (B) protection of the environment;
                  (C) prevention of waste;
                  (D) conservation of the natural resources of 
                the outer Continental Shelf;
                  (E) coordination with relevant Federal 
                agencies;
                  (F) protection of national security interests 
                of the United States;
                  (G) protection of correlative rights in the 
                outer Continental Shelf;
                  (H) a fair return to the United States for 
                any lease, easement, or right-of-way under this 
                subsection;
                  (I) prevention of interference with 
                reasonable uses (as determined by the 
                Secretary) of the exclusive economic zone, the 
                high seas, and the territorial seas;
                  (J) consideration of--
                          (i) the location of, and any schedule 
                        relating to, a lease, easement, or 
                        right-of-way for an area of the outer 
                        Continental Shelf; and
                          (ii) any other use of the sea or 
                        seabed, including use for a fishery, a 
                        sealane, a potential site of a 
                        deepwater port, or navigation;
                  (K) public notice and comment on any proposal 
                submitted for a lease, easement, or right-of-
                way under this subsection; and
                  (L) oversight, inspection, research, 
                monitoring, and enforcement relating to a 
                lease, easement, or right-of-way under this 
                subsection.
          (5) Lease duration, suspension, and cancellation.--
        The Secretary shall provide for the duration, issuance, 
        transfer, renewal, suspension, and cancellation of a 
        lease, easement, or right-of-way under this subsection.
          (6) Security.--The Secretary shall require the holder 
        of a lease, easement, or right-of-way granted under 
        this subsection to--
                  (A) furnish a surety bond or other form of 
                security, as prescribed by the Secretary;
                  (B) comply with such other requirements as 
                the Secretary considers necessary to protect 
                the interests of the public and the United 
                States; and
                  (C) provide for the restoration of the lease, 
                easement, or right-of-way.
          (7) Coordination and consultation with affected state 
        and local governments.--The Secretary shall provide for 
        coordination and consultation with the Governor of any 
        State or the executive of any local government that may 
        be affected by a lease, easement, or right-of-way under 
        this subsection.
          (8) Regulations.--Not later than 270 days after the 
        date of enactment of the Energy Policy Act of 2005, the 
        Secretary, in consultation with the Secretary of 
        Defense, the Secretary of the Department in which the 
        Coast Guard is operating, the Secretary of Commerce, 
        heads of other relevant departments and agencies of the 
        Federal Government, and the Governor of any affected 
        State, shall issue any necessary regulations to carry 
        out this subsection.
          (9) Effect of subsection.--Nothing in this subsection 
        displaces, supersedes, limits, or modifies the 
        jurisdiction, responsibility, or authority of any 
        Federal or State agency under any other Federal law.
          (10) Applicability.--This subsection does not apply 
        to any area on the outer Continental Shelf within the 
        exterior boundaries of any unit of the National Park 
        System, National Wildlife Refuge System, or National 
        Marine Sanctuary System, or any National Monument.

           *       *       *       *       *       *       *

  Sec. 24. Remedies and Penalties.--(a) At the request of the 
Secretary, the Secretary of the Army, or the Secretary of the 
Department in which the Coast Guard is operating, the Attorney 
General or a United States attorney shall institute a civil 
action in the district court of the United States for the 
district in which the affected operation is located for a 
temporary restraining order, injunction, or other appropriate 
remedy to enforce any provision of this Act, any regulation or 
order issued under this Act, or any term of a lease, license, 
or permit issued pursuant to this Act.
  [(b)(1) Except as provided in paragraph (2), if any person 
fails to comply with any provision of this Act, or any term of 
a lease, or permit issued pursuant to this Act, or any 
regulation or order issued under this Act, after notice of such 
failure and expiration of any reasonable period allowed for 
corrective action, such person shall be liable for a civil 
penalty of not more than $20,000 for each day of the 
continuance of such failure. The Secretary may assess, collect, 
and compromise any such penalty. No penalty shall be assessed 
until the person charged with a violation has been given an 
opportunity for a hearing. The Secretary shall, by regulation 
at least every 3 years, adjust the penalty specified in this 
paragraph to reflect any increases in the Consumer Price Index 
(all items, United States city average) as prepared by the 
Department of Labor.
  [(2) If a failure described in paragraph (1) constitutes or 
constituted a threat of serious, irreparable, or immediate harm 
or damage to life (including fish and other aquatic life), 
property, any mineral deposit, or the marine, coastal, or human 
environment, a civil penalty may be assessed without regard to 
the requirement of expiration of a period allowed for 
corrective action.]
  (b) Civil Penalties.--
          (1) In general.--Except as provided in paragraph (2), 
        any person who fails to comply with any provision of 
        this Act, or any term of a lease, license, or permit 
        issued pursuant to this Act, or any regulation or order 
        issued under this Act, shall be liable for a civil 
        administrative penalty of not more than $75,000 for 
        each day of the continuance of such failure. The 
        Secretary may assess, collect, and compromise any such 
        penalty.
          (2) Opportunity for a hearing.--No penalty shall be 
        assessed until the person charged with a violation has 
        been given an opportunity for a hearing.
          (3) Adjustment for inflation.--The Secretary shall, 
        by regulation at least every 3 years, adjust the 
        penalty specified in this paragraph to reflect any 
        increases in the Consumer Price Index (all items, 
        United States city average) as prepared by the 
        Department of Labor.
          (4) Threat of harm.--If a failure described in 
        paragraph (1) constitutes or constituted a threat of 
        harm or damage to life, property, any mineral deposit, 
        or the marine, coastal, or human environment, a civil 
        penalty of not more than $150,000 shall be assessed for 
        each day of the continuance of the failure.
  (c) Any person who knowingly and willfully (1) violates any 
provision of this Act, any term of a lease, license, or permit 
issued pursuant to this Act, or any regulations or order issued 
under the authority of this Act designed to protect health, 
safety, or the environment or conserve natural resources, (2) 
makes any false statement, representation, or certification in 
any application, record, report, or other document filed or 
required to be maintained under this Act, (3) falsifies, 
tampers with, or renders inaccurate any monitoring device or 
method of record required to be maintained under this Act, or 
(4) reveals any data or information required to be kept 
confidential by this Act shall, upon conviction, be punished by 
a fine of not more than [$100,000] $1,000,000, or by 
imprisonment for not more than ten years, or both. Each day 
that a violation under clause (1) of this subsection continues, 
or each day that any monitoring devise or data recorder remains 
inoperative or inaccurate because of any activity described in 
clause (3) of this subsection, shall constitute a separate 
violation.
  (d) Whenever a corporation or other entity is subject to 
prosecution under subsection (c) of this section, any officer 
or agent of such corporation or entity who [knowingly and 
willfully authorized, ordered, or carried out] authorized, 
ordered, carried out, or through reckless disregard of the law 
caused the proscribed activity shall be subject to the same 
fines or imprisonment, or both, as provided for under 
subsection (c) of this section.
  (e) The remedies and penalties prescribed in this Act shall 
be concurrent and cumulative and the exercise of one shall not 
preclude the exercise of the others. Further, the remedies and 
penalties prescribed in this Act shall be in addition to any 
other remedies and penalties afforded by any other law or 
regulation.

           *       *       *       *       *       *       *

  Sec. 27. Federal Purchase and Disposition of Oil and Gas.--
(a)(1) Except as may be necessary to comply with the provisions 
of sections 6 and 7 of this Act, all royalties or net profit 
shares, or both accruing to the United States under any oil and 
gas lease issued or maintained in accordance with this Act, 
shall, on demand of the Secretary, be paid in oil or gas[.], 
except that the Secretary may not demand such payment in oil or 
gas if the amount of such payment would exceed the amount 
necessary to fill the strategic petroleum reserve.
  (2) The United States shall have the right to purchase not to 
exceed 16\2/3\ per centum by volume of the oil and gas produced 
pursuant to a lease issued or maintained in accordance with 
this Act, at the regulated price, or, if no regulated price 
applies, at the fair market value at the well head of the oil 
and gas saved, removed, or sold, except that any oil or gas 
obtained by the United States as royalty or net profit share 
shall be credited against the amount that may be purchased 
under this subsection.
  (3) Title to any royalty, net profit share, or purchased oil 
or gas may be transferred, upon request, by the Secretary to 
the Secretary of Defense, to the Administrator of the General 
Services Administration, or to the Secretary of Energy, for 
disposal within the Federal Government.
  (b)(1) The Secretary, except as provided in this subsection, 
may offer to the public and sell by competitive bidding for not 
more than its regulated price, or, if no regulated price 
applies, not less than its fair market value, any part of the 
oil (A) obtained by the United States pursuant to any lease as 
royalty or net profit share, or (B) purchased by the United 
States pursuant to subsection (a)(2) of this section.
  (2) Whenever, after consultation with the Secretary of 
Energy, the Secretary determines that small refiners do not 
have access to adequate supplies of oil at equitable prices, 
the Secretary may dispose of any oil which is taken as a 
royalty or net profit share accruing or reserved to the United 
States pursuant to any lease issued or maintained under this 
Act, or purchased by the United States pursuant to subsection 
(a)(2) of this section, by conducting a lottery for the sale of 
such oil, or may equitably allocate such oil among the 
competitors for the purchase of such oil, at the regulated 
price, or if no regulated price applies, at its fair market 
value. The Secretary shall limit participation in any 
allocation or lottery sale to assure such access and shall 
publish notice of such allocation or sale, and the terms 
thereof, at least thirty days in advance. Such notice shall 
include qualifications for participation, the amount of oil to 
be sold, and any limitation in the amount of oil which any 
participant may be entitled to purchase.
  (3) The Secretary may only sell or otherwise dispose of oil 
described in paragraph (1) of this subsection in accordance 
with any provision of law, or regulations issued in accordance 
with such provisions, which provide for the Secretary of Energy 
to allocate, transfer, exchange, or sell oil in amounts or at 
prices determined by such provision of law or regulations.
  (c)(1) Except as provided in paragraph (2) of this 
subsection, the Secretary, pursuant to such terms as he 
determines, may offer to the public and sell by competitive 
bidding for not more than its regulated price, or, if no 
regulated price applies, not less than its fair market value 
any part of the gas (A) obtained by the United States pursuant 
to a lease as royalty or net profit share, or (B) purchased by 
the United States pursuant to subsection (a)(2) of this 
section.
  (2) Whenever, after consultation with and advice from the 
Secretary of Energy, the Federal Energy Regulatory Commission 
determines that an emergency shortage of natural gas is 
threatening to cause severe economic or social dislocation in 
any region of the United States and that such region can be 
serviced in a practical, feasible, and efficient manner by 
royalty, net profit share, or purchased gas obtained pursuant 
to the provisions of this section, the Secretary of the 
Interior may allocate or conduct a lottery for the sale of such 
gas, and shall limit participation in any allocation or lottery 
sale of such gas to any person servicing such region, but he 
shall not sell any such gas for more than its regulated price, 
or, if no regulated price applies, less than its fair market 
value. Prior to selling or allocating any gas pursuant to this 
subsection, the Secretary shall consult with the Federal Energy 
Regulatory Commission.
  (d) The lessee shall take any Federal oil or gas for which no 
acceptable bids are received, as determined by the Secretary, 
and which is not transferred pursuant to subsection (a)(3) of 
this section, and shall pay to the United States a cash amount 
equal to the regulated price, or, if no regulated price 
applies, the fair market value of the oil or gas so obtained.
  (e) As used in this section--
          (1) the term ``regulated price'' means the highest 
        price--
                  (A) at which oil may be sold pursuant to the 
                Emergency Petroleum Allocation Act of 1973 and 
                any rule or order issued under such Act;
                  (B) at which natural gas Act, any other Act, 
                regulations governing natural gas pricing, or 
                any rule or order issued under any such Act or 
                any such regulations; or
                  (C) at which either Federal oil or gas may be 
                sold under any other provision of law or rule 
                or order thereunder which sets a price (or 
                manner for determining a price) for oil or gas; 
                and
          (2) the term ``small refiner'' has the meaning given 
        such term by Small Business Administration Standards 
        128.3-8 (d) and (g), as in effect on the date of 
        enactment of this section or as thereafter revised or 
        amended.
  (f) Nothing in this section shall prohit the right of the 
United States to purchase any oil or gas produced on the outer 
Continental Shelf as provided by section 12(b) of this Act.

           *       *       *       *       *       *       *

                              ----------                              


                       ENERGY POLICY ACT OF 2005



           *       *       *       *       *       *       *
TITLE III--OIL AND GAS

           *       *       *       *       *       *       *


Subtitle E--Production Incentives

           *       *       *       *       *       *       *


[SEC. 344. INCENTIVES FOR NATURAL GAS PRODUCTION FROM DEEP WELLS IN THE 
                    SHALLOW WATERS OF THE GULF OF MEXICO.

  [(a) Royalty Incentive Regulations for Ultra Deep Gas 
Wells.--
          [(1) In general.--Not later than 180 days after the 
        date of enactment of this Act, in addition to any other 
        regulations that may provide royalty incentives for 
        natural gas produced from deep wells on oil and gas 
        leases issued pursuant to the Outer Continental Shelf 
        Lands Act (43 U.S.C. 1331 et seq.), the Secretary shall 
        issue regulations granting royalty relief suspension 
        volumes of not less than 35 billion cubic feet with 
        respect to the production of natural gas from ultra 
        deep wells on leases issued in shallow waters less than 
        400 meters deep located in the Gulf of Mexico wholly 
        west of 87 degrees, 30 minutes west longitude. 
        Regulations issued under this subsection shall be 
        retroactive to the date that the notice of proposed 
        rulemaking is published in the Federal Register.
          [(2) Suspension volumes.--The Secretary may grant 
        suspension volumes of not less than 35 billion cubic 
        feet in any case in which--
                  [(A) the ultra deep well is a sidetrack; or
                  [(B) the lease has previously produced from 
                wells with a perforated interval the top of 
                which is at least 15,000 feet true vertical 
                depth below the datum at mean sea level.
          [(3) Definitions.--In this subsection:
                  [(A) Ultra deep well.--The term ``ultra deep 
                well'' means a well drilled with a perforated 
                interval, the top of which is at least 20,000 
                true vertical depth below the datum at mean sea 
                level.
                  [(B) Sidetrack.--
                          [(i) In general.--The term 
                        ``sidetrack'' means a well resulting 
                        from drilling an additional hole to a 
                        new objective bottom-hole location by 
                        leaving a previously drilled hole.
                          [(ii) Inclusion.--The term 
                        ``sidetrack'' includes--
                                  [(I) drilling a well from a 
                                platform slot reclaimed from a 
                                previously drilled well;
                                  [(II) re-entering and 
                                deepening a previously drilled 
                                well; and
                                  [(III) a bypass from a 
                                sidetrack, including drilling 
                                around material blocking a hole 
                                or drilling to straighten a 
                                crooked hole.
  [(b) Royalty Incentive Regulations for Deep Gas Wells.--Not 
later than 180 days after the date of enactment of this Act, in 
addition to any other regulations that may provide royalty 
incentives for natural gas produced from deep wells on oil and 
gas leases issued pursuant to the Outer Continental Shelf Lands 
Act (43 U.S.C. 1331 et seq.), the Secretary shall issue 
regulations granting royalty relief suspension volumes with 
respect to production of natural gas from deep wells on leases 
issued in waters more than 200 meters but less than 400 meters 
deep located in the Gulf of Mexico wholly west of 87 degrees, 
30 minutes west longitude. The suspension volumes for deep 
wells within 200 to 400 meters of water depth shall be 
calculated using the same methodology used to calculate the 
suspension volumes for deep wells in the shallower waters of 
the Gulf of Mexico, and in no case shall the suspension volumes 
for deep wells within 200 to 400 meters of water depth be lower 
than those for deep wells in shallower waters. Regulations 
issued under this subsection shall be retroactive to the date 
that the notice of proposed rulemaking is published in the 
Federal Register.
  [(c) Limitations.--The Secretary may place limitations on the 
royalty relief granted under this section based on market 
price. The royalty relief granted under this section shall not 
apply to a lease for which deep water royalty relief is 
available.

[SEC. 345. ROYALTY RELIEF FOR DEEP WATER PRODUCTION.

  [(a) In General.--Subject to subsections (b) and (c), for 
each tract located in water depths of greater than 400 meters 
in the Western and Central Planning Area of the Gulf of Mexico 
(including the portion of the Eastern Planning Area of the Gulf 
of Mexico encompassing whole lease blocks lying west of 87 
degrees, 30 minutes West longitude), any oil or gas lease sale 
under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et 
seq.) occurring during the 5-year period beginning on the date 
of enactment of this Act shall use the bidding system 
authorized under section 8(a)(1)(H) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1337(a)(1)(H)).
  [(b) Suspension of Royalties.--The suspension of royalties 
under subsection (a) shall be established at a volume of not 
less than--
          [(1) 5,000,000 barrels of oil equivalent for each 
        lease in water depths of 400 to 800 meters;
          [(2) 9,000,000 barrels of oil equivalent for each 
        lease in water depths of 800 to 1,600 meters;
          [(3) 12,000,000 barrels of oil equivalent for each 
        lease in water depths of 1,600 to 2,000 meters; and
          [(4) 16,000,000 barrels of oil equivalent for each 
        lease in water depths greater than 2,000 meters.
  [(c) Limitation.--The Secretary may place limitations on 
royalty relief granted under this section based on market 
price.]

           *       *       *       *       *       *       *

                              ----------                              


            NAVAL PETROLEUM RESERVES PRODUCTION ACT OF 1976



           *       *       *       *       *       *       *
TITLE I--NATIONAL PETROLEUM RESERVE IN ALASKA

           *       *       *       *       *       *       *


SEC. 107. COMPETITIVE LEASING OF OIL AND GAS.

  (a) In General.--The Secretary shall conduct an expeditious 
program of competitive leasing of oil and gas in the Reserve in 
accordance with this Act.
  (b) Mitigation of Adverse Effects.--Activities undertaken 
pursuant to this Act shall include or provide for such 
conditions, restrictions, and prohibitions as the Secretary 
deems necessary or appropriate to mitigate reasonably 
foreseeable and significantly adverse effects on the surface 
resources of the National Petroleum Reserve in Alaska.
  (c) Land Use Planning; BLM Wilderness Study.--The provisions 
of section 202 and section 603 of the Federal Lands Policy and 
Management Act of 1976 (90 Stat. 2743) shall not be applicable 
to the Reserve.
  (d) First Lease Sale.--The first lease sale shall be 
conducted within twenty months of the date of enactment of this 
Act: Provided, That the first lease sale shall be conducted 
only after publication of a final environmental impact 
statement if such is deemed necessary under the provisions of 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 
et seq.).
  (e) Withdrawals.--The withdrawals established by section 102 
of Public Law 94-258 are rescinded for the purposes of the oil 
and gas leasing program authorized under this section.
  (f) Bidding Systems.--Bidding systems used in lease sales 
shall be based on bidding systems included in section 
205(a)(1)(A) through (H) of the Outer Continental Shelf Lands 
Act Amendments of 1978 (92 Stat. 629).
  (g) Geological Structures.--Lease tracts may encompass 
identified geological structures.
  (h) Size of Lease Tracts.--The size of lease tracts may be up 
to sixty thousand acres, as determined by the Secretary.
  (i) Terms.--
          [(1) In general.--] .--Each lease shall be issued for 
        an initial period of not more than 10 years, and shall 
        be extended for so long thereafter as oil or gas is 
        produced from the lease in paying quantities, oil or 
        gas is capable of being produced in paying quantities, 
        or drilling or reworking operations, as approved by the 
        Secretary, are conducted on the leased land.
          [(2) Renewal of leases with discoveries.--At the end 
        of the primary term of a lease the Secretary shall 
        renew for an additional 10-year term a lease that does 
        not meet the requirements of paragraph (1) if the 
        lessee submits to the Secretary an application for 
        renewal not later than 60 days before the expiration of 
        the primary lease and the lessee certifies, and the 
        Secretary agrees, that hydrocarbon resources were 
        discovered on one or more wells drilled on the leased 
        land in such quantities that a prudent operator would 
        hold the lease for potential future development.
          [(3) Renewal of leases without discoveries.--At the 
        end of the primary term of a lease the Secretary shall 
        renew for an additional 10-year term a lease that does 
        not meet the requirements of paragraph (1) if the 
        lessee submits to the Secretary an application for 
        renewal not later than 60 days before the expiration of 
        the primary lease and pays the Secretary a renewal fee 
        of $100 per acre of leased land, and--
                  [(A) the lessee provides evidence, and the 
                Secretary agrees that, the lessee has 
                diligently pursued exploration that warrants 
                continuation with the intent of continued 
                exploration or future potential development of 
                the leased land; or
                  [(B) all or part of the lease--
                          [(i) is part of a unit agreement 
                        covering a lease described in 
                        subparagraph (A); and
                          [(ii) has not been previously 
                        contracted out of the unit.
          [(4) Applicability.--This subsection applies to a 
        lease that is in effect on or after the date of 
        enactment of the Energy Policy Act of 2005.
          [(5) Expiration for failure to produce.--
        Notwithstanding any other provision of this Act, if no 
        oil or gas is produced from a lease within 30 years 
        after the date of the issuance of the lease the lease 
        shall expire.
          [(6) Termination.--No lease issued under this section 
        covering lands capable of producing oil or gas in 
        paying quantities shall expire because the lessee fails 
        to produce the same due to circumstances beyond the 
        control of the lessee.]
  (j) Unit Agreements.--
          (1) In general.--For the purpose of conservation of 
        the natural resources of all or part of any oil or gas 
        pool, field, reservoir, or like area, lessees 
        (including representatives) of the pool, field, 
        reservoir, or like area may unite with each other, or 
        jointly or separately with others, in collectively 
        adopting and operating under a unit agreement for all 
        or part of the pool, field, reservoir, or like area 
        (whether or not any other part of the oil or gas pool, 
        field, reservoir, or like area is already subject to 
        any cooperative or unit plan of development or 
        operation), if the Secretary determines the action to 
        be necessary or advisable in the public interest. In 
        determining the public interest, the Secretary should 
        consider, among other things, the extent to which the 
        unit agreement will minimize the impact to surface 
        resources of the leases and will facilitate 
        consolidation of facilities.
          (2) Consultation.--In making a determination under 
        paragraph (1), the Secretary shall consult with and 
        provide opportunities for participation by the State of 
        Alaska or a Regional Corporation (as defined in section 
        3 of the Alaska Native Claims Settlement Act (43 U.S.C. 
        1602)) with respect to the creation or expansion of 
        units that include acreage in which the State of Alaska 
        or the Regional Corporation has an interest in the 
        mineral estate.
          (3) Production allocation methodology.--(A) The 
        Secretary may use a production allocation methodology 
        for each participating area within a unit that includes 
        solely Federal land in the Reserve.
          (B) The Secretary shall use a production allocation 
        methodology for each participating area within a unit 
        that includes Federal land in the Reserve and non-
        Federal land based on the characteristics of each 
        specific oil or gas pool, field, reservoir, or like 
        area to take into account reservoir heterogeneity and 
        area variation in reservoir producibility across 
        diverse leasehold interests. The implementation of the 
        foregoing production allocation methodology shall be 
        controlled by agreement among the affected lessors and 
        lessees.
          (4) Benefit of operations.--Drilling, production, and 
        well reworking operations performed in accordance with 
        a unit agreement shall be deemed to be performed for 
        the benefit of all leases that are subject in whole or 
        in part to such unit agreement.
          (5) Pooling.--If separate tracts cannot be 
        independently developed and operated in conformity with 
        an established well spacing or development program, any 
        lease, or a portion thereof, may be pooled with other 
        lands, whether or not owned by the United States, under 
        a communitization or drilling agreement providing for 
        an apportionment of production or royalties among the 
        separate tracts of land comprising the drilling or 
        spacing unit when determined by the Secretary of the 
        Interior (in consultation with the owners of the other 
        land) to be in the public interest, and operations or 
        production pursuant to such an agreement shall be 
        deemed to be operations or production as to each such 
        lease committed to the agreement.
  [(k) Exploration Incentives.--
          [(1) In general.--
                  [(A) Waiver, suspension, or reduction.--To 
                encourage the greatest ultimate recovery of oil 
                or gas or in the interest of conservation, the 
                Secretary may waive, suspend, or reduce the 
                rental fees or minimum royalty, or reduce the 
                royalty on an entire leasehold (including on 
                any lease operated pursuant to a unit 
                agreement), whenever (after consultation with 
                the State of Alaska and the North Slope Borough 
                of Alaska and the concurrence of any Regional 
                Corporation for leases that include land that 
                was made available for acquisition by the 
                Regional Corporation under the provisions of 
                section 1431(o) of the Alaska National Interest 
                Lands Conservation Act (16 U.S.C. 3101 et 
                seq.)) in the judgment of the Secretary it is 
                necessary to do so to promote development, or 
                whenever in the judgment of the Secretary the 
                leases cannot be successfully operated under 
                the terms provided therein.
                  [(B) Applicability.--This paragraph applies 
                to a lease that is in effect on or after the 
                date of enactment of the Energy Policy Act of 
                2005.
          [(2) Suspension of operations and production.--The 
        Secretary may direct or assent to the suspension of 
        operations and production on any lease or unit.
          [(3) Suspension of payments.--If the Secretary, in 
        the interest of conservation, shall direct or assent to 
        the suspension of operations and production on any 
        lease or unit, any payment of acreage rental or minimum 
        royalty prescribed by such lease or unit likewise shall 
        be suspended during the period of suspension of 
        operations and production, and the term of such lease 
        shall be extended by adding any such suspension period 
        to the lease.]
  (l) Receipts.--All receipts from sales, rentals, bonuses, and 
royalties on leases issued pursuant to this section shall be 
paid into the Treasury of the United States: Provided, That 50 
percent thereof shall be paid by the Secretary of the Treasury 
semiannually, as soon thereafter as practicable after March 30 
and September 30 each year, to the State of Alaska for: (1) 
planning; (2) construction, maintenance, and operation of 
essential public facilities; and (3) other necessary provisions 
of public service: Provided further, That in the allocation of 
such funds, the State shall give priority to use by 
subdivisions of the State most directly or severely impacted by 
development of oil and gas leased under this Act.
  (m) Explorations.--Any agency of the United States and any 
person authorized by the Secretary may conduct geological and 
geophysical explorations in the National Petroleum Reserve in 
Alaska which do not interfere with operations under any 
contract maintained or granted previously. Any information 
acquired in such explorations shall be subject to the 
conditions of 43 U.S.C. 1352(a)(l)(A).
  (n) Environmental Impact Statements.--
          (1) Judicial review.--Any action seeking judicial 
        review of the adequacy of any program or site-specific 
        environmental impact statement under section 102 of the 
        National Environmental Policy Act of 1969 (42 U.S.C. 
        4332) concerning oil and gas leasing in the National 
        Petroleum Reserve-Alaska shall be barred unless brought 
        in the appropriate District Court within 60 days after 
        notice of the availability of such statement is 
        published in the Federal Register.
          (2) Initial lease sales.--The detailed environmental 
        studies and assessments that have been conducted on the 
        exploration program and the comprehensive land-use 
        studies carried out in response to sections 105 (b) and 
        (c) of Public Law 94-258 shall be deemed to have 
        fulfilled the requirements of section 102(2)(c) of the 
        National Environmental Policy Act (Public Law 91-190), 
        with regard to the first two oil and gas lease sales in 
        the National Petroleum Reserve-Alaska: Provided, That 
        not more than a total of 2,000,000 acres may be leased 
        in these two sales: Provided further, That any 
        exploration or production undertaken pursuant to this 
        section shall be in accordance with section 104(a).
  (o) Regulations.--As soon as practicable after the date of 
enactment of the Energy Policy Act of 2005, the Secretary shall 
issue regulations to implement this section.
  (p) Waiver of Administration for Conveyed Lands.--
          (1) In general.--Notwithstanding section 14(g) of the 
        Alaska Native Claims Settlement Act (43 U.S.C. 
        1613(g))--
                  (A) the Secretary of the Interior shall waive 
                administration of any oil and gas lease to the 
                extent that the lease covers any land in the 
                Reserve in which all of the subsurface estate 
                is conveyed to the Arctic Slope Regional 
                Corporation (referred to in this subsection as 
                the ``Corporation'');
                  (B)(i) in a case in which a conveyance of a 
                subsurface estate described in subparagraph (A) 
                does not include all of the land covered by the 
                oil and gas lease, the person that owns the 
                subsurface estate in any particular portion of 
                the land covered by the lease shall be entitled 
                to all of the revenues reserved under the lease 
                as to that portion, including, without 
                limitation, all the royalty payable with 
                respect to oil or gas produced from or 
                allocated to that portion;
                          (ii) in a case described in clause 
                        (i), the Secretary of the Interior 
                        shall--
                                  (I) segregate the lease into 
                                2 leases, 1 of which shall 
                                cover only the subsurface 
                                estate conveyed to the 
                                Corporation; and
                                  (II) waive administration of 
                                the lease that covers the 
                                subsurface estate conveyed to 
                                the Corporation; and
                          (iii) the segregation of the lease 
                        described in clause (ii)(I) has no 
                        effect on the obligations of the lessee 
                        under either of the resulting leases, 
                        including obligations relating to 
                        operations, production, or other 
                        circumstances (other than payment of 
                        rentals or royalties); and
                  (C) nothing in this subsection limits the 
                authority of the Secretary of the Interior to 
                manage the federally-owned surface estate 
                within the Reserve.

           *       *       *       *       *       *       *


                     DISSENTING VIEWS ON H.R. 1517

    H.R. 1517 would make numerous alterations to the Mineral 
Leasing Act of 1920, the Outer Continental Shelf Lands Act, and 
the Federal Oil and Gas Royalty Management Act that will make 
oil and gas leasing on federal land more difficult, and in turn 
reduce domestic energy development, driving up energy costs for 
American families. H.R. 1517 would increase virtually every 
royalty rate and fee for federal oil and gas leasing and 
production is increased. This would have the effect of ``nickel 
and diming'' federal oil and gas operations into a potentially 
unprofitable state. Committee Republicans are strongly opposed.
    H.R. 1517 has been described by supporters as ``seeking 
greater return for the taxpayer'' by raising royalties, minimum 
bids, and rental fees for federal oil and gas development. 
However, raising rates and fees would make development on 
federal land less attractive to operators compared to state and 
private lands. State royalty rates are higher than the federal 
royalty rate, but operators do not have to contend with the 
cumbersome, costly and unpredictable federal regulatory process 
on state- and privately-owned lands. As a result, even with 
higher royalty rates, state- and privately-owned lands are 
often more attractive to investment.
    H.R. 1517 would also make several other unnecessary and 
politically motivated changes to the statutes that govern 
mineral leasing onshore and offshore. For instance, it would 
repeal the Secretary of the Interior's authority to relax 
royalty rates in certain areas offshore Alaska and the Gulf of 
Mexico to incentivize investment. Additionally, the bill would 
allow the Secretary to take more time to issue a decision on 
administrative appeals, adding more uncertainty and cost to the 
federal leasing and permitting process. H.R. 1517 would also 
require royalty payments on all gas produced on a federal 
lease, including gas utilized for lease operations and gas that 
is released via venting and flaring.
    Disincentivizing production on federal lands will directly 
impact funding to energy producing states. For instance, 
onshore states receive approximately half of the revenues 
produced within their borders, which they go on to use for 
public services such as education. Arbitrarily increasing the 
cost of operating on federal lands will also reduce the supply 
of reliable, affordable energy, as well as threatening well-
paying jobs in rural and coastal communities. Legislative 
efforts should instead focus on how to allow for responsible 
development of federal oil and gas resources as part of 
America's energy mix.
    For these reasons, I oppose H.R. 1517.
                                                   Bruce Westerman.

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