[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3985 Introduced in Senate (IS)]
109th CONGRESS
2d Session
S. 3985
To promote the recovery of oil and gas revenues on the Outer
Continental Shelf, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 28, 2006
Ms. Landrieu introduced the following bill; which was read twice and
referred to the Committee on Energy and Natural Resources
_______________________________________________________________________
A BILL
To promote the recovery of oil and gas revenues on the Outer
Continental Shelf, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Outer Continental Shelf Royalty
Reform and Enhancement Act of 2006''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Gulf producing state.--The term ``Gulf producing
State'' means each of the States of Alabama, Louisiana,
Mississippi, and Texas.
(2) Qualified outer continental shelf revenues.--
(A) In general.--The term ``qualified outer
Continental Shelf revenues'' means all rentals,
royalties, bonus bids, and other sums due and payable
to the United States under section 5.
(B) Exclusions.--The term ``qualified outer
Continental Shelf revenues'' does not include--
(i) revenues from the forfeiture of a bond
or other surety securing obligations other than
royalties, civil penalties, or royalties taken
by the Secretary in-kind and not sold; or
(ii) revenues generated from leases subject
to section 8(g) of the Outer Continental Shelf
Lands Act (43 U.S.C. 1337(g)).
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
SEC. 3. PRICE THRESHOLD REQUIREMENT FOR FUTURE LEASES.
Notwithstanding any other provision of law, the Secretary shall
place limitations based on market price on the royalty relief granted
under any lease for the production of oil or natural gas entered into
on or after the date of enactment of this Act.
SEC. 4. CLARIFICATION OF AUTHORITY TO IMPOSE PRICE THRESHOLDS FOR
CERTAIN LEASE SALES.
Congress reaffirms the authority of the Secretary under section
8(a)(1)(H) of the Outer Continental Shelf Lands Act (43 U.S.C.
1337(a)(1)(H)) to vary, based on the price of production from a lease,
the suspension of royalties under any lease subject to section 304 of
the Outer Continental Shelf Deep Water Royalty Relief Act (43 U.S.C.
1337 note; Public Law 104-58).
SEC. 5. RECOVERY OF REVENUE FROM LEASES WITHOUT PRICE THRESHOLDS.
(a) Offer To Amend Payment Responsibilities.--
(1) In general.--The Secretary shall offer to enter into
written agreements to amend the payment responsibilities under
each lease entered into by the Secretary that--
(A) authorizes the production of oil or natural gas
on the Outer Continental Shelf;
(B) provides for relief from the payment of
royalties; and
(C) does not provide for the suspension of the
relief based on an increase in the price of oil or
natural gas, respectively, above specified thresholds.
(2) Offers.--Not later than 30 days after the date of
enactment of this Act, the Secretary shall provide each lessee
that has entered into a lease described in paragraph (1) with a
separate written offer to amend the payment responsibilities of
the lessee under the lease.
(3) Multiple lessees.--In carrying out this subsection, if
multiple persons own a share of the lease, the Secretary may
enter into a separate agreement with each person that reflects
the respective interest of the person in the lease.
(4) Price thresholds.--The offer shall propose imposing
price thresholds beginning in the calendar year in which the
offer is accepted at a level that is consistent with the price
thresholds contained in outer Continental Shelf leases that
contained price thresholds that were entered into for calendar
years 1996, 1997, and 2000.
(b) Increased Royalty Rates.--In addition to the authority provided
under subsection (a), the Secretary may increase the royalty rate on
all leases entered into by the Secretary on or after the date of
enactment of this Act for the production of oil or natural gas on the
outer Continental Shelf to a rate that is necessary to recover the
revenues lost from leases described in subsection (a)(1) in an amount
that (in conjunction with written agreements entered into under
subsection (a)) is sufficient to recover $12,000,000,000 during the
period of fiscal years 2007 through 2018.
SEC. 6. DISPOSITION OF RECOVERED QUALIFIED OUTER CONTINENTAL SHELF
REVENUES.
(a) In General.--Notwithstanding section 9 of the Outer Continental
Shelf Lands Act (43 U.S.C. 1338) and subject to the other provisions of
this section, for each applicable fiscal year, the Secretary of the
Treasury shall deposit--
(1) 50 percent of qualified outer Continental Shelf
revenues in a special account in the Treasury, to be disbursed
to Gulf producing States by the Secretary in a manner
consistent with section 31(b) of the Outer Continental Shelf
Lands Act (43 U.S.C. 1356a(b)), as determined by the Secretary;
(2) 12\1/2\ percent to provide financial assistance to
States in accordance with section 6 of the Land and Water
Conservation Fund Act of 1965 (16 U.S.C. 460l-8), which shall
be considered income to the Land and Water Conservation Fund
for purposes of section 2 of that Act (16 U.S.C. 460l-5); and
(3) 37\1/2\ percent of qualified outer Continental Shelf
revenues in the general fund of the Treasury, to be used for
deficit reduction.
(b) Timing.--The amounts required to be deposited under paragraphs
(1) and (2) of subsection (a) for the applicable fiscal year shall be
made available in accordance with that paragraph during the fiscal year
immediately following the applicable fiscal year.
(c) Administration.--Amounts made available under paragraphs (1)
and (2) of subsection (a) shall--
(1) be made available, without further appropriation, in
accordance with this section;
(2) remain available until expended; and
(3) be in addition to any amounts appropriated under--
(A) the Outer Continental Shelf Lands Act (43
U.S.C. 1331 et seq.);
(B) the Land and Water Conservation Fund Act of
1965 (16 U.S.C. 460l-4 et seq.); or
(C) any other provision of law.
SEC. 7. FEDERAL GUARANTEE OF STATE BOND.
The Secretary shall guarantee the repayment of a bond issued by the
State of Louisiana for constructing and carrying out coastal wetland
restoration projects and related storm protection infrastructure (to be
repaid using qualified outer Continental Shelf revenues received by the
State for fiscal years 2017 through 2027) in an amount equal to 100
percent of the outstanding principal of the bond, on a determination by
the Secretary that--
(1) the amount of the bond does not exceed 80 percent of
the estimated amount of qualified outer Continental Shelf
revenues the State will receive for fiscal years 2017 through
2027;
(2) the funds will be used in accordance with a plan
submitted by the State; and
(3) the bond is in a registered form and contains
appropriate legal guarantees for repayment using qualified
Outer Continental shelf revenues for fiscal years 2017 through
2027.
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