Federal Oil and Gas Lease Management Improvement Act of 1998

short title

    Section 1. This Act may be referred to as the ``Federal Oil and Gas 
Lease Management Improvement Act of 1998''.

                         findings and purposes

    Sec. 2. (a) Congress finds that--
            (1) State governments have a long and successful history of 
        regulation of operations to explore for and produce oil and 
        gas. The special role of the States was recognized by Congress 
        in 1935 through its ratification under the Constitution of the 
        Interstate Compact to Conserve Oil and Gas.
            (2) Under the guidance of the Interstate Oil and Gas 
        Compact Commission, States have established effective 
        regulation of the oil and natural gas industry and subject 
        their programs to periodic peer review through the Commission.
            (3) It is significantly less expensive for State 
        governments than for the Federal Government, through its Bureau 
        of Land Management, to regulate oil and gas lease operations on 
        Federal lands.
            (4) Significant cost savings could be achieved, with no 
        reduction in environmental protection or in the conservation of 
        oil and gas resources, by having the Federal Government defer 
        to State regulation of oil and gas lease operations on Federal 
        lands.
            (5) State governments carry out regulatory oversight on 
        State, private, and Federal lands. Oil and gas companies 
        operating on federal lands are burdened with the additional 
        cost and time of duplicative oversight by both State and 
        Federal conservation authorities. Additional cost savings could 
        be achieved within the private sector by having the Bureau of 
        Land Management defer to State regulation.
            (6) The Federal Government is presently cast in dual 
        opposing roles as a mineral owner and regulator. State 
        regulation of oil and gas operations on Federal lands would 
        eliminate this conflict of interest.
            (7) It remains the responsibility of the Secretary of the 
        Interior to carry out the Federal policy set forth in the 
        Mining and Minerals Policy Act of 1970 (30 U.S.C. Sec. 21a) to 
        foster and encourage private sector enterprise in the 
        development of economically sound and stable domestic mineral 
        industries, and the orderly and economic development of 
        domestic mineral resources and reserves, including oil and gas 
        resources.
            (8) Resource management analyses and surveys conducted 
        under the conservation laws of the United States benefit the 
        public at large and are an expense properly borne by the 
        Federal Government.
    (b) The purposes of this Act are--
            (1) to transfer from the Bureau of Land Management to each 
        State in which the Federal lands are present authority to 
        regulate oil and gas operations on leased tracts and related 
        operations as fully as if the operations were occurring on 
        privately owned land,
            (2) to share the costs saved through more efficient State 
        enforcement among State governments and the Federal treasury,
            (3) to prevent the imposition of unwarranted delays and 
        recoupments of Federal administrative costs on Federal oil and 
        gas lessees,
            (4) to effect no change in the administration of Indian 
        lands, and
            (5) to ensure that those funds deducted from the States' 
        net receipt share are directly tied to administrative costs 
        related to oil and gas on Federal lands.

                              definitions

    Sec. 3. For purposes of this Act--
            (1) The term ``Federal lands'' means all lands and 
        interests in lands 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. The term excludes ``Indian 
        lands'' as that term is defined in 30 U.S.C. Sec. 1702(3) and 
        submerged lands on the ``Outer Continental Shelf'' as that term 
        is defined in the Outer Continental Shelf Lands Act, 43 U.S.C. 
        Sec. Sec. 1331 et seq., other than submerged lands subject to 
        section 8(g) of that Act, 43 U.S.C. Sec. 1337(g).
            (2) The term ``oil and gas conservation authority'' means 
        the agency or agencies in each State responsible for regulating 
        for conservation purposes operations to explore for and produce 
        oil and natural gas.

                           application of act

    Sec. 4. For the purposes of this Act, Federal lands subject to 
section 8(g) of the Outer Continental Shelf Lands Act are deemed to be 
within the state with which revenues from those lands are shared. 
However, nothing in this Act shall be construed to give a State a 
property right or interest in any Federal lease or land.

 TITLE I--DEFERRAL TO STATE REGULATION OF OIL AND GAS LEASE OPERATIONS 
                            ON FEDERAL LANDS

    Sec. 101. (a) No sooner than 6 months from the date of enactment of 
this Act, a State may notify the Secretary of the Interior of its 
intent to accept authority for regulation of operations, as described 
in paragraphs (1) through (11) of this subsection, under oil and gas 
leases on Federal lands within the State. Effective 6 months after the 
Secretary receives the state's notice, the authority is transferred 
from the Bureau of Land Management to the State. This authority 
includes--
            (1) processing and approving Applications for Permits to 
        Drill, subject to surface use agreements and other terms and 
        conditions determined by the Secretary;
            (2) production operations;
            (3) well testing;
            (4) well completion;
            (5) well spacing;
            (6) communization;
            (7) conversion of a producing well to a water well;
            (8) well abandonment procedures;
            (9) inspections;
            (10) enforcement activities; and
            (11) site security.
    (b) Effective on the date of transfer, the Bureau of Land 
Management shall no longer include the charges associated with 
performing those authorities transferred in subsection (a) in costs 
charged against the State under section 35(b) of the Mineral Leasing 
Act (30 U.S.C. Sec. 191(b)).
    (c) The Bureau of Land Management and the Forest Service shall 
retain authority over the issuance of leases and the approval of 
surface use plans, and shall spend appropriated funds to assure that 
the agency is making timely decisions respecting oil and gas leasing, 
taking into consideration multiple uses of Federal lands, socioeconomic 
and environmental impacts, and the results of consultations with state 
and local government officials.
    Sec. 102. (a) Following the transfer of authority, no Federal 
agency shall exercise the authority formerly held by the Bureau of Land 
Management as to oil and gas lease operations and related operations on 
Federal lands.
    (b) Following the transfer of authority, each State shall enforce 
its own laws, regulations, and requirements pertaining to oil and gas 
lease operations and related operations with due regard to the national 
interest in the expedited, environmentally sound development of oil and 
gas resources in a manner consistent with oil and gas conservation 
principles.
    (c) The Bureau of Land Management may continue to enforce any 
pending actions respecting acts committed prior to the date authority 
is transferred to a State under section 101(a) until those proceedings 
are concluded.
    (d) All applications respecting oil and gas lease operations and 
related operations on federal lands pending before the Bureau of Land 
Management on the date authority is transferred shall be immediately 
transferred to the oil and gas conservation authority of the State in 
which the given lease is located. The oil and gas conservation 
authority shall act on the application in accordance with its own laws, 
regulations, and requirements.

          TITLE II--USE OF COST SAVINGS FROM STATE REGULATION

    Sec. 201. Subject to available appropriations, the Secretary of the 
Interior shall compensate any State for those costs incurred to carry 
out the authorities transferred under section 101(a). Payment shall be 
made not less than every quarter during the fiscal year. Each State 
seeking compensation shall report to the Secretary a cost breakdown for 
the authorities transferred. Compensation to a State may not exceed 50 
percent of the Bureau of Land Management's allocated cost, under 
section 35(b) of the Mineral Leasing Act, for that State for the fiscal 
year ending September 30, 1997. The Secretary will adjust the maximum 
level of cost compensation at least once every two years to reflect any 
increases in the Consumer Price Index (all items, United States city 
average) as prepared by the Department of Labor, using 1997 as the 
baseline year.
    Sec. 202. Section 35 of the Mineral Leasing Act (30 U.S.C. 
Sec. 191) is amended by adding at the end of subsection (b) the 
following:
            ``(6) The Secretary shall not include, for the purpose of 
        calculating the deduction under paragraph (1), costs of 
        preparing resource management planning documents and analyses 
        for areas in which oil and gas leasing is excluded or areas in 
        which the primary activity under review is not oil and gas 
        leasing and development.''.

               TITLE III--STREAMLINING AND COST REDUCTION

    Sec. 301. (a) Notwithstanding sections 304 and 504 of Public Law 
94-579 (43 U.S.C. Sec. Sec. 1734 and 1764) and section 9701 of title 
31, United States Code, the Department of the Interior may not recover 
its costs with respect to applications and other documents relating to 
oil and gas leases.
    (b) The Bureau of Land Management and the Forest Service shall 
complete any resource management planning documents and analyses within 
90 days of the agency's receipt of any offer, application, or request 
for which planning document or analysis must be prepared. If the agency 
is unable to complete the document or analysis within that time, it 
shall notify the applicant or lessee of the opportunity to prepare the 
required document or analysis for the agency's review and use in 
decision making. The agency for which the document or analysis is 
prepared shall reimburse the applicant or lessee for costs directly 
associated with the preparation of the document or analysis.
    Sec. 302. (a) The Bureau of Land Management and the Forest Service 
shall assure the timely issuance of Federal agency decisions respecting 
oil and gas leasing and operations on federal lands.
    (b) The Bureau of Land Management shall accept or reject an offer 
to lease within 90 days of the filing of the offer. If an offer is not 
acted upon within that time, the offer is deemed accepted.
    (c) The Bureau of Land Management and a State that has accepted 
transfer under section 101(a) shall approve or disapprove an 
Application for Permit to Drill within 30 days of receipt of a complete 
application. If the application is not acted upon within that time, the 
application is deemed approved.
    (d) The Bureau of Land Management or the Forest Service, as the 
case may be, shall approve or disapprove a surface use plan within 30 
days of receipt of a complete plan.
    (e) From the time that a Federal oil and gas lessee or operator 
files a notice of administrative appeal of a decision or order of an 
officer or employee of the Department of the Interior or the Forest 
Service respecting a Federal oil and gas Federal lease, the Department 
or Service shall have two years to issue a final decision in that 
appeal. If no final decision has been issued within that time, the 
appeal is deemed granted.
    Sec. 303. (a) The Bureau of Land Management and the Forest Service 
shall assure that unwarranted denials and stays of lease issuance and 
unwarranted restrictions on lease operations are eliminated from the 
administration of oil and as leasing on Federal lands.
    (b) Lands designated as available for multiple use under Bureau of 
Land Management resource management plans and Forest Service leasing 
analyses shall be available for oil and gas leasing without lease 
stipulations more stringent than restrictions on surface use and 
operations imposed under the laws and regulations of the relevant State 
oil and gas conservation authority unless the Bureau or Service 
includes in its decision approving the management plan or leasing 
analysis a written explanation of why more stringent stipulations are 
warranted. Any decision to require a more stringent stipulation shall 
be administratively appealable and, following a final agency decision, 
judicially reviewable under the Administrative Procedure Act.
    (c) If the Bureau of Land Management or the Forest Service rejects 
an offer to lease on the ground that the land is unavailable for 
leasing, the respective agency shall provide a written, detailed 
explanation of the reasons the land is unavailable for leasing. Where 
the determination of unavailability is based on a previous resource 
management decision, the explanation shall include a careful assessment 
of whether the reasons underlying the previous decision are still 
persuasive. The agency may not reject an offer to lease lands available 
for leasing on the ground that the offer includes lands unavailable for 
leasing, and it must segregate lands available from those unavailable, 
upon the offeror's request following notice by the agency, before 
acting on the offer to lease.
    (d) The Bureau of Land Management or the Forest Service shall 
provide a written, detailed explanation of the reasons for disapproving 
or requiring modifications of any surface use plan or Application for 
Permit to Drill.
    (e) A decision of the Bureau of Land Management or the Forest 
Service respecting an oil and gas lease shall be effective pending 
administrative appeal to the appropriate office within the Department 
of the Interior or the Department of Agriculture unless that office 
grants a stay in response to a petition satisfying the criteria for a 
stay established by 43 CFR Sec. 4.21(b)(1) (1997).
    Sec. 304. By March 31, 1999, the Secretary of the Interior and the 
Secretary of Agriculture will jointly submit a report to the President 
of the Senate and the Speaker of the House of Representatives 
explaining the most efficient means of eliminating overlapping 
jurisdiction, duplication of effort, and inconsistent policymaking and 
policy implementation as between the Bureau of Land Management and the 
Forest Service. The report will include recommendations on changes in 
statute needed to implement the report's conclusions.
    Sec. 305. (a) By March 31, 1999, the Secretary of the Interior will 
publish, through notice in the Federal Register, a national inventory 
of the oil and gas reserves and potential resources underlying Federal 
lands (other than lands governed by section 8(g) of the Outer 
Continental Shelf Lands Act). The inventory will indicate what 
percentage of those reserves and resources is currently available for 
leasing and development. The inventory will further detail what 
percentage of the reserves and resources are on--
            (1) lands now open for leasing but which have never been 
        leased;
            (2) lands open for leasing or development subject to no 
        surface occupancy stipulations; and
            (3) lands open for leasing or development subject to other 
        lease stipulations which have significantly impeded or 
        prevented, or are likely to significantly impede or prevent, 
        development.
    (b) By September 30, 1999, public comments on the inventory will be 
filed. The Secretary of the Interior shall specifically invite comments 
on the effect of Bureau of Land Management resource management 
decisions on past and future oil and gas development.
    (c) By March 31, 2000, the Secretary of the Interior will file a 
report with the President of the Senate and the Speaker of the House of 
Representatives to be comprised of his revised inventory and other 
responses to the public comments. The report will specifically indicate 
what steps the Bureau of Land Management will take to increase the 
percentage of lands open for development of oil and gas resources.

Summary: TABLE OF CONTENTS: Title I: Deferral to State Regulation of Oil and Gas Lease Operations on Federal Lands Title II: Use of Cost Savings from State Regulation Title III: Streamlining and Cost Reduction Federal Oil and Gas Lease Management Improvement Act of 1998 - Title I: Deferral to State Regulation of Oil and Gas Lease Operations on Federal Lands - Authorizes a State to notify the Secretary of the Interior of its intent to accept authority for oil and gas lease operations on Federal lands within such State. Transfers such authority by operation of law from the Bureau of Land Management (BLM) to a State six months after the Secretary receives the State's notice. Title II: Use of Cost Savings from State Regulation - Instructs the Secretary to compensate any State for costs incurred to implement the transferred authorities. Amends the Mineral Leasing Act to direct the Secretary to exclude from the 50 percent deduction from oil, gas, and geothermal revenues, with respect to calculation of specified Federal payments to States, the costs of preparing resource management planning documents and analyses for areas in which oil and gas leasing is excluded, or areas in which the primary activity under review is not oil and gas leasing and development. Title III: Streamlining and Cost Reduction - Prohibits the Department of the Interior from recovering its costs with respect to applications and other documents relating to oil and gas leases. Prescribes guidelines for the decision-making process of the BLM and the Forest Service affecting oil and gas leases and operations. Directs the BLM and the Forest Service to assure that unwarranted denials and stays of lease issuance and unwarranted restrictions on lease operations are eliminated from the administration of oil and gas leasing on Federal lands. Sets forth a timetable for the Secretary of the Interior to: (1) report jointly with the Secretary of Agriculture to the Congress on the most efficient means of eliminating overlap and duplication between the BLM and the Forest Service. (2) publish notice in the Federal Register of a national inventory of oil and gas reserves and potential resources underlying Federal lands. And (3) report to the Congress a revised inventory of such reserves and resources as a result of public comment, and specifically indicate BLM steps to increase the percentage of lands open for oil and gas development.