II 

114TH CONGRESS 

1ST SESSION S. 1310 

To prohibit the Secretary of the Interior from issuing new oil or natural 

gas production leases in the Gulf of Mexico under the Outer Continental 

Shelf Lands Act to a person that does not renegotiate its existing 

leases in order to require royalty payments if oil and natural gas prices 

are greater than or equal to specified price thresholds, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 12, 2015 

Mr. MARKEY introduced the following bill; which was read twice and referred 

to the Committee on Energy and Natural Resources 

A BILL 

To prohibit the Secretary of the Interior from issuing new 

oil or natural gas production leases in the Gulf of Mexico 

under the Outer Continental Shelf Lands Act to a person 

that does not renegotiate its existing leases in order 

to require royalty payments if oil and natural gas prices 

are greater than or equal to specified price thresholds, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Deficit Reduction 

3 Through Fair Oil Royalties Act’’. 

4 SEC. 2. ELIGIBILITY FOR NEW LEASES AND THE TRANSFER 

5 OF LEASES. 

6 (a) DEFINITIONS.—In this section: 

7 (1) COVERED LEASE.—The term ‘‘covered 

8 lease’’ means a lease for oil or gas production in the 

9 Gulf of Mexico that is— 

10 (A) in existence on the date of enactment 

11 of this Act; 

12 (B) issued by the Secretary under section 

13 304 of the Outer Continental Shelf Deep Water 

14 Royalty Relief Act (43 U.S.C. 1337 note; Pub15 lic Law 104–58); and 

16 (C) not subject to limitations on royalty re17 lief based on market price that are equal to or 

18 less than the price thresholds described in 

19 clauses (v) through (vii) of section 8(a)(3)(C) of 

20 the Outer Continental Shelf Lands Act (43 

21 U.S.C. 1337(a)(3)(C)). 

22 (2) LESSEE.—The term ‘‘lessee’’ includes any 

23 person or other entity that controls, is controlled by, 

24 or is in or under common control with, a lessee. 

25 (3) SECRETARY.—The term ‘‘Secretary’’ means 

26 the Secretary of the Interior. 


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1 (b) ISSUANCE OF NEW LEASES.— 

2 (1) IN GENERAL.—The Secretary shall not 

3 issue any new lease that authorizes the production 

4 of oil or natural gas under the Outer Continental 

5 Shelf Lands Act (43 U.S.C. 1331 et seq.) to a per6 son described in paragraph (2) unless the person has 

7 renegotiated each covered lease with respect to which 

8 the person is a lessee, to modify the payment re9 sponsibilities of the person to require the payment of 

10 royalties if the price of oil and natural gas is greater 

11 than or equal to the price thresholds described in 

12 clauses (v) through (vii) of section 8(a)(3)(C) of the 

13 Outer Continental Shelf Lands Act (43 U.S.C. 

14 1337(a)(3)(C)). 

15 (2) PERSONS DESCRIBED.—A person referred 

16 to in paragraph (1) is— 

17 (A) a lessee that— 

18 (i) holds a covered lease on the date 

19 on which the Secretary considers the 

20 issuance of the new lease; or 

21 (ii) was issued a covered lease before 

22 the date of enactment of this Act, but 

23 transferred the covered lease to another 

24 person or entity (including a subsidiary or 


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1 affiliate of the lessee) after the date of en2 actment of this Act; or 

3 (B) any other person that has any direct 

4 or indirect interest in, or that derives any ben5 efit from, a covered lease. 

6 (3) MULTIPLE LESSEES.— 

7 (A) IN GENERAL.—For purposes of para8 graph (1), if there are multiple lessees that own 

9 a share of a covered lease, the Secretary may 

10 implement separate agreements with any lessee 

11 with a share of the covered lease that modifies 

12 the payment responsibilities with respect to the 

13 share of the lessee to include price thresholds 

14 that are equal to or less than the price thresh15 olds described in clauses (v) through (vii) of 

16 section 8(a)(3)(C) of the Outer Continental 

17 Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)). 

18 (B) TREATMENT OF SHARE AS COVERED

19 LEASE.—Beginning on the effective date of an 

20 agreement under subparagraph (A), any share 

21 subject to the agreement shall not constitute a 

22 covered lease with respect to any lessees that 

23 entered into the agreement. 

24 (c) TRANSFERS.—A lessee or any other person who 

25 has any direct or indirect interest in, or who derives a 


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1 benefit from, a lease shall not be eligible to obtain by sale 

2 or other transfer (including through a swap, spinoff, serv3 icing, or other agreement) any covered lease, the economic 

4 benefit of any covered lease, or any other lease for the 

5 production of oil or natural gas in the Gulf of Mexico 

6 under the Outer Continental Shelf Lands Act (43 U.S.C. 

7 1331 et seq.), unless the lessee or other person— 

8 (1) has renegotiated each covered lease with re9 spect to which the lessee or person is a lessee, to 

10 modify the payment responsibilities of the lessee or 

11 person to include price thresholds that are equal to 

12 or less than the price thresholds described in clauses 

13 (v) through (vii) of section 8(a)(3)(C) of the Outer 

14 Continental Shelf Lands Act (43 U.S.C. 

15 1337(a)(3)(C)); or 

16 (2) has entered into an agreement with the Sec17 retary to modify the terms of all covered leases of 

18 the lessee or other person to include limitations on 

19 royalty relief based on market prices that are equal 

20 to or less than the price thresholds described in 

21 clauses (v) through (vii) of section 8(a)(3)(C) of the 

22 Outer Continental Shelf Lands Act (43 U.S.C. 

23 1337(a)(3)(C)). 

24 (d) USE OF AMOUNTS FOR DEFICIT REDUCTION.— 

25 Notwithstanding any other provision of law, any amounts 


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1 received by the United States as rentals or royalties under 

2 covered leases shall be deposited in the Treasury and used 

3 for— 

4 (1) Federal budget deficit reduction; or 

5 (2) if there is no Federal budget deficit, reduc6 ing the Federal debt in such manner as the Sec7 retary of the Treasury considers appropriate. 

8 SEC. 3. PRICE THRESHOLDS FOR ROYALTY SUSPENSION 

9 PROVISIONS. 

10 (a) IN GENERAL.—The Secretary of the Interior shall 

11 agree to a request by any lessee to amend any lease issued 

12 for any Central and Western Gulf of Mexico tract during 

13 the period of January 1, 1996, through November 28, 

14 2000, to incorporate price thresholds applicable to royalty 

15 suspension provisions, that are equal to or less than the 

16 price thresholds described in clauses (v) through (vii) of 

17 section 8(a)(3)(C) of the Outer Continental Shelf Lands 

18 Act (43 U.S.C. 1337(a)(3)(C)). 

19 (b) NEW OR REVISED PRICE THRESHOLDS.—An 

20 amended lease under subsection (a) shall impose the new 

21 or revised price thresholds effective on October 1, 2015. 

22 (c) EXISTING LEASE PROVISIONS.—Lease provisions 

23 in effect on the date of enactment of this Act shall prevail 

24 through September 30, 2015. 

Æ 


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