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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4761 Introduced in House (IH)]

109th CONGRESS
  2d Session
                                H. R. 4761

To provide for exploration, development, and production activities for 
    mineral resources on the outer Continental Shelf, and for other 
                               purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           February 15, 2006

   Mr. Jindal (for himself, Mr. Baker, Mr. Boustany, and Mrs. Drake) 
 introduced the following bill; which was referred to the Committee on 
                               Resources

_______________________________________________________________________

                                 A BILL

 
To provide for exploration, development, and production activities for 
    mineral resources 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 ``Domestic Energy Production through 
Offshore Exploration and Equitable Treatment of State Holdings Act of 
2006''.

SEC. 2. POLICY.

    It is the policy of the United States that--
            (1) adjacent States are required by the circumstances to 
        commit significant resources in support of exploration, 
        development, and production activities for mineral resources on 
        the outer Continental Shelf, and it is fair and proper for a 
        portion of the receipts from such activities to be shared with 
        Adjacent States and their local coastal governments;
            (2) the existing laws governing the leasing and production 
        of the mineral resources of the outer Continental Shelf have 
        reduced the production of mineral resources, have preempted 
        Adjacent States from being sufficiently involved in the 
        decisions regarding the allowance of mineral resource 
        development, and have been harmful to the national interest;
            (3) the national interest is served by granting the 
        Adjacent States more options related to whether or not mineral 
        leasing should occur in the outer Continental Shelf within 
        their Adjacent Zones;
            (4) it is not reasonably foreseeable that exploration of a 
        leased tract located more than 25 miles seaward of the 
        coastline, development and production of a natural gas 
        discovery located more than 25 miles seaward of the coastline, 
        or development and production of an oil discovery located more 
        than 50 miles seaward of the coastline will adversely affect 
        resources near the coastline;
            (5) transportation of oil from a leased tract might 
        reasonably be foreseen, under limited circumstances, to have 
        the potential to adversely affect resources near the coastline 
        if the oil is within 50 miles of the coastline, but such 
        potential to adversely affect such resources is likely no 
        greater, and probably less, than the potential impacts from 
        tanker transportation because tanker spills usually involve 
        large releases of oil over a brief period of time; and
            (6) among other bodies of inland waters, the Great Lakes, 
        Long Island Sound, Delaware Bay, Chesapeake Bay, Albemarle 
        Sound, San Francisco Bay, and Puget Sound are not part of the 
        outer Continental Shelf, and are not subject to leasing by the 
        Federal Government for the exploration, development, and 
        production of any mineral resources that might lie beneath 
        them.

SEC. 3. DEFINITIONS UNDER THE OUTER CONTINENTAL SHELF LANDS ACT.

    Section 2 of the Outer Continental Shelf Lands Act (43 U.S.C. 1331) 
is amended--
            (1) by amending paragraph (f) to read as follows:
    ``(f) The term `affected State' means the Adjacent State.'';
            (2) by striking the semicolon at the end of each of 
        paragraphs (a) through (o) and inserting a period;
            (3) by striking ``; and'' at the end of paragraph (p) and 
        inserting a period;
            (4) by adding at the end the following:
    ``(r) The term `Adjacent State' means, with respect to any program, 
plan, lease sale, leased tract or other activity, proposed, conducted, 
or approved pursuant to the provisions of this Act, any State the laws 
of which are declared, pursuant to section 4(a)(2), to be the law of 
the United States for the portion of the outer Continental Shelf on 
which such program, plan, lease sale, leased tract or activity 
appertains or is, or is proposed to be, conducted. For purposes of this 
paragraph, the term `State' includes Puerto Rico and the other 
Territories of the United States.
    ``(s) The term `Adjacent Zone' means, with respect to any program, 
plan, lease sale, leased tract, or other activity, proposed, conducted, 
or approved pursuant to the provisions of this Act, the portion of the 
outer Continental Shelf for which the laws of a particular Adjacent 
State are declared, pursuant to section 4(a)(2), to be the law of the 
United States.
    ``(t) The term `miles' means statute miles.
    ``(u) The term `coastline' has the same meaning as the term `coast 
line' as defined in section 2(c) of the Submerged Lands Act (43 U.S.C. 
1301(c)).
    ``(v) The term `Neighboring State' means a coastal state having a 
common boundary at the coastline with the Adjacent State.''; and
            (5) in paragraph (a), by inserting after ``control'' the 
        following: ``or lying within the United States exclusive 
        economic zone adjacent to the Territories of the United 
        States''.

SEC. 4. DETERMINATION OF ADJACENT ZONES AND PLANNING AREAS.

    Section 4(a)(2)(A) of the Outer Continental Shelf Lands Act (43 
U.S.C. 1333(a)(2)(A)) is amended in the first sentence by striking ``, 
and the President'' and all that follows through the end of the 
sentence and inserting the following: ``The lines extending seaward and 
defining each State's Adjacent Zone, and each OCS Planning Area, are as 
indicated on the maps for each outer Continental Shelf region entitled 
`Alaska OCS Region State Adjacent Zone and OCS Planning Areas', 
`Pacific OCS Region State Adjacent Zones and OCS Planning Areas', `Gulf 
of Mexico OCS Region State Adjacent Zones and OCS Planning Areas', and 
`Atlantic OCS Region State Adjacent Zones and OCS Planning Areas', all 
of which are dated September 2005 and on file in the Office of the 
Director, Minerals Management Service.''.

SEC. 5. ADMINISTRATION OF LEASING.

    Section 5 of the Outer Continental Shelf Lands Act (43 U.S.C. 1334) 
is amended by adding at the end the following:
    ``(k) Voluntary Partial Relinquishment of a Lease.--Any lessee of a 
producing lease may relinquish to the Secretary any portion of a lease 
that the lessee has no interest in producing and that the Secretary 
finds is geologically prospective. In return for any such 
relinquishment, the Secretary shall provide to the lessee a royalty 
incentive for the portion of the lease retained by the lessee, in 
accordance with regulations promulgated by the Secretary to carry out 
this subsection. The Secretary shall publish final regulations 
implementing this subsection within 365 days after the date of the 
enactment of the Domestic Energy Production through Offshore 
Exploration and Equitable Treatment of State Holdings Act of 2006.
    ``(l) Natural Gas Lease Regulations.--Not later than July 1, 2007, 
the Secretary shall publish a final regulation that shall--
            ``(1) establish procedures for entering into natural gas 
        leases;
            ``(2) ensure that natural gas leases are only available for 
        tracts on the outer Continental Shelf that are wholly within 
        125 miles of the coastline within an area withdrawn from 
        disposition by leasing on the day after the date of enactment 
        of the Domestic Energy Production through Offshore Exploration 
        and Equitable Treatment of State Holdings Act of 2006;
            ``(3) provide that natural gas leases shall contain the 
        same rights and obligations established for oil and gas leases, 
        except as otherwise provided in the Domestic Energy Production 
        through Offshore Exploration and Equitable Treatment of State 
        Holdings Act of 2006;
            ``(4) provide that, in reviewing the adequacy of bids for 
        natural gas leases, the value of any crude oil estimated to be 
        contained within any tract shall be excluded;
            ``(5) provide that any crude oil produced from a well and 
        reinjected into the leased tract shall not be subject to 
        payment of royalty, and that the Secretary shall consider, in 
        setting the royalty rates for a natural gas lease, the 
        additional cost to the lessee of not producing any crude oil; 
        and
            ``(6) provide that any Federal law that applies to an oil 
        and gas lease on the outer Continental Shelf shall apply to a 
        natural gas lease unless otherwise clearly inapplicable.''.

SEC. 6. GRANT OF LEASES BY SECRETARY.

    Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337) 
is amended--
            (1) in subsection (a)(1) by inserting after the first 
        sentence the following: ``Further, the Secretary may grant 
        natural gas leases in a manner similar to the granting of oil 
        and gas leases and under the various bidding systems available 
        for oil and gas leases.'';
            (2) by adding at the end of subsection (b) the following: 
        ``The Secretary may issue more than one lease for a given tract 
        if each lease applies to a separate and distinct range of 
        vertical depths, horizontal surface area, or a combination of 
        the two. The Secretary may issue regulations that the Secretary 
        determines are necessary to manage such leases consistent with 
        the purposes of this Act.'';
            (3) in subsection (p)(2)(B)--
                    (A) by striking ``27'' and inserting ``50''; and
                    (B) by striking ``15'' and inserting ``200'';
            (4) by adding at the end the following:
    ``(q) Natural Gas Leases.--
            ``(1) Right to produce natural gas.--A lessee of a natural 
        gas lease shall have the right to produce the natural gas from 
        a natural gas leased tract if the Secretary estimates that the 
        discovered field has at least 40 percent of the economically 
        recoverable Btu content of the field contained within natural 
        gas and such natural gas is economical to produce.
            ``(2) Right to produce crude oil.--A lessee of a natural 
        gas lease may produce crude oil from the lease unless the 
        Governor and the legislature of the Adjacent State object to 
        such production within 180 days after receipt of written notice 
        from the lessee of intent to produce crude oil from the lease. 
        If the leased tract is located within 50 miles of the nearest 
        point on the coastline of a Neighboring State, the Governor and 
        legislature of the Neighboring State shall also receive such 
        notice and have the right to object to such production within 
        180 days after receipt of such notice.
            ``(3) Estimates of btu content.--The Secretary shall make 
        estimates of the natural gas Btu content of discovered fields 
        on a natural gas lease only after the completion of at least 
        one exploration well, the data from which has been tied to the 
        results of a three-dimensional seismic survey of the field. The 
        Secretary may not require the lessee to further delineate any 
        discovered field prior to making such estimates.
            ``(4) Transportation of crude oil.--If an Adjacent State or 
        any applicable Neighboring State does not object to production 
        of crude oil from a natural gas lease, the lessee shall be 
        permitted to transport the crude oil from the leased tract 
        through Adjacent State waters, and Neighboring State waters if 
        applicable, to facilities onshore in the Adjacent State, and 
        Neighboring State if applicable, unless the lessee agreed to 
        other arrangements with the Adjacent State or Neighboring 
        State, or both.
            ``(5) Repurchase of certain natural gas leases.--Upon 
        request of the lessee and certification by the Secretary of the 
        Interior that a natural gas lease contains all or part of a 
        commercial oil and gas discovery that is not allowed to be 
        produced because it does not meet the standard set in paragraph 
        (1), the Secretary of the Treasury shall repurchase the lease 
        by issuance of a check or electronic payment from OCS Receipts 
        to the lessee in full compensation for the repurchase. The 
        Secretary shall recoup from the State and local governments any 
        funds previously shared with them that were derived from the 
        repurchased lease. Such recoupment shall only be from the State 
        and local governments' shares of OCS receipts that are payable 
        after the date of repurchase.
            ``(6) Amount of compensation.--Repurchase compensation for 
        each lease repurchased under the authority of this section 
        shall be in the amount of the lesser of the original bonus bid 
        paid for the lease or, if the lessee is not the original 
        lessee, the compensation paid by the current lessee to obtain 
        its interest in the lease. In addition, the lessee shall be 
        compensated for any expenses directly attributable to the lease 
        that the lessee incurs after acquisition of its interest in the 
        lease to be repurchased, including rentals, seismic acquisition 
        costs, drilling costs, and other reasonable expenses on the 
        lease, including expenses incurred in the repurchase process, 
        to the extent that the lessee has not previously been 
        compensated by the United States for such expenses. The lessee 
        shall not be compensated for general overhead expenses or 
        employee salaries.
            ``(7) Priority right to obtain future oil and gas lease.--
        The lessee, or a designee of the lessee, of a repurchased 
        natural gas leased tract shall have the right to repurchase 
        such tract as an oil and gas lease, on a noncompetitive basis, 
        by repaying the amount received by the lessee if the tract is 
        made available for lease under an oil and gas lease within 30 
        years after the repurchase.
            ``(8) Definition of natural gas.--For purposes of a natural 
        gas lease, natural gas means natural gas and all substances 
        produced in association with gas, including, but not limited 
        to, hydrocarbon liquids (other than crude oil) that are 
        obtained by the condensation of hydrocarbon vapors and separate 
        out in liquid form from the produced gas stream.
    ``(r) Removal of Restrictions on Joint Bidding in Certain Areas of 
the Outer Continental Shelf.--Restrictions on joint bidders shall no 
longer apply to tracts located in the Alaska OCS Region. Such 
restrictions shall not apply to tracts in other OCS regions determined 
to be `frontier tracts' or otherwise `high cost tracts' under final 
regulations that shall be published by the Secretary by not later than 
365 days after the date of the enactment of the Domestic Energy 
Production through Offshore Exploration and Equitable Treatment of 
State Holdings Act of 2006.'';
            (5) by striking subsection (a)(3)(A) and redesignating the 
        subsequent subparagraphs as subparagraphs (A) and (B), 
        respectively;
            (6) in subsection (a)(3)(A) (as so redesignated) by 
        striking ``In the Western'' and all that follows through ``the 
        Secretary'' the first place it appears and inserting ``The 
        Secretary''; and
            (7) effective October 1, 2006, in subsection (g)--
                    (A) by striking all after ``(g)'', except paragraph 
                (3);
                    (B) by striking the last sentence of paragraph (3); 
                and
                    (C) by striking ``(3)''.

SEC. 7. DISPOSITION OF RECEIPTS.

    Section 9 of the Outer Continental Shelf Lands Act (43 U.S.C. 1338) 
is amended--
            (1) by designating the existing text as subsection (a);
            (2) in subsection (a) (as so designated) by inserting ``, 
        if not paid as otherwise provided in this title'' after 
        ``receipts''; and
            (3) by adding the following:
    ``(b) Treatment of OCS Receipts From Tracts Completely Within 100 
Miles of the Coastline.--
            ``(1) Deposit.--The Secretary shall deposit into a separate 
        account in the Treasury the portion of OCS Receipts for each 
        fiscal year that will be shared under paragraphs (2), (3), and 
        (4).
            ``(2) Phased-in receipts sharing.--
                    ``(A) Beginning October 1, 2005, the Secretary 
                shall share OCS Receipts derived from the following 
                areas:
                            ``(i) Lease tracts located on portions of 
                        the Gulf of Mexico OCS Region completely beyond 
                        4 marine leagues from any coastline and 
                        completely within 100 miles of any coastline 
                        that are available for leasing under the 2002-
                        2007 5-Year Oil and Gas Leasing Program in 
                        effect prior to the date of the enactment of 
                        the Domestic Energy Production through Offshore 
                        Exploration and Equitable Treatment of State 
                        Holdings Act of 2006.
                            ``(ii) Lease tracts in production prior to 
                        October 1, 2005, completely beyond 4 marine 
                        leagues from any coastline and completely 
                        within 100 miles of any coastline located on 
                        portions of the OCS that were not available for 
                        leasing under the 2002-2007 5-Year OCS Oil and 
                        Gas Leasing Program in effect prior to the date 
                        of the enactment of the Domestic Energy 
                        Production through Offshore Exploration and 
                        Equitable Treatment of State Holdings Act of 
                        2006.
                            ``(iii) Lease tracts for which leases are 
                        issued prior to October 1, 2005, located in the 
                        Alaska OCS Region completely beyond 4 marine 
                        leagues from any coastline and completely 
                        within 100 miles of the coastline.
                    ``(B) The Secretary shall share the following 
                percentages of OCS Receipts from the leases described 
                in subparagraph (A) derived during the fiscal year 
                indicated:
                            ``(i) For fiscal year 2006, 6.0 percent.
                            ``(ii) For fiscal year 2007, 7.0 percent.
                            ``(iii) For fiscal year 2008, 8.0 percent.
                            ``(iv) For fiscal year 2009, 9.0 percent.
                            ``(v) For fiscal year 2010, 12.0 percent.
                            ``(vi) For fiscal year 2011, 15.0 percent.
                            ``(vii) For fiscal year 2012, 18.0 percent.
                            ``(viii) For fiscal year 2013, 21.0 
                        percent.
                            ``(ix) For fiscal year 2014, 24.0 percent.
                            ``(x) For fiscal year 2015, 27.0 percent.
                            ``(xi) For fiscal year 2016, 30.0 percent.
                            ``(xii) For fiscal year 2017, 33.0 percent.
                            ``(xiii) For fiscal year 2018, 36.0 
                        percent.
                            ``(xiv) For fiscal year 2019, 39.0 percent.
                            ``(xv) For fiscal year 2020, 42.0 percent.
                            ``(xvi) For fiscal year 2021, 45.0 percent.
                            ``(xvii) For fiscal year 2022 and each 
                        subsequent fiscal year, 50.0 percent.
                    ``(C) The provisions of this paragraph shall not 
                apply to leases that could not have been issued but for 
                section 5(k) of this Act or section 6(2) of the 
                Domestic Energy Production through Offshore Exploration 
                and Equitable Treatment of State Holdings Act of 2006.
            ``(3) Immediate receipts sharing.--Beginning October 1, 
        2005, the Secretary shall share 50 percent of OCS Receipts 
        derived from all leases located completely beyond 4 marine 
        leagues from any coastline and completely within 100 miles of 
        any coastline not included within the provisions of paragraph 
        (2).
            ``(4) Receipts sharing from tracts within 4 marine leagues 
        of any coastline.--Beginning October 1, 2005, the Secretary 
        shall share 75 percent of OCS Receipts derived from all leases 
        located completely or partially within 4 marine leagues from 
        any coastline.
            ``(5) Allocations.--The Secretary shall allocate the OCS 
        Receipts deposited into the separate account established by 
        paragraph (1) that are shared under paragraphs (2), (3), and 
        (4) as follows:
                    ``(A) Bonus bids.--Deposits derived from bonus bids 
                from a leased tract, including interest thereon, shall 
                be allocated at the end of each fiscal year as follows:
                            ``(i) 87.5 percent to the Adjacent State.
                            ``(ii) 6.25 percent into the Treasury, 
                        which shall be allocated to the account 
                        established by section 14 of the Domestic 
                        Energy Production through Offshore Exploration 
                        and Equitable Treatment of State Holdings Act 
                        of 2006.
                            ``(iii) 5 percent into the account 
                        established by section 23 of the Domestic 
                        Energy Production through Offshore Exploration 
                        and Equitable Treatment of State Holdings Act 
                        of 2006.
                            ``(iv) 1.25 percent into the account 
                        established by section 26 of the Domestic 
                        Energy Production through Offshore Exploration 
                        and Equitable Treatment of State Holdings Act 
                        of 2006.
                    ``(B) Royalties.--Deposits derived from royalties 
                from a leased tract, including interest thereon, shall 
                be allocated at the end of each fiscal year as follows:
                            ``(i) 87.5 percent to the Adjacent State 
                        and any other producing State or States with a 
                        leased tract within its Adjacent Zone within 
                        100 miles of its coastline that generated 
                        royalties during the fiscal year, if the other 
                        producing or States have a coastline point 
                        within 300 miles of any portion of the leased 
                        tract, in which case the amount allocated for 
                        the leased tract shall be--
                                    ``(I) one-third to the Adjacent 
                                State; and
                                    ``(II) two-thirds to each producing 
                                State, including the Adjacent State, 
                                inversely proportional to the distance 
                                between the nearest point on the 
                                coastline of the producing State and 
                                the geographic center of the leased 
                                tract.
                            ``(ii) 6.25 percent into the Treasury, 
                        which shall be allocated to the account 
                        established by section 14 of the Domestic 
                        Energy Production through Offshore Exploration 
                        and Equitable Treatment of State Holdings Act 
                        of 2006.
                            ``(iii) 5 percent into the account 
                        established by section 23 of the Domestic 
                        Energy Production through Offshore Exploration 
                        and Equitable Treatment of State Holdings Act 
                        of 2006.
                            ``(iv) 1.25 percent into the account 
                        established by section 26 of the Domestic 
                        Energy Production through Offshore Exploration 
                        and Equitable Treatment of State Holdings Act 
                        of 2006.
    ``(c) Treatment of OCS Receipts From Tracts Partially or Completely 
Beyond 100 Miles of the Coastline.--
            ``(1) Deposit.--The Secretary shall deposit into a separate 
        account in the Treasury the portion of OCS Receipts for each 
        fiscal year that will be shared under paragraphs (2) and (3).
            ``(2) Phased-in receipts sharing.--
                    ``(A) Beginning October 1, 2005, the Secretary 
                shall share OCS Receipts derived from the following 
                areas:
                            ``(i) Lease tracts located on portions of 
                        the Gulf of Mexico OCS Region partially or 
                        completely beyond 100 miles of any coastline 
                        that are available for leasing under the 2002-
                        2007 5-Year Oil and Gas Leasing Program in 
                        effect prior to the date of enactment of the 
                        Domestic Energy Production through Offshore 
                        Exploration and Equitable Treatment of State 
                        Holdings Act of 2006.
                            ``(ii) Lease tracts in production prior to 
                        October 1, 2005, partially or completely beyond 
                        100 miles of any coastline located on portions 
                        of the OCS that were not available for leasing 
                        under the 2002-2007 5-Year OCS Oil and Gas 
                        Leasing Program in effect prior to the date of 
                        enactment of the Domestic Energy Production 
                        through Offshore Exploration and Equitable 
                        Treatment of State Holdings Act of 2006.
                            ``(iii) Lease tracts for which leases are 
                        issued prior to October 1, 2005, located in the 
                        Alaska OCS Region partially or completely 
                        beyond 100 miles of the coastline.
                    ``(B) The Secretary shall share the following 
                percentages of OCS Receipts from the leases described 
                in subparagraph (A) derived during the fiscal year 
                indicated:
                            ``(i) For fiscal year 2006, 6.0 percent.
                            ``(ii) For fiscal year 2007, 7.0 percent.
                            ``(iii) For fiscal year 2008, 8.0 percent.
                            ``(iv) For fiscal year 2009, 9.0 percent.
                            ``(v) For fiscal year 2010, 12.0 percent.
                            ``(vi) For fiscal year 2011, 15.0 percent.
                            ``(vii) For fiscal year 2012, 18.0 percent.
                            ``(viii) For fiscal year 2013, 21.0 
                        percent.
                            ``(ix) For fiscal year 2014, 24.0 percent.
                            ``(x) For fiscal year 2015, 27.0 percent.
                            ``(xi) For fiscal year 2016, 30.0 percent.
                            ``(xii) For fiscal year 2017, 33.0 percent.
                            ``(xiii) For fiscal year 2018, 36.0 
                        percent.
                            ``(xiv) For fiscal year 2019, 39.0 percent.
                            ``(xv) For fiscal year 2020, 42.0 percent.
                            ``(xvi) For fiscal year 2021, 45.0 percent.
                            ``(xvii) For fiscal year 2022 and each 
                        subsequent fiscal year, 50.0 percent.
                    ``(C) The provisions of this paragraph shall not 
                apply to leases that could not have been issued but for 
                section 5(k) of this Act or section 6(2) of the 
                Domestic Energy Production through Offshore Exploration 
                and Equitable Treatment of State Holdings Act of 2006.
            ``(3) Immediate receipts sharing.--Beginning October 1, 
        2005, the Secretary shall share 50 percent of OCS Receipts 
        derived on and after October 1, 2005, from all leases located 
        partially or completely beyond 100 miles of any coastline not 
        included within the provisions of paragraph (2).
            ``(4) Allocations.--The Secretary shall allocate the OCS 
        Receipts deposited into the separate account established by 
        paragraph (1) that are shared under paragraphs (2) and (3) as 
        follows:
                    ``(A) Bonus bids.--Deposits derived from bonus bids 
                from a leased tract, including interest thereon, shall 
                be allocated at the end of each fiscal year as follows:
                            ``(i) 87.5 percent to the Adjacent State.
                            ``(ii) 6.25 percent into the Treasury, 
                        which shall be allocated to the account 
                        established by section 14 of the Domestic 
                        Energy Production through Offshore Exploration 
                        and Equitable Treatment of State Holdings Act 
                        of 2006.
                            ``(iii) 5 percent into the account 
                        established by section 23 of the Domestic 
                        Energy Production through Offshore Exploration 
                        and Equitable Treatment of State Holdings Act 
                        of 2006.
                            ``(iv) 1.25 percent into the account 
                        established by section 26 of the Domestic 
                        Energy Production through Offshore Exploration 
                        and Equitable Treatment of State Holdings Act 
                        of 2006.
                    ``(B) Royalties.--Deposits derived from royalties 
                from a leased tract, including interest thereon, shall 
                be allocated at the end of each fiscal year as follows:
                            ``(i) 87.5 percent to the Adjacent State 
                        and any other producing State or States with a 
                        leased tract within its Adjacent Zone partially 
                        or completely beyond 100 miles of its coastline 
                        that generated royalties during the fiscal 
                        year, if the other producing State or States 
                        have a coastline point within 300 miles of any 
                        portion of the leased tract, in which case the 
                        amount allocated for the leased tract shall 
                        be--
                                    ``(I) one-third to the Adjacent 
                                State; and
                                    ``(II) two-thirds to each producing 
                                State, including the Adjacent State, 
                                inversely proportional to the distance 
                                between the nearest point on the 
                                coastline of the producing State and 
                                the geographic center of the leased 
                                tract.
                            ``(ii) 6.25 percent into the account 
                        established by section 14 of the Domestic 
                        Energy Production through Offshore Exploration 
                        and Equitable Treatment of State Holdings Act 
                        of 2006.
                            ``(iii) 5 percent into the account 
                        established by section 23 of the Domestic 
                        Energy Production through Offshore Exploration 
                        and Equitable Treatment of State Holdings Act 
                        of 2006.
                            ``(iv) 1.25 percent into the account 
                        established by section 26 of the Domestic 
                        Energy Production through Offshore Exploration 
                        and Equitable Treatment of State Holdings Act 
                        of 2006.
    ``(d) Transmission of Allocations.--
            ``(1) In general.--Not later than 90 days after the end of 
        each fiscal year, the Secretary shall transmit--
                    ``(A) to each State two-thirds of such State's 
                allocations under subsections (b)(5)(A)(i), 
                (b)(5)(B)(i), (c)(4)(A)(i), and (c)(4)(B)(i) for the 
                immediate prior fiscal year;
                    ``(B) to coastal county-equivalent and municipal 
                political subdivisions of such State a total of one-
                third of such State's allocations under subsections 
                (b)(5)(A)(i), (b)(5)(B)(i), (c)(4)(A)(i), and 
                (c)(4)(B)(i), together with all accrued interest 
                thereon; and
                    ``(C) the remaining allocations under subsections 
                (b)(5) and (c)(4), together with all accrued interest 
                thereon.
            ``(2) Allocations to coastal county-equivalent political 
        subdivisions.--The Secretary shall make an initial allocation 
        of the OCS Receipts to be shared under paragraph (1)(B) as 
        follows:
                    ``(A) 25 percent shall be allocated based on the 
                ratio of such coastal county-equivalent political 
                subdivision's population to the coastal population of 
                all coastal county-equivalent political subdivisions in 
                the State.
                    ``(B) 25 percent shall be allocated based on the 
                ratio of such coastal county-equivalent political 
                subdivision's coastline miles to the coastline miles of 
                all coastal county-equivalent political subdivisions in 
                the State as calculated by the Secretary. In such 
                calculations, coastal county-equivalent political 
                subdivisions without a coastline shall be considered to 
                have 50 percent of the average coastline miles of the 
                coastal county-equivalent political subdivisions that 
                do have coastlines.
                    ``(C) 25 percent shall be allocated to all coastal 
                county-equivalent political subdivisions having a 
                coastline point within 300 miles of the leased tract 
                for which OCS Receipts are being shared based on a 
                formula that allocates the funds based on such coastal 
                county-equivalent political subdivision's relative 
                distance from the leased tract.
                    ``(D) 25 percent shall be allocated to all coastal 
                county-equivalent political subdivisions having a 
                coastline point within 300 miles of the leased tract 
                for which OCS Receipts are being shared based on the 
                relative level of outer Continental Shelf oil and gas 
                activities in a coastal political subdivision compared 
                to the level of outer Continental Shelf activities in 
                all coastal political subdivisions in the State. The 
                Secretary shall define the term `outer Continental 
                Shelf oil and gas activities' for purposes of this 
                subparagraph to include, but not be limited to, 
                construction of vessels, drillships, and platforms 
                involved in exploration, production, and development on 
                the outer Continental Shelf; support and supply bases, 
                ports, and related activities; offices of geologists, 
                geophysicists, engineers, and other professionals 
                involved in support of exploration, production, and 
                development of oil and gas on the outer Continental 
                Shelf; pipelines and other means of transporting oil 
                and gas production from the outer Continental Shelf; 
                and processing and refining of oil and gas production 
                from the outer Continental Shelf. For purposes of this 
                subparagraph, if a coastal county-equivalent political 
                subdivision does not have a coastline, its coastal 
                point shall be the point on the coastline closest to 
                it.
            ``(3) Allocations to coastal municipal political 
        subdivisions.--The initial allocation to each coastal county-
        equivalent political subdivision under paragraph (2) shall be 
        further allocated to the coastal county-equivalent political 
        subdivision and any coastal municipal political subdivisions 
        located partially or wholly within the boundaries of the 
        coastal county-equivalent political subdivision as follows:
                    ``(A) One-third shall be allocated to the coastal 
                county-equivalent political subdivision.
                    ``(B) Two-thirds shall be allocated on a per capita 
                basis to the municipal political subdivisions and the 
                county-equivalent political subdivision, with the 
                allocation to the latter based upon its population not 
                included within the boundaries of a municipal political 
                subdivision.
    ``(e) Investment of Deposits.--Amounts deposited under 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 in which they are deposited and 
yielding the highest reasonably available interest rates as determined 
by the Secretary of the Treasury.
    ``(f) Use of Funds.--A recipient of funds under this section may 
use the funds for one or more of the following:
            ``(1) To reduce in-State college tuition at public 
        institutions of higher learning and otherwise support public 
        education, including career technical education.
            ``(2) To make transportation infrastructure improvements.
            ``(3) To reduce taxes.
            ``(4) To promote and provide for--
                    ``(A) coastal or environmental restoration;
                    ``(B) fish, wildlife, and marine life habitat 
                enhancement;
                    ``(C) waterways maintenance;
                    ``(D) shore protection; and
                    ``(E) marine and oceanographic education and 
                research.
            ``(5) To improve infrastructure associated with energy 
        production activities conducted on the outer Continental Shelf.
            ``(6) To fund energy demonstration projects and supporting 
        infrastructure for energy projects.
            ``(7) For any other purpose as determined by State law.
    ``(g) No Accounting Required.--No recipient of funds under this 
section shall be required to account to the Federal Government for the 
expenditure of such funds, except as otherwise may be required by law. 
However, States may enact legislation providing for accounting for and 
auditing of such expenditures. Further, funds allocated under this 
section to States and political subdivisions may be used as matching 
funds for other Federal programs.
    ``(h) Effect of Future Laws.--Enactment of any future Federal 
statute that has the effect, as determined by the Secretary, of 
restricting any Federal agency from spending appropriated funds, or 
otherwise preventing it from fulfilling its pre-existing 
responsibilities as of the date of enactment of the statute, unless 
such responsibilities have been reassigned to another Federal agency by 
the statute with no prevention of performance, to issue any permit or 
other approval impacting on the OCS oil and gas leasing program, or any 
lease issued thereunder, or to implement any provision of this Act 
shall automatically prohibit any sharing of OCS Receipts under this 
section directly with the States, and their coastal political 
subdivisions, for the duration of the restriction. The Secretary shall 
make the determination of the existence of such restricting effects 
within 30 days of a petition by any outer Continental Shelf lessee or 
producing State.
    ``(i) Definitions.--In this section:
            ``(1) Coastal county-equivalent political subdivision.--The 
        term `coastal county-equivalent political subdivision' means a 
        political jurisdiction immediately below the level of State 
        government, including a county, parish, borough in Alaska, 
        independent municipality not part of a county, parish, or 
        borough in Alaska, or other equivalent subdivision of a coastal 
        State, that lies within the coastal zone.
            ``(2) Coastal municipal political subdivision.--The term 
        `coastal municipal political subdivision' means a municipality 
        located within and part of a county, parish, borough in Alaska, 
        or other equivalent subdivision of a State, all or part of 
        which coastal municipal political subdivision lies within the 
        coastal zone.
            ``(3) Coastal population.--The term `coastal population' 
        means the population of all coastal county-equivalent political 
        subdivisions, as determined by the most recent official data of 
        the Census Bureau.
            ``(4) Coastal zone.--The term `coastal zone' means that 
        portion of a coastal State, including the entire territory of 
        any coastal county-equivalent political subdivision at least a 
        part of which lies, within 75 miles landward from the 
        coastline, or a greater distance as determined by State law 
        enacted to implement this section.
            ``(5) Bonus bids.--The term `bonus bids' means all funds 
        received by the Secretary to issue an outer Continental Shelf 
        minerals lease.
            ``(6) Royalties.--The term `royalties' means all funds 
        received by the Secretary from production of oil or natural 
        gas, or the sale of production taken in-kind, from an outer 
        Continental Shelf minerals lease.
            ``(7) Producing state.--The term `producing State' means an 
        Adjacent State having an Adjacent Zone containing leased tracts 
        from which OCS Receipts were derived.
            ``(8) OCS receipts.--The term `OCS Receipts' means bonus 
        bids and royalties.''.

SEC. 8. REVIEW OF OUTER CONTINENTAL SHELF EXPLORATION PLANS.

    Subsections (c) and (d) of section 11 of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1340) are amended to read as follows:
    ``(c) Plan Review; Plan Provisions.--
            ``(1) Except as otherwise provided in this Act, prior to 
        commencing exploration pursuant to any oil and gas lease issued 
        or maintained under this Act, the holder thereof shall submit 
        an exploration plan (hereinafter in this section referred to as 
        a `plan') to the Secretary for review which shall include all 
        information and documentation required under paragraphs (2) and 
        (3). The Secretary shall review the plan for completeness 
        within 10 days of submission. If the Secretary finds that the 
        plan is not complete, the Secretary shall notify the lessee 
        with a detailed explanation and require such modifications of 
        such plan as are necessary to achieve completeness. The 
        Secretary shall have 10 days to review a modified plan for 
        completeness. Such plan may apply to more than one lease held 
        by a lessee in any one region of the outer Continental Shelf, 
        or by a group of lessees acting under a unitization, pooling, 
        or drilling agreement, and the lessee shall certify that such 
        plan is consistent with the terms of the lease and is 
        consistent with all statutory and regulatory requirements in 
        effect on the date of issuance of the lease. The Secretary 
        shall have 30 days from the date the plan is deemed complete to 
        conduct a review of the plan. If the Secretary finds the plan 
        is not consistent with the lease and all such statutory and 
        regulatory requirements, the Secretary shall notify the lessee 
        with a detailed explanation of such modifications of such plan 
        as are necessary to achieve compliance. The Secretary shall 
        have 30 days to review any modified plan submitted by the 
        lessee. The lessee shall not take any action under the 
        exploration plan within the 30-day review period, or thereafter 
        until the plan has been modified to achieve compliance as so 
        notified.
            ``(2) An exploration plan submitted under this subsection 
        shall include, in the degree of detail which the Secretary may 
        by regulation require--
                    ``(A) a schedule of anticipated exploration 
                activities to be undertaken;
                    ``(B) a description of equipment to be used for 
                such activities;
                    ``(C) the general location of each well to be 
                drilled; and
                    ``(D) such other information deemed pertinent by 
                the Secretary.
            ``(3) The Secretary may, by regulation, require that such 
        plan be accompanied by a general statement of development and 
        production intentions which shall be for planning purposes only 
        and which shall not be binding on any party.
    ``(d) Plan Revisions; Conduct of Exploration Activities.--
            ``(1) If a significant revision of an exploration plan 
        under this subsection is submitted to the Secretary, the 
        process to be used for the review of such revision shall be the 
        same as set forth in subsection (c) of this section.
            ``(2) All exploration activities pursuant to any lease 
        shall be conducted in accordance with an exploration plan or a 
        revised plan which has been submitted to and reviewed by the 
        Secretary.''.

SEC. 9. RESERVATION OF LANDS AND RIGHTS.

    Section 12 of the Outer Continental Shelf Lands Act (43 U.S.C. 
1341) is amended--
            (1) in subsection (a) by adding at the end the following: 
        ``The President may partially or completely revise or revoke 
        any prior withdrawal made by the President under the authority 
        of this section. The President may not revise or revoke a 
        withdrawal that was initiated by a petition from a State and 
        approved by the Secretary of the Interior under subsection (h). 
        A withdrawal by the President may be for a term not to exceed 
        10 years. In considering a potential withdrawal under this 
        subsection, to the maximum extent practicable the President 
        shall accommodate competing interests and potential uses of the 
        outer Continental Shelf.'';
            (2) by adding at the end the following:
    ``(g) Option to Petition for Leasing Within Certain Areas of the 
Outer Continental Shelf.--
            ``(1) Prohibition against leasing.--Except as otherwise 
        provided in this subsection, prior to June 30, 2012, the 
        Secretary shall not offer for leasing for oil and gas, or for 
        natural gas, any area withdrawn from disposition by leasing in 
        the Atlantic OCS Region or the Pacific OCS Region, or the Gulf 
        of Mexico OCS Region Eastern Planning Area, as depicted on the 
        map referred to within this paragraph, under the `Memorandum on 
        Withdrawal of Certain Areas of the United States Outer 
        Continental Shelf from Leasing Disposition', 34 Weekly Comp. 
        Pres. Doc. 1111, dated June 12, 1998, or any area not withdrawn 
        under that Memorandum that is included within the Gulf of 
        Mexico OCS Region Eastern Planning Area as indicated on the map 
        entitled `Gulf of Mexico OCS Region State Adjacent Zones and 
        OCS Planning Areas' or within the Florida Straits Planning Area 
        as indicated on the map entitled `Atlantic OCS Region State 
        Adjacent Zones and OCS Planning Areas', both of which are dated 
        September 2005 and on file in the Office of the Director, 
        Minerals Management Service.
            ``(2) Revocation of withdrawal.--The provisions of the 
        `Memorandum on Withdrawal of Certain Areas of the United States 
        Outer Continental Shelf from Leasing Disposition', 34 Weekly 
        Comp. Pres. Doc. 1111, dated June 12, 1998, are hereby revoked 
        and are no longer in effect regarding any areas included within 
        the Gulf of Mexico OCS Region Central Planning Area as 
        indicated on the map entitled `Gulf of Mexico OCS Region State 
        Adjacent Zones and OCS Planning Areas' dated September 2005 and 
        on file in the Office of the Director, Minerals Management 
        Service. The 2002-2007 5-Year Outer Continental Shelf Oil and 
        Gas Leasing Program is hereby amended to include the areas 
        added to the Gulf of Mexico OCS Region Central Planning Area by 
        this Act to the extent that such areas were included within the 
        original boundaries of proposed Lease Sale 181. The amendment 
        to such leasing program includes two sales in such additional 
        areas, one of which shall be held in January 2007 and one of 
        which shall be held in June 2007. The Final Environmental 
        Impact Statement prepared for this area for Lease Sale 181 
        shall be deemed sufficient for all purposes for each lease sale 
        in which such area is offered for lease during the 2002-2007 5-
        Year Outer Continental Shelf Oil and Gas Leasing Program 
        without need for supplementation. Any tract only partially 
        added to the Gulf of Mexico OCS Region Central Planning Area by 
        this Act shall be eligible for leasing of the part of such 
        tract that is included within the Gulf of Mexico OCS Region 
        Central Planning Area, and the remainder of such tract that 
        lies outside of the Gulf of Mexico OCS Region Central Planning 
        Area may be developed and produced by the lessee of such 
        partial tract using extended reach or similar drilling from a 
        location on a leased area.
            ``(3) Petition for leasing.--
                    ``(A) In general.--The Governor of the State, upon 
                concurrence of its legislature, may submit to the 
                Secretary a petition requesting that the Secretary make 
                available any area that is within the State's Adjacent 
                Zone, included within the provisions of paragraph (1), 
                and that (i) is greater than 25 miles from any point on 
                the coastline of a Neighboring State for the conduct of 
                offshore leasing, pre-leasing, and related activities 
                with respect to natural gas leasing; or (ii) is greater 
                than 50 miles from any point on the coastline of a 
                Neighboring State for the conduct of offshore leasing, 
                pre-leasing, and related activities with respect to oil 
                and gas leasing. The Adjacent State may also petition 
                for leasing any other area within its Adjacent Zone if 
                leasing is allowed in the similar area of the Adjacent 
                Zone of the applicable Neighboring State, or if not 
                allowed, if the Neighboring State, acting through its 
                Governor, expresses its concurrence with the petition. 
                The Secretary shall only consider such a petition upon 
                making a finding that leasing is allowed in the similar 
                area of the Adjacent Zone of the applicable Neighboring 
                State or upon receipt of the concurrence of the 
                Neighboring State. The date of receipt by the Secretary 
                of such concurrence by the Neighboring State shall 
                constitute the date of receipt of the petition for that 
                area for which the concurrence applies. A petition for 
                leasing any part of the Alabama Adjacent Zone that is a 
                part of the Gulf of Mexico Eastern Planning Area, as 
                indicated on the map entitled `Gulf of Mexico OCS 
                Region State Adjacent Zones and OCS Planning Areas' 
                which is dated September 2005 and on file in the Office 
                of the Director, Minerals Management Service, shall 
                require the concurrence of both Alabama and Florida.
                    ``(B) Limitations on leasing.--In its petition, a 
                State with an Adjacent Zone that contains leased tracts 
                may condition oil and gas, or natural gas, new leasing 
                for tracts within 25 miles of the coastline by--
                            ``(i) requiring a net reduction in the 
                        number of production platforms;
                            ``(ii) requiring a net increase in the 
                        average distance of production platforms from 
                        the coastline;
                            ``(iii) limiting permanent surface 
                        occupancy on new leases to areas that are more 
                        than 10 miles from the coastline;
                            ``(iv) limiting some tracts to being 
                        produced from shore or from platforms located 
                        on other tracts; or
                            ``(v) other conditions that the Adjacent 
                        State may deem appropriate as long as the 
                        Secretary does not determine that production is 
                        made economically or technically impracticable 
                        or otherwise impossible.
                    ``(C) Action by secretary.--Not later than 90 days 
                after receipt of a petition under subparagraph (A), the 
                Secretary shall approve the petition, unless the 
                Secretary determines that leasing the area would 
                probably cause serious harm or damage to the marine 
                resources of the State's Adjacent Zone. Prior to 
                approving the petition, the Secretary shall complete an 
                environmental assessment that documents the anticipated 
                environmental effects of leasing in the area included 
                within the scope of the petition.
                    ``(D) Failure to act.--If the Secretary fails to 
                approve or deny a petition in accordance with 
                subparagraph (C) the petition shall be considered to be 
                approved 90 days after receipt of the petition.
                    ``(E) Amendment of the 5-year leasing program.--
                Notwithstanding section 18, within 180 days of the 
                approval of a petition under subparagraph (C) or (D), 
                the Secretary shall amend the current 5-Year Outer 
                Continental Shelf Oil and Gas Leasing Program to 
                include a lease sale or sales for the entire area 
                covered by the approved petition, unless there are, 
                from the date of approval, fewer than 12 months 
                remaining in the current 5-Year Leasing Program in 
                which case the Secretary shall include the areas 
                covered by the approved petition within lease sales 
                under the next 5-Year Leasing Program. For purposes of 
                amending the 5-Year Program in accordance with this 
                section, further consultations with States shall not be 
                required. The environmental assessment performed under 
                the provisions of the National Environmental Policy Act 
                of 1969 to assess the effects of approving the petition 
                shall be sufficient to amend the 5-Year Leasing 
                Program.
    ``(h) Option to Petition for Extension of Withdrawal From Leasing 
Within Certain Areas of the Outer Continental Shelf.--
            ``(1) In general.--The Governor of the State, upon the 
        concurrence of its legislature, may submit to the Secretary 
        petitions requesting that the Secretary extend for a period of 
        time of up to 5 years for each petition the withdrawal from 
        leasing for all or part of any area within the State's Adjacent 
        Zone within 125 miles of the coastline that is subject to 
        subsection (g)(1). A State may petition multiple times for any 
        particular area but not more than once per calendar year for 
        any particular area. A State must submit separate petitions, 
        with separate votes by its legislature, for areas within 50 
        miles of the coastline, areas more than 50 miles but not 
        exceeding 100 miles from the coastline, and areas exceeding 100 
        miles but not exceeding 125 miles from the coastline. A 
        petition of a State may apply to either oil and gas leasing or 
        natural gas leasing, or both, and may request some areas to be 
        withdrawn from all leasing and some areas to be withdrawn only 
        from one type of leasing. A petition for extending the 
        withdrawal from leasing of any part of the Alabama Adjacent 
        Zone that is a part of the Gulf of Mexico OCS Region Eastern 
        Planning Area, as indicated on the map entitled `Gulf of Mexico 
        OCS Region State Adjacent Zones and OCS Planning Areas' which 
        is dated September 2005 and on file in the Office of the 
        Director, Minerals Management Service, may be made by either 
        Alabama or Florida.
            ``(2) Action by secretary.--The Secretary shall perform an 
        environmental assessment under the National Environmental 
        Policy Act of 1969 to assess the effects of approving the 
        petition under paragraph (1). Not later than 90 days after 
        receipt of the petition, the Secretary shall approve the 
        petition, unless the Secretary determines that extending the 
        withdrawal from leasing would probably cause serious harm or 
        damage to the marine resources of the State's Adjacent Zone. 
        The Secretary shall not approve a petition from a State that 
        extends the remaining period of a withdrawal of an area from 
        leasing for a total of more than 10 years. However, the 
        Secretary may approve petitions to extend the withdrawal from 
        leasing of any area ad infinitum, subject only to the 
        limitations contained in this subsection.
            ``(3) Failure to act.--If the Secretary fails to approve or 
        deny a petition in accordance with paragraph (2) the petition 
        shall be considered to be approved 90 days after receipt of the 
        petition.
    ``(i) Effect of Other Laws.--Adoption by any Adjacent State of any 
constitutional provision, or enactment of any State statute, that has 
the effect, as determined by the Secretary, of restricting either the 
Governor or the Legislature, or both, from exercising full discretion 
related to subsection (g) or (h), or both, shall automatically (1) 
prohibit any sharing of OCS Receipts under this Act with the Adjacent 
State, and its coastal political subdivisions, and (2) prohibit the 
Adjacent State from exercising any authority under subsection (h), for 
the duration of the restriction. The Secretary shall make the 
determination of the existence of such restricting constitutional 
provision or State statute within 30 days of a petition by any outer 
Continental Shelf lessee or coastal State.''.

SEC. 10. OUTER CONTINENTAL SHELF LEASING PROGRAM.

    Section 18 of the Outer Continental Shelf Lands Act (43 U.S.C. 
1344) is amended--
            (1) in subsection (a), by adding at the end of paragraph 
        (3) the following: ``The Secretary shall, in each 5-year 
        program, include lease sales that when viewed as a whole 
        propose to offer for oil and gas or natural gas leasing at 
        least 75 percent of the available unleased acreage within each 
        OCS Planning Area. Available unleased acreage is that portion 
        of the outer Continental Shelf that is not under lease at the 
        time of the proposed lease sale, and has not otherwise been 
        made unavailable for leasing by law.'';
            (2) in subsection (c), by striking so much as precedes 
        paragraph (3) and inserting the following:
    ``(c)(1) During the preparation of any proposed leasing program 
under this section, the Secretary shall consider and analyze leasing 
throughout the entire Outer Continental Shelf without regard to any 
other law affecting such leasing. During this preparation the Secretary 
shall invite and consider suggestions from any interested Federal 
agency, including the Attorney General, in consultation with the 
Federal Trade Commission, and from the Governor of any coastal State. 
The Secretary may also invite or consider any suggestions from the 
executive of any local government in a coastal State that have been 
previously submitted to the Governor of such State, and from any other 
person. Further, the Secretary shall consult with the Secretary of 
Defense regarding military operational needs in the outer Continental 
Shelf. The Secretary shall work with the Secretary of Defense to 
resolve any conflicts that might arise regarding offering any area of 
the outer Continental Shelf for oil and gas or natural gas leasing. If 
the Secretaries are not able to resolve all such conflicts, any 
unresolved issues shall be elevated to the President for resolution.
    ``(2) After the consideration and analysis required by paragraph 
(1), including the consideration of the suggestions received from any 
interested Federal agency, the Federal Trade Commission, the Governor 
of any coastal State, any local government of a coastal State, and any 
other person, the Secretary shall publish in the Federal Register a 
proposed leasing program accompanied by a draft environmental impact 
statement prepared pursuant to the National Environmental Policy Act of 
1969. After the publishing of the proposed leasing program and during 
the comment period provided for on the draft environmental impact 
statement, the Secretary shall submit a copy of the proposed program to 
the Governor of each affected State for review and comment. The 
Governor may solicit comments from those executives of local 
governments in the Governor's State that the Governor, in the 
discretion of the Governor, determines will be affected by the proposed 
program. If any comment by such Governor is received by the Secretary 
at least 15 days prior to submission to the Congress pursuant to 
paragraph (3) and includes a request for any modification of such 
proposed program, the Secretary shall reply in writing, granting or 
denying such request in whole or in part, or granting such request in 
such modified form as the Secretary considers appropriate, and stating 
the Secretary's reasons therefor. All such correspondence between the 
Secretary and the Governor of any affected State, together with any 
additional information and data relating thereto, shall accompany such 
proposed program when it is submitted to the Congress.''; and
            (3) by adding at the end the following:
    ``(i) Projection of State Adjacent Zone Resources and State and 
Local Government Shares of OCS Receipts.--Concurrent with the 
publication of the scoping notice at the beginning of the development 
of each 5-year outer Continental Shelf oil and gas leasing program, or 
as soon thereafter as possible, the secretary shall--
                    ``(1) provide to each Adjacent State a current 
                estimate of proven and potential oil and gas resources 
                located within the State's Adjacent Zone; and
                    ``(2) provide to each Adjacent State, and coastal 
                political subdivisions thereof, a best-efforts 
                projection of the OCS Receipts that the Secretary 
                expects will be shared with each Adjacent State, and 
                its coastal political subdivisions, using the 
                assumption that the unleased tracts within the State's 
                Adjacent Zone are fully made available for leasing, 
                including long-term projected OCS Receipts. In 
                addition, the Secretary shall include a macroeconomic 
                estimate of the impact of such leasing on the national 
                economy and each State's economy, including investment, 
                jobs, revenues, personal income, and other 
                categories.''.

SEC. 11. COORDINATION WITH ADJACENT STATES.

    Section 19 of the Outer Continental Shelf Lands Act (43 U.S.C. 
1345) is amended--
            (1) in subsection (a) in the first sentence by inserting 
        ``, for any tract located within the Adjacent State's Adjacent 
        Zone,'' after ``government''; and
            (2) by adding the following:
    ``(f)(1) No Federal agency may permit or otherwise approve, without 
the concurrence of the Adjacent State, the construction of a crude oil 
or petroleum products (or both) pipeline within the part of the 
Adjacent State's Adjacent Zone that is not available by law for oil and 
gas or natural gas leasing, except that such a pipeline may be approved 
to pass through such Adjacent Zone if at least 50 percent of the 
production projected to be carried by the pipeline within its first 10 
years of operation is from areas of the Adjacent State's Adjacent Zone.
            ``(2) No State may prohibit the construction within its 
        Adjacent Zone or its State waters of a natural gas pipeline 
        that will transport natural gas produced from the outer 
        Continental Shelf. However, an Adjacent State may prevent a 
        proposed natural gas pipeline landing location if it proposes 
        two alternate landing locations in the Adjacent State, 
        acceptable to the Adjacent State, located within 50 miles on 
        either side of the proposed landing location.''.

SEC. 12. ENVIRONMENTAL STUDIES.

    Section 20(d) of the Outer Continental Shelf Lands Act (43 U.S.C. 
1346) is amended--
            (1) by inserting ``(1)'' after ``(d)''; and
            (2) by adding at the end the following:
            ``(2) For all programs, lease sales, leases, and actions 
        under this Act, the following shall apply regarding the 
        application of the National Environmental Policy Act of 1969:
                    ``(A) Granting or directing lease suspensions and 
                the conduct of all preliminary activities on outer 
                Continental Shelf tracts, including seismic activities, 
                are categorically excluded from the need to prepare 
                either an environmental assessment or an environmental 
                impact statement, and the Secretary shall not be 
                required to analyze whether any exceptions to a 
                categorical exclusion apply for activities conducted 
                under the authority of this Act.
                    ``(B) The environmental impact statement developed 
                in support of each 5-year oil and gas leasing program 
                provides the environmental analysis for all lease sales 
                to be conducted under the program and such sales shall 
                not be subject to further environmental analysis.
                    ``(C) Exploration plans shall not be subject to any 
                requirement to prepare an environmental impact 
                statement, and the Secretary may find that exploration 
                plans are eligible for categorical exclusion due to the 
                impacts already being considered within an 
                environmental impact statement or due to mitigation 
                measures included within the plan.
                    ``(D) Within each OCS Planning Area, after the 
                preparation of the first development and production 
                plan environmental impact statement for a leased tract 
                within the Area, future development and production 
                plans for leased tracts within the Area shall only 
                require the preparation of an environmental assessment 
                unless the most recent development and production plan 
                environmental impact statement within the Area was 
                finalized more than 10 years prior to the date of the 
                approval of the plan, in which case an environmental 
                impact statement shall be required.''.

SEC. 13. REVIEW OF OUTER CONTINENTAL SHELF DEVELOPMENT AND PRODUCTION 
              PLANS.

    Section 25 of the Outer Continental Shelf Lands Act (43 U.S.C. 
1351(a)) is amended to read as follows:

``SEC. 25. REVIEW OF OUTER CONTINENTAL SHELF DEVELOPMENT AND PRODUCTION 
              PLANS.

    ``(a) Development and Production Plans; Submission to Secretary; 
Statement of Facilities and Operation; Submission to Governors of 
Affected States and Local Governments.--
            ``(1) Prior to development and production pursuant to an 
        oil and gas lease issued on or after September 18, 1978, for 
        any area of the outer Continental Shelf, or issued or 
        maintained prior to September 18, 1978, for any area of the 
        outer Continental Shelf, with respect to which no oil or gas 
        has been discovered in paying quantities prior to September 18, 
        1978, the lessee shall submit a development and production plan 
        (hereinafter in this section referred to as a `plan') to the 
        Secretary for review.
            ``(2) A plan shall be accompanied by a statement describing 
        all facilities and operations, other than those on the outer 
        Continental Shelf, proposed by the lessee and known by the 
        lessee (whether or not owned or operated by such lessee) that 
        will be constructed or utilized in the development and 
        production of oil or gas from the lease area, including the 
        location and site of such facilities and operations, the land, 
        labor, material, and energy requirements associated with such 
        facilities and operations, and all environmental and safety 
        safeguards to be implemented.
            ``(3) Except for any privileged or proprietary information 
        (as such term is defined in regulations issued by the 
        Secretary), the Secretary, within 30 days after receipt of a 
        plan and statement, shall--
                    ``(A) submit such plan and statement to the 
                Governor of any affected State, and upon request to the 
                executive of any affected local government; and
                    ``(B) make such plan and statement available to any 
                appropriate interstate regional entity and the public.
    ``(b) Development and Production Activities in Accordance With Plan 
as Lease Requirement.--After enactment of the Domestic Energy 
Production through Offshore Exploration and Equitable Treatment of 
State Holdings Act of 2006, no oil and gas lease may be issued pursuant 
to this Act in any region of the outer Continental Shelf, unless such 
lease requires that development and production activities be carried 
out in accordance with a plan that complies with the requirements of 
this section. This section shall also apply to leases that do not have 
an approved development and production plan as of the date of enactment 
of the Domestic Energy Production through Offshore Exploration and 
Equitable Treatment of State Holdings Act of 2006.
    ``(c) Scope and Contents of Plan.--A plan may apply to more than 
one oil and gas lease, and shall set forth, in the degree of detail 
established by regulations issued by the Secretary--
            ``(1) the general work to be performed;
            ``(2) a description of all facilities and operations 
        located on the outer Continental Shelf that are proposed by the 
        lessee or known by the lessee (whether or not owned or operated 
        by such lessee) to be directly related to the proposed 
        development, including the location and size of such facilities 
        and operations, and the land, labor, material, and energy 
        requirements associated with such facilities and operations;
            ``(3) the environmental safeguards to be implemented on the 
        outer Continental Shelf and how such safeguards are to be 
        implemented;
            ``(4) all safety standards to be met and how such standards 
        are to be met;
            ``(5) an expected rate of development and production and a 
        time schedule for performance; and
            ``(6) such other relevant information as the Secretary may 
        by regulation require.
    ``(d) Completeness Review of the Plan.--
            ``(1) Prior to commencing any activity under a development 
        and production plan pursuant to any oil and gas lease issued or 
        maintained under this Act, the lessee shall certify that the 
        plan is consistent with the terms of the lease and that it is 
        consistent with all statutory and regulatory requirements in 
        effect on the date of issuance of the lease. The plan shall 
        include all required information and documentation required 
        under subsection (c).
            ``(2) The Secretary shall review the plan for completeness 
        within 30 days of submission. If the Secretary finds that the 
        plan is not complete, the Secretary shall notify the lessee 
        with a detailed explanation of such modifications of such plan 
        as are necessary to achieve completeness. The Secretary shall 
        have 30 days to review a modified plan for completeness.
    ``(e) Review for Consistency of the Plan.--
            ``(1) After a determination that a plan is complete, the 
        Secretary shall have 120 days to conduct a review of the plan, 
        to ensure that it is consistent with the terms of the lease, 
        and that it is consistent with all such statutory and 
        regulatory requirements applicable to the lease. The review 
        shall ensure that the plan is consistent with lease terms, and 
        statutory and regulatory requirements applicable to the lease, 
        related to national security or national defense, including any 
        military operating stipulations or other restrictions. The 
        Secretary shall seek the assistance of the Department of 
        Defense in the conduct of the review of any plan prepared under 
        this section for a lease containing military operating 
        stipulations or other restrictions and shall accept the 
        assistance of the Department of Defense in the conduct of the 
        review of any plan prepared under this section for any other 
        lease when the Secretary of Defense requests an opportunity to 
        participate in the review. If the Secretary finds that the plan 
        is not consistent, the Secretary shall notify the lessee with a 
        detailed explanation of such modifications of such plan as are 
        necessary to achieve consistency.
            ``(2) The Secretary shall have 120 days to review a 
        modified plan.
            ``(3) The lessee shall not conduct any activities under the 
        plan during any 120-day review period, or thereafter until the 
        plan has been modified to achieve compliance as so notified.
            ``(4) After review by the Secretary provided for by this 
        section, a lessee may operate pursuant to the plan without 
        further review or approval by the Secretary.
    ``(f) Review of Revision of the Approved Plan.--The lessee may 
submit to the Secretary any revision of a plan if the lessee determines 
that such revision will lead to greater recovery of oil and natural 
gas, improve the efficiency, safety, and environmental protection of 
the recovery operation, is the only means available to avoid 
substantial economic hardship to the lessee, or is otherwise not 
inconsistent with the provisions of this Act, to the extent such 
revision is consistent with protection of the human, marine, and 
coastal environments. The process to be used for the review of any such 
revision shall be the same as that set forth in subsections (d) and 
(e).
    ``(g) Cancellation of Lease on Failure to Submit Plan or Comply 
With a Plan.--Whenever the owner of any lease fails to submit a plan in 
accordance with regulations issued under this section, or fails to 
comply with a plan, the lease may be canceled in accordance with 
section 5(c) and (d). Termination of a lease because of failure to 
comply with a plan, including required modifications or revisions, 
shall not entitle a lessee to any compensation.
    ``(h) Production and Transportation of Natural Gas; Submission of 
Plan to Federal Energy Regulatory Commission; Impact Statement.--If any 
development and production plan submitted to the Secretary pursuant to 
this section provides for the production and transportation of natural 
gas, the lessee shall contemporaneously submit to the Federal Energy 
Regulatory Commission that portion of such plan that relates to the 
facilities for transportation of natural gas. The Secretary and the 
Federal Energy Regulatory Commission shall agree as to which of them 
shall prepare an environmental impact statement pursuant to the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) 
applicable to such portion of such plan, or conduct studies as to the 
effect on the environment of implementing it. Thereafter, the findings 
and recommendations by the agency preparing such environmental impact 
statement or conducting such studies pursuant to such agreement shall 
be adopted by the other agency, and such other agency shall not 
independently prepare another environmental impact statement or 
duplicate such studies with respect to such portion of such plan, but 
the Federal Energy Regulatory Commission, in connection with its review 
of an application for a certificate of public convenience and necessity 
applicable to such transportation facilities pursuant to section 7 of 
the Natural Gas Act (15 U.S.C. 717f), may prepare such environmental 
studies or statement relevant to certification of such transportation 
facilities as have not been covered by an environmental impact 
statement or studies prepared by the Secretary. The Secretary, in 
consultation with the Federal Energy Regulatory Commission, shall 
promulgate rules to implement this subsection, but the Federal Energy 
Regulatory Commission shall retain sole authority with respect to rules 
and procedures applicable to the filing of any application with the 
Commission and to all aspects of the Commission's review of, and action 
on, any such application.''.

SEC. 14. FEDERAL ENERGY NATURAL RESOURCES ENHANCEMENT FUND ACT OF 2006.

    (a) Findings.--The Congress finds the following:
            (1) Energy and minerals exploration, development, and 
        production on Federal onshore and offshore lands, including 
        bio-based fuel, natural gas, minerals, oil, geothermal, and 
        power from wind, waves, currents, and thermal energy, involves 
        significant outlays of funds by Federal and State wildlife, 
        fish, and natural resource management agencies for 
        environmental studies, planning, development, monitoring, and 
        management of wildlife, fish, air, water, and other natural 
        resources.
            (2) State wildlife, fish, and natural resource management 
        agencies are funded primarily through permit and license fees 
        paid to the States by the general public to hunt and fish, and 
        through Federal excise taxes on equipment used for these 
        activities.
            (3) Funds generated from consumptive and recreational uses 
        of wildlife, fish, and other natural resources currently are 
        inadequate to address the natural resources related to energy 
        and minerals development on Federal onshore and offshore lands.
            (4) Funds available to Federal agencies responsible for 
        managing Federal onshore and offshore lands and Federal-trust 
        wildlife and fish species and their habitats are inadequate to 
        address the natural resources related to energy and minerals 
        development on Federal onshore and offshore lands.
            (5) Receipts derived from sales, bonus bids, and royalties 
        under the mineral leasing laws of the United States are paid to 
        the Treasury through the Minerals Management Service of the 
        Department of the Interior.
            (6) None of the receipts derived from sales, bonus bids, 
        and royalties under the minerals leasing laws of the United 
        States are paid to the Federal or State agencies to examine, 
        monitor, and manage wildlife, fish, air, water, and other 
        natural resources related to natural gas, oil, and mineral 
        exploration and development.
    (b) Purposes.--It is the purpose of this section to--
            (1) establish a fund for the monitoring and management of 
        wildlife and fish, and their habitats, and air, water, and 
        other natural resources related to energy and minerals 
        development on Federal onshore and offshore lands;
            (2) make available receipts derived from sales, bonus bids, 
        and royalties from onshore and offshore gas, mineral, oil, and 
        any additional form of energy exploration and development under 
        the laws of the United States for the purposes of such fund;
            (3) distribute funds from such fund each fiscal year to the 
        Secretary of the Interior and the States; and
            (4) use the distributed funds to secure the necessary 
        trained workforce or contractual services to conduct 
        environmental studies, planning, development, monitoring, and 
        post-development management of wildlife and fish and their 
        habitats and air, water, and other natural resources that may 
        be related to bio-based fuel, gas, mineral, oil, wind, or other 
        energy exploration, development, transportation, transmission, 
        and associated activities on Federal onshore and offshore 
        lands, including, but not limited to--
                    (A) pertinent research, surveys, and environmental 
                analyses conducted to identify any impacts on wildlife, 
                fish, air, water, and other natural resources from 
                energy and mineral exploration, development, 
                production, and transportation or transmission;
                    (B) projects to maintain, improve, or enhance 
                wildlife and fish populations and their habitats or 
                air, water, or other natural resources, including 
                activities under the Endangered Species Act of 1973;
                    (C) research, surveys, environmental analyses, and 
                projects that assist in managing, including mitigating 
                either onsite or offsite, or both, the impacts of 
                energy and mineral activities on wildlife, fish, air, 
                water, and other natural resources; and
                    (D) projects to teach young people to live off the 
                land.
    (c) Definitions.--In this section:
            (1) Enhancement fund.--The term ``Enhancement Fund'' means 
        the Federal Energy Natural Resources Enhancement Fund 
        established by subsection (d).
            (2) State.--The term ``State'' means the State government 
        agency primarily responsible for fish and wildlife trust 
        resources within a State.
    (d) Establishment and Use of Federal Energy Natural Resources 
Enhancement Fund.--
            (1) Enhancement fund.--There is established in the Treasury 
        a separate account to be known as the ``Federal Energy Natural 
        Resources Enhancement Fund''.
            (2) Funding.--The Secretary of the Treasury shall deposit 
        in the Enhancement Fund--
                    (A) such sums as are provided by sections 
                9(b)(5)(A)(ii), 9(b)(5)(B)(ii), 9(c)(4)(A)(ii), and 
                9(c)(4)(B)(ii) of the Outer Continental Shelf Lands 
                Act, as amended by this Act;
                    (B)(i) during the period of October 1, 2006, 
                through September 30, 2015, 0.5 percent of all sums 
                paid into the Treasury under section 35 of the Mineral 
                Leasing Act (30 U.S.C. 191), and
                    (ii) beginning October 1, 2015, and thereafter, 2.5 
                percent of all sums paid into the Treasury under 
                section 35 of the Mineral Leasing Act (30 U.S.C. 191); 
                and
                    (C)(i) during the period of October 1, 2006, 
                through September 30, 2015, 0.5 percent of all sums 
                paid into the Treasury from receipts derived from bonus 
                bids and royalties from other mineral leasing on public 
                lands, and
                    (ii) beginning October 1, 2015, and thereafter, 2.5 
                percent of all sums paid into the Treasury from 
                receipts derived from bonus bids and royalties from 
                other mineral leasing on public lands.
            (3) Investments.--The Secretary of the Treasury shall 
        invest the amounts deposited under paragraph (2) and all 
        accrued interest on the amounts deposited under paragraph (2) 
        only in interest bearing obligations of the United States or in 
        obligations guaranteed as to both principal and interest by the 
        United States.
            (4) Payment to secretary of the interior.--
                    (A) In general.--Beginning with fiscal year 2007, 
                and in each fiscal year thereafter, one-third of 
                amounts deposited into the Enhancement Fund, together 
                with the interest thereon, shall be available, without 
                fiscal year limitations, to the Secretary of the 
                Interior for use for the purposes described in (b)(4).
                    (B) Withdrawals and transfer of funds.--The 
                Secretary of the Treasury shall withdraw such amounts 
                from the Enhancement Fund as the Secretary of the 
                Interior may request, subject to the limitation in (A), 
                and transfer such amounts to the Secretary of the 
                Interior to be used, at the discretion of the Secretary 
                of the Interior, by the Minerals Management Service, 
                the Bureau of Land Management, and the United States 
                Fish and Wildlife Service for use for the purposes 
                described in subsection (b)(4).
            (5) Payment to states.--
                    (A) In general.--Beginning with fiscal year 2007, 
                and in each fiscal year thereafter, two-thirds of 
                amounts deposited into the Enhancement Fund, together 
                with the interest thereon, shall be available, without 
                fiscal year limitations, to the States for use for the 
                purposes described in (b)(4).
                    (B) Withdrawals and transfer of funds.--Within the 
                first 90 days of each fiscal year, the Secretary of the 
                Treasury shall withdraw amounts from the Enhancement 
                Fund and transfer such amounts to the States based on 
                the proportion of all receipts that were collected the 
                previous fiscal year from Federal leases within the 
                boundaries of each State and each State's outer 
                Continental Shelf Adjacent Zone as determined in 
                accordance with section 4(a) of the Outer Continental 
                Shelf Lands Act (43 U.S.C. 1333(a)), as amended by this 
                Act.
                    (C) Use of payments by state.--Each State shall use 
                the payments made under subparagraph (B) only for 
                carrying out projects and programs for the purposes 
                described in (b)(4).
                    (D) Encourage use of private funds by state.--Each 
                State shall use the payments made under subparagraph 
                (B) to leverage private funds for carrying out projects 
                for the purposes described in (b)(4).
    (e) Limitation on Use.--Amounts available under this section may 
not be used for the purchase of any interest in land.
    (f) Reports to Congress.--
            (1) In general.--Beginning in fiscal year 2008 and 
        continuing for each fiscal year thereafter, the Secretary of 
        the Interior and each State receiving funds from the 
        Enhancement Fund shall submit a report to the Committee on 
        Energy and Natural Resources of the Senate and the Committee on 
        Resources of the House of Representatives.
            (2) Required information.--Reports submitted to the 
        Congress by the Secretary of the Interior and States under this 
        subsection shall include the following information regarding 
        expenditures during the previous fiscal year:
                    (A) A summary of pertinent scientific research and 
                surveys conducted to identify impacts on wildlife, 
                fish, and other natural resources from energy and 
                mineral developments.
                    (B) A summary of projects planned and completed to 
                maintain, improve or enhance wildlife and fish 
                populations and their habitats or other natural 
                resources.
                    (C) A list of additional actions that assist, or 
                would assist, in managing, including mitigating either 
                onsite or offsite, or both, the impacts of energy and 
                mineral development on wildlife, fish, and other 
                natural resources.
                    (D) A summary of private (non-Federal) funds used 
                to plan, conduct, and complete the plans and programs 
                identified in paragraphs (2)(A) and (2)(B).

SEC. 15. TERMINATION OF EFFECT OF LAWS PROHIBITING THE SPENDING OF 
              APPROPRIATED FUNDS FOR CERTAIN PURPOSES.

    All provisions of existing Federal law prohibiting the spending of 
appropriated funds to conduct oil and natural gas leasing and 
preleasing activities for any area of the outer Continental Shelf shall 
have no force or effect.

SEC. 16. OUTER CONTINENTAL SHELF INCOMPATIBLE USE.

    (a) In General.--No Federal agency may permit construction or 
operation (or both) of any facility, or designate or maintain a 
restricted transportation corridor or operating area on the Federal 
outer Continental Shelf or in State waters, that will be incompatible 
with, as determined by the Secretary of the Interior, oil and gas or 
natural gas leasing and substantially full exploration and production 
of tracts that are geologically prospective for oil or natural gas (or 
both).
    (b) Exceptions.--Subsection (a) shall not apply to any facility, 
transportation corridor, or operating area the construction, operation, 
designation, or maintenance of which is or will be--
            (1) located in an area of the outer Continental Shelf that 
        is unavailable for oil and gas or natural gas leasing by 
        operation of law;
            (2) used for a military readiness activity (as defined in 
        section 315(f) of Public Law 107-314; 16 U.S.C. 703 note); or
            (3) required in the national interest, as determined by the 
        President.

SEC. 17. REPURCHASE OF CERTAIN LEASES.

    (a) Authority to Repurchase and Cancel Certain Leases.--The 
Secretary of the Interior shall repurchase and cancel any Federal oil 
and gas, geothermal, coal, oil shale, tar sands, or other mineral 
lease, whether onshore or offshore, if the Secretary finds that such 
lease qualifies for repurchase and cancellation under the regulations 
authorized by this section.
    (b) Regulations.--Not later than 365 days after the date of the 
enactment of this Act, the Secretary shall publish a final regulation 
stating the conditions under which a lease referred to in subsection 
(a) would qualify for repurchase and cancellation, and the process to 
be followed regarding repurchase and cancellation. Such regulation 
shall include, but not be limited to, the following:
            (1) The Secretary shall repurchase and cancel a lease after 
        written request by the lessee upon a finding by the Secretary 
        that--
                    (A) a request by the lessee for a required permit 
                or other approval complied with applicable law, except 
                the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 
                et seq.), and terms of the lease and such permit or 
                other approval was denied;
                    (B) a Federal agency failed to act on a request by 
                the lessee for a required permit, other approval, or 
                administrative appeal within a regulatory or statutory 
                time-frame associated with the requested action, 
                whether advisory or mandatory, or if none, within 180 
                days; or
                    (C) a Federal agency attached a condition of 
                approval, without agreement by the lessee, to a 
                required permit or other approval if such condition of 
                approval was not mandated by Federal statute or 
                regulation in effect on the date of lease issuance, or 
                was not specifically allowed under the terms of the 
                lease.
            (2) A lessee shall not be required to exhaust 
        administrative remedies regarding a permit request, 
        administrative appeal, or other required request for approval 
        for the purposes of this section.
            (3) The Secretary shall make a final agency decision on a 
        request by a lessee under this section within 180 days of 
        request.
            (4) Compensation to a lessee to repurchase and cancel a 
        lease under this section shall be the amount that a lessee 
        would receive in a restitution case for a material breach of 
        contract.
            (5) Compensation shall be in the form of a check or 
        electronic transfer from the Department of the Treasury from 
        funds deposited into miscellaneous receipts under the authority 
        of the same Act that authorized the issuance of the lease being 
        repurchased.
            (6) Failure of the Secretary to make a final agency 
        decision on a request by a lessee under this section within 180 
        days of request shall result in a 10 percent increase in the 
        compensation due to the lessee if the lease is ultimately 
        repurchased.
    (c) No Prejudice.--This section shall not be interpreted to 
prejudice any other rights that the lessee would have in the absence of 
this section.

SEC. 18. OFFSITE ENVIRONMENTAL MITIGATION.

    Notwithstanding any other provision of law, any person conducting 
activities under the Mineral Leasing Act (30 U.S.C. 181 et seq.), the 
Geothermal Steam Act (30 U.S.C. 1001 et seq.), the Mineral Leasing Act 
for Acquired Lands (30 U.S.C. 351 et seq.), the Weeks Act (16 U.S.C. 
552 et seq.), the General Mining Act of 1872 (30 U.S.C. 22 et seq.), 
the Materials Act of 1947 (30 U.S.C. 601 et seq.), or the Outer 
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), may in satisfying 
any mitigation requirements associated with such activities propose 
mitigation measures on a site away from the area impacted and the 
Secretary of the Interior shall accept these proposed measures if the 
Secretary finds that they generally achieve the purposes for which 
mitigation measures appertained.

SEC. 19. AMENDMENTS TO THE MINERAL LEASING ACT.

    Section 17(g) of the Mineral Leasing Act (30 U.S.C. 226(g)) is 
amended to read as follows:
    ``(g) Regulation of Surface-Disturbing Activities.--
            ``(1) Regulation of surface-disturbing activities.--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.
            ``(2) Submission of exploration plan; completion review; 
        compliance review.--
                    ``(A) Prior to beginning oil and gas exploration 
                activities, a lessee shall submit an exploration plan 
                to the Secretary of the Interior for review.
                    ``(B) The Secretary shall review the plan for 
                completeness within 10 days of submission.
                    ``(C) In the event the exploration plan is 
                determined to be incomplete, the Secretary shall notify 
                the lessee in writing and specify the items or 
                information needed to complete the exploration plan.
                    ``(D) The Secretary shall have 10 days to review 
                any modified exploration plan submitted by the lessee.
                    ``(E) To be deemed complete, an exploration plan 
                shall include, in the degree of detail to be determined 
                by the Secretary by rule or regulation--
                            ``(i) a drilling plan containing a 
                        description of the drilling program;
                            ``(ii) the surface and projected completion 
                        zone location;
                            ``(iii) pertinent geologic data;
                            ``(iv) expected hazards, and proposed 
                        mitigation measures to address such hazards;
                            ``(v) a schedule of anticipated exploration 
                        activities to be undertaken;
                            ``(vi) a description of equipment to be 
                        used for such activities;
                            ``(vii) a certification from the lessee 
                        stating that the exploration plan complies with 
                        all lease, regulatory and statutory 
                        requirements in effect on the date of the 
                        issuance of the lease;
                            ``(viii) evidence that the lessee has 
                        secured an adequate bond, surety, or other 
                        financial arrangement prior to commencement of 
                        any surface disturbing activity;
                            ``(ix) a plan that details the complete and 
                        timely reclamation of the lease tract; and
                            ``(x) such other relevant information as 
                        the Secretary may by regulation require.
                    ``(F) Upon a determination that the exploration 
                plan is complete, the Secretary shall have 30 days from 
                the date the plan is deemed complete to conduct a 
                review of the plan.
                    ``(G) If the Secretary finds the exploration plan 
                is not consistent with all statutory and regulatory 
                requirements in effect on the date of issuance of the 
                lease, the Secretary shall notify the lessee with a 
                detailed explanation of such modifications of the 
                exploration plan as are necessary to achieve 
                compliance.
                    ``(H) The lessee shall not take any action under 
                the exploration plan within a 30 day review period, or 
                thereafter until the plan has been modified to achieve 
                compliance as so notified.
                    ``(I) After review by the Secretary provided by 
                this subsection, a lessee may operate pursuant to the 
                plan without further review or approval by the 
                Secretary.
            ``(3) Plan revisions; conduct of exploration activities.--
                    ``(A) If a significant revision of an exploration 
                plan under this subsection is submitted to the 
                Secretary, the process to be used for the review of 
                such revision shall be the same as set forth in 
                paragraph (1) of this subsection.
                    ``(B) All exploration activities pursuant to any 
                lease shall be conducted in accordance with an 
                exploration plan that has been submitted to and 
                reviewed by the Secretary or a revision of such plan.
            ``(4) Submission of development and production plan; 
        completeness review; compliance review.--
                    ``(A) Prior to beginning oil and gas development 
                and production activities, a lessee shall submit a 
                development and exploration plan to the Secretary of 
                the Interior. Upon submission, such plans shall be 
                subject to a review for completeness.
                    ``(B) The Secretary shall review the plan for 
                completeness within 30 days of submission.
                    ``(C) In the event a development and production 
                plan is determined to be incomplete, the Secretary 
                shall notify the lessee in writing and specify the 
                items or information needed to complete the plan.
                    ``(D) The Secretary shall have 30 days to review 
                for completeness any modified development and 
                production plan submitted by the lessee.
                    ``(E) To be deemed complete, a development and 
                production plan shall include, in the degree of detail 
                to be determined by the Secretary by rule or 
                regulation--
                            ``(i) a drilling plan containing a 
                        description of the drilling program;
                            ``(ii) the surface and projected completion 
                        zone location;
                            ``(iii) pertinent geologic data;
                            ``(iv) expected hazards, and proposed 
                        mitigation measures to address such hazards;
                            ``(v) a statement describing all facilities 
                        and operations proposed by the lessee and known 
                        by the lessee (whether or not owned or operated 
                        by such lessee) that shall be constructed or 
                        utilized in the development and production of 
                        oil or gas from the leases areas, including the 
                        location and site of such facilities and 
                        operations, the land, labor, material, and 
                        energy requirements associated with such 
                        facilities and operations;
                            ``(vi) the general work to be performed;
                            ``(vii) the environmental safeguards to be 
                        implemented in connection with the development 
                        and production and how such safeguards are to 
                        be implemented;
                            ``(viii) all safety standards to be met and 
                        how such standards are to be met;
                            ``(ix) an expected rate of development and 
                        production and a time schedule for performance;
                            ``(x) a certification from the lessee 
                        stating that the development and production 
                        plan complies with all lease, regulatory, and 
                        statutory requirements in effect on the date of 
                        issuance of the lease;
                            ``(xi) evidence that the lessee has secured 
                        an adequate bond, surety, or other financial 
                        arrangement prior to commencement of any 
                        surface disturbing activity;
                            ``(xii) a plan that details the complete 
                        and timely reclamation of the lease tract; and
                            ``(xiii) such other relevant information as 
                        the Secretary may by regulation require.
                    ``(F) Upon a determination that the development and 
                production plan is complete, the Secretary shall have 
                120 days from the date the plan is deemed complete to 
                conduct a review of the plan.
                    ``(G) If the Secretary finds the development and 
                production plan is not consistent with all statutory 
                and regulatory requirements in effect on the date of 
                issuance of the lease, the Secretary shall notify the 
                lessee with a detailed explanation of such 
                modifications of the development and production plan as 
                are necessary to achieve compliance.
                    ``(H) The lessee shall not take any action under 
                the development and production plan within a 120 day 
                review period, or thereafter until the plan has been 
                modified to achieve compliance as so notified.
            ``(5) Plan revisions; conduct of development and production 
        activities.--
                    ``(A) If a significant revision of a development 
                and production plan under this subsection is submitted 
                to the Secretary, the process to be used for the review 
                of such revision shall be the same as set forth in 
                paragraph (4) of this subsection.
                    ``(B) All development and production activities 
                pursuant to any lease shall be conducted in accordance 
                with an exploration plan that has been submitted to and 
                reviewed by the Secretary or a revision of such plan.
            ``(6) Cancellation of lease on failure to submit plan or 
        comply with approved plan.--Whenever the owner of any lease 
        fails to submit a plan in accordance with regulations issued 
        under this section, or fails to comply with a plan, the lease 
        may be canceled in accordance with section 31. Termination of a 
        lease because of failure to comply with a plan, including 
        required modifications or revisions, shall not entitle a lessee 
        to any compensation.''.

SEC. 20. MINERALS MANAGEMENT SERVICE.

    The bureau known as the ``Minerals Management Service'' in the 
Department of the Interior shall be known as the ``National Ocean 
Resources and Royalty Service''.

SEC. 21. AUTHORITY TO USE DECOMMISSIONED OFFSHORE OIL AND GAS PLATFORMS 
              AND OTHER FACILITIES FOR MARICULTURE, ARTIFICIAL REEF, 
              SCIENTIFIC RESEARCH, OR OTHER USES.

    (a) Short Title.--This section may be cited as the ``Rigs to Reefs 
Act of 2005''.
    (b) In General.--The Outer Continental Shelf Lands Act (43 U.S.C. 
1301 et seq.) is amended by inserting after section 9 the following:

``SEC. 10. USE OF DECOMMISSIONED OFFSHORE OIL AND GAS PLATFORMS AND 
              OTHER FACILITIES FOR MARICULTURE, ARTIFICIAL REEF, 
              SCIENTIFIC RESEARCH, OR OTHER USES.

    ``(a) In General.--The Secretary shall issue regulations under 
which the Secretary may authorize use of an offshore oil and gas 
platform or other facility that is decommissioned from service for oil 
and gas purposes for culture of marine organisms, an artificial reef, 
scientific research, or any other use authorized under section 8(p).
    ``(b) Transfer Requirements.--The Secretary shall not allow the 
transfer of a decommissioned offshore oil and gas platform or other 
facility to another person unless the Secretary is satisfied that the 
transferee is sufficiently bonded, endowed, or otherwise financially 
able to fulfill its obligations, including but not limited to--
            ``(1) ongoing maintenance of the platform or other 
        facility;
            ``(2) any liability obligations that might arise;
            ``(3) removal of the platform or other facility if 
        determined necessary by the Secretary; and
            ``(4) any other requirements and obligations that the 
        Secretary may deem appropriate by regulation.
    ``(c) Plugging and Abandonment.--The Secretary shall ensure that 
obligations of a lessee regarding the plugging and abandonment of wells 
are unaffected by implementation of this section.
    ``(d) Potential to Petition to Opt-Out of Regulations.--An Adjacent 
State acting through a resolution of its legislature, with concurrence 
of its Governor, may petition to opt-out of the application of 
regulations promulgated under this section to platforms and other 
facilities located in the area of its Adjacent Zone within 25 miles of 
the coastline. The Secretary is authorized to except such area from the 
application of such regulations, and shall approve such petition, 
unless the Secretary finds that approving the petition would probably 
cause serious harm or damage to the marine resources of the State's 
Adjacent Zone. Prior to acting on the petition, the Secretary shall 
complete an environmental assessment that documents the anticipated 
environmental effects of approving the petition.
    ``(e) Limitation on Liability.--A person that had used an offshore 
oil and gas platform or other facility for oil and gas purposes and 
that no longer has any ownership or control of the platform or other 
facility shall not be liable under Federal law for any costs or damages 
arising from such platform or other facility after the date the 
platform or other facility is used for any purpose under subsection 
(a), unless such costs or damages arise from--
            ``(1) use of the platform or other facility by the person 
        for development or production of oil or gas; or
            ``(2) another act or omission of the person.
    ``(f) Other Leasing and Use not Affected.--This section, and the 
use of any offshore oil and gas platform or other facility for any 
purpose under subsection (a), shall not affect--
            ``(1) the authority of the Secretary to lease any area 
        under this Act; or
            ``(2) any activity otherwise authorized under this Act.''.
    (c) Deadline for Regulations.--The Secretary of the Interior shall 
issue regulations under subsection (b) by not later than 180 days after 
the date of the enactment of this Act.
    (d) Study and Report on Effects of Removal of Platforms.--Not later 
than one year after the date of enactment of this Act, the Secretary of 
the Interior, in consultation with other Federal agencies as the 
Secretary deems advisable, shall study and report to the Congress 
regarding how the removal of offshore oil and gas platforms and other 
facilities from the outer Continental Shelf would affect existing fish 
stocks and coral populations.

SEC. 22. REPEAL OF REQUIREMENT TO CONDUCT COMPREHENSIVE INVENTORY OF 
              OCS OIL AND NATURAL GAS RESOURCES.

    The Energy Policy Act of 2005 (Public Law 109-58) is amended--
            (1) by repealing section 357 (119 Stat. 720; 42 U.S.C. 
        15912); and
            (2) in the table of contents in section 1(b), by striking 
        the item relating to such section 357.

SEC. 23. MINING AND PETROLEUM SCHOOLS.

    (a) Federal Energy and Mineral Resources Professional Development 
Fund.--
            (1) Professional development fund.--There is established in 
        the Treasury a separate account to be known as the ``Federal 
        Energy And Mineral Resources Professional Development Fund'' 
        (in this section referred to as the ``Professional Development 
        Fund'').
            (2) Funding.--The Secretary of the Treasury shall deposit 
        in the Professional Development Fund--
                    (A) such sums as are provided by sections 
                9(b)(5)(A)(iii), 9(b)(5)(B)(iii), 9(c)(4)(A)(iii), and 
                9(c)(4)(B)(iii) of the Outer Continental Shelf Lands 
                Act, as amended by this Act;
                    (B)(i) during the period of October 1, 2006, 
                through September 30, 2015, 0.4 percent of all sums 
                paid into the Treasury under section 35 of the Mineral 
                Leasing Act (30 U.S.C. 191), and
                    (ii) beginning October 1, 2015, and thereafter, 2.0 
                percent of all sums paid into the Treasury under 
                section 35 of the Mineral Leasing Act (30 U.S.C. 191);
                    (C)(i) during the period of October 1, 2006, 
                through September 30, 2015, 0.4 percent of all sums 
                paid into the Treasury from receipts derived from bonus 
                bids and royalties from other mineral leasing on public 
                lands, and
                    (ii) beginning October 1, 2015, and thereafter, 2.0 
                percent of all sums paid into the Treasury from 
                receipts derived from bonus bids and royalties from 
                other mineral leasing on public lands;
                    (D) donations received under paragraph (4);
                    (E) amounts referred to in section 2325 of the 
                Revised Statutes; and
                    (F) funds received under section 10 of the Energy 
                and Mineral Schools Reinvestment Act, as amended by 
                this Act.
            (3) Investments.--The Secretary of the Treasury shall 
        invest the amounts deposited under paragraph (2) and all 
        accrued interest on the amounts deposited under paragraph (2) 
        only in interest bearing obligations of the United States or in 
        obligations guaranteed as to both principal and interest by the 
        United States.
            (4) Donations.--The Secretary of the Interior may solicit 
        and accept donations of funds for deposit into the Professional 
        Development Fund.
            (5) Availability to secretary of the interior.--
                    (A) In general.--Beginning with fiscal year 2007, 
                and in each fiscal year thereafter, the amounts 
                deposited into the Professional Development Fund, 
                together with the interest thereon, shall be available, 
                without fiscal year limitations, to the Secretary of 
                the Interior for use to carry out the Energy and 
                Mineral Schools Reinvestment Act.
                    (B) Withdrawals and transfer of funds.--The 
                Secretary of the Treasury shall withdraw such amounts 
                from the Professional Development Fund as the Secretary 
                of the Interior may request and transfer such amounts 
                to the Secretary of the Interior to be used, at the 
                discretion of the Secretary to carry out the Energy and 
                Mineral Schools Reinvestment Act.
    (b) Maintenance and Restoration of Existing and Historic Petroleum 
and Mining Engineering Programs.--Public Law 98-409 (30 U.S.C. 1221 et 
seq.) is amended to read as follows:

``SEC. 1. SHORT TITLE.

    ``This Act may be cited as the `Energy and Mineral Schools 
Reinvestment Act'.

``SEC. 2. POLICY.

    ``It is the policy of the United States to maintain the human 
capital needed to preserve and foster the economic, energy, and mineral 
resources security of the United States. The petroleum and mining 
engineering programs and the applied geology and geophysics programs at 
State chartered schools, universities, and institutions that produce 
human capital are national assets and should be assisted with Federal 
funds to ensure their continued health and existence.

``SEC. 3. MAINTAINING AND RESTORING HISTORIC AND EXISTING PETROLEUM AND 
              MINING ENGINEERING EDUCATION PROGRAMS.

    ``(a) Using the funds in the Federal Energy And Mineral Resources 
Professional Development Fund, the Secretary of the Interior (in this 
Act referred to as the `Secretary') shall provide funds to each 
historic and existing State-chartered recognized petroleum or mining 
school to assist such schools, universities, and institutions in 
maintaining programs in petroleum, mining, and mineral engineering 
education and research. All funds shall be directed only to these 
programs and shall be subject to the conditions of this section. Such 
funds shall not be less than 35 percent of the annual outlay of funds 
under this Act.
    ``(b) In this Act the term `historic and existing State-chartered 
recognized petroleum or mining school' means a school, university, or 
educational institution with the presence of an engineering program 
meeting the specific program criteria, established by the member 
societies of ABET, Inc., for petroleum, mining, or mineral engineering 
and that is accredited on the date of enactment of the Domestic Energy 
Production through Offshore Exploration and Equitable Treatment of 
State Holdings Act of 2006 by ABET, Inc.
    ``(c) It shall be the duty of each school, university, or 
institution receiving funds under this section to provide for and 
enhance the training of undergraduate and graduate petroleum, mining, 
and mineral engineers through research, investigations, demonstrations, 
and experiments. All such work shall be carried out in a manner that 
will enhance undergraduate education.
    ``(d) Each school, university, or institution receiving funds under 
this Act shall maintain the program for which the funds are provided 
for 10 years after the date of the first receipt of such funds take 
steps agreed to by the Secretary, to increase the number of 
undergraduate students enrolled in and completing the programs of study 
in petroleum, mining, and mineral engineering.
    ``(e) The research, investigation, demonstration, experiment, and 
training authorized by this section may include development and 
production of conventional and non-conventional fuel resources, the 
production of metallic and non-metallic mineral resources including 
industrial mineral resources, and the production of stone, sand, and 
gravel. In all cases the work carried out with funds made available 
under this Act shall include a significant opportunity for 
participation by undergraduate students.
    ``(f) Research funded by this Act related to energy and mineral 
resource development and production may include studies of petroleum, 
mining, and mineral extraction and immediately related beneficiation 
technology; mineral economics, reclamation technology and practices for 
active operations, and the development of re-mining systems and 
technologies to facilitate reclamation that fosters the ultimate 
recovery of resources at abandoned petroleum, mining, and aggregate 
production sites.
    ``(g) Grants for basic science and engineering studies and research 
shall not require additional participation by funding partners. Grants 
for studies to demonstrate the proof of concept for science and 
engineering or the demonstration of feasibility and implementation 
shall include participation by industry and may include funding from 
other Federal agencies.
    ``(h)(1) No funds made available under this section shall be 
applied to the acquisition by purchase or lease of any land or 
interests therein, or the rental, purchase, construction, preservation, 
or repair of any building.
    ``(2) Funding made available under this section may be used with 
the express approval of the Secretary for proposals that will provide 
for maintaining or upgrading of existing laboratories and laboratory 
equipment. Funding for such maintenance shall not be used for 
university overhead expenses.
    ``(3) Funding made available under this Act may be used for 
maintaining and upgrading mines and oil and gas drilling rigs owned by 
a school, university, or institution described in this section that are 
used for undergraduate and graduate training and worker safety 
training. All requests for funding such mines and oil and gas drilling 
rigs must demonstrate that they have been owned by the school, 
university, or institution for 5 years prior to the date of enactment 
of the Domestic Energy Production through Offshore Exploration and 
Equitable Treatment of State Holdings Act of 2006 and have been 
actively used for instructional or training purposes during that time.
    ``(4) Any funding made available under this section for research, 
investigation, demonstration, experiment, or training shall not be used 
for university overhead charges in excess of 10 percent of the amount 
authorized by the Secretary.

``SEC. 4. FORMER AND NEW PETROLEUM AND MINING ENGINEERING PROGRAMS.

    ``A school, university, or educational institution that formerly 
met the requirements of section 3(b) immediately before the date of the 
enactment of the Domestic Energy Production through Offshore 
Exploration and Equitable Treatment of State Holdings Act of 2006, or 
that seeks to establish a new program described in section 3(b), shall 
be eligible for funding under this Act only if it--
            ``(1) establishes a petroleum, mining, or mineral 
        engineering program that meets the specific program criteria 
        and is accredited as such by ABET, Inc.;
            ``(2) agrees to the conditions of subsections (c), (d), and 
        (e) of section 3 and the Secretary, as advised by the Committee 
        established by section 11, determines that the program will 
        strengthen and increase the number of nationally available, 
        well- qualified faculty members in petroleum, mining, and 
        mineral engineering; and
            ``(3) agrees to maintain the accredited program for 10 
        years after the date of the first receipt of funds under this 
        Act.

``SEC. 5. FUNDING OF CONSORTIA OF HISTORIC AND EXISTING SCHOOLS.

    ``(a) Where appropriate, the Secretary may make funds available to 
consortia of schools, universities, or institutions described in 
sections 3, 4, and 6 to meet the necessary expenses for purposes of--
            ``(1) specific energy and mineral research projects of 
        broad application that could not otherwise be undertaken, 
        including the expenses of planning and coordinating regional 
        petroleum, mining, and mineral engineering projects by two or 
        more schools; and
            ``(2) research into any aspects of petroleum, mining, or 
        mineral engineering problems, including but not limited to 
        exploration, that are related to the mission of the Department 
        of the Interior and that are considered by the Committee to be 
        desirable.
    ``(b) Each application for funds under subsection (a) shall state, 
among other things, the nature of the project to be undertaken; the 
period during which it will be pursued; the qualifications of the 
personnel who will direct and conduct it; the estimated costs; the 
importance of the project to the Nation, region, or States concerned; 
its relation to other known research projects theretofore pursued or 
being pursued; the extent to which the proposed project will maximize 
the opportunity for the training of undergraduate petroleum, mining, 
and mineral engineers; and the extent of participation by 
nongovernmental sources in the project.
    ``(c) No funds shall be made available under this section except 
for a project approved by the Secretary. All funds shall be made 
available upon the basis of merit of the project, the need for the 
knowledge that it is expected to produce when completed, and the 
opportunity it provides for the undergraduate training of individuals 
as petroleum, mining, and mineral engineers.

``SEC. 6. SUPPORT FOR SCHOOLS WITH ENERGY AND MINERAL RESOURCE PROGRAMS 
              IN PETROLEUM AND MINERAL EXPLORATION GEOLOGY, PETROLEUM 
              GEOPHYSICS, OR MINING GEOPHYSICS.

    ``(a) Up to 20 percent of the annual outlay of funds under this Act 
may be granted to schools, universities, and institutions other than 
those described in sections 3 and 4.
    ``(b) The Secretary, as advised by the Committee established by 
section 11, shall determine the eligibility of a college or university 
to receive funding under this Act using criteria that include--
            ``(1) the presence of a substantial program of 
        undergraduate and graduate geoscience instruction and research 
        in one or more of the following specialties: petroleum geology, 
        mineral exploration geology, economic geology, industrial 
        minerals geology, mining geology, petroleum geophysics, mining 
        geophysics, geological engineering, or geophysical engineering 
        that has a demonstrated history of achievement;
            ``(2) evidence of institutional commitment for the purposes 
        of this Act that includes a significant opportunity for 
        participation by undergraduate students in research;
            ``(3) evidence that such school, university, or institution 
        has or can obtain significant industrial cooperation in 
        activities within the scope of this Act;
            ``(4) agreement by the school, university, or institution 
        to maintain the programs for which the funding is sought for 
        the 10-year period beginning on the date the school, 
        university, or institution first receives such funds; and
            ``(5) requiring that such funding shall be for the purposes 
        set forth in subsections (e), (f), and (g) of section 3 and 
        subject to the conditions set forth in section 3(h).

``SEC. 7. DESIGNATION OF FUNDS FOR SCHOLARSHIPS AND FELLOWSHIPS.

    ``(a) The Secretary shall utilize not more than 30 percent of the 
annual outlay of funds under this Act for the purpose of providing 
merit-based scholarships for undergraduate education, graduate 
fellowships, and postdoctoral fellowships.
    ``(b) In order to receive a scholarship or a graduate fellowship, 
an individual student must be a lawful permanent resident of the United 
States or a United States citizen and must agree in writing to complete 
a course of studies and receive a degree in petroleum, mining, or 
mineral engineering, petroleum geology, mining and economic geology, 
petroleum and mining geophysics, or mineral economics.
    ``(c) The regulations required by section 9 shall require that an 
individual, in order to retain a scholarship or graduate fellowship, 
must continue in one of the course of studies listed in subsection (b) 
of this section, must remain in good academic standing, as determined 
by the school, institution, or university and must allow for 
reinstatement of the scholarship or graduate fellowship by the 
Secretary, upon the recommendation of the school or institution. Such 
regulations may also provide for recovery of funds from an individual 
who fails to complete any of the courses of study listed in subsection 
(b) of this section after notice that such completion is a requirement 
of receipt funding under this Act.

``SEC. 8. FUNDING CRITERIA FOR INSTITUTIONS.

    ``(a) Funds available under this Act shall be paid at such times 
and in such amounts during each fiscal year as determined by the 
Secretary, and upon vouchers approved by the Secretary. Each school, 
university, or institution that receives funds under this Act shall--
            ``(1) establish its plan to provide for the training of 
        individuals as petroleum or mineral engineers and scientists 
        under a curriculum appropriate to the field of mineral 
        resources and mineral engineering and related fields;
            ``(2) establish policies and procedures that assure that 
        Federal funds made available under this Act for any fiscal year 
        will supplement and, to the extent practicable, increase the 
        level of funds that would, in the absence of such Federal 
        funds, be made available for purposes of this Act, and in no 
        case supplant such funds; and
            ``(3) have an officer appointed by its governing authority 
        who shall receive and account for all funds paid under this Act 
        and shall make an annual report to the Secretary on or before 
        the first day of September of each year, on work accomplished 
        and the status of projects underway, together with a detailed 
        statement of the amounts received under this Act during the 
        preceding fiscal year, and of its disbursements on schedules 
        prescribed by the Secretary.
    ``(b) If any of the funds received by the authorized receiving 
officer of a program under this Act are found by the Secretary to have 
been improperly diminished, lost, or misapplied, such funds shall be 
recovered by the Secretary.
    ``(c) Schools, universities, and institutions receiving funds under 
this Act are authorized and encouraged to plan and conduct programs 
under this Act in cooperation with each other and with such other 
agencies, business enterprises and individuals.

``SEC. 9. DUTIES OF SECRETARY.

    ``(a) The Secretary, acting through the Assistant Secretary for 
Land and Minerals Management, shall administer this Act and, after 
consultation with other interested Federal agencies, shall prescribe 
such rules and regulations as may be necessary to carry out its 
provisions not later than 1 year after the enactment of the Domestic 
Energy Production through Offshore Exploration and Equitable Treatment 
of State Holdings Act of 2006.
    ``(b) The Secretary shall furnish such advice and assistance as 
will best promote the purposes of this Act, shall participate in 
coordinating research, investigations, demonstrations, and experiments 
initiated under this Act, shall indicate to schools, universities, and 
institutions receiving funds under this Act such lines of inquiry that 
seem most important, and shall encourage and assist in the 
establishment and maintenance of cooperation between such schools, 
universities, and institutions, other research organizations, the 
Department of the Interior, and other Federal agencies.
    ``(c) On or before the first day of July of each year beginning 
after the date of enactment of this sentence, schools, universities, 
and institutions receiving funds under this Act shall certify 
compliance with this Act. An individual granted a scholarship or 
fellowship with funds provided under this Act, shall through their 
respective school, university, or institution, advise the Secretary 
upon completion of the course of studies and the awarding of the degree 
within 30 days after the award. As needed the Secretary shall ascertain 
whether the requirements of this Act have been met by schools, 
universities, and institutions and individuals.

``SEC. 10. COORDINATION.

    ``(a) Nothing in this Act shall be construed to impair or modify 
the legal relationship existing between any of the schools, 
universities, and institutions under whose direction a program is 
established with funds provided under this Act and the government of 
the State in which it is located. Nothing in this Act shall in any way 
be construed to authorize Federal control or direction of education at 
any school, university, or institution.
    ``(b) The programs authorized by this Act are intended to enhance 
the Nation's petroleum, mining, and mineral engineering education 
programs and to enhance educational programs in petroleum and mining 
exploration and to increase the number of individuals enrolled in and 
completing these programs. To achieve this intent, the Secretary and 
the Committee established by section 11 shall receive the continuing 
advice and cooperation of all agencies of the Federal Government 
concerned with the identification, exploration, and development energy 
and mineral resources.
    ``(c) Nothing in this Act is intended to give or shall be construed 
as giving the Secretary any authority over mining and mineral resources 
research conducted by any agency of the Federal Government, or as 
repealing or diminishing existing authorities or responsibilities of 
any agency of the Federal Government to plan and conduct, contract for, 
or assist in research in its area of responsibility and concern with 
regard to mining and mineral resources.
    ``(d) The schools, universities, and institutions receiving funding 
under this Act shall generally make publicly available the information 
and reports on projects completed, in progress, or planned with funds 
provided under this Act. This information shall be made available on an 
annual basis. All uses, products, processes, patents, and other 
developments resulting from any research, demonstration, or experiment 
funded in whole or in part under this Act shall be made available 
promptly to the general public, subject to exception or limitation, if 
any, as the Secretary may find necessary in the interest of national 
security. Schools, universities, and institutions receiving patents for 
inventions funded in whole or in part under this Act shall be governed 
by the applicable Federal law, except that one percent of gross 
revenues derived from such patents shall be paid by the schools and the 
institutions to the Federal Energy and Mineral Resources Professional 
Development Fund established by section 23(a) of the Domestic Energy 
Production through Offshore Exploration and Equitable Treatment of 
State Holdings Act of 2006.

``SEC. 11. COMMITTEE ON PETROLEUM, MINING, AND MINERAL ENGINEERING AND 
              ENERGY AND MINERAL RESOURCE EDUCATION.

    ``(a) The Secretary shall appoint a Committee on Petroleum, Mining, 
and Mineral Engineering and Energy and Mineral Resource Education 
composed of--
            ``(1) the Assistant Secretary of the Interior responsible 
        for land and minerals management and not more than 16 other 
        persons who are knowledgeable in the fields of mining and 
        mineral resources research, including 2 university 
        administrators one of whom shall be from historic and existing 
        petroleum and mining schools; a community, technical, or tribal 
        college administrator; a career technical education educator; 6 
        representatives equally distributed from the petroleum, mining, 
        and aggregate industries; a working miner; a working oilfield 
        worker; a representative of the Interstate Oil and Gas Compact 
        Commission; a representative from the Interstate Mining Compact 
        Commission; a representative from the Western Governors 
        Association; a representative of the State geologists, and a 
        representative of a State mining and reclamation agency. In 
        making these 16 appointments, the Secretary shall consult with 
        interested groups.
            ``(2) The Assistant Secretary for Land and Minerals 
        Management, in the capacity of the Chairman of the Committee, 
        may have present during meetings of the Committee 
        representatives of Federal agencies with responsibility for 
        energy and minerals resources management, energy and mineral 
        resource investigations, energy and mineral commodity 
        information, international trade in energy and mineral 
        commodities, mining regulation and mine safety research, and 
        research into the development, production, and utilization of 
        energy and mineral commodities. These representatives shall 
        serve as technical advisors to the committee and shall have no 
        voting responsibilities.
    ``(b) The Committee shall consult with, and make recommendations 
to, the Secretary on all matters relating to funding energy and mineral 
resources research and the awarding and allocation of funding made 
under this Act. The Secretary shall consult with and carefully consider 
recommendations of the Committee in such matters.
    ``(c) Committee members, other than officers or employees of 
Federal, State, or local governments, shall be, for each day (including 
traveltime) during which they are performing Committee business, paid 
at a rate fixed by the Secretary but not in excess of the daily 
equivalent of the maximum rate of pay for level IV of the Executive 
Schedule under section 5136 of title 5, United States Code, and shall 
be fully reimbursed for travel, subsistence, and related expenses.
    ``(d) The Committee shall be chaired by the Assistant Secretary of 
the Interior responsible for land and minerals management. There shall 
also be elected a Vice Chairman by the Committee from among the members 
referred to in this section. The Vice Chairman shall perform such 
duties as are determined to be appropriate by the committee, except 
that the Chairman of the Committee must personally preside at all 
meetings of the full Committee. The Committee may organize itself into 
such subcommittees as the Committee may deem appropriate.
    ``(e) Following completion of the report required by section 385 of 
the Energy Policy Act of 2005, the Committee shall consider the 
recommendations of the report, ongoing efforts in the schools, 
universities, and institutions receiving funding under this Act, the 
Federal and State Governments, and the private sector, and shall 
formulate and recommend to the Secretary a national plan for a program 
utilizing the fiscal resources provided under this Act. The Committee 
shall submit such plan to the Secretary for approval. Upon approval, 
the plan shall guide the Secretary and the Committee in their actions 
under this Act.
    ``(f) Section 10 of the Federal Advisory Committee Act (5 U.S.C. 
App. 2) shall not apply to the Committee.

``SEC. 12. CAREER TECHNICAL EDUCATION.

    ``(a) Up to 15 percent of the annual outlay of funds under this Act 
may be granted to schools or institutions including, but not limited 
to, colleges, universities, community colleges, tribal colleges, 
technical institutes, and secondary schools, other than those described 
in sections 3, 4, 5, and 6.
    ``(b) The Secretary, as advised by the Committee established under 
section 11, shall determine the eligibility of a school or institution 
to receive funding under this section using criteria that include--
            ``(1) the presence of a substantial program of training, 
        including vocational education for individuals seeking to enter 
        the oil and gas, coal mining, or mineral mining industries in a 
        skilled technical trade offered by the schools or institutions 
        referred to in subsection (a); or
            ``(2) the presence of a State-approved program of career 
        technical education at a secondary school, offered 
        cooperatively with a schools or institutions referred to in 
        subsection (a) in one of the industrial sectors of--
                    ``(A) agriculture, forestry, or fisheries;
                    ``(B) utilities;
                    ``(C) construction;
                    ``(D) manufacturing; and
                    ``(E) transportation and warehousing.
    ``(c) Schools or institutions receiving funds under this section 
must show evidence of an institutional commitment for the purposes 
career technical education and provide evidence that the school or 
institution can obtain industrial cooperation in activities within the 
scope of this Act.
    ``(d) Schools or institutions receiving funds under this section 
must agree to maintain the programs for which the funding is sought for 
a period of 10 years beginning on the date the school or institution 
receives such funds, unless the Secretary finds that a shorter period 
of time is appropriate for the local labor market or is required by 
State authorities.''.

SEC. 24. ONSHORE AND OFFSHORE MINERAL LEASE FEES.

    Notwithstanding any other provision of law, the Department of the 
Interior is prohibited from charging fees applicable to actions on 
Federal onshore and offshore oil and gas, coal, geothermal, and other 
mineral leases, including transportation of any production from such 
leases, if such fees were not established in final regulations prior to 
the date of issuance of the lease.

SEC. 25. OCS REGIONAL HEADQUARTERS.

    The headquarters for the Gulf of Mexico Region shall permanently be 
located within the State of Louisiana within 25 miles of the center of 
Jackson Square, New Orleans, Louisiana. Further, not later than July 1, 
2008, the Secretary of the Interior shall establish the headquarters 
for the Atlantic OCS Region and the headquarters for the Pacific OCS 
Region within a State bordering the Atlantic OCS Region and a State 
bordering the Pacific OCS Region, respectively, from among the States 
bordering those Regions, that petitions by no later than January 1, 
2008, for leasing, for oil and gas or natural gas, covering at least 40 
percent of the area of its Adjacent Zone within 100 miles of the 
coastline. Such Atlantic and Pacific OCS Regions headquarters shall be 
located within 25 miles of the coastline and each MMS OCS regional 
headquarters shall be the permanent duty station for all Minerals 
Management Service personnel that on a daily basis spend on average 60 
percent or more of their time in performance of duties in support of 
the activities of the respective Region, except that the Minerals 
Management Service may house regional inspection staff in other 
locations. Each OCS Region shall each be led by a Regional Director who 
shall be an employee within the Senior Executive Service.

SEC. 26. NATIONAL GEOLOGIC DATA AND MAPPING FUND ACT OF 2005.

    (a) Short Title.--This section may be cited as the ``National 
Geologic Data and Mapping Fund Act of 2006''.
    (b) Purposes.--The purpose of this section is to--
            (1) establish a fund to provide funding for geologic 
        mapping and the preservation and use of geologic data;
            (2) make available receipts derived from sales, bonus bids, 
        and royalties from onshore and offshore gas, minerals, oil, and 
        any additional form of energy exploration and development under 
        the laws of the United States for the purposes of the such 
        fund;
            (3) distribute funds from such fund each fiscal year to the 
        Secretary of the Interior and the States; and
            (4) use the distributed funds to secure the necessary 
        trained workforce, contractual services, and other support, 
        including maintenance and capital investments, to conduct 
        geologic mapping and preserve and make geologic data available 
        for use.
    (c) Definitions.--In this section:
            (1) Geologic fund.--The term ``Geologic Fund'' means the 
        National Geologic Data and Mapping Fund established by 
        subsection (d).
            (2) State.--The term ``State'' means the State geological 
        survey, the agency that acts as the State geological survey, or 
        any other State government agency primarily responsible for 
        geologic mapping or geologic data preservation (or both) within 
        a State.
    (d) Establishment and Use of National Geologic Data and Mapping 
Fund.--
            (1) Geologic fund.--There is established in the Treasury a 
        separate account to be known as the ``National Geologic Data 
        and Mapping Fund''.
            (2) Funding.--The Secretary of the Treasury shall deposit 
        in the Enhancement Fund--
                    (A) such sums as are provided by sections 
                9(b)(5)(A)(iv), 9(b)(5)(B)(iv), 9(c)(4)(A)(iv), and 
                9(c)(4)(B)(iv) of the Outer Continental Shelf Lands 
                Act, as amended by this Act;
                    (B)(i) during the period of October 1, 2006, 
                through September 30, 2015, 0.1 percent of all sums 
                paid into the Treasury under section 35 of the Mineral 
                Leasing Act (30 U.S.C. 191), and
                    (ii) beginning October 1, 2015, and thereafter, 0.5 
                percent of all sums paid into the Treasury under 
                section 35 of the Mineral Leasing Act (30 U.S.C. 191); 
                and
                    (C)(i) during the period of October 1, 2006, 
                through September 30, 2015, 0.1 percent of all sums 
                paid into the Treasury from receipts derived from bonus 
                bids and royalties from other mineral leasing on public 
                lands, and
                    (ii) beginning October 1, 2015, and thereafter, 0.5 
                percent of all sums paid into the Treasury from 
                receipts derived from bonus bids and royalties from 
                other mineral leasing on public lands.
            (3) Investments.--The Secretary of the Treasury shall 
        invest the amounts deposited under paragraph (2) and all 
        accrued interest on the amounts deposited under paragraph (2) 
        only in interest bearing obligations of the United States or in 
        obligations guaranteed as to both principal and interest by the 
        United States.
            (4) Availability to secretary of the interior.--
                    (A) In general.--Beginning with fiscal year 2007, 
                and in each fiscal year thereafter, one-third of 
                amounts deposited into the Geologic Fund, together with 
                the interest thereon, shall be available, without 
                fiscal year limitations, to the Secretary of the 
                Interior for use for the purposes described in 
                subsection (b)(4).
                    (B) Withdrawals and transfer of funds.--The 
                Secretary of the Treasury shall withdraw such amounts 
                from the Geologic Fund as the Secretary of the Interior 
                may request, subject to the limitation in subparagraph 
                (A), and transfer such amounts to the Secretary of the 
                Interior to be used, at the discretion of the Secretary 
                of the Interior, by the Minerals Management Service, 
                the Bureau of Land Management, and the United States 
                Geological Survey for the purposes described in 
                subsection (b)(4). No funds distributed from the 
                Geologic Fund may be used to purchase an interest in 
                land.
            (5) Payment to states.--
                    (A) In general.--Beginning with fiscal year 2007, 
                and in each fiscal year thereafter, two-thirds of 
                amounts deposited into the Geologic Fund, together with 
                the interest thereon, shall be available, without 
                fiscal year limitations, to the States for use for the 
                purposes described in subsection (b)(4).
                    (B) Withdrawals and transfer of funds.--Within the 
                first 90 days of each fiscal year, the Secretary of the 
                Treasury shall withdraw amounts from the Geologic Fund 
                and transfer such amounts to the States based on a 
                formula devised by the Secretary of the Interior based 
                on the relative geologic mapping and data preservation 
                needs of the States.
                    (C) Use of payments by states.--Each State shall 
                use the payments made under subparagraph (B) only for 
                carrying out projects and programs for the purposes 
                described in subsection (b)(4). No funds distributed 
                from the Geologic Fund may be used to purchase an 
                interest in land.
                    (D) Encouragement of use of private funds by 
                states.--Each State shall use the payments made under 
                subparagraph (B) to leverage private funds for carrying 
                out projects for the purposes described in subsection 
                (b)(4).
    (e) Report to Congress.--Beginning in fiscal year 2008 and 
continuing for each fiscal year thereafter, the Secretary of the 
Interior and each State receiving funds from the Geologic Fund shall 
submit a report to the Committee on Energy and Natural Resources of the 
Senate and the Committee on Resources of the House of Representatives. 
Reports submitted to the Congress by the Secretary of the Interior and 
the States shall include detailed information regarding expenditures 
during the previous fiscal year.

SEC. 27. LEASES FOR AREAS LOCATED WITHIN 100 MILES OF CALIFORNIA OR 
              FLORIDA.

    (a) Authorization to Cancel and Exchange Certain Existing Oil and 
Gas Leases; Prohibition on Submittal of Exploration Plans for Certain 
Leases Prior to June 30, 2012.--
            (1) Authority.--Effective 180 days after the date of 
        enactment of this subtitle, the lessee of an existing oil and 
        gas lease for an area located completely within 100 miles of 
        the coastline within the California or Florida Adjacent Zones 
        shall have the option, without compensation, of exchanging such 
        lease for a new oil and gas lease having a primary term of 5 
        years. For the area subject to the new lease, the lessee may 
        select any unleased tract at least part of which is located 
        within the area between 100 and 125 miles from the coastline, 
        and completely beyond 100 miles from the coastline, within the 
        same Adjacent State's Adjacent Zone as the lease being 
        exchanged.
            (2) Administrative process.--The Secretary of the Interior 
        shall establish a reasonable administrative process through 
        which a lessee may exercise its option to exchange an oil and 
        gas lease for a new oil and gas lease as provided for in this 
        section. Such exchanges, including the issuance of new leases, 
        shall not be considered to be major Federal actions for 
        purposes of the National Environmental Policy Act of 1969 (42 
        U.S.C. 4321 et seq.). Further, such exchanges conducted in 
        accordance with this section are deemed to be in compliance all 
        provisions of the Outer Continental Shelf Lands Act (43 U.S.C. 
        1331 et seq.). The Secretary shall issue a new lease in 
        exchange for the lease being exchanged notwithstanding that the 
        area that will be subject to the lease may be withdrawn from 
        leasing under the Outer Continental Shelf Lands Act or 
        otherwise unavailable for leasing under the provisions of any 
        other law.
            (3) Operating restrictions.--A new lease issued in exchange 
        for an existing lease under this section shall be subject to 
        such national defense operating restrictions on the OCS tract 
        covered by the new lease as may be applicable upon issuance.
            (4) Priority.--The Secretary shall give priority in the 
        lease exchange process based on the amount of the original 
        bonus bid paid for the issuance of each lease to be exchanged. 
        The Secretary shall allow leases covering partial tracts to be 
        exchanged for leases covering full tracts conditioned upon 
        payment of additional bonus bids on a per-acre basis as 
        determined by the average per acre of the original bonus bid 
        per acre for the partial tract being exchanged.
            (5) Exploration plans.--Any exploration plan submitted to 
        the Secretary of the Interior after the date of the enactment 
        of this Act and before July 1, 2012, for an oil and gas lease 
        for an area wholly within 100 miles of the coastline within the 
        California Adjacent Zone or Florida Adjacent Zone shall not be 
        treated as received by the Secretary until the earlier of July 
        1, 2012, or the date on which a petition by the Adjacent State 
        for oil and gas leasing covering the area within which is 
        located the area subject to the oil and gas lease was approved.
    (b) Further Lease Cancellation and Exchange Provisions.--
            (1) Cancellation of lease.--As part of the lease exchange 
        process under this section, the Secretary shall cancel a lease 
        that is exchanged under this section.
            (2) Consent of lessees.--All lessees holding an interest in 
        a lease must consent to cancellation of their leasehold 
        interests in order for the lease to be cancelled and exchanged 
        under this section.
            (3) Waiver of rights.--As a prerequisite to the exchange of 
        a lease under this section, the lessee must waive any rights to 
        bring any litigation against the United States related to the 
        transaction.
            (4) Plugging and abandonment.--The plugging and abandonment 
        requirements for any wells located on any lease to be cancelled 
        and exchanged under this section must be complied with by the 
        lessees prior to the cancellation and exchange.
    (c) Area Partially Within 100 Miles of Florida.--An existing oil 
and gas lease for an area located partially within 100 miles of the 
coastline within the Florida Adjacent Zone may only be developed and 
produced using wells drilled from well-head locations at least 100 
miles from the coastline to any bottom-hole location on the area of the 
lease.
    (d) Existing Oil and Gas Lease Defined.--In this section the term 
``existing oil and gas lease'' means an oil and gas lease in effect on 
the date of the enactment of this Act.

SEC. 28. COASTAL IMPACT ASSISTANCE.

     Section 31 of the Outer Continental Shelf Lands Act (43 U.S.C. 
1356a) is repealed.

SEC. 29. OIL SHALE AND TAR SANDS AMENDMENTS.

    (a) Repeal of Requirement to Establish Payments.--Section 369(o) of 
the Energy Policy Act of 2005 (Public Law 109-58; 119 Stat. 728; 42 
U.S.C. 15927) is repealed.
    (b) Treatment of Revenues.--Section 21 of the Mineral Leasing Act 
(30 U.S.C. 241) is amended by adding at the end the following:
    ``(e) Revenues.--
            ``(1) In general.--Notwithstanding the provisions of 
        section 35, all revenues received from and under an oil shale 
        or tar sands lease shall be disposed of as provided in this 
        subsection.
            ``(2) Royalty rates for commercial leases.--
                    ``(A) Initial production.--For the first 10 years 
                after initial production under each oil shale or tar 
                sands lease issued under the commercial leasing program 
                established under subsection (d), the Secretary shall 
                set the royalty rate at not less than 1 percent nor 
                more than 3 percent of the gross value of production. 
                However, the initial production period royalty rate set 
                by the Secretary shall not apply to production 
                occurring more than 15 years after the date of issuance 
                of the lease.
                    ``(B) Subsequent periods.--After the periods of 
                time specified in subparagraph (A), the Secretary shall 
                set the royalty rate on each oil shale or tar sands 
                lease issued under the commercial leasing program 
                established under subsection (d) at not less than 6 
                percent nor more than 9 percent of the gross value of 
                production.
                    ``(C) Reduction.--The Secretary shall reduce any 
                royalty otherwise required to be paid under 
                subparagraphs (A) and (B) under any oil shale or tar 
                sands lease on a sliding scale based upon market price, 
                with a 10 percent reduction if the monthly average 
                price of NYMEX West Texas Intermediate crude oil at 
                Cushing, Oklahoma, (WTI) drops below $50 (in 2005 
                dollars) for the month in which the production is sold, 
                and an 80 percent reduction if the monthly average 
                price of WTI drops below $30 (in 2005 dollars) for the 
                month in which the production is sold.
            ``(3) Disposition of revenues.--
                    ``(A) Deposit.--The Secretary shall deposit into a 
                separate account in the Treasury all revenues derived 
                from any oil shale or tar sands lease.
                    ``(B) Allocations to states and local political 
                subdivisions.--The Secretary shall allocate 50 percent 
                of the revenues deposited into the account established 
                under subparagraph (A) to the State within the 
                boundaries of which the leased lands are located, with 
                a portion of that to be paid directly by the Secretary 
                to the State's local political subdivisions as provided 
                in this paragraph.
                    ``(C) Transmission of allocations.--
                            ``(i) In general.--Not later than the last 
                        business day of the month after the month in 
                        which the revenues were received, the Secretary 
                        shall transmit--
                                    ``(I) to each State two-thirds of 
                                such State's allocations under 
                                subparagraph (B), and in accordance 
                                with clauses (ii) and (iii) to certain 
                                county-equivalent and municipal 
                                political subdivisions of such State a 
                                total of one-third of such State's 
                                allocations under subparagraph (B), 
                                together with all accrued interest 
                                thereon; and
                                    ``(II) the remaining balance of 
                                such revenues deposited into the 
                                account that are not allocated under 
                                subparagraph (B), together with 
                                interest thereon, shall be transmitted 
                                to the miscellaneous receipts account 
                                of the Treasury, except that until a 
                                lease has been in production for 20 
                                years 50 percent of such remaining 
                                balance derived from a lease shall be 
                                paid in accordance with subclause (I).
                            ``(ii) Allocations to certain county-
                        equivalent political subdivisions.--The 
                        Secretary shall under clause (i)(I) make 
                        equitable allocations of the revenues to 
                        county-equivalent political subdivisions that 
                        the Secretary determines are closely associated 
                        with the leasing and production of oil shale 
                        and tar sands, under a formula that the 
                        Secretary shall determine by regulation.
                            ``(iii) Allocations to municipal political 
                        subdivisions.--The initial allocation to each 
                        county-equivalent political subdivision under 
                        clause (ii) shall be further allocated to the 
                        county-equivalent political subdivision and any 
                        municipal political subdivisions located 
                        partially or wholly within the boundaries of 
                        the county-equivalent political subdivision on 
                        an equitable basis under a formula that the 
                        Secretary shall determine by regulation.
                    ``(D) Investment of deposits.--The deposits in the 
                Treasury account established under 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.
                    ``(E) Use of funds.--A recipient of funds under 
                this subsection may use the funds for any lawful 
                purpose as determined by State law. Funds allocated 
                under this subsection to States and local political 
                subdivisions may be used as matching funds for other 
                Federal programs without limitation. Funds allocated to 
                local political subdivisions under this subsection may 
                not be used in calculation of payments to such local 
                political subdivisions under programs for payments in 
                lieu of taxes or other similar programs.
                    ``(F) No accounting required.--No recipient of 
                funds under this subsection shall be required to 
                account to the Federal Government for the expenditure 
                of such funds, except as otherwise may be required by 
                law.
            ``(4) Definitions.--In this subsection:
                    ``(A) County-equivalent political subdivision.--The 
                term `county-equivalent political subdivision' means a 
                political jurisdiction immediately below the level of 
                State government, including a county, parish, borough 
                in Alaska, independent municipality not part of a 
                county, parish, or borough in Alaska, or other 
                equivalent subdivision of a State.
                    ``(B) Municipal political subdivision.--The term 
                `municipal political subdivision' means a municipality 
                located within and part of a county, parish, borough in 
                Alaska, or other equivalent subdivision of a State.''.
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