II 

110TH CONGRESS 

2D SESSION S. 3543 

To improve the administration of the Minerals Management Service, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 23 (legislative day, SEPTEMBER 17), 2008 

Mr. MENENDEZ (for himself and Mr. NELSON of Florida) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources 

A BILL 

To improve the administration of the Minerals Management 

Service, and for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Integrity in Offshore Energy Resources Act of 2008’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

TITLE I—EMPLOYEES OF SERVICE 

Sec. 101. Employee ethical standards. 


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TITLE II—PROGRAMS OF SERVICE 

Sec. 201. Suspension of royalty-in-kind program. 

Sec. 202. Audits. 

Sec. 203. Annual reports. 

Sec. 204. Prohibition on use of royalty-in-kind revenues for administrative 

costs. 

1 SEC. 2. DEFINITIONS. 

2 In this Act: 

3 (1) DEPARTMENT.—The term ‘‘Department’’ 

4 means the Department of the Interior. 

5 (2) MINERAL.—The term ‘‘mineral’’ has the 

6 meaning given the term ‘‘minerals’’ in section 2 of 

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

8 1331). 

9 (3) MINERAL MINING.— 

10 (A) IN GENERAL.—The term ‘‘mineral 

11 mining’’ means— 

12 (i) any activity carried out on Federal 

13 land on or off a claim (with or without a 

14 discovery) for mineral leasing, preleasing, 

15 any related activity, prospecting, explo16 ration, development, mining, extraction, 

17 milling, beneficiation, processing, or stor18 age of mined or processed materials with 

19 respect to any mineral that is under the 

20 jurisdiction of the Service and uses reason21 ably incident to the activity; and 


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1 (ii) any reclamation activity for any 

2 mineral and uses reasonably incident to 

3 the activity. 

4 (B) INCLUSIONS.—The term ‘‘mineral ac5 tivity’’ includes the construction and use of 

6 roads, transmission lines, pipelines, utility cor7 ridors, and other means of access across Fed8 eral land for an ancillary facility. 

9 (4) ROYALTY-IN-KIND PROGRAM.—The term 

10 ‘‘royalty-in-kind program’’ means the program es11 tablished under— 

12 (A) section 342 of the Energy Policy Act 

13 of 2005 (42 U.S.C. 15902); 

14 (B) section 36 of the Mineral Leasing Act 

15 (30 U.S.C. 192); 

16 (C) section 27 of the Outer Continental 

17 Shelf Lands Act (43 U.S.C. 1353); or 

18 (D) any other similar provision of law. 

19 (5) SECRETARY.—The term ‘‘Secretary’’ means 

20 the Secretary of the Interior. 

21 (6) SERVICE.—The term ‘‘Service’’ means the 

22 Minerals Management Service. 


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1 TITLE I—EMPLOYEES OF 

2 SERVICE 

3 SEC. 101. EMPLOYEE ETHICAL STANDARDS. 

4 (a) GIFTS.— 

5 (1) PROHIBITION.— 

6 (A) IN GENERAL.—An employee of the 

7 Service may not knowingly accept a gift from 

8 an entity that is engaged in the business of 

9 mineral mining. 

10 (B) EXCEPTIONS.—Except for the value 

11 exception, the regulations providing exceptions 

12 to the gift rules for Federal employees for gifts 

13 from outside sources (5 C.F.R. Part 2635) 

14 shall apply to subparagraph (A). 

15 (2) VIOLATION.—Whoever violates paragraph 

16 (1) shall be guilty of a felony and fined under title 

17 18, United States Code, or imprisoned for not more 

18 than 2 years, or both. 

19 (b) FINANCIAL DISCLOSURE.—The filing require20 ments of section 101(f) of the Ethics in Government Act 

21 of 1978 shall apply to an employee of the Service in a 

22 position classified at an annual income equivalent to GS– 

23 13 or higher. 

24 (c) DIVESTITURE REQUIREMENT.—An employee of 

25 the Service may not own stock or any other interest in 


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1 an entity that is engaged in the business of mineral mining 

2 during the period of employment of that employee by the 

3 Service. 

4 (d) OUTSIDE EMPLOYMENT.—An employee of the 

5 Service may not be employed by any entity that is engaged 

6 in the business of mineral mining during the period of em7 ployment of that employee by the Service. 

8 (e) REVOLVING DOOR.— 

9 (1) ANY WORK FOR THE INDUSTRY.—An em10 ployee of the Service shall not work for an entity en11 gaged in the business of mineral mining during the 

12 1 year period after the termination of his or her em13 ployment with the Service. 

14 (2) VIOLATION.—Whoever violates paragraph 

15 (1) shall be guilty of a felony and punished as pro16 vided in section 216 of title 18, United States Code. 

17 TITLE II—PROGRAMS OF 

18 SERVICE 

19 SEC. 201. SUSPENSION OF ROYALTY-IN-KIND PROGRAM. 

20 (a) IN GENERAL.—Notwithstanding any other provi21 sion of law, the authority of the Secretary to carry out 

22 each royalty-in-kind program is suspended during the pe23 riod— 

24 (1) beginning on the date of enactment of this 

25 Act; and 


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1 (2) ending on the date the Secretary certifies to 

2 Congress that the Secretary, acting through the 

3 Service, has— 

4 (A) conducted a comprehensive review to 

5 determine if the Service is accurately collecting 

6 royalties and reported the results of the review 

7 to Congress; 

8 (B) conducted a thorough review to ensure 

9 that metering equipment properly measures 

10 what royalties are owed to the Federal Govern11 ment and reported the results of the review to 

12 Congress; 

13 (C) implemented a robust training pro14 gram for employees of the Service that cul15 minates in a certification signed by an employee 

16 that the employee understands the ethics laws 

17 (including regulations); and 

18 (D) created an ombudsman position that— 

19 (i) monitors the progress of the Serv20 ice in carrying out the actions described in 

21 this paragraph; and 

22 (ii) is appointed by, and reports exclu23 sively to, the Inspector General of the De24 partment. 


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1 (b) APPLICATION.—Subsection (a) applies to a con2 tract entered into on or after the date of enactment of 

3 this Act. 

4 SEC. 202. AUDITS. 

5 (a) NUMBER OF AUDITS.— 

6 (1) IN GENERAL.—The Secretary shall ensure 

7 that by fiscal year 2009 the Service shall perform 

8 each fiscal year not less that 550 audits of oil and 

9 gas leases entered into by the Secretary for which 

10 payment is made under a royalty-in-kind program. 

11 (2) COMPLIANCE REVIEWS.—For purposes of 

12 paragraph (1), a compliance review shall not be con13 sidered an audit. 

14 (b) STANDARDS.—Not later than 120 days after the 

15 date of enactment of this Act, the Secretary shall promul16 gate regulations that— 

17 (1) require that all employees that conduct au18 dits or compliance reviews of oil and gas leases en19 tered into by the Secretary shall meet professional 

20 auditor qualifications that are consistent with the 

21 latest revision of the Government Auditing Stand22 ards issued by the Comptroller General of the 

23 United States; and 


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1 (2) ensure that all audits conducted by the De2 partment are performed in accordance with the 

3 Standards. 

4 SEC. 203. ANNUAL REPORTS. 

5 Not later than 1 year after the date of enactment 

6 of this Act and each year thereafter, the Inspector General 

7 of the Department shall submit to Congress a report that 

8 evaluates— 

9 (1) the performance of the Secretary in car10 rying out each royalty-in-kind program; and 

11 (2) whether the royalty-in-kind program costs 

12 or saves taxpayer dollars as compared to receiving 

13 revenues in cash. 

14 SEC. 204. PROHIBITION ON USE OF ROYALTY-IN-KIND REV15 ENUES FOR ADMINISTRATIVE COSTS. 

16 Section 342(b)(5) of the Energy Policy Act of 2005 

17 (42 U.S.C. 15902(b)(5)) is amended— 

18 (1) by striking ‘‘LIMITATION.—’’ and all that 

19 follows through ‘‘subparagraph (B), the’’ in sub20 paragraph (A) and inserting ‘‘LIMITATION.—The’’; 

21 and 

22 (2) by striking subparagraph (B). 

Æ 


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