113 
the Interior to be used, at the discretion of the 
Secretary of the Interior, by the Minerals Man-
agement Service, the Bureau of Land Manage-
ment, 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 Geo-
logic Fund, together with the interest thereon, 
shall be available, without fiscal year limita-
tions, to the States for use for the purposes de-
scribed 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 with-
draw amounts from the Geologic Fund and 
transfer such amounts to the States based on 
a formula devised by the Secretary of the Inte-
rior 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 sub-
114 
paragraph (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 le-
verage 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 Com-
mittee on Energy and Natural Resources of the Senate 
and the Committee on Resources of the House of Rep-
resentatives. Reports submitted to the Congress by the 
Secretary of the Interior and the States shall include de-
tailed information regarding expenditures during the pre-
vious 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
115 
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 com-
pletely 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 be-
tween 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 adminis-
trative 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.). Fur-
116 
ther, such exchanges conducted in accordance with 
this section are deemed to be in compliance all provi-
sions 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 un-
available 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 op-
erating restrictions on the OCS tract covered by the 
new lease as may be applicable upon issuance. 
(4) PRIORITY.—The Secretary shall give pri-
ority 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 Sec-
retary 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.
117 
(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 ap-
proved. 
(b) FURTHER
LEASE
CANCELLATION
AND
EX-
CHANGE PROVISIONS.— 
(1) CANCELLATION OF LEASE.—As part of the 
lease exchange process under this section, the Sec-
retary 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
118 
must waive any rights to bring any litigation against 
the United States related to the transaction. 
(4) PLUGGING AND ABANDONMENT.—The plug-
ging and abandonment requirements for any wells 
located on any lease to be cancelled and exchanged 
under this section must be complied with by the les-
sees prior to the cancellation and exchange. 
(c) AREA PARTIALLY WITHIN 100 MILES OF FLOR-
IDA.—An existing oil and gas lease for an area located 
partially within 100 miles of the coastline within the Flor-
ida 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 PAY-
MENTS.—Section 369(o) of the Energy Policy Act of 2005
119 
(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 add-
ing at the end the following: 
‘‘(e) REVENUES.— 
‘‘(1) IN GENERAL.—Notwithstanding the provi-
sions of section 35, all revenues received from and 
under an oil shale or tar sands lease shall be dis-
posed 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 com-
mercial leasing program established under sub-
section (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 pro-
duction 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),
120 
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 pro-
duction. 
‘‘(C) REDUCTION.—The Secretary shall re-
duce 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, Okla-
homa, (WTI) drops below $50 (in 2005 dollars) 
for the month in which the production is sold, 
and an 80 percent reduction if the monthly av-
erage 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 de-
posit into a separate account in the Treasury 
all revenues derived from any oil shale or tar 
sands lease.
121 
‘‘(B) ALLOCATIONS TO STATES AND LOCAL 
POLITICAL SUBDIVISIONS.—The Secretary shall 
allocate 50 percent of the revenues deposited 
into the account established under subpara-
graph (A) to the State within the boundaries of 
which the leased lands are located, with a por-
tion of that to be paid directly by the Secretary 
to the State’s local political subdivisions as pro-
vided 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 sub-
paragraph (B), and in accordance 
with clauses (ii) and (iii) to certain 
county-equivalent and municipal polit-
ical 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 ac-
122 
count that are not allocated under 
subparagraph (B), together with in-
terest 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 SUBDIVI-
SIONS.—The Secretary shall under clause 
(i)(I) make equitable allocations of the rev-
enues to county-equivalent political sub-
divisions that the Secretary determines are 
closely associated with the leasing and pro-
duction of oil shale and tar sands, under a 
formula that the Secretary shall determine 
by regulation. 
‘‘(iii) ALLOCATIONS
TO
MUNICIPAL 
POLITICAL SUBDIVISIONS.—The initial al-
location to each county-equivalent political 
subdivision under clause (ii) shall be fur-
ther allocated to the county-equivalent po-
litical subdivision and any municipal polit-
123 
ical subdivisions located partially or wholly 
within the boundaries of the county-equiva-
lent political subdivision on an equitable 
basis under a formula that the Secretary 
shall determine by regulation. 
‘‘(D) INVESTMENT OF DEPOSITS.—The de-
posits in the Treasury account established 
under this section shall be invested by the Sec-
retary 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 pro-
grams 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
124 
for payments in lieu of taxes or other similar 
programs. 
‘‘(F) NO ACCOUNTING REQUIRED.—No re-
cipient 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 po-
litical subdivision’ means a political jurisdiction 
immediately below the level of State govern-
ment, 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
SUBDIVI-
SION.—The term ‘municipal political subdivi-
sion’ means a municipality located within and 
part of a county, parish, borough in Alaska, or 
other equivalent subdivision of a State.’’. 
Æ