I 
109TH CONGRESS 
2D SESSION 
H. R. 6401 
To promote the fair production of oil and gas on the Outer Continental 
Shelf. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 6, 2006 
Mr. MELANCON (for himself and Mr. ABERCROMBIE) introduced the following 
bill; which was referred to the Committee on Resources 
A BILL 
To promote the fair production of oil and gas on the Outer 
Continental Shelf. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. LEASES, EASEMENTS, AND RIGHTS-OF-WAY ON 
THE OUTER CONTINENTAL SHELF. 
Section 8 of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1337) is amended by adding at the end the 
following: 
‘‘(q) ROYALTY SUSPENSION PROVISIONS.— 
‘‘(1) IN GENERAL.—Subject to paragraphs (2) 
through (4), the Secretary shall agree to a request 
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by any lessee to amend any lease issued as a result 
of a Central or Western Gulf of Mexico lease sale 
held during the period beginning on January 1, 
1998, and ending on December 31, 1999, to incor-
porate price thresholds applicable to royalty suspen-
sion provisions in the amount of $34.73 per barrel 
(2005 dollars) for oil and for natural gas of $4.34 
per million Btu (2005 dollars). 
‘‘(2) ADJUSTMENT.—The oil and natural gas 
price thresholds established under paragraph (1) 
shall be adjusted during any calendar year after 
2005 by the percentage, if any, by which the implicit 
price deflator for the gross domestic product as com-
puted and published by the Department of Com-
merce changed during the preceding calendar year. 
‘‘(3) NEW ROYALTY SUSPENSION VOLUMES.— 
After the date of enactment of this subsection, price 
thresholds shall apply to any royalty suspension vol-
umes granted by the Secretary. 
‘‘(4) EFFECTIVE
DATE.—Any amended lease 
shall impose the new price thresholds effective begin-
ning October 1, 2006. 
‘‘(r) CONSERVATION OF RESOURCES FEES.— 
‘‘(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of this subsection, the Sec-
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retary shall establish, by regulation, a conservation 
of resources fee for producing leases that will apply 
to new and existing leases which shall be established 
at $9 per barrel for oil and $1.25 per million Btu 
for gas (2006 dollars). 
‘‘(2) COVERED
AREAS.—The fee shall only 
apply to leases issued with deep water royalty relief 
for which royalties are not being paid when prices 
exceed $34.73 per barrel for oil and $4.34 per mil-
lion Btu for natural gas (2005 dollars). 
‘‘(3) EFFECTIVE DATE.—A fee imposed under 
this subsection shall apply to production that occurs 
on or after October 1, 2006.’’. 
SEC. 2. COASTAL IMPACT ASSISTANCE PROGRAM. 
Section 31(b) of the Outer Continental Shelf Lands 
Act (43 U.S.C. 1356a(b)) is amended— 
(1) in paragraph (1)— 
(A) by striking ‘‘The’’ and inserting the 
following: 
‘‘(A) FISCAL YEARS 2007 THROUGH 2010.— 
The’’; and 
(B) by adding at the end the following: 
‘‘(B) CERTAIN ROYALTY REVENUES.—Not-
withstanding section 9, of the amount of any 
royalty revenues payable to the United States 
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from any lease issued with deep water royalty 
relief as the result of a Central or Western Gulf 
of Mexico lease sale held during the period be-
ginning on January 1, 1998, and ending on De-
cember 31, 1999, the Secretary of the Treasury 
shall deposit— 
‘‘(i) the amount of the royalty reve-
nues in a special account in the Treasury, 
to be available to the Secretary of the Inte-
rior, without further appropriation, for 
each of fiscal years 2007 through 2016, 
for disbursement to Gulf producing States 
and coastal political subdivisions in accord-
ance with this section, except that the 
amount made available under this clause 
shall not exceed a total of $5,450,000,000; 
and 
‘‘(ii) any remainder of the royalty rev-
enues in the general fund of the Treasury, 
to be used for deficit reduction.’’; and 
(2) in paragraph (3)(B)— 
(A) in clause (i), by striking ‘‘and’’ after 
the semicolon at the end; 
(B) in clause (ii), by striking the period at 
the end and inserting ‘‘; and’’; and 
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(C) by adding at the end the following: 
‘‘(iii) the amount of qualified outer 
Continental Shelf revenues for each of fis-
cal years 2011 through 2016 shall be de-
termined using qualified outer Continental 
Shelf revenues received for fiscal year 
2010.’’. 
SEC. 3. SENSE OF THE CONGRESS TO BUY AND BUILD 
AMERICAN. 
(a) BUY AND BUILD AMERICAN.—It is the intention 
of the Congress that this Act, among other things, result 
in a healthy and growing American industrial, manufac-
turing, transportation, and service sector employing the 
vast talents of America’s workforce to assist in the devel-
opment of affordable energy from the Outer Continental 
Shelf. Moreover, the Congress intends to monitor the de-
ployment of personnel and material in the Outer Conti-
nental Shelf to encourage the development of American 
technology and manufacturing to enable United States 
workers to benefit from this Act by good jobs and careers, 
as well as the establishment of important industrial facili-
ties to support expanded access to American resources. 
(b) SAFEGUARD FOR EXTRAORDINARY ABILITY.— 
Section 30(a) of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1356(a)) is amended in the matter preceding 
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