I 
112TH CONGRESS 
1ST SESSION H. R. 1352 
To prohibit the Secretary of the Interior from issuing any new lease that 
authorizes the production of oil or natural gas under the Outer Conti-
nental Shelf Lands Act to a person that does not renegotiate existing 
leases held by the person to incorporate limitations on royalty relief 
based on market price that are equal to or less than price thresholds 
that apply to other leases under that Act, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 4, 2011 
Mr. MARKEY (for himself, Mr. HOLT, Mr. HINCHEY, Mr. GEORGE MILLER 
of California, Mrs. CAPPS, and Mr. MORAN) introduced the following bill; 
which was referred to the Committee on Natural Resources 
A BILL 
To prohibit the Secretary of the Interior from issuing any 
new lease that authorizes the production of oil or natural 
gas under the Outer Continental Shelf Lands Act to 
a person that does not renegotiate existing leases held 
by the person to incorporate limitations on royalty relief 
based on market price that are equal to or less than 
price thresholds that apply to other leases under that 
Act, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
VerDate Mar 15 2010 
01:46 Apr 06, 2011
Jkt 099200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H1352.IH
H1352
tjames on DSKG8SOYB1PROD with BILLS
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Deficit Reduction 
Through Fair Oil Royalties Act’’. 
SEC. 2. ELIGIBILITY FOR NEW LEASES AND THE TRANSFER 
OF LEASES. 
(a) ISSUANCE OF NEW LEASES.— 
(1) IN
GENERAL.—The Secretary shall not 
issue any new lease that authorizes the production 
of oil or natural gas under the Outer Continental 
Shelf Lands Act (43 U.S.C. 1331 et seq.) to a per-
son described in paragraph (2) unless the person has 
renegotiated each covered lease with respect to which 
the person is a lessee, to modify the payment re-
sponsibilities of the person to require the payment of 
royalties if the price of oil and natural gas is greater 
than or equal to the price thresholds described in 
clauses (v) through (vii) of section 8(a)(3)(C) of the 
Outer Continental Shelf Lands Act (43 U.S.C. 
1337(a)(3)(C)). 
(2) PERSONS DESCRIBED.—A person referred 
to in paragraph (1) is a person that— 
(A) is a lessee that— 
(i) holds a covered lease on the date 
on which the Secretary considers the 
issuance of the new lease; or 
VerDate Mar 15 2010 
01:46 Apr 06, 2011
Jkt 099200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H1352.IH
H1352
tjames on DSKG8SOYB1PROD with BILLS
(ii) was issued a covered lease before 
the date of enactment of this Act, but 
transferred the covered lease to another 
person or entity (including a subsidiary or 
affiliate of the lessee) after the date of en-
actment of this Act; or 
(B) any other person that has any direct 
or indirect interest in, or that derives any ben-
efit from, a covered lease. 
(3) MULTIPLE LESSEES.— 
(A) IN GENERAL.—For purposes of para-
graph (1), if there are multiple lessees that own 
a share of a covered lease, the Secretary may 
implement separate agreements with any lessee 
with a share of the covered lease that modifies 
the payment responsibilities with respect to the 
share of the lessee to include price thresholds 
that are equal to or less than the price thresh-
olds described in clauses (v) through (vii) of 
section 8(a)(3)(C) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)). 
(B) TREATMENT OF SHARE AS COVERED 
LEASE.—Beginning on the effective date of an 
agreement under subparagraph (A), any share 
subject to the agreement shall not constitute a 
VerDate Mar 15 2010 
01:46 Apr 06, 2011
Jkt 099200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H1352.IH
H1352
tjames on DSKG8SOYB1PROD with BILLS
covered lease with respect to any lessees that 
entered into the agreement. 
(b) TRANSFERS.—A lessee or any other person who 
has any direct or indirect interest in, or who derives a 
benefit from, a lease shall not be eligible to obtain by sale 
or other transfer (including through a swap, spinoff, serv-
icing, or other agreement) any covered lease, the economic 
benefit of any covered lease, or any other lease for the 
production of oil or natural gas in the Gulf of Mexico 
under the Outer Continental Shelf Lands Act (43 U.S.C. 
1331 et seq.), unless the lessee or other person has— 
(1) renegotiated each covered lease with respect 
to which the lessee or person is a lessee, to modify 
the payment responsibilities of the lessee or person 
to include price thresholds that are equal to or less 
than the price thresholds described in clauses (v) 
through (vii) of section 8(a)(3)(C) of the Outer Con-
tinental Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)); 
or 
(2) entered into an agreement with the Sec-
retary to modify the terms of all covered leases of 
the lessee or other person to include limitations on 
royalty relief based on market prices that are equal 
to or less than the price thresholds described in 
clauses (v) through (vii) of section 8(a)(3)(C) of the 
VerDate Mar 15 2010 
01:46 Apr 06, 2011
Jkt 099200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H1352.IH
H1352
tjames on DSKG8SOYB1PROD with BILLS
Outer Continental Shelf Lands Act (43 U.S.C. 
1337(a)(3)(C)). 
(c) USE OF AMOUNTS FOR DEFICIT REDUCTION.— 
Notwithstanding any other provision of law, any amounts 
received by the United States as rentals or royalties under 
covered leases shall be deposited in the Treasury and used 
for Federal budget deficit reduction or, if there is no Fed-
eral budget deficit, for reducing the Federal debt in such 
manner as the Secretary of the Treasury considers appro-
priate. 
(d) DEFINITIONS.—In this section— 
(1) COVERED
LEASE.—The term ‘‘covered 
lease’’ means a lease for oil or gas production in the 
Gulf of Mexico that is— 
(A) in existence on the date of enactment 
of this Act; 
(B) issued by the Department of the Inte-
rior under section 304 of the Outer Continental 
Shelf Deep Water Royalty Relief Act (43 
U.S.C. 1337 note; Public Law 104–58); and 
(C) not subject to limitations on royalty re-
lief based on market price that are equal to or 
less than the price thresholds described in 
clauses (v) through (vii) of section 8(a)(3)(C) of 
VerDate Mar 15 2010 
01:46 Apr 06, 2011
Jkt 099200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H1352.IH
H1352
tjames on DSKG8SOYB1PROD with BILLS
the Outer Continental Shelf Lands Act (43 
U.S.C. 1337(a)(3)(C)). 
(2) LESSEE.—The term ‘‘lessee’’ includes any 
person or other entity that controls, is controlled by, 
or is in or under common control with, a lessee. 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Interior. 
SEC. 3. PRICE THRESHOLDS FOR ROYALTY SUSPENSION 
PROVISIONS. 
The Secretary of the Interior shall agree to a request 
by any lessee to amend any lease issued for any Central 
and Western Gulf of Mexico tract in the period of January 
1, 1996, through November 28, 2000, to incorporate price 
thresholds applicable to royalty suspension provisions, that 
are equal to or less than the price thresholds described 
in clauses (v) through (vii) of section 8(a)(3)(C) of the 
Outer 
Continental 
Shelf 
Lands 
Act 
(43 
U.S.C. 
1337(a)(3)(C)). Any amended lease shall impose the new 
or revised price thresholds effective October 1, 2011. Ex-
isting lease provisions shall prevail through September 30, 
2011. 
Æ 
VerDate Mar 15 2010 
01:46 Apr 06, 2011
Jkt 099200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6301
E:\BILLS\H1352.IH
H1352
tjames on DSKG8SOYB1PROD with BILLS