136 
(A) COAL-TO-LIQUIDS
FRONT-END
ENGI-
NEERING AND DESIGN.—The terms ‘‘coal-to-liq-
uids front-end engineering and design’’ and 
‘‘FEED’’ mean those expenditures necessary to 
engineer, design, and obtain permits for a facil-
ity for a particular geographic location which 
will utilize a process or technique to produce liq-
uid fuels from coal resources. 
(B) LOW-RANK COAL WATER FUEL.—In this 
subsection the term ‘‘low-rank coal water fuel’’ 
means a liquid fuel produced from hydrothermal 
treatment of lignite and sub-bituminous coals. 
(4) GRANT PROVISIONS.—All grants shall require 
a 50 percent non-Federal cost share. The first 4 
FEED grant recipients who receive full project con-
struction financing commitments, based on earliest 
calendar date, shall not be required to repay any of 
their grants. The next 4 FEED grant recipients who 
receive such commitments shall be required to repay 
25 percent of the grant. The next 4 FEED grant re-
cipients who receive such commitments shall be re-
quired to repay 50 percent of the grant, and the re-
maining FEED grant recipeints shall be required to 
repay 75 percent of the grant. The LRCWF recipient 
shall not be required to repay the grant. Any required 
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137 
repayment shall be paid as part of the closing process 
for any construction financing relating to the grant. 
No repayment shall require the payment of interest if 
repaid within 5 years of the issuance of the grant. 
FEED grants shall be be limited to a maximum of 
$1,000,000 per 1,000 barrels per day of liquid fuels 
production capacity, not to exceed $25 million per 
year. 
(5) FUNDING.—The Secretary shall carry out the 
grant program established by this subsection with 
funds from the Geo Fund. 
(h) RENEWABLE ENERGY FROM OCEAN WAVE, CUR-
RENT, AND THERMAL RESOURCES.— 
(1) PROGRAM.—The Secretary of the Interior 
shall establish a grant program for the production of 
renewable energy from ocean waves, currents, and 
thermal resources. 
(2) GRANT PROVISIONS.—All grants under this 
subsection shall require a 50 percent non-Federal cost 
share. 
(3) FUNDING.—The Secretary shall carry out 
this grant program with funds from the Geo Fund in 
each of fiscal years 2007 through 2011 in the amount 
of not less than $6,000,000 each year, and thereafter 
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138 
in such amounts as the Secretary may find appro-
priate. 
(i) AMENDMENT TO THE SURFACE MINING CONTROL 
AND RECLAMATION ACT OF 1977.—Section 517 of the Sur-
face Mining Control and Reclamation Act of 1977 (30 
U.S.C. 1267) is amended by adding adding at the end the 
following: 
‘‘(i) Any person who provides the regulatory authority 
with a map under subsection (b)(1) shall not be liable to 
any other person in any way for the accuracy or complete-
ness of any such map which was not prepared and certified 
by or on behalf of such person.’’. 
SEC. 27. LEASES FOR AREAS LOCATED WITHIN 100 MILES OF 
CALIFORNIA OR FLORIDA. 
(a) AUTHORIZATION TO CANCEL AND EXCHANGE CER-
TAIN EXISTING OIL AND GAS LEASES; PROHIBITION ON 
SUBMITTAL OF EXPLORATION PLANS FOR CERTAIN LEASES 
PRIOR TO JUNE 30, 2010.— 
(1) AUTHORITY.—Within 2 years after the date 
of enactment of this Act, 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 
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139 
the area subject to the new lease, the lessee may select 
any unleased tract on the outer Continental Shelf that 
is in an area available for leasing. Further, with the 
permission of the relevant Governor, such a lessee 
may convert its existing oil and gas lease into a nat-
ural gas lease having a primary term of 5 years and 
covering the same area as the existing lease or an-
other area within the same State’s Adjacent Zone 
within 100 miles of the coastline. 
(2) ADMINISTRATIVE
PROCESS.—The Secretary 
of the Interior shall establish a reasonable adminis-
trative process to implement paragraph (1). Ex-
changes and conversions under subsection (a), includ-
ing the issuance of new leases, shall not be considered 
to be major Federal actions for purposes of the Na-
tional Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.). Further, such actions conducted in ac-
cordance with this section are deemed to be in compli-
ance all provisions of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1331 et seq.). 
(3) OPERATING
RESTRICTIONS.—A new lease 
issued in exchange for an existing lease under this 
section shall be subject to such national defense oper-
ating stipulations on the OCS tract covered by the 
new lease as may be applicable upon issuance. 
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140 
(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 cov-
ering full tracts conditioned upon payment of addi-
tional 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, 
2010, for an oil and gas lease for an area wholly 
within 100 miles of the coastline within the Cali-
fornia Adjacent Zone or Florida Adjacent Zone shall 
not be treated as received by the Secretary until the 
earlier of July 1, 2010, or the date on which a peti-
tion by the Adjacent State for oil and gas leasing cov-
ering 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 Sec-
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141 
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 
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 lo-
cated 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 par-
tially within 100 miles of the coastline within the Florida 
n 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. This subsection shall not apply if Florida has 
petitioned for leasing closer to the coastline than 100 miles. 
(d) EXISTING OIL AND GAS LEASE DEFINED.—In this 
section the term ‘‘existing oil and gas lease’’ means an oil 
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142 
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 
(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 provi-
sions 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) ROYALTY RATES.—The Secretary shall 
model the royalty schedule for oil shale and tar 
sands leases based on the royalty program cur-
rently in effect for the production of synthetic 
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143 
crude oil from oil sands in the Province of Al-
berta, Canada. 
‘‘(B) REDUCTION.—The Secretary shall re-
duce any royalty otherwise required to be paid 
under subparagraph (A) under any oil shale or 
tar sands lease on a sliding scale based upon 
market price, with a 10 percent reduction if the 
average futures price of NYMEX Light Sweet 
Crude, or a similar index, drops, for the previous 
quarter year, below $50 (in January 1, 2006, 
dollars), and an 80 percent reduction if the aver-
age price drops below $30 (in January 1, 2006, 
dollars) for the quarter previous to the one in 
which the production is sold. 
‘‘(3) DISPOSITION OF REVENUES.— 
‘‘(A) DEPOSIT.—The Secretary shall deposit 
into a separate account in the Treasury all reve-
nues 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 
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144 
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 subpara-
graph (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 ac-
count that are not allocated under sub-
paragraph (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 per-
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145 
cent of such remaining balance derived 
from a lease shall be paid in accord-
ance with subclause (I). 
‘‘(ii) ALLOCATIONS TO CERTAIN COUN-
TY-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 associ-
ated 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 PO-
LITICAL SUBDIVISIONS.—The initial alloca-
tion to each county-equivalent political sub-
division 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-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 
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146 
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 matu-
rities 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 with-
out limitation. Funds allocated to local political 
subdivisions under this subsection may not be 
used in calculation of payments to such local po-
litical subdivisions under programs for payments 
in lieu of taxes or other similar programs. 
‘‘(F) NO ACCOUNTING REQUIRED.—No re-
cipient of funds under this subsection shall be re-
quired 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: 
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147 
‘‘(A) COUNTY-EQUIVALENT POLITICAL SUB-
DIVISION.—The term ‘county-equivalent political 
subdivision’ means a political jurisdiction imme-
diately below the level of State government, in-
cluding 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.’’. 
SEC. 30. AVAILABILITY OF OCS RECEIPTS TO PROVIDE PAY-
MENTS UNDER SECURE RURAL SCHOOLS AND 
COMMUNITY SELF-DETERMINATION ACT OF 
2000. 
Section 9 of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1338) is amended by inserting after subsection 
(i), as added by section 7 of this Act, the following new 
subsection: 
‘‘(j) AVAILABILITY OF FUNDS FOR PAYMENTS UNDER 
SECURE RURAL SCHOOLS AND COMMUNITY SELF-DETER-
MINATION ACT OF 2000.—Notwithstanding any other provi-
sion of this section, $50,000,000 of OCS Receipts shall be 
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148 
available to the Secretary of the Treasury for each of fiscal 
years 2007 through 2012 to make payments under sections 
102 and 103 of the Secure Rural Schools and Community 
Self-Determination Act of 2000 (Public Law 106–393; 16 
U.S.C. 500 note). The Secretary of the Treasury shall use 
the funds made available by this subsection to make such 
payments in lieu of using funds in the Treasury not other-
wise appropriated, as otherwise authorized by sections 
102(b)(3) and 103(b)(2) of such Act.’’. 
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Union Calendar No. 295 
109TH CONGRESS 
2D SESSION 
H. R. 4761 
[Report No. 109–531] 
A BILL 
To provide for exploration, development, and pro-
duction activities for mineral resources on the 
outer Continental Shelf, and for other purposes. 
JUNE 26, 2006 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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