934
(3) for the generation, transmission, and dis-
tribution of electric energy. 
SEC. 2032. ELECTRICITY TRANSMISSION LINE RIGHT-OF-
WAY, CLEVELAND NATIONAL FOREST AND 
ADJACENT PUBLIC LAND, CALIFORNIA. 
(a) ISSUANCE.—
(1) IN GENERAL.—Not later than 60 days after 
the completion of the environmental reviews under 
subsection (c), the Secretary of the Interior and the 
Secretary of Agriculture shall issue all necessary 
grants, easements, permits, plan amendments, and 
other approvals to allow for the siting and construc-
tion of a high-voltage electricity transmission line 
right-of-way running approximately north to south 
through the Trabuco Ranger District of the Cleve-
land National Forest in the State of California and 
adjacent lands under the jurisdiction of the Bureau 
of Land Management and the Forest Service. 
(2) INCLUSIONS.—The right-of-way approvals 
under paragraph (1) shall provide all necessary Fed-
eral authorization from the Secretary of the Interior 
and the Secretary of Agriculture for the routing, 
construction, operation, and maintenance of a 500-
kilovolt transmission line capable of meeting the 
long-term electricity transmission needs of the region
935
between the existing Valley-Serrano transmission 
line to the north and the Telega-Escondido trans-
mission line to the south, and for connecting to fu-
ture generating capacity that may be developed in 
the region. 
(b) PROTECTION OF WILDERNESS AREAS.—The Sec-
retary of the Interior and the Secretary of Agriculture 
shall not allow any portion of a transmission line right-
of-way corridor identified in subsection (a) to enter any 
identified wilderness area in existence as of the date of 
enactment of this Act. 
(c) ENVIRONMENTAL
AND
ADMINISTRATIVE
RE-
VIEWS.—
(1) DEPARTMENT
OF
INTERIOR
OR
LOCAL 
AGENCY.—The Secretary of the Interior, acting 
through the Director of the Bureau of Land Man-
agement, shall be the lead Federal agency with over-
all responsibility to ensure completion of required 
environmental and other reviews of the approvals to 
be issued under subsection (a). 
(2) NATIONAL FOREST SYSTEM LAND.—For the 
portions of the corridor on National Forest System 
lands, the Secretary of Agriculture shall complete all 
required environmental reviews and administrative
936
actions in coordination with the Secretary of the In-
terior. 
(3) EXPEDITIOUS
COMPLETION.—The reviews 
required for issuance of the approvals under sub-
section (a) shall be completed not later than 1 year 
after the date of enactment of this Act. 
(d) OTHER TERMS AND CONDITIONS.—The trans-
mission line right-of-way shall be subject to such terms 
and conditions as the Secretary of the Interior and the 
Secretary of Agriculture consider necessary, based on the 
environmental reviews under subsection (c), to protect the 
value of historic, cultural, and natural resources under the 
jurisdiction of the Secretary of the Interior or the Sec-
retary of Agriculture. 
(e) PREFERENCE AMONG PROPOSALS.—The Sec-
retary of the Interior and the Secretary of Agriculture 
shall give a preference to any application or preapplication 
proposal for a transmission line right-of-way referred to 
in subsection (a) that was submitted before December 31, 
2002, over all other applications and proposals for the 
same or a similar right-of-way submitted on or after that 
date.
937
SEC. 2033. SENSE OF CONGRESS REGARDING DEVELOP-
MENT OF MINERALS UNDER PADRE ISLAND 
NATIONAL SEASHORE. 
(a) FINDINGS.—Congress finds the following: 
(1) Pursuant to Public Law 87–712 (16 U.S.C. 
459d et seq.; popularly known as the ‘‘Federal Ena-
bling Act’’) and various deeds and actions under 
that Act, the United States is the owner of only the 
surface estate of certain lands constituting the 
Padre Island National Seashore. 
(2) Ownership of the oil, gas, and other min-
erals in the subsurface estate of the lands consti-
tuting the Padre Island National Seashore was never 
acquired by the United States, and ownership of 
those interests is held by the State of Texas and pri-
vate parties. 
(3) Public Law 87–712 (16 U.S.C. 459d et 
seq.)—
(A) expressly contemplated that the United 
States would recognize the ownership and fu-
ture development of the oil, gas, and other min-
erals in the subsurface estate of the lands con-
stituting the Padre Island National Seashore by 
the owners and their mineral lessees; and
938
(B) recognized that approval of the State 
of Texas was required to create Padre Island 
National Seashore. 
(4) Approval was given for the creation of 
Padre Island National Seashore by the State of 
Texas through Tex. Rev. Civ. Stat. Ann. Art. 
6077(t) (Vernon 1970), which expressly recognized 
that development of the oil, gas, and other minerals 
in the subsurface of the lands constituting Padre Is-
land National Seashore would be conducted with full 
rights of ingress and egress under the laws of the 
State of Texas. 
(b) SENSE OF CONGRESS.—It is the sense of Con-
gress that with regard to Federal law, any regulation of 
the development of oil, gas, or other minerals in the sub-
surface of the lands constituting Padre Island National 
Seashore should be made as if those lands retained the 
status that the lands had on September 27, 1962. 
SEC. 2034. LIVINGSTON PARISH MINERAL RIGHTS TRANS-
FER. 
(a) AMENDMENTS.—Section 102 of Public Law 102–
562 (106 Stat. 4234) is amended—
(1) by striking ‘‘(a) IN GENERAL.—’’; 
(2) by striking ‘‘and subject to the reservation 
in subsection (b),’’; and
939
(3) by striking subsection (b). 
(b) IMPLEMENTATION OF AMENDMENT.—The Sec-
retary of the Interior shall execute the legal instruments 
necessary to effectuate the amendment made by sub-
section (a)(3). 
Subtitle C—Naval Petroleum 
Reserves 
SEC. 2041. TRANSFER OF ADMINISTRATIVE JURISDICTION 
AND ENVIRONMENTAL REMEDIATION, NAVAL 
PETROLEUM RESERVE NUMBERED 2, KERN 
COUNTY, CALIFORNIA. 
(a) ADMINISTRATION JURISDICTION TRANSFER TO 
SECRETARY OF THE INTERIOR.—Effective on the date of 
the enactment of this Act, administrative jurisdiction and 
control over all public domain lands included within Naval 
Petroleum Reserve Numbered 2 located in Kern County, 
California, (other than the lands specified in subsection 
(b)) are transferred from the Secretary of Energy to the 
Secretary of the Interior for management, subject to sub-
section (c), in accordance with the general land laws. 
(b) EXCLUSION OF CERTAIN RESERVE LANDS.—The 
transfer of administrative jurisdiction made by subsection 
(a) does not include the following lands: 
(1) That portion of Naval Petroleum Reserve 
Numbered 2 authorized for disposal under section
940
3403(a) of the Strom Thurmond National Defense 
Authorization Act for Fiscal Year 1999 (Public Law 
105–261; 10 U.S.C. 7420 note). 
(2) That portion of the surface estate of Naval 
Petroleum Reserve Numbered 2 conveyed to the City 
of Taft, California, by section 2042 of this Act. 
(c) PURPOSE OF TRANSFER.—Notwithstanding any 
other provision of law, the principle purpose of the lands 
subject to transfer under subsection (a) is the production 
of hydrocarbon resources, and the Secretary of the Inte-
rior shall manage the lands in a fashion consistent with 
this purpose. In managing the lands, the Secretary of the 
Interior shall regulate operations only to prevent unneces-
sary degradation and to provide for ultimate economic re-
covery of the resources. 
(d) CONFORMING AMENDMENT.—Section 3403 of the 
Strom Thurmond National Defense Authorization Act for 
Fiscal Year 1999 (Public Law 105–261; 10 U.S.C 7420 
note) is amended by striking subsection (b). 
SEC. 2042. LAND CONVEYANCE, PORTION OF NAVAL PETRO-
LEUM RESERVE NUMBERED 2, TO CITY OF 
TAFT, CALIFORNIA. 
(a) CONVEYANCE.—Effective on the date of the en-
actment of this Act, there is conveyed to the City of Taft, 
California (in this section referred to as the ‘‘City’’), all
941
surface right, title, and interest of the United States in 
and to a parcel of real property consisting of approxi-
mately 167 acres located in the N1⁄2 of section 18, town-
ship 32 south, range 24 east, Mount Diablo meridian, 
more fully described as Parcels 1 and 2 according to the 
Record of Survey filed on July 1, 1974, in Book 11 of 
Record Surveys at page 68, County of Kern, State of Cali-
fornia. 
(b) CONSIDERATION.—The conveyance under sub-
section (a) is made without the payment of consideration 
by the City. 
(c) TREATMENT OF EXISTING RIGHTS.—The convey-
ance under subsection (a) is subject to valid existing 
rights, including Federal oil and gas lease SAC—019577. 
(d) TREATMENT OF MINERALS.—All coal, oil, gas, 
and other minerals within the lands conveyed under sub-
section (a) are reserved to the United States, except that 
the United States and its lessees, licensees, permittees, or 
assignees shall have no right of surface use or occupancy 
of the lands. Nothing in this subsection shall be construed 
to require the United States or its lessees, licensees, per-
mittees, or assignees to support the surface of the con-
veyed lands. 
(e) INDEMNIFY AND HOLD HARMLESS.—The City 
shall indemnify, defend, and hold harmless the United
942
States for, from, and against, and the City shall assume 
all responsibility for, any and all liability of any kind or 
nature, including all loss, cost, expense, or damage, arising 
from the City’s use or occupancy of, or operations on, the 
land conveyed under subsection (a), whether such use or 
occupancy of, or operations on, occurred before or occur 
after the date of the enactment of this Act. 
(f) INSTRUMENT OF CONVEYANCE.—Not later than 
one year after the date of the enactment of this Act, the 
Secretary of Energy shall execute, file, and cause to be 
recorded in the appropriate office a deed or other appro-
priate instrument documenting the conveyance made by 
this section. 
SEC. 2043. REVOCATION OF LAND WITHDRAWAL. 
Effective on the date of the enactment of this Act, 
the Executive Order of December 13, 1912, which created 
Naval Petroleum Reserve Numbered 2, is revoked in its 
entirety. 
SEC. 2044. EFFECT OF TRANSFER AND CONVEYANCE. 
Nothing in this Act shall be construed——
(1) to impose on the Secretary of Energy any 
new liability or responsibility that the Secretary of 
Energy did not bear before the date of the enact-
ment of this Act; or
943
(2) to increase the level of responsibility of the 
Secretary of Energy with respect to any responsi-
bility borne by the Secretary of Energy before that 
date. 
Subtitle D—Miscellaneous 
Provisions 
SEC. 2051. SPLIT-ESTATE FEDERAL OIL AND GAS LEASING 
AND DEVELOPMENT PRACTICES. 
(a) REVIEW.—In consultation with affected private 
surface owners, oil and gas industry, and other interested 
parties, the Secretary of the Interior shall undertake a re-
view of the current policies and practices with respect to 
management of Federal subsurface oil and gas develop-
ment activities and their effects on the privately owned 
surface. This review shall include—
(1) a comparison of the rights and responsibil-
ities under existing mineral and land law for the 
owner of a Federal mineral lease, the private surface 
owners and the Department; 
(2) a comparison of the surface owner consent 
provisions in section 714 of the Surface Mining Con-
trol and Reclamation Act of 1977 (30 U.S.C. 1304) 
concerning surface mining of Federal coal deposits 
and the surface owner consent provisions for oil and
944
gas development, including coalbed methane produc-
tion; and 
(3) recommendations for administrative or leg-
islative action necessary to facilitate reasonable ac-
cess for Federal oil and gas activities while address-
ing surface owner concerns and minimizing impacts 
to private surface. 
(b) REPORT.—The Secretary of the Interior shall re-
port the results of such review to Congress not later than 
180 days after the date of enactment of this Act. 
SEC. 2052. ROYALTY PAYMENTS UNDER LEASES UNDER 
THE OUTER CONTINENTAL SHELF LANDS 
ACT. 
(a) ROYALTY RELIEF.—
(1) IN GENERAL.—For purposes of providing 
compensation for lessees and a State for which 
amounts are authorized by section 6004(c) of the Oil 
Pollution Act of 1990 (Public Law 101–380), a les-
see may withhold from payment any royalty due and 
owing to the United States under any leases under 
the Outer Continental Shelf Lands Act (43 U.S.C. 
1301 et seq.) for offshore oil or gas production from 
a covered lease tract if, on or before the date that 
the payment is due and payable to the United
945
States, the lessee makes a payment to the State of 
44 cents for every $1 of royalty withheld. 
(2) TREATMENT
OF
AMOUNTS.—Any royalty 
withheld by a lessee in accordance with this section 
(including any portion thereof that is paid to the 
State under paragraph (1)) shall be treated as paid 
for purposes of satisfaction of the royalty obligations 
of the lessee to the United States. 
(3) CERTIFICATION OF WITHHELD AMOUNTS.—
The Secretary of the Treasury shall—
(A) determine the amount of royalty with-
held by a lessee under this section; and 
(B) promptly publish a certification when 
the total amount of royalty withheld by the les-
see under this section is equal to—
(i) the dollar amount stated at page 
47 of Senate Report number 101–534, 
which is designated therein as the total 
drainage claim for the West Delta field; 
plus 
(ii) interest as described at page 47 of 
that Report. 
(b) PERIOD OF ROYALTY RELIEF.—Subsection (a) 
shall apply to royalty amounts that are due and payable 
in the period beginning on January 1, 2006, and ending
946
on the date on which the Secretary of the Treasury pub-
lishes a certification under subsection (a)(4)(B). 
(c) DEFINITIONS.—As used in this section: 
(1) COVERED LEASE TRACT.—The term ‘‘cov-
ered lease tract’’ means a leased tract (or portion of 
a leased tract)—
(A) lying seaward of the zone defined and 
governed by section 8(g) of the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1337(g)); or 
(B) lying within such zone but to which 
such section does not apply. 
(2) LESSEE.—The term ‘‘lessee’’—
(A) means a person or entity that, on the 
date of the enactment of the Oil Pollution Act 
of 1990, was a lessee referred to in section 
6004(c) of that Act (as in effect on that date 
of the enactment), but did not hold lease rights 
in Federal offshore lease OCS–G–5669; and 
(B) includes successors and affiliates of a 
person or entity described in subparagraph (A). 
SEC. 2053. DOMESTIC OFFSHORE ENERGY REINVESTMENT. 
The Outer Continental Shelf Lands Act (43 U.S.C. 
1331 et seq.) is amended by adding at the end the fol-
lowing:
947
‘‘SEC. 32. DOMESTIC OFFSHORE ENERGY REINVESTMENT 
PROGRAM. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) COASTAL
ENERGY
STATE.—The term 
‘Coastal Energy State’ means a Coastal State off 
the coastline of which, within the seaward lateral 
boundary as determined under section 4, outer Con-
tinental Shelf bonus bids or royalties are generated. 
‘‘(2) COASTAL
POLITICAL
SUBDIVISION.—The 
term ‘coastal political subdivision’ means a county, 
parish, or other equivalent subdivision of a Coastal 
Energy State, all or part of which lies within the 
boundaries of the coastal zone of the State, as iden-
tified in the State’s approved coastal zone manage-
ment program under the Coastal Zone Management 
Act of 1972 (16 U.S.C. 1451 et seq.) on the date 
of the enactment of this section. 
‘‘(3) COASTAL POPULATION.—The term ‘coastal 
population’ means the population of a coastal polit-
ical subdivision, as determined by the most recent 
official data of the Census Bureau. 
‘‘(4) COASTLINE.—The term ‘coastline’ has the 
same meaning as the term ‘coast line’ in subsection 
2(c) of the Submerged Lands Act (43 U.S.C. 
1301(c)).
948
‘‘(5) FUND.—The term ‘Fund’ means the Se-
cure Energy Reinvestment Fund established by this 
section. 
‘‘(6) LEASED TRACT.—The term ‘leased tract’ 
means a tract maintained under section 6 or leased 
under section 8 for the purpose of drilling for, devel-
oping, and producing oil and natural gas resources. 
‘‘(7) QUALIFIED OUTER CONTINENTAL SHELF 
REVENUES.—The term ‘qualified outer Continental 
Shelf revenues’ means all amounts received by the 
United States on or after October 1, 2005, from 
each leased tract or portion of a leased tract lying 
seaward of the zone defined and governed by section 
8(g), or lying within such zone but to which section 
8(g) does not apply, including bonus bids, rents, roy-
alties (including payments for royalties taken in kind 
and sold), net profit share payments, and related in-
terest. 
‘‘(8) SECRETARY.—The term ‘Secretary’ means 
the Secretary of the Interior. 
‘‘(b) SECURE ENERGY REINVESTMENT FUND.—
‘‘(1) ESTABLISHMENT.—There is established in 
the Treasury of the United States a separate ac-
count which shall be known as the ‘Secure Energy
949
Reinvestment Fund’. The Fund shall consist of 
amounts deposited under paragraph (2). 
‘‘(2) DEPOSITS.—For each of fiscal years 2006 
through 2015, the Secretary of the Treasury shall 
deposit into the Fund, subject to appropriations, the 
following: 
‘‘(A) Notwithstanding section 9, all quali-
fied outer Continental Shelf revenues attrib-
utable to royalties received by the United States 
in the fiscal year that are in excess of the fol-
lowing amount: 
‘‘(i) $7,000,000,000 in the case of 
royalties received in fiscal year 2006. 
‘‘(ii) $7,100,000,000 in the case of 
royalties received in fiscal year 2007. 
‘‘(iii) $7,300,000,000 in the case of 
royalties received in fiscal year 2008. 
‘‘(iv) $6,900,000,000 in the case of 
royalties received in fiscal year 2009. 
‘‘(v) $7,200,000,000 in the case of 
royalties received in fiscal year 2010. 
‘‘(vi) $7,250,000,000 in the case of 
royalties received in fiscal year 2011. 
‘‘(vii) $8,125,000,000 in the case of 
royalties received in fiscal year 2012.
950
‘‘(viii) $8,100,000,000 in the case of 
royalties received in fiscal year 2013. 
‘‘(ix) $9,000,000,000 in the case of 
royalties received in fiscal year 2014. 
‘‘(x) $7,500,000,000 in the case of 
royalties received in fiscal year 2015. 
‘‘(B) Notwithstanding section 9, all quali-
fied outer Continental shelf revenues attrib-
utable to bonus bids received by the United 
States in each of the fiscal years 2006 through 
2015 that are in excess of $880,000,000. 
‘‘(C) Notwithstanding section 9, in addi-
tion to amounts deposited under subparagraphs 
(A) and (B), $35,000,000 of amounts received 
by the United States each fiscal year as royal-
ties for oil or gas production on the outer Con-
tinental Shelf. 
‘‘(D) All interest earned under paragraph 
(4). 
In no event shall deposits under subparagraphs (A) 
through (C) total more than $50,000,000 per fiscal 
year. 
‘‘(3) DEPOSITS AFTER FISCAL YEAR 2015.—For 
each fiscal year after fiscal year 2015, the Secretary
951
of the Treasury shall deposit into the Fund the fol-
lowing: 
‘‘(A) 25 percent of qualified outer Conti-
nental Shelf revenues received by the United 
States in the preceding fiscal year. 
‘‘(B) All interest earned under paragraph 
(4). 
‘‘(4) INVESTMENT.—The Secretary of the 
Treasury shall invest moneys in the Fund (including 
interest) in public debt securities with maturities 
suitable to the needs of the Fund, as determined by 
the Secretary of the Treasury, and bearing interest 
at rates determined by the Secretary of the Treas-
ury, taking into consideration current market yields 
on outstanding marketable obligations of the United 
States of comparable maturity. Such invested mon-
eys shall remain invested until needed to meet re-
quirements for disbursement under this section. 
‘‘(c) USE
OF
SECURE
ENERGY
REINVESTMENT 
FUND.—
‘‘(1) IN GENERAL.—(A) The Secretary shall use 
amounts in the Fund remaining after the application 
of subsection (d) to pay to each Coastal Energy 
State, and to coastal political subdivisions of such 
State, the amount allocated to the State or coastal
952
political subdivision, respectively, under this sub-
section. 
‘‘(B) The Secretary shall make payments under 
this paragraph in December of 2006, and of each 
year thereafter, from revenues received by the 
United States in the preceding fiscal year. 
‘‘(2) ALLOCATION.—The Secretary shall allo-
cate amounts deposited into the Fund in a fiscal 
year, and other amounts determined by the Sec-
retary to be available, among Coastal Energy States, 
and to coastal political subdivisions of such States, 
as follows: 
‘‘(A)(i) The allocation for each Coastal En-
ergy State shall be calculated based on the ratio 
of qualified outer Continental Shelf revenues 
generated off the coastline of the Coastal En-
ergy State to the qualified outer Continental 
Shelf revenues generated off the coastlines of 
all Coastal Energy States for the preceding fis-
cal year. 
‘‘(ii) For purposes of this subparagraph, 
qualified outer Continental Shelf revenues shall 
be considered to be generated off the coastline 
of a Coastal Energy State if the geographic 
center of the lease tract from which the reve-
953
nues are generated is located within the area 
formed by the extension of the State’s seaward 
lateral boundaries. 
‘‘(B) 35 percent of each Coastal Energy 
State’s allocable share as determined under 
subparagraph (A) shall be allocated among and 
paid directly to the coastal political subdivisions 
of the State by the Secretary based on the fol-
lowing formula: 
‘‘(i) 25 percent shall be allocated 
based on the ratio of each coastal political 
subdivision’s coastal population to the 
coastal population of all coastal political 
subdivisions of the Coastal Energy State. 
‘‘(ii) 25 percent shall be allocated 
based on the ratio of each coastal political 
subdivision’s coastline miles to the coast-
line miles of all coastal political subdivi-
sions of the State. In the case of a coastal 
political subdivision without a coastline, 
the coastline of the political subdivision for 
purposes of this clause shall be one-third 
the average length of the coastline of the 
other coastal political subdivisions of the 
State.
954
‘‘(iii) 50 percent shall be allocated 
based on a formula that allocates 75 per-
cent of the funds based on such coastal po-
litical subdivision’s relative distance from 
any leased tract used to calculate that 
State’s allocation and 25 percent of the 
funds based on the relative level of outer 
Continental Shelf oil and gas activities in 
a coastal political subdivision to the level of 
outer Continental Shelf oil and gas activi-
ties in all coastal political subdivisions in 
such State, as determined by the Sec-
retary. 
‘‘(d) ADMINISTRATIVE EXPENSES.—Of amounts in 
the Fund each fiscal year, the Secretary may use up to 
one-half of one percent for the administrative costs of im-
plementing this section. 
‘‘(e) DISPOSITION OF FUNDS.—A Coastal Energy 
State or coastal political subdivision may use funds pro-
vided to such entity under this section for any payment 
that is eligible to be made with funds provided to States 
under section 35 of the Mineral Leasing Act (30 U.S.C. 
191).’’.
955
SEC. 2054. REPURCHASE OF LEASES THAT ARE NOT AL-
LOWED TO BE EXPLORED OR DEVELOPED. 
(a) AUTHORITY TO REPURCHASE AND CANCEL CER-
TAIN LEASES.—Notwithstanding any other provisions of 
law, any Federal oil and gas, geothermal, coal, oil shale, 
or tar sands lease, whether onshore or offshore, issued by 
the Secretary, or units of such leases if unitized, that by 
operation of law, including but not limited to denial of a 
permit request, (1) is not allowed to be explored in the 
lawful manner requested by the lessee, or (2) if explored 
resulting in a commercial discovery is not allowed to be 
developed or produced in the lawful manner requested by 
the lessee, shall, upon the written request of the lessee 
and a finding by the Secretary that such lease qualifies, 
be authorized for repurchase and cancelled by the Sec-
retary. If a permit, approval, or appeal has been expressly 
denied and the proposal of the lessee is found by the Sec-
retary not to have been in compliance with law, the lessee 
shall not be entitled to have the lease repurchased and 
cancelled. However, if the lessee alleges that the Govern-
ment has failed to act on a proposal of the lessee within 
the applicable period of time, the Secretary shall make no 
inquiry or determination as to whether the contents of the 
request complied with the law, and the Secretary shall re-
strict the Secretary’s findings to whether or not the Gov-
ernment failed to act within the applicable period of time.
956
The Secretary shall make all decisions under this section 
within 180 days of request. The area covered by any re-
purchased and cancelled lease shall remain available for 
future leasing unless otherwise prohibited by law. For pur-
poses of this section, failure to act within a regulatory or 
statutory time-frame, whether advisory or mandatory, or 
if none, within a reasonable period of time not to exceed 
180 days, on a permit request, administrative appeal, or 
other request for approval, shall be considered to meet the 
operation of law requirements of this section. Further, 
conditions of approval attached to permit approvals shall 
meet the operation of law requirement of this section if 
such conditions are not mandated by statute or regulation 
and not agreed to by the lessee. A lessee shall not be re-
quired to exhaust administrative remedies regarding a per-
mit request, administrative appeal, or other required re-
quest for approval for the purposes of this section. 
(b) DETERMINATION
OF
A
COMMERCIAL
DIS-
COVERY.—The Secretary shall make any required deter-
mination of the existence of a commercial resource dis-
covery. For oil and gas, a commercial discovery is a dis-
covery in paying quantities. The Secretary shall be guided 
in such a determination by precedent, and by written ad-
vice, including input from the lessee.
957
(c) COMPENSATION.—Upon authorization by the Sec-
retary of the repurchase of a lease under this section, a 
lessee shall be compensated in the amount of the total of 
lease acquisition costs, rentals, seismic acquisition costs, 
archeological and environmental studies, drilling costs, 
and other reasonable expenses on the lease, including ex-
penses incurred in the repurchase process, to the extent 
that the lessee has not previously been compensated by 
the United States for such expenses. The lessee shall not 
be compensated for general overhead expenses, employee 
salaries, or interest. If the lessee is an assignee, the lessee 
may not claim the expenses of his assignor. Compensation 
shall be in the form of a check or electronic transfer from 
the Department of the Treasury from funds deposited into 
miscellaneous receipts under the authority of the same Act 
that authorized the issuance of the lease being repur-
chased. If the Secretary fails to make the repurchase au-
thorization decision under subsection (a) within the re-
quired 180 days and the lease is ultimately repurchased, 
the compensation due to the lessee shall increase by 25 
percent, plus 1 percent for every seven days that the deci-
sion is delayed beyond the required 180 days. 
(d) DELEGATION OF AUTHORITY AND FINALITY OF 
DECISIONS.—The Secretary may delegate authority grant-
ed by this section only to individuals who have been ap-
958
pointed by the President, by and with the advice and con-
sent of the Senate. A decision under this section by the 
Secretary, or delegated official, shall be considered the 
final agency decision. 
(e) REGULATIONS.—The Secretary shall issue rea-
sonable regulations implementing this section not later 
than 1 year after date of enactment of this Act. 
(f) SECRETARY.—For purposes of this section, the 
term ‘‘Secretary’’ means the Secretary of the Interior. 
(g) NO PREJUDICE.—This section shall not be inter-
preted to prejudice any other rights that the lessee would 
have in the absence of this section. 
TITLE XXI—COAL 
SEC. 2101. SHORT TITLE. 
This title may be cited as the ‘‘Coal Leasing Amend-
ments Act of 2005’’. 
SEC. 2102. LEASE MODIFICATIONS FOR CONTIGUOUS COAL 
LANDS OR COAL DEPOSITS. 
Section 3 of the Mineral Leasing Act (30 U.S.C. 203) 
is amended in the first sentence by striking ‘‘such lease,’’ 
and all that follows through the end of the sentence and 
inserting ‘‘such lease.’’. 
SEC. 2103. APPROVAL OF LOGICAL MINING UNITS. 
Section 2(d)(2) of the Mineral Leasing Act (30 
U.S.C. 202a(2)) is amended—
959
(1) by inserting ‘‘(A)’’ after ‘‘(2)’’; and 
(2) by adding at the end the following: 
‘‘(B) The Secretary may establish a period of more 
than 40 years if the Secretary determines that the longer 
period—
‘‘(i) will ensure the maximum economic recovery 
of a coal deposit; or 
‘‘(ii) the longer period is in the interest of the 
orderly, efficient, or economic development of a coal 
resource.’’. 
SEC. 2104. PAYMENT OF ADVANCE ROYALTIES UNDER COAL 
LEASES. 
(a) IN GENERAL.—Section 7(b) of the Mineral Leas-
ing Act (30 U.S.C. 207(b)) is amended to read as follows: 
‘‘(b)(1) Each lease shall be subjected to the condition 
of diligent development and continued operation of the 
mine or mines, except where operations under the lease 
are interrupted by strikes, the elements, or casualties not 
attributable to the lessee. 
‘‘(2)(A) The Secretary of the Interior, upon deter-
mining that the public interest will be served thereby, may 
suspend the condition of continued operation upon the 
payment of advance royalties. 
‘‘(B) Such advance royalties shall be computed—
‘‘(i) based on—
960
‘‘(I) the average price in the spot market 
for sales of comparable coal from the same re-
gion during the last month of each applicable 
continued operation year; or 
‘‘(II) in the absence of a spot market for 
comparable coal from the same region, by using 
a comparable method established by the Sec-
retary of the Interior to capture the commercial 
value of coal; and 
‘‘(ii) based on commercial quantities, as defined 
by regulation by the Secretary of the Interior. 
‘‘(C) The aggregate number of years during the ini-
tial and any extended term of any lease for which advance 
royalties may be accepted in lieu of the condition of contin-
ued operation shall not exceed 20. 
‘‘(3) The amount of any production royalty paid for 
any year shall be reduced (but not below zero) by the 
amount of any advance royalties paid under such lease to 
the extent that such advance royalties have not been used 
to reduce production royalties for a prior year. 
‘‘(4) This subsection shall be applicable to any lease 
or logical mining unit in existence on the date of the enact-
ment of this paragraph or issued or approved after such 
date.