H. R. 1975—16
(2) CLERICAL AMENDMENT.—The table of contents in section
1 of such Act (30 U.S.C. 1701) is amended by adding after
the item relating to section 115 the following new item:
‘‘Sec. 116. Assessments.’’.
(g) LIABILITY FOR ROYALTY PAYMENTS.—Section 102(a) of the
Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C.
1712(a)) is amended to read as follows:
‘‘(a) In order to increase receipts and achieve effective collections
of royalty and other payments, a lessee who is required to make
any royalty or other payment under a lease or under the mineral
leasing laws, shall make such payments in the time and manner
as may be specified by the Secretary or the applicable delegated
State. A lessee may designate a person to make all or part of
the payments due under a lease on the lessee’s behalf and shall
notify the Secretary or the applicable delegated State in writing
of such designation, in which event said designated person may,
in its own name, pay, offset or credit monies, make adjustments,
request and receive refunds and submit reports with respect to
payments required by the lessee. Notwithstanding any other provi-
sion of this Act to the contrary, a designee shall not be liable
for any payment obligation under the lease. The person owning
operating rights in a lease shall be primarily liable for its pro
rata share of payment obligations under the lease. If the person
owning the legal record title in a lease is other than the operating
rights owner, the person owning the legal record title shall be
secondarily liable for its pro rata share of such payment obligations
under the lease.’’.
(h) CLERICAL AMENDMENTS.—(1) The heading of section 111
of the Federal Oil and Gas Royalty management Act of 1982 (30
U.S.C. 1721) is amended to read as follows:
‘‘ROYALTY TERMS AND CONDITIONS, INTEREST, AND PENALTIES’’.
(2) The item relating to section 111 in the table of contents
in section 1 of such Act (30 U.S.C. 1701) is amended to read
as follows:
‘‘Sec. 111. Royalty terms and conditions, interest, and penalties.’’.
SEC. 7. ALTERNATIVES FOR MARGINAL PROPERTIES.
(a) IN GENERAL.—The Federal Oil and Gas Royalty Manage-
ment Act of 1982 (30 U.S.C. 1701 et seq.), as amended by section
6 of this Act, is further amended by adding at the end the following:
‘‘SEC. 117. ALTERNATIVES FOR MARGINAL PROPERTIES.
‘‘(a) DETERMINATION OF BEST INTERESTS OF STATE CONCERNED
AND THE UNITED STATES.—The Secretary and the State concerned,
acting in the best interests of the United States and the State
concerned to promote production, reduce administrative costs, and
increase net receipts to the United States and the States, shall
jointly determine, on a case by case basis, the amount of what
marginal production from a lease or leases or well or wells, or
parts thereof, shall be subject to a prepayment under subsection
(b) or regulatory relief under subsection (c). If the State concerned
does not consent, such prepayments or regulatory relief shall not
be made available under this section for such marginal production:
Provided, That if royalty payments from a lease or leases, or well
or wells are not shared with any State, such determination shall
be made solely by the Secretary.
H. R. 1975—17
‘‘(b) PREPAYMENT OF ROYALTY.—
‘‘(1) IN GENERAL.—Notwithstanding the provisions of any
lease to the contrary, for any lease or leases or well or wells
identified by the Secretary and the State concerned pursuant
to subsection (a), the Secretary is authorized to accept a prepay-
ment for royalties in lieu of monthly royalty payments under
the lease for the remainder of the lease term if the affected
lessee so agrees. Any prepayment agreed to by the Secretary,
State concerned and lessee which is less than an average $500
per month in total royalties shall be effectuated under this
section not earlier than two years after the date of enactment
of this section and, any prepayment which is greater than
an average $500 per month in total royalties shall be effec-
tuated under this section not earlier than three years after
the date of enactment of this section. The Secretary and the
State concerned may condition their acceptance of the prepay-
ment authorized under this section on the lessee’s agreeing
to such terms and conditions as the Secretary and the State
concerned deem appropriate and consistent with the purposes
of this Act. Such terms may—
‘‘(A) provide for prepayment that does not result in
a loss of revenue to the United States in present value
terms;
‘‘(B) include provisions for receiving additional prepay-
ments or royalties for developments in the lease or leases
or well or wells that deviate significantly from the assump-
tions and facts on which the valuation is determined; and
‘‘(C) require the lessee or it designee to provide such
periodic production reports as may be necessary to allow
the Secretary and the State concerned to monitor produc-
tion for the purposes of subparagraph (B).
‘‘(2) STATE SHARE.—A prepayment under this section shall
be shared by the Secretary with any State or other recipient
to the same extent as any royalty payment for such lease.
‘‘(3) SATISFACTION OF OBLIGATION.—Except as may be pro-
vided in the terms and conditions established by the Secretary
under subsection (b), a lessee or its designee who makes a
prepayment under this section shall have satisfied in full the
lessee’s obligation to pay royalty on the production stream
sold from the lease or leases or well or wells.
‘‘(c) ALTERNATIVE ACCOUNTING AND AUDITING REQUIREMENTS.—
Within one year after the date of the enactment of this section,
the Secretary or the delegated State shall provide accounting,
reporting, and auditing relief that will encourage lessees to continue
to produce and develop properties subject to subsection (a): Pro-
vided, That such relief will only be available to lessees in a State
that concurs, which concurrence is not required if royalty payments
from the lease or leases or well or wells are not shared with
any State. Prior to granting such relief, the Secretary and, if appro-
priate, the State concerned shall agree that the type of marginal
wells and relief provided under this paragraph is in the best interest
of the United States and, if appropriate, the State concerned.’’.
(b) CLERICAL AMENDMENT.—The table of contents in section
1 of such Act (30 U.S.C. 1701) is amended by adding after the
item relating to section 116 the following new item:
‘‘Sec. 117. Alternatives for marginal properties.’’.
H. R. 1975—18
SEC. 8. APPLICABILITY.
(a) FOGRMA.—With respect to Federal lands, sections 202
and 307 of the Federal Oil and Gas Royalty Management Act
of 1982 (30 U.S.C. 1732 and 1755), are no longer applicable. The
applicability of those sections to Indian leases is not affected.
(b) OCSLA.—Effective on the date of the enactment of this
Act, section 10 of the Outer Continental Shelf Lands Act (43 U.S.C.
1339) is repealed.
SEC. 9. INDIAN LANDS.
The amendments made by this Act shall not apply with respect
to Indian lands, and the provisions of the Federal Oil and Gas
Royalty Management Act of 1982 as in effect on the day before
the date of enactment of this Act shall continue to apply after
such date with respect to Indian lands.
SEC. 10. PRIVATE LANDS.
This Act shall not apply to any privately owned minerals.
SEC. 11. EFFECTIVE DATE.
Except as provided by section 115(h), section 111(h), section
111(k)(5), and section 117 of the Federal Oil and Gas Royalty
Management Act of 1982 (as added by this Act), this Act, and
the amendments made by this Act, shall apply with respect to
the production of oil and gas after the first day of the month
following the date of the enactment of this Act.
SEC. 12. SAVINGS CLAUSE.
Nothing in this Act shall be construed to give a State a property
right or interest in any Federal lease or land.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.