(1) IN
GENERAL.—The Secretary, after con-
sultation with the State of Alaska, the city of 
Kaktovik, and the North Slope Borough, may des-
ignate up to a total of 45,000 acres of the Coastal 
Plain as a Special Area if the Secretary determines 
that the Special Area is of such unique character 
and interest so as to require special management 
and regulatory protection. The Secretary shall des-
ignate as such a Special Area the Sadlerochit Spring 
area, comprising approximately 4,000 acres. 
(2) MANAGEMENT.—Each such Special Area 
shall be managed so as to protect and preserve the 
area’s unique and diverse character including its 
fish, wildlife, and subsistence resource values. 
(3) EXCLUSION
FROM
LEASING
OR
SURFACE 
OCCUPANCY.—The Secretary may exclude any Spe-
cial Area from leasing. If the Secretary leases a Spe-
cial Area, or any part thereof, for purposes of oil 
and gas exploration, development, production, and 
related activities, there shall be no surface occu-
pancy of the lands comprising the Special Area. 
(4) DIRECTIONAL DRILLING.—Notwithstanding 
the other provisions of this subsection, the Secretary 
may lease all or a portion of a Special Area under 
terms that permit the use of horizontal drilling tech-
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nology from sites on leases located outside the Spe-
cial Area. 
(f) LIMITATION
ON
CLOSED
AREAS.—The Sec-
retary’s sole authority to close lands within the Coastal 
Plain to oil and gas leasing and to exploration, develop-
ment, and production is that set forth in this subtitle. 
(g) REGULATIONS.— 
(1) IN
GENERAL.—The Secretary shall pre-
scribe such regulations as may be necessary to carry 
out this subtitle, including rules and regulations re-
lating to protection of the fish and wildlife, their 
habitat, subsistence resources, and environment of 
the Coastal Plain, by no later than 15 months after 
the date of enactment of this subtitle. 
(2) REVISION
OF
REGULATIONS.—The Sec-
retary shall periodically review and, if appropriate, 
revise the rules and regulations issued under sub-
section (a) to reflect any significant biological, envi-
ronmental, or engineering data that come to the Sec-
retary’s attention. 
SEC. 904. LEASE SALES. 
(a) IN GENERAL.—Lands may be leased pursuant to 
this subtitle to any person qualified to obtain a lease for 
deposits of oil and gas under the Mineral Leasing Act (30 
U.S.C. 181 et seq.). 
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(b) PROCEDURES.—The Secretary shall, by regula-
tion, establish procedures for— 
(1) receipt and consideration of sealed nomina-
tions for any area in the Coastal Plain for inclusion 
in, or exclusion (as provided in subsection (c)) from, 
a lease sale; 
(2) the holding of lease sales after such nomina-
tion process; and 
(3) public notice of and comment on designa-
tion of areas to be included in, or excluded from, a 
lease sale. 
(c) LEASE SALE BIDS.—Bidding for leases under 
this subtitle shall be by sealed competitive cash bonus bids. 
(d) ACREAGE MINIMUM IN FIRST SALE.—In the first 
lease sale under this subtitle, the Secretary shall offer for 
lease those tracts the Secretary considers to have the 
greatest potential for the discovery of hydrocarbons, tak-
ing into consideration nominations received pursuant to 
subsection (b)(1), but in no case less than 200,000 acres. 
(e) TIMING
OF
LEASE
SALES.—The Secretary 
shall— 
(1) conduct the first lease sale under this sub-
title within 22 months after the date of the enact-
ment of this subtitle; and 
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(2) conduct additional sales so long as sufficient 
interest in development exists to warrant, in the Sec-
retary’s judgment, the conduct of such sales. 
SEC. 905. GRANT OF LEASES BY THE SECRETARY. 
(a) IN GENERAL.—The Secretary may grant to the 
highest responsible qualified bidder in a lease sale con-
ducted pursuant to section 904 any lands to be leased on 
the Coastal Plain upon payment by the lessee of such 
bonus as may be accepted by the Secretary. 
(b) SUBSEQUENT
TRANSFERS.—No lease issued 
under this subtitle may be sold, exchanged, assigned, sub-
let, or otherwise transferred except with the approval of 
the Secretary. Prior to any such approval the Secretary 
shall consult with, and give due consideration to the views 
of, the Attorney General. 
SEC. 906. LEASE TERMS AND CONDITIONS. 
(a) IN GENERAL.—An oil or gas lease issued pursu-
ant to this subtitle shall— 
(1) provide for the payment of a royalty of not 
less than 121⁄2 percent in amount or value of the 
production removed or sold from the lease, as deter-
mined by the Secretary under the regulations appli-
cable to other Federal oil and gas leases; 
(2) provide that the Secretary may close, on a 
seasonal basis, portions of the Coastal Plain to ex-
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ploratory drilling activities as necessary to protect 
caribou calving areas and other species of fish and 
wildlife; 
(3) require that the lessee of lands within the 
Coastal Plain shall be fully responsible and liable for 
the reclamation of lands within the Coastal Plain 
and any other Federal lands that are adversely af-
fected in connection with exploration, development, 
production, or transportation activities conducted 
under the lease and within the Coastal Plain by the 
lessee or by any of the subcontractors or agents of 
the lessee; 
(4) provide that the lessee may not delegate or 
convey, by contract or otherwise, the reclamation re-
sponsibility and liability to another person without 
the express written approval of the Secretary; 
(5) provide that the standard of reclamation for 
lands required to be reclaimed under this subtitle 
shall be, as nearly as practicable, a condition capable 
of supporting the uses which the lands were capable 
of supporting prior to any exploration, development, 
or production activities, or upon application by the 
lessee, to a higher or better use as approved by the 
Secretary; 
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