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(43 U.S.C. 1764) is amended by adding at the end the 
following: 
‘‘(k) DETERMINATION OF FAIR MARKET VALUE OF 
LINEAR
RIGHTS-OF-WAY.—(1) 
Effective 
upon 
the 
issuance of the rules required by paragraph (2), for pur-
poses of subsection (g), the Secretary concerned shall de-
termine the fair market rental for the use of land encum-
bered by a linear right-of-way granted, issued, or renewed 
under this title using the valuation method described in 
paragraphs (2), (3), and (4). 
‘‘(2) Not later than 1 year after the date of enact-
ment of this subsection, and in accordance with subsection 
(k), the Secretary of the Interior shall amend section 
2803.1–2 of title 43, Code of Federal Regulations, as in 
effect on the date of enactment of this subsection, to revise 
the per acre rental fee zone value schedule by State, coun-
ty, and type of linear right-of-way use to reflect current 
values of land in each zone. The Secretary of Agriculture 
shall make the same revisions for linear rights-of-way 
granted, issued, or renewed under this title on National 
Forest System lands. 
‘‘(3) The Secretary concerned shall update annually 
the schedule revised under paragraph (2) by multiplying 
the current year’s rental per acre by the annual change, 
second quarter to the second quarter (June 30 to June
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30) in the Gross National Product Implicit Price Deflator 
Index published in the Survey of Current Business of the 
Department of Commerce, Bureau of Economic Analysis. 
‘‘(4) Whenever the cumulative change in the index 
referred to in paragraph (3) exceeds 30 percent, or the 
change in the 3-year average of the 1-year Treasury inter-
est rate used to determine per acre rental fee zone values 
exceeds plus or minus 50 percent, the Secretary concerned 
shall conduct a review of the zones and rental per acre 
figures to determine whether the value of Federal land has 
differed sufficiently from the index referred to in para-
graph (3) to warrant a revision in the base zones and rent-
al per acre figures. If, as a result of the review, the Sec-
retary concerned determines that such a revision is war-
ranted, the Secretary concerned shall revise the base zones 
and rental per acre figures accordingly.’’. 
(b) RIGHTS-OF-WAY
UNDER
MINERAL
LEASING 
ACT.—Section 28(l) of the Mineral Leasing Act (30 
U.S.C. 185(l)) is amended by inserting before the period 
at the end the following: ‘‘using the valuation method de-
scribed in section 2803.1–2 of title 43, Code of Federal 
Regulations, as revised pursuant to section 504(k) of the 
Federal Land Policy and Management Act of 1976 (43 
U.S.C. 1764(k))’’.
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SEC. 30203. USGS ESTIMATES OF OIL AND GAS RESOURCES 
UNDERLYING ONSHORE FEDERAL LANDS. 
Section 604(a) of the Energy Act of 2000 (42 U.S.C. 
6217) is amended—
(1) in subsection (a)(1)—
(A) by striking ‘‘reserve’’; and 
(B) by striking ‘‘and’’ after the semicolon; 
(2) by striking subsection (a)(2) and inserting 
the following: 
‘‘(2) the extent and nature of any restrictions 
or impediments to the development of such re-
sources, including—
‘‘(A) impediments to the timely granting of 
leases; and 
‘‘(B) post-lease restrictions, impediments, 
or delays on development, involving conditions 
of approval, applications for permits to drill, or 
processing of environmental permits; and 
‘‘(C) permits or restrictions associated with 
transporting the resources for entry into com-
merce; and 
‘‘(3) the amount of resources not produced or 
introduced into commerce because of those restric-
tions.’’; and 
(3) in subsection (b)—
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(A) by striking ‘‘reserve’’ and inserting 
‘‘resource’’; and 
(B) by striking ‘‘publically’’ and inserting 
‘‘publicly’’.
SEC. 30204. ROYALTY INCENTIVES FOR CERTAIN OFF-
SHORE AREAS.
(a) OUTER CONTINENTAL SHELF SHALLOW WATER 
DEEP GAS ROYALTY RELIEF.—
(1) SHORT
TITLE.—This subsection may be 
cited as the ‘‘Outer Continental Shelf Shallow Water 
Deep Gas Royalty Relief Act’’. 
(2) PURPOSES.—The purposes of this sub-
section are the following: 
(A) To accelerate natural gas exploration, 
development, and production from wells drilled 
to deep depths on existing shallow water lease 
tracts on the Outer Continental Shelf. 
(B) To provide royalty incentives for the 
production of natural gas from such tracts. 
(C) To provide royalty incentives for devel-
opment of new technologies and the exploration 
and development of the new frontier of deep 
drilling on the Outer Continental Shelf.
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(3) ROYALTY
INCENTIVES
UNDER
EXISTING 
LEASES FOR PRODUCTION OF DEEP GAS IN SHAL-
LOW WATER IN THE GULF OF MEXICO.—
(A) SUSPENSION OF ROYALTIES.—
(i) IN
GENERAL.—The Secretary of 
the Interior shall grant royalty relief for 
natural gas produced under leases issued 
under the Outer Continental Shelf Lands 
Act (43 U.S.C. 1301 et seq.) prior to Jan-
uary 1, 2001, from deep wells on oil and 
gas lease tracts in shallow waters of the 
Gulf of Mexico located wholly west of 87 
degrees, 30 minutes west longitude. 
(ii) AMOUNT OF RELIEF.—The Sec-
retary shall grant royalty relief to eligible 
leases in the following amounts: 
(I) A suspension volume of at 
least 15 billion cubic feet of natural 
gas produced from a successful deep 
well with a total vertical depth of 
15,000 feet to 17,999 feet. 
(II) A suspension volume of at 
least 25 billion cubic feet of natural 
gas produced from a successful deep
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well with a total vertical depth of 
18,000 feet to 19,999 feet. 
(III) A suspension volume of at 
least 35 billion cubic feet of natural 
gas produced from any ultra deep 
well. 
(IV) A suspension volume of at 
least 5 billion cubic feet of natural gas 
per well for up to 2 unsuccessful wells 
drilled to a depth of at least 18,000 
feet on a lease tract that subsequently 
produces natural gas from a success-
ful deep well. 
(iii) 
LIMITATION.—The 
Secretary 
shall not grant the royalty incentives out-
lined in this subparagraph if the average 
annual NYMEX natural gas price exceeds 
for one full calendar year the threshold 
price of $5 per million Btu, adjusted from 
the year 2000 for inflation.
(B) DEFINITIONS.—For purposes of this 
paragraph: 
(i) The term ‘‘deep well’’ means a well 
drilled with a perforated interval, the top 
of which is at least 15,000 feet true
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vertical depth below the datum at mean 
sea level. 
(ii) The term ‘‘eligible lease’’ means a 
lease that—
(I) was issued in a lease sale held 
before January 1, 2001;
(II) is for a tract located in the 
Gulf of Mexico entirely in water 
depths less than 200 meters on a 
block wholly west of 87 degrees, 30 
minutes west longitude; and
(III) is for a tract that has not 
produced gas or oil from a well that 
commenced drilling before March 26, 
2003, with a completion 15,000 feet 
true vertical depth below the datum at 
mean sea level or deeper. 
(iii) The term ‘‘shallow water’’ means 
water less than 200 meters deep. 
(iv) The term ‘‘ultra deep well’’ means 
a well drilled with a perforated interval, 
the top of which is at least 20,000 feet 
true vertical depth below the datum at 
mean sea level.
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(4) SUNSET.—This subsection shall have no 
force or effect after the end of the 5-year period be-
ginning on the date of the enactment of this Act. 
(b) DEEP WATER AREAS.—Section 8(a) of the Outer 
Continental Shelf Lands Act (43 U.S.C. 1337(a)) is 
amended by adding at the end the following: 
‘‘(9)(A) For all tracts located in water depths of 
greater than 400 meters in the Western and Central Plan-
ning Area of the Gulf of Mexico, including that portion 
of the Eastern Planning Area of the Gulf of Mexico en-
compassing whole lease blocks lying west of 87 degrees, 
30 minutes West longitude, and for all tracts in a frontier 
area offshore Alaska, any oil or gas lease sale under this 
Act occurring after the date of the enactment of this para-
graph and before July 1, 2007, shall use the bidding sys-
tem authorized in paragraph (1)(H), except that the sus-
pension of royalties shall be set at a volume of not less 
than the following: 
‘‘(i) 5 million barrels of oil equivalent for each 
lease in water depths of 400 to 800 meters. 
‘‘(ii) 9 million barrels of oil equivalent for each 
lease in water depths of 800 to 1,600 meters. 
‘‘(iii) 12 million barrels of oil equivalent for 
each lease in water depths greater than 1,600 me-
ters.
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‘‘(B) For purposes of this paragraph, the term ‘fron-
tier area offshore Alaska’ includes, at a minimum, those 
areas offshore Alaska with seasonal ice, long distances to 
existing pipelines and ports, or a lack of production infra-
structure.’’.
(c) APPLICATION OF OTHER EXISTING AUTHORITY 
TO OFFSHORE ALASKA.—Section 8(a)(3)(B) of the Outer 
Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(B)) 
is amended—
(1) by striking ‘‘and the portion’’ and inserting 
‘‘, the portion’’; and 
(2) by inserting after ‘‘longitude,’’ the fol-
lowing: ‘‘and in the planning areas offshore Alas-
ka,’’. 
(d) RELATIONSHIP TO EXISTING AUTHORITY.—Ex-
cept as expressly provided in this section, nothing in this 
section is intended to limit the authority of the Secretary 
of the Interior under the Outer Continental Shelf Lands 
Act (43 U.S.C. 1331 et seq.) to provide royalty suspen-
sion. 
(e) SAVINGS CLAUSE.—Nothing in this section shall 
be construed to affect any offshore preleasing, leasing, or 
development moratorium, including any moratorium appli-
cable to the Eastern Planning Area of the Gulf of Mexico 
located off the Gulf Coast of Florida.
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SEC. 30205. MARGINAL PROPERTY PRODUCTION INCEN-
TIVES. 
(a) PURPOSE.—The purpose of this section is to pro-
vide to independent producers incentives for extended pro-
duction from Federal oil and gas leases that are still pro-
ducible but approaching abandonment due to economic 
factors. 
(b) MARGINAL PROPERTY DEFINED.—
(1) IN GENERAL.—Until such time as the Sec-
retary of the Interior promulgates rules under sub-
section (f) that prescribe a different definition, for 
purposes of the royalty relief granted under this sec-
tion the term ‘‘marginal property’’ means an on-
shore unit, communitization agreement, or lease not 
within a unit or communitization agreement, that 
produces on average the combined equivalent of less 
than 15 barrels of oil per well per day or 90 million 
British thermal units of gas per well per day. 
(2) CALCULATION OF AVERAGE PER WELL PRO-
DUCTION.—In calculating the average per well pro-
duction under paragraph (1), the lessee and the Sec-
retary shall—
(A) include those wells that produce more 
than half the days in the three most recent pro-
duction months; and
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(B) calculate the average over the three 
most recent production months. 
(c) CONDITIONS
FOR
REDUCTION
OF
ROYALTY 
RATE.—Until such time as the Secretary of the Interior 
promulgates rules under subsection (f) that prescribe dif-
ferent thresholds or standards— 
(1) the Secretary shall, upon request by the op-
erator of a marginal property who is an independent 
producer, reduce the royalty rate on oil production 
from the marginal property as prescribed in sub-
section (d) when the spot price of West Texas Inter-
mediate crude oil at Cushing, Oklahoma, is, on aver-
age, less than $15 per barrel for 90 consecutive 
trading days; and 
(2) the Secretary shall, upon request by the op-
erator of a marginal property who is an independent 
producer, reduce the royalty rate on gas production 
from the marginal property to the rate prescribed in 
subsection (d) when the spot price of natural gas de-
livered at Henry Hub, Louisiana, is, on average, less 
than $2 per million British thermal units for 90 con-
secutive trading days. 
(d) REDUCED ROYALTY RATE.—
(1) IN
GENERAL.—The reduced royalty rate 
under this subsection shall be the lesser of—
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(A) 5 percent; or 
(B) the applicable rate under any other 
statutory or regulatory royalty relief provision 
that applies to the affected production. 
(2) EFFECTIVE
DATE.—The reduced royalty 
rate under this subsection shall be effective on the 
first day of the production month following the date 
on which the applicable price standard prescribed in 
subsection (c) is met. 
(e) TERMINATION OF REDUCED ROYALTY RATE.—
A royalty rate prescribed in subsection (d)(1) shall termi-
nate—
(1) for oil production from a marginal property, 
on the first day of the production month following 
the date on which—
(A) the spot price of West Texas Inter-
mediate crude oil at Cushing, Oklahoma, on av-
erage, exceeds $15 per barrel for 90 consecutive 
trading days, or 
(B) the property no longer qualifies as a 
marginal property under subsection (b); and 
(2) for gas production from a marginal prop-
erty, on the first day of the production month fol-
lowing the date on which—
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(A) the spot price of natural gas delivered 
at Henry Hub, Louisiana, on average, exceeds 
$2 per million British thermal units for 90 con-
secutive trading days, or 
(B) the property no longer qualifies as a 
marginal property under subsection (b). 
(f) RULES PRESCRIBING DIFFERENT RELIEF.—
(1) IN GENERAL.—The Secretary of the Inte-
rior, after consultation with the Secretary of Energy, 
may by rule prescribe different parameters, stand-
ards, and requirements for, and a different degree or 
extent of, royalty relief for marginal properties in 
lieu of those prescribed in subsections (b) through 
(d). 
(2) MARGINAL PROPERTIES.—The Secretary of 
the Interior, after consultation with the Secretary of 
Energy, and within 1 year after the date of enact-
ment of this Act, shall—
(A) by rule prescribe standards and re-
quirements for, and the extent of royalty relief 
for, marginal properties for oil and gas leases 
on the outer Continental Shelf; and 
(B) by rule define what constitutes a mar-
ginal property on the outer Continental Shelf 
for purposes of this section.
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(3) CONSIDERATIONS.—In promulgating rules 
under this subsection, the Secretary of the Interior 
may consider—
(A) oil and gas prices and market trends; 
(B) production costs; 
(C) abandonment costs; 
(D) Federal and State tax provisions and 
their effects on production economics; 
(E) other royalty relief programs; 
(F) regional differences in average well-
head prices; 
(G) national energy security issues; and 
(H) other relevant matters. 
(g) SAVINGS PROVISION.—Nothing in this section 
shall prevent a lessee from receiving royalty relief or a roy-
alty reduction pursuant to any other law or regulation that 
provides more relief than the amounts provided by this 
section.
(h) INDEPENDENT PRODUCER DEFINED.—In this 
section the term ‘‘independent producer’’ means a person 
who is not an integrated oil company, as that term is de-
fined in section 219(b)(4) of the Internal Revenue Code 
of 1986 (26 U.S.C. 291(b)(4)).
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SEC. 30206. FEDERAL ONSHORE OIL AND GAS LEASING AND 
PERMITTING PRACTICES. 
(a) REVIEW OF ONSHORE OIL AND GAS LEASING 
PRACTICES.—The Secretary of the Interior, in cooperation 
with the Secretary of Agriculture with respect to National 
Forest System lands under the jurisdiction of the Depart-
ment of Agriculture, shall perform an internal review of 
Federal onshore oil and gas leasing and permitting prac-
tices. The review shall include the following: 
(1) The process by which Federal land man-
agers accept or reject an offer to lease, including the 
timeframes in which such offers are acted upon, and 
any recommendations for improving and expediting 
the process. 
(2) The process for considering applications for 
permits to drill, including the timeframes in which 
such applications are considered, and any rec-
ommendations for improving and expediting the 
process. 
(3) The process for considering surface use 
plans of operation, including the timeframes in 
which such plans are considered, and any rec-
ommendations for improving and expediting the 
process. 
(4) The process for administrative appeal of de-
cisions or orders of officers or employees of the Bu-
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reau of Land Management with respect to a Federal 
oil or gas lease, including the timeframes in which 
such appeals are heard and decided, and any rec-
ommendations for improving and expediting the 
process. 
(5) The process by which Federal land man-
agers identify stipulations to address site-specific 
concerns and conditions, including those relating to 
the environment and resource use conflicts, whether 
stipulations are effective in addressing resource val-
ues, and any recommendations for expediting and 
improving the identification and effectiveness of stip-
ulations. 
(6) The process by which the Federal land 
management agencies coordinate planning and anal-
ysis with planning of Federal, State, and local agen-
cies having jurisdiction over adjacent areas and 
other land uses, and any recommendations for im-
proving and expediting the process. 
(7) The documentation provided to lease appli-
cants and lessees with respect to determinations to 
reject lease applications or to require modification of 
proposed surface use plans of operation and rec-
ommendations regarding improvement of such docu-
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mentation to more clearly set forth the basis for the 
decision. 
(b) REPORT.—The Secretaries shall report to the 
Committee on Resources of the House of Representatives 
and to the Committee on Energy and Natural Resources 
of the Senate no later than 1 year after the date of the 
enactment of this Act, summarizing the findings of their 
respective reviews undertaken pursuant to this section and 
the actions they have taken or plan to take to improve 
the Federal onshore oil and gas leasing program.
SEC. 30207. MANAGEMENT OF FEDERAL OIL AND GAS LEAS-
ING PROGRAMS. 
(a) TIMELY ACTION ON LEASES AND PERMITS.—To 
ensure timely action on oil and gas leases and applications 
for permits to drill on lands otherwise available for leasing, 
the Secretary of the Interior shall—
(1) ensure expeditious compliance with the re-
quirements of section 102(2)(C) of the National En-
vironmental Policy Act of 1969 (42 U.S.C. 
4332(2)(C)); 
(2) improve consultation and coordination with 
the States and the public; and 
(3) improve the collection, storage, and retrieval 
of information related to such leasing activities. 
(b) BEST MANAGEMENT PRACTICES.—
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(1) IN GENERAL.—Within 18 months after the 
date of enactment of this Act, the Secretary of the 
Interior shall develop and implement best manage-
ment practices to improve the administration of the 
onshore oil and gas leasing program pursuant to the 
Mineral Leasing Act (30 U.S.C. 181, et seq.) and 
ensure timely action on oil and gas leases and appli-
cations for permits to drill on lands otherwise avail-
able for leasing. 
(2) CONSIDERATION AND CONSULTATION.—In 
developing such best management practices the Sec-
retary shall consider the recommendations resulting 
from the review under section 30206.
(3) REGULATIONS.—Within 180 days after the 
development of best management practices under 
paragraph (1), the Secretary shall publish for public 
comment proposed regulations that set forth specific 
timeframes for processing leases and applications in 
accordance with those practices, including deadlines 
for—
(A) approving or disapproving—
(i) resource management plans and 
related documents; 
(ii) lease applications;
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(iii) applications for permits to drill; 
and 
(iv) surface use plans; and 
(B) related administrative appeals.
SEC. 30208. CONSULTATION REGARDING OIL AND GAS 
LEASING ON PUBLIC LANDS. 
(a) IN GENERAL.—Not later than six months after 
the date of enactment of this Act, the Secretary of the 
Interior and the Secretary of Agriculture shall enter into, 
and submit to the Congress, a memorandum of under-
standing in accordance with this section regarding oil and 
gas leasing on public lands within the jurisdiction of the 
Secretary of the Interior and National Forest System 
lands within the jurisdiction of the Secretary of Agri-
culture. 
(b) CONTENTS.—The memorandum of understanding 
shall include provisions that—
(1) establish an administrative procedure for 
timely processing of oil and gas lease applications, 
including lines of authority, steps in application 
processing, and timeframes for application proc-
essing; 
(2) establish an administrative procedure for 
timely processing of surface use plans of operation 
and applications for permits to drill, including lines
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of authority and steps for processing such plans and 
applications within 30 days after receipt by the Sec-
retary concerned; 
(3) provide for coordination of planning relating 
to oil and gas development; 
(4) provide for coordination of environmental 
compliance efforts to avoid duplication of effort; 
(5) provide for coordination of use of lease stip-
ulations to achieve consistency; 
(6) ensure that lease stipulations are only as re-
strictive as is necessary to protect the resource for 
which the stipulations are applied; and 
(7) establish reasonable timeframes to process 
applications for permits to drill. 
(c) DATA RETRIEVAL SYSTEM.—
(1) IN GENERAL.—The Secretary of the Inte-
rior and the Secretary of Agriculture shall establish 
a joint data retrieval system that is capable of track-
ing applications and formal requests made pursuant 
to procedures of the Federal onshore oil and gas 
leasing program and providing information as to the 
status of such applications and requests within the 
Department of the Interior and the Department of 
Agriculture.