I 
109TH CONGRESS 
2D SESSION 
H. R. 5111 
To amend the Energy Policy Act of 2005 to authorize discounted sales 
of royalty oil and gas taken in-kind from a Federal oil or gas lease 
to provide additional resources to Federal low-income energy assistance 
programs. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 5, 2006 
Mr. UDALL of Colorado introduced the following bill; which was referred to 
the Committee on Resources 
A BILL 
To amend the Energy Policy Act of 2005 to authorize dis-
counted sales of royalty oil and gas taken in-kind from 
a Federal oil or gas lease to provide additional resources 
to Federal low-income energy assistance programs. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Royalty In-Kind for 
Energy Assistance Improvement Act of 2006’’. 
SEC. 2. FINDINGS AND PURPOSE. 
(a) FINDINGS.—The Congress finds the following: 
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(1) As energy costs continue to rise, it is in-
creasingly difficult for our most vulnerable residents 
to afford to heat and cool their homes. 
(2) The Energy Information Administration re-
cently projected in its Short-term Energy Outlook 
that on average, households heating primarily with 
natural gas can expect to spend $178 (24 percent) 
more for fuel this winter than last winter. 
(3) Heating costs as well as costs of cooling in 
the summer are a concern. High summer electricity 
usage due to hot temperatures can put households in 
debt and at risk of disconnection. 
(4) More than 13 million households in poverty 
will spend an average of 25 percent of their entire 
annual income this year on their energy bills just to 
maintain their modest levels of usage. 
(5) The need for additional low-income energy 
assistance has never been greater. At current fund-
ing levels, the Low-Income Home Energy Assistance 
Program (LIHEAP) serves less than 15 percent of 
the eligible population. 
(6) LIHEAP is a critically important program 
because it ensures that low-income Americans don’t 
have to choose between heating or cooling their 
homes and paying their medical bills or going with-
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out food, which is a common practice in one of three 
low-income families. 
(7) Under authorities granted in the Mineral 
Leasing Act (30 U.S.C. 182 et seq.) and the Outer 
Continental Shelf Lands Act (43 U.S.C. 1331 et 
seq.), the Secretary of the Interior may require Fed-
eral oil and gas lessees to satisfy their royalty pay-
ment obligation through ‘‘royalty in-kind’’ arrange-
ments under which they provide oil instead of mone-
tary value. 
(8) Section 342(j) of the Energy Policy Act of 
2005 (42 U.S.C. 15902(j)) was intended to provide 
the Federal Government with an innovative tool, au-
thorizing the Secretary to grant preference to low- 
income consumers when disposing of oil or natural 
gas received by the Government under such an ar-
rangement. 
(9) However, the Department of the Interior 
has concluded that section 342(j) of the Energy Pol-
icy Act of 2005, as enacted, cannot be implemented 
because of legal deficiencies in the subsection as en-
acted. 
(b) PURPOSE.—The purpose of this Act is to amend 
section 342(j) of the Energy Policy Act of 2005 (42 
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U.S.C. 15902(j)) to make it possible to assist low-income 
consumers of energy to meet their energy needs. 
SEC. 3. AUTHORIZATION OF DISCOUNTED SALES OF ROY-
ALTY OIL AND GAS TAKEN IN-KIND FROM 
FEDERAL OIL OR GAS LEASE TO PROVIDE AD-
DITIONAL RESOURCES TO LIHEAP. 
Section 342(j) of the Energy Policy Act of 2005 (42 
U.S.C. 15902(j)) is amended by redesignating paragraph 
(2) as paragraph (3), and by inserting after paragraph 
(1) the following: 
‘‘(3) DISCOUNTED SALES.— 
‘‘(A) AUTHORIZATION.—In granting a 
preference under paragraph (1), the Secretary 
may sell at a discounted price royalty oil or gas 
taken in-kind, in accordance with an agreement 
under this paragraph. 
‘‘(B) 
DISCOUNTED
PRICE.—The 
dis-
counted price of oil or gas sold under this para-
graph shall be not less than 50 percent of the 
fair market value of the oil or gas. 
‘‘(C) AGREEMENT.—The Secretary shall 
require, as a condition of any sale to a person 
of oil or gas at a discounted price under this 
paragraph, that the person enter into an agree-
ment with the Secretary under which the person 
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is obligated to provide additional resources for 
a Federal low-income energy assistance pro-
gram that have a value that is not less than the 
difference between— 
‘‘(i) the sum of the fair market value 
of the purchased oil or gas, respectively; 
and 
‘‘(ii) the sum of— 
‘‘(I) the amount paid by the per-
son for the oil or gas; and 
‘‘(II) the administrative costs in-
curred by the person in purchasing 
the oil and complying with the agree-
ment. 
‘‘(D) COMPLIANCE WITH ANTI-DEFICIENCY 
ACT.—Any sale of oil at a discounted price in 
accordance with this paragraph is deemed to be 
in compliance with section 1301(d) of title 31, 
United States Code, popularly known as the 
Anti-Deficiency Act. 
‘‘(E) 
REGULATIONS.—In 
implementing 
this paragraph, the Secretary may issue rules, 
and may enter into such agreements with any 
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Federal or State agency or other person, as the 
Secretary considers appropriate.’’. 
Æ 
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