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‘‘(6) SECRETARY.—The term ‘Secretary’ means 
the Secretary of the Interior. 
‘‘(7) TRIBAL
CONSORTIUM.—The term ‘tribal 
consortium’ means an organization that consists of 
at least 3 entities, at least 1 of which is an Indian 
tribe. 
‘‘SEC. 2602. INDIAN TRIBAL RESOURCE REGULATION. 
‘‘To the maximum extent practicable, the Secretary 
and the Secretary of Energy shall make available to In-
dian tribes, tribal consortia, and Native Corporations sci-
entific and technical data for use in the development and 
management of energy resources on Indian land and on 
land conveyed to a Native Corporation. 
‘‘SEC. 2603. LEASES, BUSINESS AGREEMENTS, AND RIGHTS-
OF-WAY INVOLVING ENERGY DEVELOPMENT 
OR TRANSMISSION. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law—
‘‘(1) an Indian or Indian tribe may enter into 
a lease or business agreement for the purpose of en-
ergy development, including a lease or business 
agreement for—
‘‘(A) exploration for, extraction of, proc-
essing of, or other development of energy re-
sources; and
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‘‘(B) construction or operation of—
‘‘(i) an electric generation, trans-
mission, or distribution facility located on 
Indian land; or 
‘‘(ii) a facility to process or refine en-
ergy resources developed on Indian land; 
and 
‘‘(2) a lease or business agreement described in 
paragraph (1) shall not require the approval of the 
Secretary if—
‘‘(A) the lease or business agreement is ex-
ecuted under tribal regulations approved by the 
Secretary under subsection (e); and 
‘‘(B) the term of the lease or business 
agreement does not exceed 30 years. 
‘‘(b) RIGHTS-OF-WAY FOR PIPELINES OR ELECTRIC 
TRANSMISSION
OR DISTRIBUTION LINES.—An Indian 
tribe may grant a right-of-way over the Indian land of the 
Indian tribe for a pipeline or an electric transmission or 
distribution line without specific approval by the Secretary 
if—
‘‘(1) the right-of-way is executed under and 
complies with tribal regulations approved by the Sec-
retary under subsection (e);
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‘‘(2) the term of the right-of-way does not ex-
ceed 30 years; and 
‘‘(3) the pipeline or electric transmission or dis-
tribution line serves—
‘‘(A) an electric generation, transmission, 
or distribution facility located on Indian land; 
or 
‘‘(B) a facility located on Indian land that 
processes or refines renewable or nonrenewable 
energy resources developed on Indian land. 
‘‘(c) RENEWALS.—A lease or business agreement en-
tered into or a right-of-way granted by an Indian tribe 
under this section may be renewed at the discretion of the 
Indian tribe, in accordance with this section. 
‘‘(d) VALIDITY.—No lease, business agreement, or 
right-of-way under this section shall be valid unless the 
lease, business agreement, or right-of-way is authorized in 
accordance with tribal regulations approved by the Sec-
retary under subsection (e). 
‘‘(e) TRIBAL REGULATORY REQUIREMENTS.—
‘‘(1) IN GENERAL.—An Indian tribe may sub-
mit to the Secretary for approval tribal regulations 
governing leases, business agreements, and rights-of-
way under this section. 
‘‘(2) APPROVAL OR DISAPPROVAL.—
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‘‘(A) IN
GENERAL.—Not later than 120 
days after the date on which the Secretary re-
ceives tribal regulations submitted by an Indian 
tribe under paragraph (1) (or such later date as 
may be agreed to by the Secretary and the In-
dian tribe), the Secretary shall approve or dis-
approve the regulations. 
‘‘(B) CONDITIONS
FOR
APPROVAL.—The 
Secretary shall approve tribal regulations sub-
mitted under paragraph (1) only if the regula-
tions include provisions that, with respect to a 
lease, business agreement, or right-of-way 
under this section—
‘‘(i) ensure the acquisition of nec-
essary information from the applicant for 
the lease, business agreement, or right-of-
way; 
‘‘(ii) address the term of the lease or 
business agreement or the term of convey-
ance of the right-of-way; 
‘‘(iii) address amendments and renew-
als; 
‘‘(iv) address consideration for the 
lease, business agreement, or right-of-way;
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‘‘(v) address technical or other rel-
evant requirements; 
‘‘(vi) establish requirements for envi-
ronmental review in accordance with sub-
paragraph (C); 
‘‘(vii) ensure compliance with all ap-
plicable environmental laws; 
‘‘(viii) identify final approval author-
ity; 
‘‘(ix) provide for public notification of 
final approvals; and 
‘‘(x) establish a process for consulta-
tion with any affected States concerning 
potential off-reservation impacts associated 
with the lease, business agreement, or 
right-of-way. 
‘‘(C) 
ENVIRONMENTAL
REVIEW
PROC-
ESS.—Tribal regulations submitted under para-
graph (1) shall establish, and include provisions 
to ensure compliance with, an environmental re-
view process that, with respect to a lease, busi-
ness agreement, or right-of-way under this sec-
tion, provides for—
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‘‘(i) the identification and evaluation 
of all significant environmental impacts (as 
compared with a no-action alternative); 
‘‘(ii) the identification of proposed 
mitigation; 
‘‘(iii) a process for ensuring that the 
public is informed of and has an oppor-
tunity to comment on any proposed lease, 
business agreement, or right-of-way before 
tribal approval of the lease, business agree-
ment, or right-of-way (or any amendment 
to or renewal of a lease, business agree-
ment, or right-of-way); and 
‘‘(iv) sufficient administrative support 
and technical capability to carry out the 
environmental review process. 
‘‘(3) PUBLIC
PARTICIPATION.—The Secretary 
may provide notice and opportunity for public com-
ment on tribal regulations submitted under para-
graph (1). 
‘‘(4) DISAPPROVAL.—If the Secretary dis-
approves tribal regulations submitted by an Indian 
tribe under paragraph (1), the Secretary shall—
‘‘(A) notify the Indian tribe in writing of 
the basis for the disapproval;
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‘‘(B) identify what changes or other ac-
tions are required to address the concerns of 
the Secretary; and 
‘‘(C) provide the Indian tribe with an op-
portunity to revise and resubmit the regula-
tions. 
‘‘(5) EXECUTION
OF
LEASE
OR
BUSINESS 
AGREEMENT OR GRANTING OF RIGHT-OF-WAY.—If 
an Indian tribe executes a lease or business agree-
ment or grants a right-of-way in accordance with 
tribal regulations approved under this subsection, 
the Indian tribe shall provide to the Secretary—
‘‘(A) a copy of the lease, business agree-
ment, or right-of-way document (including all 
amendments to and renewals of the document); 
and 
‘‘(B) in the case of tribal regulations or a 
lease, business agreement, or right-of-way that 
permits payment to be made directly to the In-
dian tribe, documentation of those payments 
sufficient to enable the Secretary to discharge 
the trust responsibility of the United States as 
appropriate under applicable law. 
‘‘(6) LIABILITY.—The United States shall not 
be liable for any loss or injury sustained by any
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party (including an Indian tribe or any member of 
an Indian tribe) to a lease, business agreement, or 
right-of-way executed in accordance with tribal regu-
lations approved under this subsection. 
‘‘(7) COMPLIANCE REVIEW.—
‘‘(A) IN
GENERAL.—After exhaustion of 
tribal remedies, any person may submit to the 
Secretary, in a timely manner, a petition to re-
view compliance of an Indian tribe with tribal 
regulations of the Indian tribe approved under 
this subsection. 
‘‘(B) ACTION BY SECRETARY.—The Sec-
retary shall—
‘‘(i) not later than 60 days after the 
date on which the Secretary receives a pe-
tition under subparagraph (A), review 
compliance of an Indian tribe described in 
subparagraph (A); and 
‘‘(ii) on completion of the review, if 
the Secretary determines that an Indian 
tribe is not in compliance with tribal regu-
lations approved under this subsection, 
take such action as is necessary to compel 
compliance, including—
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‘‘(I)(aa) rescinding a lease, busi-
ness agreement, or right-of-way under 
this section; or 
‘‘(bb) suspending a lease, busi-
ness agreement, or right-of-way under 
this section until an Indian tribe is in 
compliance with tribal regulations; 
and 
‘‘(II) rescinding approval of the 
tribal regulations and reassuming the 
responsibility for approval of leases, 
business agreements, or rights-of-way 
associated with an energy pipeline or 
distribution line described in sub-
section (b). 
‘‘(C) COMPLIANCE.—If the Secretary seeks 
to compel compliance of an Indian tribe with 
tribal regulations under subparagraph (B)(ii), 
the Secretary shall—
‘‘(i) make a written determination 
that describes the manner in which the 
tribal regulations have been violated; 
‘‘(ii) provide the Indian tribe with a 
written notice of the violation together 
with the written determination; and
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‘‘(iii) before taking any action de-
scribed in subparagraph (B)(ii) or seeking 
any other remedy, provide the Indian tribe 
with a hearing and a reasonable oppor-
tunity to attain compliance with the tribal 
regulations. 
‘‘(D) APPEAL.—An Indian tribe described 
in subparagraph (C) shall retain all rights to 
appeal as provided in regulations promulgated 
by the Secretary. 
‘‘(f) AGREEMENTS.—
‘‘(1) IN GENERAL.—Any agreement by an In-
dian tribe that relates to the development of an elec-
tric generation, transmission, or distribution facility, 
or a facility to process or refine renewable or non-
renewable energy resources developed on Indian 
land, shall not require the specific approval of the 
Secretary under section 2103 of the Revised Stat-
utes (25 U.S.C. 81) if the activity that is the subject 
of the agreement is carried out in accordance with 
this section. 
‘‘(2) LIABILITY.—The United States shall not 
be liable for any loss or injury sustained by any per-
son (including an Indian tribe or any member of an 
Indian tribe) resulting from an action taken in per-
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formance of an agreement entered into under this 
subsection. 
‘‘(g) NO EFFECT ON OTHER LAW.—Nothing in this 
section affects the application of any provision of—
‘‘(1) the Act of May 11, 1938 (commonly 
known as the Indian Mineral Leasing Act of 1938; 
25 U.S.C. 396a et seq.); 
‘‘(2) the Indian Mineral Development Act of 
1982 (25 U.S.C. 2101 et seq.); 
‘‘(3) the Surface Mining Control and Reclama-
tion Act of 1977 (30 U.S.C. 1201 et seq.); or 
‘‘(4) any Federal environmental law. 
‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section, to remain available until 
expended.’’. 
TITLE II—OIL AND GAS 
SEC. 30201. PROGRAM ON OIL AND GAS ROYALTIES IN-
KIND. 
(a) APPLICABILITY OF SECTION.—Notwithstanding 
any other provision of law, the provisions of this section 
shall apply to all royalty in-kind accepted by the Secretary 
of the Interior on or after the date of the enactment of 
this Act under any Federal oil or gas lease or permit under 
section 36 of the Mineral Leasing Act (30 U.S.C. 192),
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section 27 of the Outer Continental Shelf Lands Act (43 
U.S.C. 1353), or any other Federal law governing leasing 
of Federal lands for oil and gas development. 
(b) TERMS AND CONDITIONS.—All royalty accruing 
to the United States shall, on the demand of the Secretary 
of the Interior, be paid in oil or gas. If the Secretary of 
the Interior makes such a demand, the following provi-
sions apply to such payment: 
(1) Delivery by, or on behalf of, the lessee of 
the royalty amount and quality due under the lease 
satisfies the lessee’s royalty obligation for the 
amount delivered, except that transportation and 
processing reimbursements paid to, or deductions 
claimed by, the lessee shall be subject to review and 
audit. 
(2)(A) Royalty production shall be placed in 
marketable condition by the lessee at no cost to the 
United States. 
(B) In this paragraph, the term ‘‘in marketable 
condition’’ means sufficiently free from impurities 
and otherwise in a condition that it will be accepted 
by a purchaser under a sales contract typical of the 
field or area in which the royalty production was 
produced. 
(3) The Secretary of the Interior may—
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(A) sell or otherwise dispose of any royalty 
production taken in-kind (other than oil or gas 
transferred under section 27(a)(3) of the Outer 
Continental Shelf Lands Act (43 U.S.C. 
1353(a)(3)) for not less than the market price; 
and 
(B) transport or process (or both) any roy-
alty production taken in-kind. 
(4) The Secretary of the Interior may, notwith-
standing section 3302 of title 31, United States 
Code, retain and use a portion of the revenues from 
the sale of oil and gas royalties taken in-kind that 
otherwise would be deposited to miscellaneous re-
ceipts, without regard to fiscal year limitation, or 
may use royalty production, to pay the cost of—
(A) transporting the royalty production; 
(B) processing the royalty production; 
(C) disposing of the royalty production; or 
(D) any combination of transporting, proc-
essing, and disposing of the royalty production. 
(5) The Secretary of the Interior may use a 
portion of the revenues from the sale of oil royalties 
taken in-kind, without fiscal year limitation, to pay 
transportation costs, salaries, and other administra-
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tive costs directly related to filling the Strategic Pe-
troleum Reserve. 
(c) REIMBURSEMENT OF COST.—If the lessee, pursu-
ant to an agreement with the United States or as provided 
in the lease, processes the royalty gas or delivers the roy-
alty oil or gas at a point not on or adjacent to the lease 
area, the Secretary of the Interior shall—
(1) reimburse the lessee for the reasonable costs 
of transportation (not including gathering) from the 
lease to the point of delivery or for processing costs; 
or 
(2) at the discretion of the Secretary of the In-
terior, allow the lessee to deduct such transportation 
or processing costs in reporting and paying royalties 
in value for other Federal oil and gas leases. 
(d) BENEFIT TO THE UNITED STATES REQUIRED.—
The Secretary of the Interior may receive oil or gas royal-
ties in-kind only if the Secretary determines that receiving 
such royalties provides benefits to the United States great-
er than or equal to those likely to have been received had 
royalties been taken in value. 
(e) REPORT TO CONGRESS.—By June 30, 2004, the 
Secretary of the Interior shall provide a report to the Con-
gress that describes actions taken to develop an organiza-
tion, business processes, and automated systems to sup-
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port a full royalty in-kind capability to be used in tandem 
with the royalty in value approach to managing Federal 
oil and gas revenues.
(f) DEDUCTION OF EXPENSES.—
(1) IN
GENERAL.—Before making payments 
under section 35 of the Mineral Leasing Act (30 
U.S.C. 191) or section 8(g) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1337(g)) of revenues 
derived from the sale of royalty production taken in-
kind from a lease, the Secretary of the Interior shall 
deduct amounts paid or deducted under subsections 
(b)(4) and (c), and shall deposit such amounts to 
miscellaneous receipts. 
(2) ACCOUNTING
FOR
DEDUCTIONS.—If the 
Secretary of the Interior allows the lessee to deduct 
transportation or processing costs under subsection 
(c), the Secretary may not reduce any payments to 
recipients of revenues derived from any other Fed-
eral oil and gas lease as a consequence of that de-
duction. 
(g) CONSULTATION WITH STATES.—The Secretary 
of the Interior—
(1) shall consult with a State before conducting 
a royalty in-kind program under this title within the 
State, and may delegate management of any portion
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of the Federal royalty in-kind program to such State 
except as otherwise prohibited by Federal law; and 
(2) shall consult annually with any State from 
which Federal oil or gas royalty is being taken in-
kind to ensure to the maximum extent practicable 
that the royalty in-kind program provides revenues 
to the State greater than or equal to those likely to 
have been received had royalties been taken in-value. 
(h) PROVISIONS FOR SMALL REFINERIES.—
(1) PREFERENCE.—If the Secretary of the In-
terior determines that sufficient supplies of crude oil 
are not available in the open market to refineries not 
having their own source of supply for crude oil, the 
Secretary may grant preference to such refineries in 
the sale of any royalty oil accruing or reserved to the 
United States under Federal oil and gas leases 
issued under any mineral leasing law, for processing 
or use in such refineries at private sale at not less 
than the market price. 
(2) PRORATION
AMONG
REFINERIES
IN
PRO-
DUCTION AREA.—In disposing of oil under this sub-
section, the Secretary of the Interior may, at the 
discretion of the Secretary, prorate such oil among 
such refineries in the area in which the oil is pro-
duced.
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(i) DISPOSITION TO FEDERAL AGENCIES.—
(1) ONSHORE ROYALTY.—Any royalty oil or gas 
taken by the Secretary of the Interior in-kind from 
onshore oil and gas leases may be sold at not less 
than the market price to any department or agency 
of the United States. 
(2) OFFSHORE ROYALTY.—Any royalty oil or 
gas taken in-kind from Federal oil and gas leases on 
the outer Continental Shelf may be disposed of only 
under section 27 of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1353). 
(j) PREFERENCE FOR FEDERAL LOW-INCOME EN-
ERGY ASSISTANCE PROGRAMS.—In disposing of royalty oil 
or gas taken in-kind under this section, the Secretary may 
grant a preference to any person, including any State or 
Federal agency, for the purpose of providing additional re-
sources to any Federal low-income energy assistance pro-
gram. 
SEC. 30202. CLARIFICATION OF FAIR MARKET RENTAL 
VALUE 
DETERMINATIONS 
FOR 
PUBLIC 
LANDS AND FOREST SERVICE RIGHTS-OF-
WAY. 
(a) LINEAR
RIGHTS-OF-WAY
UNDER
FEDERAL 
LAND POLICY AND MANAGEMENT ACT.—Section 504 of 
the Federal Land Policy and Management Act of 1976