IB 
Union Calendar No. 436 
112TH CONGRESS 
2D SESSION 
H. R. 3404 
[Report No. 112–601] 
To establish in the Department of the Interior an Under Secretary for 
Energy, Lands, and Minerals and a Bureau of Ocean Energy, an Ocean 
Energy Safety Service, and an Office of Natural Resources Revenue, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 14, 2011 
Mr. HASTINGS of Washington introduced the following bill; which was referred 
to the Committee on Natural Resources 
JULY 17, 2012 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on November 14, 2011] 
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A BILL 
To establish in the Department of the Interior an Under 
Secretary for Energy, Lands, and Minerals and a Bureau 
of Ocean Energy, an Ocean Energy Safety Service, and 
an Office of Natural Resources Revenue, and for other 
purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. ESTABLISHMENT OF UNDER SECRETARY FOR 
ENERGY, LANDS, AND MINERALS AND ASSIST-
ANT SECRETARY OF OCEAN ENERGY AND 
SAFETY. 
There shall be in the Department of the Interior— 
(1) an Under Secretary for Energy, Lands, and 
Minerals, who shall— 
(A) be appointed by the President, by and 
with the advise and consent of the Senate; 
(B) report to the Secretary of the Interior, 
or to the Deputy Secretary of the Interior if or-
dered by the Secretary; 
(C) be paid at the rate payable for level III 
of the Executive Schedule; and 
(D) be responsible for— 
(i) the safe and responsible develop-
ment of our energy and mineral resources 
on Federal lands in appropriate accordance 
with United States energy demands, includ-
ing administration of the Office of Surface 
Mining and the Bureau of Land Manage-
ment as separate, independent agencies of 
the Department under the Assistant Sec-
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retary of Land and Minerals Management; 
and 
(ii) ensuring multiple-use missions of 
the Department of the Interior that promote 
the safe and sustained development of en-
ergy and minerals resources on public lands 
(as that term is defined in the Federal 
Land Policy and Management Act of 1976 
(43 U.S.C. 1701 et seq.)); 
(2) an Assistant Secretary of Ocean Energy and 
Safety, who shall— 
(A) be appointed by the President, by and 
with the advise and consent of the Senate; 
(B) report to the Under Secretary for En-
ergy, Lands, and Minerals; 
(C) be paid at the rate payable for level IV 
of the Executive Schedule; and 
(D) be responsible for ensuring safe and ef-
ficient development of energy and minerals on 
the Outer Continental Shelf of the United States; 
and 
(3) an Assistant Secretary of Land and Minerals 
Management, who shall— 
(A) be appointed by the President, by and 
with the advise and consent of the Senate; 
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(B) report to the Under Secretary for En-
ergy, Lands, and Minerals; 
(C) be paid at the rate payable for level IV 
of the Executive Schedule; and 
(D) be responsible for ensuring safe and ef-
ficient development of energy and minerals on 
public lands and other Federal onshore lands 
under the jurisdiction of the Department of the 
Interior, including implementation of the Min-
eral Leasing Act (30 U.S.C. 181 et seq.) and the 
Surface Mining Control and Reclamation Act 
(30 U.S.C. 1201 et seq.) and administration of 
the Office of Surface Mining. 
SEC. 2. BUREAU OF OCEAN ENERGY. 
(a) ESTABLISHMENT.—There is established in the De-
partment of the Interior a Bureau of Ocean Energy (re-
ferred to in this section as the ‘‘Bureau’’), which shall— 
(1) be headed by a Director of Ocean Energy (re-
ferred to in this section as the ‘‘Director’’); and 
(2) be administered under the direction of the 
Assistant Secretary of Ocean Energy and Safety. 
(b) DIRECTOR.— 
(1) APPOINTMENT.—The Director shall be ap-
pointed by the Secretary of the Interior. 
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(2) COMPENSATION.—The Director shall be com-
pensated at the rate provided for Level V of the Exec-
utive Schedule under section 5316 of title 5, United 
States Code. 
(c) DUTIES.— 
(1) IN GENERAL.—The Secretary of the Interior 
shall carry out through the Bureau all functions, 
powers, and duties vested in the Secretary relating to 
the administration of a comprehensive program of off-
shore mineral and renewable energy resources man-
agement. 
(2) SPECIFIC AUTHORITIES.—The Director shall 
promulgate and implement regulations— 
(A) for the proper issuance of leases for the 
exploration, development, and production of non-
renewable and renewable energy and mineral re-
sources on the Outer Continental Shelf; 
(B) relating to resource identification, ac-
cess, evaluation, and utilization; 
(C) for development of leasing plans, lease 
sales, and issuance of leases for such resources; 
(D) regarding issuance of environmental 
impact statements related to leasing and post 
leasing activities including exploration, develop-
ment, and production, and the use of third party 
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contracting for necessary environmental analysis 
for the development of such resources; and 
(E) for the processing of exploration plans 
and development plans. 
(3) LIMITATION.—The Secretary shall not carry 
out through the Bureau any function, power, or duty 
that is— 
(A) required by section 3 to be carried out 
through the Ocean Energy Safety Service; or 
(B) required by section 4 to be carried out 
through the Office of Natural Resources Revenue. 
(d) RESPONSIBILITIES OF LAND MANAGEMENT AGEN-
CIES.—Nothing in this section shall affect the authorities 
of the Bureau of Land Management under the Federal Land 
Policy and Management Act of 1976 (43 U.S.C. 1701 et 
seq.) or of the Forest Service under the National Forest 
Management Act of 1976 (Public Law 94–588). 
SEC. 3. OCEAN ENERGY SAFETY SERVICE. 
(a) ESTABLISHMENT.—There is established in the De-
partment of the Interior an Ocean Energy Safety Service 
(referred to in this section as the ‘‘Service’’), which shall— 
(1) be headed by a Director of Energy Safety (re-
ferred to in this section as the ‘‘Director’’); and 
(2) be administered under the direction of the 
Assistant Secretary of Ocean Energy and Safety. 
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(b) DIRECTOR.— 
(1) APPOINTMENT.—The Director shall be ap-
pointed by the Secretary of the Interior. 
(2) COMPENSATION.—The Director shall be com-
pensated at the rate provided for Level V of the Exec-
utive Schedule under section 5316 of title 5, United 
States Code. 
(c) DUTIES.— 
(1) IN GENERAL.—The Secretary of the Interior 
shall carry out through the Service all functions, pow-
ers, and duties vested in the Secretary relating to the 
administration of safety and environmental enforce-
ment activities related to offshore mineral and renew-
able energy resources on the Outer Continental Shelf 
pursuant to the Outer Continental Shelf Lands Act 
(43 U.S.C. 1331 et seq.) including the authority to de-
velop, promulgate, and enforce regulations to ensure 
the safe and sound exploration, development, and pro-
duction of mineral and renewable energy resources on 
the Outer Continental Shelf in a timely fashion. 
(2) SPECIFIC AUTHORITIES.—The Director shall 
be responsible for all safety activities related to explo-
ration and development of renewable and mineral re-
sources on the Outer Continental Shelf, including— 
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(A) exploration, development, production, 
and ongoing inspections of infrastructure; 
(B) the suspending or prohibiting, on a 
temporary basis, any operation or activity, in-
cluding production under leases held on the 
Outer Continental Shelf, in accordance with sec-
tion 5(a)(1) of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1334(a)(1)); 
(C) cancelling any lease, permit, or right-of- 
way on the Outer Continental Shelf, in accord-
ance with section 5(a)(2) of the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1334(a)(2)); 
(D) compelling compliance with applicable 
Federal laws and regulations relating to worker 
safety and other matters; 
(E) requiring comprehensive safety and en-
vironmental management programs for persons 
engaged in activities connected with the explo-
ration, development, and production of mineral 
or renewable energy resources; 
(F) developing and implementing regula-
tions for Federal employees to carry out any in-
spection or investigation to ascertain compliance 
with applicable regulations, including health, 
safety, or environmental regulations; 
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(G) implementing the Offshore Technology 
Research and Risk Assessment Program under 
section 21 of the Outer Continental Shelf Lands 
Act (43 U.S.C. 1347); 
(H) summoning witnesses and directing the 
production of evidence; 
(I) levying fines and penalties and disquali-
fying operators; 
(J) carrying out any safety, response, and 
removal preparedness functions; and 
(K) the processing of permits. 
(d) EMPLOYEES.— 
(1) IN
GENERAL.—The Secretary shall ensure 
that the inspection force of the Bureau consists of 
qualified, trained employees who meet qualification 
requirements and adhere to the highest professional 
and ethical standards. 
(2) QUALIFICATIONS.—The qualification require-
ments referred to in paragraph (1)— 
(A) shall be determined by the Secretary, 
subject to subparagraph (B); and 
(B) shall include— 
(i) three years of practical experience 
in oil and gas exploration, development, or 
production; or 
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(ii) a degree in an appropriate field of 
engineering from an accredited institution 
of higher learning. 
(3) ASSIGNMENT.—In assigning oil and gas in-
spectors to the inspection and investigation of indi-
vidual operations, the Secretary shall give due consid-
eration to the extent possible to their previous experi-
ence in the particular type of oil and gas operation 
in which such inspections are to be made. 
(4) BACKGROUND CHECKS.—The Director shall 
require that an individual to be hired as an inspec-
tion officer undergo an employment investigation (in-
cluding a criminal history record check). 
(5) 
LANGUAGE
REQUIREMENTS.—Individuals 
hired as inspectors must be able to read, speak, and 
write English well enough to— 
(A) carry out written and oral instructions 
regarding the proper performance of inspection 
duties; and 
(B) write inspection reports and statements 
and log entries in the English language. 
(6) ANNUAL PROFICIENCY REVIEW.— 
(A) ANNUAL
PROFICIENCY
REVIEW.—The 
Director shall provide that an annual evaluation 
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of each individual assigned inspection duties is 
conducted and documented. 
(B) CONTINUATION OF EMPLOYMENT.—An 
individual employed as an inspector may not 
continue to be employed in that capacity unless 
the evaluation demonstrates that the indi-
vidual— 
(i) continues to meet all qualifications 
and standards; 
(ii) has a satisfactory record of per-
formance and attention to duty based on the 
standards and requirements in the inspec-
tion program; and 
(iii) demonstrates the current knowl-
edge and skills necessary to courteously, 
vigilantly, and effectively perform Inspec-
tion functions. 
(7) LIMITATION ON RIGHT TO STRIKE.—Any in-
dividual that conducts permitting or inspections 
under this section may not participate in a strike, or 
assert the right to strike. 
(8) PERSONNEL
AUTHORITY.—Notwithstanding 
any other provision of law, the Director may employ, 
appoint, discipline and terminate for cause, and fix 
the compensation, terms, and conditions of employ-
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ment of Federal service for individuals as the employ-
ees of the Service in order to restore and maintain the 
trust of the people of the United States in the ac-
countability of the management of our Nation’s en-
ergy safety program. 
(9) TRAINING ACADEMY.— 
(A) IN GENERAL.—The Secretary shall es-
tablish and maintain a National Offshore En-
ergy Health and Safety Academy (referred to in 
this paragraph as the ‘‘Academy’’) as an agency 
of the Ocean Energy Safety Service. 
(B) FUNCTIONS
OF
ACADEMY.—The Sec-
retary, through the Academy, shall be responsible 
for— 
(i) the initial and continued training 
of both newly hired and experienced offshore 
oil and gas inspectors in all aspects of 
health, safety, environmental, and oper-
ational inspections; 
(ii) the training of technical support 
personnel of the Bureau; 
(iii) any other training programs for 
offshore oil and gas inspectors, Bureau per-
sonnel, Department personnel, or other per-
sons as the Secretary shall designate; and 
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(iv) certification of the successful com-
pletion of training programs for newly 
hired and experienced offshore oil and gas 
inspectors. 
(C) COOPERATIVE AGREEMENTS.— 
(i) IN GENERAL.—In performing func-
tions under this paragraph, and subject to 
clause (ii), the Secretary may enter into co-
operative educational and training agree-
ments with educational institutions, related 
Federal academies, other Federal agencies, 
State governments, safety training firms, 
and oil and gas operators and related in-
dustries. 
(ii) TRAINING
REQUIREMENT.—Such 
training shall be conducted by the Academy 
in accordance with curriculum needs and 
assignment of instructional personnel estab-
lished by the Secretary. 
(10) USE OF DEPARTMENT PERSONNEL.—In per-
forming functions under this subsection, the Secretary 
shall use, to the extent practicable, the facilities and 
personnel of the Department of the Interior. The Sec-
retary may appoint or assign to the Academy such of-
ficers and employees as the Secretary considers nec-
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essary for the performance of the duties and functions 
of the Academy. 
(11) ADDITIONAL TRAINING PROGRAMS.— 
(A) IN GENERAL.—The Secretary shall work 
with appropriate educational institutions, opera-
tors, and representatives of oil and gas workers 
to develop and maintain adequate programs 
with educational institutions and oil and gas op-
erators that are designed— 
(i) to enable persons to qualify for po-
sitions in the administration of this Act; 
and 
(ii) to provide for the continuing edu-
cation of inspectors or other appropriate 
Department of the Interior personnel. 
(B) FINANCIAL
AND
TECHNICAL
ASSIST-
ANCE.—The Secretary may provide financial 
and technical assistance to educational institu-
tions in carrying out this paragraph. 
(e) LIMITATION.—The Secretary shall not carry out 
through the Service any function, power, or duty that is— 
(1) required by section 2 to be carried out 
through Bureau of Ocean Energy; or 
(2) required by section 4 to be carried out 
through the Office of Natural Resources Revenue. 
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SEC. 4. OFFICE OF NATURAL RESOURCES REVENUE. 
(a) ESTABLISHMENT.—There is established in the De-
partment of the Interior an Office of Natural Resources 
Revenue (referred to in this section as the ‘‘Office’’) to be 
headed by a Director of Natural Resources Revenue (re-
ferred to in this section as the ‘‘Director’’). 
(b) APPOINTMENT AND COMPENSATION.— 
(1) IN
GENERAL.—The Director shall be ap-
pointed by the Secretary of the Interior. 
(2) COMPENSATION.—The Director shall be com-
pensated at the rate provided for Level V of the Exec-
utive Schedule under section 5316 of title 5, United 
States Code. 
(c) DUTIES.— 
(1) IN GENERAL.—The Secretary of the Interior 
shall carry out, through the Office, all functions, pow-
ers, and duties vested in the Secretary and relating 
to the administration of offshore royalty and revenue 
management functions. 
(2) 
SPECIFIC
AUTHORITIES.—The 
Secretary 
shall carry out, through the Office, all functions, pow-
ers, and duties previously assigned to the Minerals 
Management Service (including the authority to de-
velop, promulgate, and enforce regulations) regarding 
offshore royalty and revenue collection; royalty and 
revenue distribution; auditing and compliance; inves-
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tigation and enforcement of royalty and revenue regu-
lations; and asset management for onshore and off-
shore activities. 
(d) LIMITATION.—The Secretary shall not carry out 
through the Office any function, power, or duty that is— 
(1) required by section 2 to be carried out 
through Bureau of Ocean Energy; or 
(2) required by section 3 to be carried out 
through the Ocean Energy Safety Service. 
SEC. 5. ETHICS AND DRUG TESTING. 
(a) CERTIFICATION.—The Secretary of the Interior 
shall certify annually that all Department of the Interior 
officers and employees having regular, direct contact with 
lessees, contractors, concessionaires, and other businesses in-
terested before the Government as a function of their official 
duties, or conducting investigations, issuing permits, or re-
sponsible for oversight of energy programs, are in full com-
pliance with all Federal employee ethics laws and regula-
tions under the Ethics in Government Act of 1978 (5 U.S.C. 
App.) and part 2635 of title 5, Code of Federal Regulations, 
and all guidance issued under subsection (c). 
(b) DRUG TESTING.—The Secretary shall conduct a 
random drug testing program of all Department of the Inte-
rior personnel referred to in subsection (a). 
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(c) GUIDANCE.—Not later than 90 days after the date 
of enactment of this Act, the Secretary shall issue supple-
mentary ethics and drug testing guidance for the employees 
for which certification is required under subsection (a). The 
Secretary shall update the supplementary ethics guidance 
not less than once every 3 years thereafter. 
SEC. 6. ABOLISHMENT OF MINERALS MANAGEMENT SERV-
ICE. 
(a) ABOLISHMENT.—The Minerals Management Serv-
ice is abolished. 
(b) COMPLETED ADMINISTRATIVE ACTIONS.— 
(1) IN GENERAL.—Completed administrative ac-
tions of the Minerals Management Service shall not be 
affected by the enactment of this Act, but shall con-
tinue in effect according to their terms until amend-
ed, modified, superseded, terminated, set aside, or re-
voked in accordance with law by an officer of the 
United States or a court of competent jurisdiction, or 
by operation of law. 
(2) COMPLETED
ADMINISTRATIVE
ACTION
DE-
FINED.—For purposes of paragraph (1), the term 
‘‘completed administrative action’’ includes orders, 
determinations, memoranda of understanding, memo-
randa of agreements, rules, regulations, personnel ac-
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tions, permits, agreements, grants, contracts, certifi-
cates, licenses, registrations, and privileges. 
(c) PENDING PROCEEDINGS.—Subject to the authority 
of the Secretary of the Interior and the officers of the De-
partment of the Interior under this Act— 
(1) pending proceedings in the Minerals Manage-
ment Service, including notices of proposed rule-
making, and applications for licenses, permits, cer-
tificates, grants, and financial assistance, shall con-
tinue, notwithstanding the enactment of this Act or 
the vesting of functions of the Service in another 
agency, unless discontinued or modified under the 
same terms and conditions and to the same extent 
that such discontinuance or modification could have 
occurred if this Act had not been enacted; and 
(2) orders issued in such proceedings, and ap-
peals therefrom, and payments made pursuant to 
such orders, shall issue in the same manner and on 
the same terms as if this Act had not been enacted, 
and any such orders shall continue in effect until 
amended, modified, superseded, terminated, set aside, 
or revoked by an officer of the United States or a 
court of competent jurisdiction, or by operation of 
law. 
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(d) PENDING CIVIL ACTIONS.—Subject to the authority 
of the Secretary of the Interior or any officer of the Depart-
ment of the Interior under this Act, pending civil actions 
shall continue notwithstanding the enactment of this Act, 
and in such civil actions, proceedings shall be had, appeals 
taken, and judgments rendered and enforced in the same 
manner and with the same effect as if such enactment had 
not occurred. 
(e) REFERENCES.—References relating to the Minerals 
Management Service in statutes, Executive orders, rules, 
regulations, directives, or delegations of authority that pre-
cede the effective date of this Act are deemed to refer, as 
appropriate, to the Department, to its officers, employees, 
or agents, or to its corresponding organizational units or 
functions. Statutory reporting requirements that applied in 
relation to the Minerals Management Service immediately 
before the effective date of this Act shall continue to apply. 
SEC. 7. CONFORMING AMENDMENTS TO EXECUTIVE SCHED-
ULE PAY RATES. 
(a) UNDER SECRETARY FOR ENERGY, LANDS, AND 
MINERALS.—Section 5314 of title 5, United States Code, 
is amended by inserting after the item relating to ‘‘Under 
Secretaries of the Treasury (3)’’ the following: 
‘‘Under Secretary for Energy, Lands, and Min-
erals, Department of the Interior.’’. 
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(b) ASSISTANT SECRETARIES.—Section 5315 of title 5, 
United States Code, is amended by striking ‘‘Assistant Sec-
retaries of the Interior (6).’’ and inserting the following: 
‘‘Assistant Secretaries, Department of the Inte-
rior (7).’’. 
(c) DIRECTORS.—Section 5316 of title 5, United States 
Code, is amended by striking ‘‘Director, Bureau of Mines, 
Department of the Interior.’’ and inserting the following 
new items: 
‘‘Director, Bureau of Ocean Energy, Department 
of the Interior. 
‘‘Director, Ocean Energy Safety Service, Depart-
ment of the Interior. 
‘‘Director, Office of Natural Resources Revenue, 
Department of the Interior.’’. 
SEC. 8. OUTER CONTINENTAL SHELF ENERGY SAFETY ADVI-
SORY BOARD. 
(a) ESTABLISHMENT.—The Secretary of the Interior 
shall establish, under the Federal Advisory Committee Act, 
an Outer Continental Shelf Energy Safety Advisory Board 
(referred to in this section as the ‘‘Board’’)— 
(1) to provide the Secretary and the Directors es-
tablished by this Act with independent scientific and 
technical advice on safe, responsible, and timely min-
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eral and renewable energy exploration, development, 
and production activities; and 
(2) to review operations of the National Offshore 
Energy Health and Safety Academy established under 
section 3(d), including submitting to the Secretary 
recommendations of curriculum to ensure training 
scientific and technical advancements. 
(b) MEMBERSHIP.— 
(1) SIZE.—The Board shall consist of not more 
than 11 members, who— 
(A) shall be appointed by the Secretary 
based on their expertise in oil and gas drilling, 
well design, operations, well containment and oil 
spill response; and 
(B) must have significant scientific, engi-
neering, management, and other credentials and 
a history of working in the field related to safe 
energy exploration, development, and production 
activities. 
(2) CONSULTATION AND NOMINATIONS.—The Sec-
retary shall consult with the National Academy of 
Sciences and the National Academy of Engineering to 
identify potential candidates for the Board and shall 
take nominations from the public. 
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(3) TERM.—The Secretary shall appoint Board 
members to staggered terms of not more than 4 years, 
and shall not appoint a member for more than 2 con-
secutive terms. 
(4) BALANCE.—In appointing members to the 
Board, the Secretary shall ensure a balanced rep-
resentation of industry and research interests. 
(c) CHAIR.—The Secretary shall appoint the Chair for 
the Board from among its members. 
(d) MEETINGS.—The Board shall meet not less than 
3 times per year and shall host, at least once per year, a 
public forum to review and assess the overall energy safety 
performance of Outer Continental Shelf mineral and renew-
able energy resource activities. 
(e) OFFSHORE DRILLING SAFETY ASSESSMENTS AND 
RECOMMENDATIONS.—As part of its duties under this sec-
tion, the Board shall, by not later than 180 days after the 
date of enactment of this section and every 5 years there-
after, submit to the Secretary a report that— 
(1) assesses offshore oil and gas well control tech-
nologies, practices, voluntary standards, and regula-
tions in the United States and elsewhere; and 
(2) as appropriate, recommends modifications to 
the regulations issued under this Act to ensure ade-
quate protection of safety and the environment, in-
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cluding recommendations on how to reduce regula-
tions and administrative actions that are duplicative 
or unnecessary. 
(f) REPORTS.—Reports of the Board shall be submitted 
by the Board to the Committee on Natural Resources of the 
House or Representatives and the Committee on Energy 
and Natural Resources of the Senate and made available 
to the public in electronically accessible form. 
(g) TRAVEL EXPENSES.—Members of the Board, other 
than full-time employees of the Federal Government, while 
attending meeting of the Board or while otherwise serving 
at the request of the Secretary or the Director while serving 
away from their homes or regular places of business, may 
be allowed travel expenses, including per diem in lieu of 
subsistence, as authorized by section 5703 of title 5, United 
States Code, for individuals in the Government serving 
without pay. 
SEC. 9. VETERANS PREFERENCE. 
Consistent with existing law, the Under Secretary for 
Energy, Lands, and Minerals shall, in administering the 
programs and authorities referenced under this Act, provide 
a hiring preference to eligible members listed under section 
2108 of title 5, United States Code. 
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Union Calendar No. 436 
112TH CONGRESS 
2D SESSION 
H. R. 3404 
[Report No. 112–601] 
A BILL 
To establish in the Department of the Interior an 
Under Secretary for Energy, Lands, and Min-
erals and a Bureau of Ocean Energy, an Ocean 
Energy Safety Service, and an Office of Natural 
Resources Revenue, and for other purposes. 
JULY 17, 2012 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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