To terminate the effect of all provisions of Federal law that prohibit the expenditure of appropriated funds to conduct natural gas leasing and preleasing activities for any area of the Outer Continental Shelf, to terminate all withdrawals of Federal submerged lands of the Outer Continental Shelf from leasing for exploration for, and development and production of, natural gas, and for other purposes.

SECTION 1. SHORT TITLE.

     This Act may be cited as the ``Outer Continental Shelf Natural Gas 
Relief Act''.

SEC. 2. TERMINATION OF PROHIBITIONS ON EXPENDITURES FOR, AND 
              WITHDRAWALS FROM, OFFSHORE GAS LEASING.

    (a) Prohibitions on Expenditures.--All provisions of Federal law 
that prohibit the expenditure of appropriated funds to conduct natural 
gas leasing and preleasing activities for any area of the Outer 
Continental Shelf shall have no force or effect.
    (b) Revocation Withdrawals.--All withdrawals of Federal submerged 
lands of the Outer Continental Shelf from leasing, including 
withdrawals by the President under the authority of section 12(a) of 
the Outer Continental Shelf Lands Act (43 U.S.C. 1341(a)), are hereby 
revoked and are no longer in effect with respect to the leasing of 
areas for exploration for, and development and production of, natural 
gas.

SEC. 3. OUTER CONTINENTAL SHELF LEASING PROGRAM.

    (a) State Approval Requirements.--The Outer Continental Shelf Lands 
Act (43 U.S.C. 1331 et seq.) is amended by inserting after section 9 
the following:

``SEC. 10. STATE APPROVAL REQUIREMENT WITH RESPECT TO GAS LEASING.

    ``The Secretary may not grant any gas lease for any area of the 
outer Continental Shelf that is located within 20 miles of the 
coastline of a State unless the Governor of the State notifies the 
Secretary that the State approves of the granting of such a lease for 
such area.''.
    (b) Minimum Area Subject to Gas Leasing.--
            (1) Requirement.--Section 18(a) of the Outer Continental 
        Shelf Lands Act (43 U.S.C. 1344(a)) is amended by inserting 
        after the second sentence the following: ``The Secretary shall, 
        in each 5-year program, include lease sales that when viewed as 
        a whole propose to offer for gas leasing at least 75 percent of 
        the available unleased acreage within each outer Continental 
        Shelf planning area.''.
            (2) Application.--The amendment made by paragraph (1) shall 
        apply with respect to the 5-year Outer Continental Shelf gas 
        leasing program in effect on the date of the enactment of this 
        Act, and to each such 5-year program thereafter.

SEC. 4. SHARING OF REVENUES.

    (a) In General.--Section 8(g) of the Outer Continental Shelf Lands 
Act (43 U.S.C. 1337(g)) is amended--
            (1) in paragraph (2) by striking ``Notwithstanding'' and 
        inserting ``Except as provided in paragraph (6), and 
        notwithstanding'';
            (2) by redesignating paragraphs (6) and (7) as paragraphs 
        (7) and (8); and
            (3) by inserting after paragraph (5) the following:
            ``(6) Bonus bids and royalties after september 30, 2006.--
                    ``(A) New gas leases.--Of amounts received by the 
                United States as bonus bids and royalties under new 
                Federal gas leases on submerged lands that are located 
                within the seaward boundaries of a State established 
                under section 4(a)(2)(A)--
                            ``(i) 40 percent shall be paid to the 
                        State; and
                            ``(ii) 10 percent shall be available for 
                        the Low-Income Home Energy Assistance Program 
                        under the Low-Income Home Energy Assistance Act 
                        of 1981 (42 U.S.C. 8621 et seq.).
                    ``(B) Existing gas leases.--Of amounts received by 
                the United States as bonus bids and royalties under 
                existing Federal gas leases on submerged lands that are 
                located within the seaward boundaries of a State 
                established under section 4(a)(2)(A), there shall be 
                paid to the State--
                            ``(i) in the case of amounts received in 
                        the first full fiscal year after the date of 
                        the enactment of the Outer Continental Shelf 
                        Natural Gas Relief Act, 10 percent;
                            ``(ii) in the case of amounts received in 
                        the second full fiscal year after such date of 
                        enactment, 20 percent;
                            ``(iii) in the case of amounts received in 
                        the third full fiscal year after such date of 
                        enactment, 30 percent; and
                            ``(iv) in the case of amounts received in 
                        the fourth full fiscal year after such date of 
                        enactment and each fiscal year thereafter, 40 
                        percent.
                    ``(C) Leased tract that lies partially within the 
                seaward boundaries of a state.--In the case of a leased 
                tract that lies partially within the seaward boundaries 
                of a State, the amounts of bonus bids and royalties 
                from such tract that are subject to subparagraph (A) or 
                (B), as applicable, with respect to such State shall be 
                a percentage of the total amounts of bonus bids and 
                royalties from such tract that is equivalent to the 
                total percentage of surface acreage of the tract that 
                lies within such seaward boundaries.
                    ``(D) Definitions.--In this paragraph:
                            ``(i) Existing federal gas lease.--The term 
                        `existing Federal gas lease' means a gas lease 
                        under this Act granted before the date of the 
                        enactment of the Outer Continental Shelf 
                        Natural Gas Relief Act.
                            ``(ii) New federal gas lease.--The term 
                        `new Federal gas lease' means a gas lease under 
                        this Act granted on or after the date of the 
                        enactment of the Outer Continental Shelf 
                        Natural Gas Relief Act.
                    ``(E) Application.--This paragraph shall apply to 
                bonus bids and royalties received by the United States 
                after September 30, 2006,''.
    (b) Establishment of State Seaward Boundaries.--Section 4(a)(2)(A) 
of the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a)(2)(A)) is 
amended in the first sentence by striking ``, and the President'' and 
all that follows through the end of the sentence and inserting the 
following: ``. Such extended lines are deemed to be as indicated on the 
maps for each outer Continental Shelf region entitled `Alaska OCS 
Region State Adjacent Zone and OCS Planning Areas', `Pacific OCS Region 
State Adjacent Zones and OCS Planning Areas', `Gulf of Mexico OCS 
Region State Adjacent Zones and OCS Planning Areas', and `Atlantic OCS 
Region State Adjacent Zones and OCS Planning Areas', all of which are 
dated September 2005 and on file in the Office of the Director, 
Minerals Management Service.''.

SEC. 5. NATURAL GAS-ONLY LEASING.

    Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337) 
is amended by adding at the end the following subsection:
    ``(p) Natural Gas-Only Leasing.--
            ``(1) In general.--The Secretary may issue leases under 
        this section that authorize development and production only of 
        natural gas and associated condensate in accordance with 
        regulations promulgated under paragraph (2).
            ``(2) Regulations.--Before issuing any lease under 
        paragraph (1), the Secretary must promulgate regulations that--
                    ``(A) define what constitutes natural gas, 
                condensate, and oil;
                    ``(B) establish the lessee's rights and obligations 
                regarding condensate produced in association with 
                natural gas;
                    ``(C) prescribe procedures and requirements that 
                the lessee of a lease issued under this subsection must 
                follow if the lessee discovers oil deposits in the 
                course of exploration or development; and
                    ``(D) establish such other requirements for natural 
                gas-only leases as the Secretary considers appropriate.
            ``(3) Application of other laws.--All provisions of this 
        Act or any other Federal law or regulations that apply to oil 
        and natural gas leases for the outer Continental Shelf shall 
        apply to natural gas-only leases authorized under this 
        subsection.
            ``(4) Existing leases.--At the request of the lessee of an 
        oil and gas lease in effect under this section on the date of 
        enactment of this subsection, and under the requirements 
        prescribed in regulations promulgated under paragraph (2), the 
        Secretary may restrict development under such a lease to 
        natural gas and associated condensate only.
            ``(5) Oil and gas leasing programs.--
                    ``(A) Program for 2002-2007.--The Secretary may 
                issue a natural gas-only lease in accordance with this 
                subsection before June 30, 2007, without amending the 
                outer Continental shelf leasing program that applies 
                for the period beginning on the date of the enactment 
                of this subsection and ending June 30, 2007, if the 
                Secretary provides public notice and an opportunity to 
                comment on the proposed notice of sale.
                    ``(B) Program for 2007-2012.--The Secretary may 
                include provisions regarding issuance of natural gas-
                only leases in the outer Continental shelf leasing 
                program that applies for the 5-year period beginning in 
                2007, notwithstanding any draft proposal for such 
                program issued before the date of the enactment of this 
                subsection.''.

Summary: Outer Continental Shelf Natural Gas Relief Act - States that all provisions of federal law that prohibit the expenditure of appropriated funds to conduct natural gas leasing and preleasing activities for any area of the Outer Continental Shelf are without any force or effect.

Revokes all withdrawals from leasing of federal submerged lands of the Outer Continental Shelf, including withdrawals by the President under the Outer Continental Shelf Lands Act.

States such withdrawals are no longer in effect with respect to the leasing of areas for natural gas exploration, development, and production.

Prohibits granting a gas lease for any area of the Outer Continental Shelf located within 20 miles of a state's coastline unless the Governor grants state approval.

Directs the Secretary of Energy, in each five-year oil and gas leasing program, to include lease sales that when viewed as a whole propose to offer for gas leasing at least 75% of the available unleased acreage within each Outer Continental Shelf planning area.

Sets forth a scheme for bonus bids and royalties that affects: (1) new and existing gas leases; and (2) leased tracts lying partially within the seaward boundaries of a state.

Permits leases that authorize development and production solely of natural gas and associated condensate, including leases for program years 2002-2007, and for program years 2007-2012.