II 115th CONGRESS 2d Session S. 2319 IN THE SENATE OF THE UNITED STATES January 18, 2018 Mr. Barrasso (for himself, Mr. Hoeven , Mr. Enzi , Mr. Lee , and Mr. Hatch ) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To empower States to manage the development and production of oil and gas on available Federal land, and for other purposes.

1. Short title This Act may be cited as the Opportunities for the Nation and States to Harness Onshore Resources for Energy Act or the ONSHORE Act . 2. Cooperative federalism in oil and gas permitting on available Federal land (a) In general The Mineral Leasing Act ( 30 U.S.C. 181 et seq.) is amended— (1) by redesignating section 44 as section 47; and (2) by adding after section 43 the following: 44. Cooperative federalism in oil and gas permitting on available Federal land (a) Definitions In this section: (1) APD The term APD means a permit— (A) that grants authority to drill for oil and gas; and (B) for which an application has been received that includes— (i) a drilling plan; (ii) a surface use plan of operations described in section 3162.3–1(f) of title 43, Code of Federal Regulations (or a successor regulation); (iii) evidence of bond coverage; and (iv) such other information as may be required by applicable orders and notices. (2) Available Federal land The term available Federal land means any Federal land that— (A) is located within the boundaries of a State; (B) is not held by the United States in trust for the benefit of a federally recognized Indian Tribe or a member of a federally recognized Indian Tribe; (C) is not a unit of the National Park System; (D) is not a unit of the National Wildlife Refuge System, other than a unit of the National Wildlife Refuge System for which oil and gas drilling is allowed under law; (E) is not a congressionally approved wilderness area under the Wilderness Act ( 16 U.S.C. 1131 et seq.); and (F) has been identified as land available for lease, or has been leased, for the exploration, development, and production of oil and gas— (i) by the Bureau of Land Management under— (I) a resource management plan under the Federal Land Policy and Management Act of 1976 ( 43 U.S.C. 1701 et seq.); or (II) an integrated activity plan with respect to the National Petroleum Reserve–Alaska; or (ii) by the Forest Service under a National Forest management plan under the Forest and Rangeland Renewable Resources Planning Act of 1974 ( 16 U.S.C. 1600 et seq.). (3) Drilling plan The term drilling plan means a plan described in section 3162.3–1(e) of title 43, Code of Federal Regulations (or a successor regulation). (4) Secretary The term Secretary means the Secretary of the Interior. (5) State applicant The term State applicant means a State that submits an application under subsection (c). (6) State program The term State program means a program in a State under which the State may— (A) issue APDs or approve drilling plans, as applicable, on available Federal land; and (B) impose sanctions for violations of State laws, regulations, or any condition of an issued APD or approved drilling plan, as applicable. (7) Sundry notice The term sundry notice means a written request— (A) to perform work not covered under an APD or drilling plan; or (B) for a change to operations covered under an APD or drilling plan. (b) Authorizations (1) In general On receipt of an application under subsection (c), the Secretary may delegate to a State exclusive authority— (A) to issue an APD on available Federal land; or (B) to approve drilling plans on available Federal land. (2) Sundry notices On request of a State for which authority is delegated under paragraph (1), the authority delegated may include the authority to approve sundry notices. (3) Inspection and enforcement (A) In general On request of a State for which authority is delegated under paragraph (1), the authority delegated may include the authority to inspect and enforce an APD or drilling plan, as applicable. (B) Effect A delegation of authority under paragraph (1)(A) shall not affect the ability of the Secretary to collect inspection fees under subsection (d) of section 108 of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1718 ). (c) State application process (1) Submission of application A State seeking a delegation of authority under subparagraph (A) or (B) of subsection (b)(1) shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including— (A) a description of the State program that the State proposes to administer under State law; and (B) a statement from the Governor or attorney general of the State that demonstrates that the laws of the State provide adequate authority to carry out the State program. (2) Deadline for approval or disapproval Not later than 180 days after the date on which an application under paragraph (1) is received, the Secretary shall approve or disapprove the application. (3) Requirements for approval (A) In general The Secretary may approve an application received under paragraph (1) only if the Secretary determines that— (i) the State applicant would be at least as effective as the Secretary in issuing APDs or in approving drilling plans, as applicable; (ii) the State program of the State applicant— (I) complies with this Act; and (II) provides for the termination or modification of an issued APD or approved drilling plan, as applicable, for cause, including for— (aa) the violation of any condition of the issued APD or approved drilling plan; (bb) obtaining the issued APD or approved drilling plan by misrepresentation; or (cc) failure to fully disclose in the application all relevant facts; (iii) the State applicant has sufficient administrative and technical personnel and sufficient funding to carry out the State program; and (iv) approval of the application would not result in decreased royalty payments owed to the United States under section 35(a), except as provided in subsection (e) of that section. (B) Memoranda of understanding With respect to a State applicant seeking authority under subsection (b)(3)(A) to inspect and enforce APDs or drilling plans, as applicable, before approving the application of the State applicant, the Secretary shall enter into a memorandum of understanding with the State applicant under paragraph (6) that describes the Federal and State responsibilities with respect to the inspection and enforcement. (C) Public notice Before approving an application received under paragraph (1), the Secretary shall— (i) provide public notice of the application; (ii) solicit public comment for the application; and (iii) hold a public hearing for the application in the State. (4) Disapproval If the Secretary disapproves an application submitted under paragraph (1), the Secretary shall provide to the State applicant written notification of— (A) the reasons for the disapproval, including any information, data, or analysis on which the disapproval is based; and (B) any revisions or modifications necessary to obtain approval. (5) Resubmittal of application A State may resubmit an application under paragraph (1) at any time. (6) State memoranda of understanding Before a State submits an application under paragraph (1), the Secretary, on request of a State, may enter into a memorandum of understanding with the State regarding the proposed State program— (A) to describe the Federal and State responsibilities for oil and gas regulations; (B) to provide technical assistance; and (C) to share best management practices. (d) Administrative fees for APDs (1) In general A State for which authority has been delegated under subsection (b)(1)(A) may collect a fee for each application for an APD that is submitted to the State. (2) No collection of fee by Secretary The Secretary may not collect a fee from the applicant or from the State for an application for an APD that is submitted to a State for which authority has been delegated under subsection (b)(1)(A). (3) Fee amount The fee collected under paragraph (1) shall be less than or equal to the amount of the fee collected by the Secretary under section 35(d)(2) from States for which authority has not been delegated under subsection (b)(1)(A). (4) Use A State shall use 100 percent of the fees collected under this subsection for the administration of the approved State program of the State. (e) Voluntary termination of authority (1) In general After providing written notice to the Secretary, a State may voluntarily terminate any authority delegated to the State under subsection (b)(1) on expiration of the 60-day period beginning on the date on which the Secretary receives the written notice. (2) Resumption by Secretary On termination of the authority delegated to a State under paragraph (1), the Secretary shall resume any activities for which authority was delegated to the State under subsection (b)(1). (f) Appeal of denial of application for APD or application for approval of drilling plan (1) In general If a State for which the Secretary has delegated authority under subsection (b)(1) denies an application for an APD or an application for approval of a drilling plan, the applicant may appeal the decision to the Office of Hearings and Appeals of the Department of the Interior. (2) Fee allowed The Secretary may charge an applicant a fee for an appeal under paragraph (1). (g) Federal administration of State program (1) Notification If the Secretary has reason to believe that a State is not administering or enforcing an approved State program, the Secretary shall notify the relevant State regulatory authority of any possible deficiencies. (2) State response Not later than 30 days after the date on which a State receives notification of a possible deficiency under paragraph (1), the State shall— (A) take appropriate action to correct the possible deficiency; and (B) notify the Secretary of the action in writing. (3) Determination (A) In general On expiration of the 30-day period described in paragraph (2), the Secretary shall issue public notice of any determination of the Secretary that— (i) a violation of all or any part of an approved State program has resulted from a failure of the State to administer or enforce the approved State program of the State; or (ii) the State has not demonstrated the capability and intent of the State to administer or enforce the State program of the State. (B) Appeal A State may appeal the determination of the Secretary under subparagraph (A) in the applicable United States District Court. (C) Resumption by Secretary pending appeal The Secretary may not resume activities under paragraph (4) if an appeal under subparagraph (B) is pending. (4) Resumption by Secretary Except as provided in paragraph (3)(C), if the Secretary has made a determination under paragraph (3)(A), the Secretary shall resume any activities for which authority was delegated to the State during the period— (A) beginning on the date on which the Secretary issues the public notice under paragraph (3)(A); and (B) ending on the date on which the Secretary determines that the State may administer or enforce, as applicable, the approved State program of the State. (5) Standing A State with an approved regulatory program shall have standing to sue the Secretary for any action taken under this subsection. . (b) Inspection fees Section 108 of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1718 ) is amended by adding at the end the following: (d) Inspection fees for certain States (1) Collection of fees (A) In general The Secretary shall collect annual nonrefundable inspection fees in the amount specified in subparagraph (B), from each designated operator under each lease on Federal or Indian lands that is— (i) subject to inspection under subsection (b); and (ii) located in a State for which the Secretary has delegated authority under section 44(b)(1)(A) of the Mineral Leasing Act. (B) Amount The amount of the fees collected under subparagraph (A) shall be— (i) $700 for each lease or unit or communitization agreement with no active or inactive wells, but with surface use, disturbance or reclamation; (ii) $1,225 for each lease or unit or communitization agreement with 1 to 10 wells, with any combination of active or inactive wells; (iii) $4,900 for each lease or unit or communitization agreement with 11 to 50 wells, with any combination of active or inactive wells; and (iv) $9,800 for each lease or unit or communitization agreement with more than 50 wells, with any combination of active or inactive wells. (2) Onshore energy safety fund (A) In general There is established in the Treasury of the United States a fund to be known as the Onshore Energy Safety Fund (referred to in this subsection as the Fund ). (B) Deposits An amount equal to the amounts collected as fees under paragraph (1) shall be deposited in the Fund. (C) Availability Amounts in the Fund shall— (i) only be available to the extent and in the amount provided in advance in appropriations Acts; (ii) be used only for purposes described in subparagraph (D); (iii) remain available until expended; and (iv) be credited as offsetting collections. (D) Use of funds Notwithstanding section 3302 of title 31, United States Code, amounts deposited in the Fund shall only be available for expenditure for purposes of carrying out inspections under subsection (b) in those States for which the Secretary has delegated authority under section 44(b)(1)(A) of the Mineral Leasing Act. (3) Payment due date The Secretary shall require payment of any fee assessed under paragraph (1) not later than 30 days after the date on which the Secretary provides notice of the assessment of the fee after the completion of an inspection. (4) Penalty If a designated operator assessed a fee under paragraph (1) fails to pay the full amount of the fee required under this subsection, the Secretary may, in addition to using any other applicable enforcement authority, assess civil penalties against the operator under section 109 in the same manner as if this section were a mineral leasing law. (5) Notification to State of noncompliance If, on the basis of any inspection under subsection (b), the Secretary determines that an operator is failing to comply with the requirements of mineral leasing laws or this Act, the Secretary shall notify the State of the failure to comply immediately. . (c) Existing authorities Section 390(a) of the Energy Policy Act of 2005 ( 42 U.S.C. 15942(a) ) is amended— (1) by striking Action by the Secretary and inserting The Secretary ; (2) by striking with respect to any of the activities described in subsection (b) shall be subject to a rebuttable presumption that the use of and inserting shall apply ; and (3) by striking would apply if the activity and inserting for each action described in subsection (b) if the action . 3. Conveyance to certain States of property interest in State share of royalties and other payments (a) In general Section 35 of the Mineral Leasing Act ( 30 U.S.C. 191 ) is amended— (1) in subsection (a), in the first sentence, by striking shall be paid into the Treasury and inserting shall, except as provided in subsection (e), be paid into the Treasury ; (2) in subsection (c)(1), by inserting and except as provided in subsection (e) before , any rentals ; and (3) by adding at the end the following: (e) Conveyance to certain States of property interest in State share (1) In general Notwithstanding any other provision of law, on request of a State and in lieu of any payments to the State under subsection (a), the Secretary of the Interior shall convey to the State all right, title, and interest in and to the percentage specified in that subsection for that State that would otherwise be required to be paid into the Treasury under that subsection. (2) Amount Notwithstanding any other provision of law, after a conveyance to a State under paragraph (1), any person shall pay directly to the State any amount owed by the person for which the right, title, and interest has been conveyed to the State under this subsection. (3) Notice The Secretary of the Interior shall promptly provide to each holder of a lease of public land to which subsection (a) applies that is located in a State to which right, title, and interest is conveyed under this subsection notice that— (A) the Secretary of the Interior has conveyed to the State all right, title, and interest in and to the amounts referred to in paragraph (1); and (B) the leaseholder is required to pay the amounts directly to the State. (4) Report A State that has received a conveyance under this subsection shall report monthly to the Office of Natural Resources Revenue of the Department of the Interior the amount paid to the State pursuant to this subsection. (5) Application With respect to the interest conveyed to a State under this subsection from sales, bonuses, royalties (including interest charges), and rentals collected under the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1701 et seq.), this subsection shall only apply with respect to States for which the Secretary has delegated any authority under section 44(b)(1). . (b) Administrative costs Section 35(b) of the Mineral Leasing Act ( 30 U.S.C. 191(b) ) is amended by striking In determining and inserting Except with respect to States for which the Secretary has delegated any authority under section 44(b)(1), in determining . (c) Conforming amendment Section 205(f) of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1735(f) ) is amended in the seventh sentence by striking All and inserting Subject to subsection (e) of section 35 of the Mineral Leasing Act ( 30 U.S.C. 191 ), all . 4. Permitting on non-Federal surface estate The Mineral Leasing Act ( 30 U.S.C. 181 et seq.) is amended by inserting after section 44 (as added by section 2(a)(2)) the following: 45. Permitting on non-Federal surface estate (a) Permits not required for certain activities on non-Federal surface estate The following activities conducted on non-Federal surface estate shall not require a permit from the Bureau of Land Management and shall not be considered a major Federal action under the National Environmental Policy Act of 1969 ( 42 U.S.C. 4321 et seq.): (1) Oil and gas operations for the exploration for, or development or production of, oil and gas in a lease or unit or communitization agreement in which the United States holds a mineral ownership interest of 50 percent or less. (2) Oil and gas operations that may have potential drainage impacts, as determined by the Bureau of Land Management, on oil and gas in which the United States holds a mineral ownership interest. (b) DOI notification The Secretary of the Interior shall provide to each State a map or list indicating Federal mineral ownership within that State. (c) State notification Each State with an approved permit to drill or drilling plan that would impact or extract oil and gas owned by the Federal Government shall notify the Secretary of the Interior of the approved permit to drill or drilling plan. (d) Royalties Nothing in this section affects the amount of royalties due to the United States under this Act from the production of oil and gas. . 5. State and Tribal authority for hydraulic fracturing regulation The Mineral Leasing Act ( 30 U.S.C. 181 et seq.) is amended by inserting after section 45 (as added by section 4) the following: 46. State and Tribal authority for hydraulic fracturing regulation (a) In general In this section: (1) Hydraulic fracturing defined The term hydraulic fracturing means the process of creating small cracks or fractures in underground geological formations for well stimulation purposes of bringing hydrocarbons into the wellbore and to the surface for capture. (2) Secretary The term Secretary means the Secretary of the Interior. (b) Enforcement of Federal regulations The Secretary shall not enforce any Federal regulation, guidance, or permit requirement regarding hydraulic fracturing relating to oil, gas, or geothermal production activities on or under any land in any State that has regulations, guidance, or permit requirements for that activity. (c) State authority The Secretary shall defer to State regulations, guidance, and permit requirements for all activities regarding hydraulic fracturing relating to oil, gas, or geothermal production activities on Federal land. (d) Transparency of State regulations (1) In general Each State shall submit to the Bureau of Land Management a copy of the regulations of the State that apply to hydraulic fracturing operations on Federal land, including the regulations that require disclosure of chemicals used in hydraulic fracturing operations. (2) Availability The Secretary shall make available to the public on the website of the Secretary the regulations submitted under paragraph (1). (e) Tribal authority on trust land The Secretary shall not enforce any Federal regulation, guidance, or permit requirement with respect to hydraulic fracturing on any land held in trust or restricted status for the benefit of a federally recognized Indian Tribe or a member of a federally recognized Indian Tribe, except with the express consent of the beneficiary on whose behalf the land is held in trust or restricted status. . 6. Review of Integrated Activity Plan for the National Petroleum Reserve–Alaska The Secretary of the Interior shall— (1) conduct a review of the National Petroleum Reserve–Alaska Final Integrated Activity Plan/Environmental Impact Statement, for which notice of availability was published in the Federal Register on December 28, 2012 (77 Fed. Reg. 76515), to determine which land within the National Petroleum Reserve–Alaska should be made available for oil and gas leasing; and (2) make available the lands described in paragraph (1) for oil and gas leasing. 7. Protested lease sales Section 17(b)(1)(A) of the Mineral Leasing Act ( 30 U.S.C. 226(b)(1)(A) ) is amended by inserting after the seventh sentence the following: The Secretary shall resolve any protest to a lease sale within 60 days following such payment. .