[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3711 Engrossed in Senate (ES)]
109th CONGRESS
2d Session
S. 3711
_______________________________________________________________________
AN ACT
To enhance the energy independence and security of the United States by
providing for exploration, development, and production activities for
mineral resources in the Gulf of Mexico, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Gulf of Mexico Energy Security Act
of 2006''.
SEC. 2. DEFINITIONS.
In this Act:
(1) 181 area.--The term ``181 Area'' means the area
identified in map 15, page 58, of the Proposed Final Outer
Continental Shelf Oil and Gas Leasing Program for 1997-2002,
dated August 1996, of the Minerals Management Service,
available in the Office of the Director of the Minerals
Management Service, excluding the area offered in OCS Lease
Sale 181, held on December 5, 2001.
(2) 181 south area.--The term ``181 South Area'' means any
area--
(A) located--
(i) south of the 181 Area;
(ii) west of the Military Mission Line; and
(iii) in the Central Planning Area;
(B) excluded from the Proposed Final Outer
Continental Shelf Oil and Gas Leasing Program for 1997-
2002, dated August 1996, of the Minerals Management
Service; and
(C) included in the areas considered for oil and
gas leasing, as identified in map 8, page 37 of the
document entitled ``Draft Proposed Program Outer
Continental Shelf Oil and Gas Leasing Program 2007-
2012'', dated February 2006.
(3) Bonus or royalty credit.--The term ``bonus or royalty
credit'' means a legal instrument or other written
documentation, or an entry in an account managed by the
Secretary, that may be used in lieu of any other monetary
payment for--
(A) a bonus bid for a lease on the outer
Continental Shelf; or
(B) a royalty due on oil or gas production from any
lease located on the outer Continental Shelf.
(4) Central planning area.--The term ``Central Planning
Area'' means the Central Gulf of Mexico Planning Area of the
outer Continental Shelf, as designated in the document entitled
``Draft Proposed Program Outer Continental Shelf Oil and Gas
Leasing Program 2007-2012'', dated February 2006.
(5) Eastern planning area.--The term ``Eastern Planning
Area'' means the Eastern Gulf of Mexico Planning Area of the
outer Continental Shelf, as designated in the document entitled
``Draft Proposed Program Outer Continental Shelf Oil and Gas
Leasing Program 2007-2012'', dated February 2006.
(6) 2002-2007 planning area.--The term ``2002-2007 planning
area'' means any area--
(A) located in--
(i) the Eastern Planning Area, as
designated in the Proposed Final Outer
Continental Shelf Oil and Gas Leasing Program
2002-2007, dated April 2002, of the Minerals
Management Service;
(ii) the Central Planning Area, as
designated in the Proposed Final Outer
Continental Shelf Oil and Gas Leasing Program
2002-2007, dated April 2002, of the Minerals
Management Service; or
(iii) the Western Planning Area, as
designated in the Proposed Final Outer
Continental Shelf Oil and Gas Leasing Program
2002-2007, dated April 2002, of the Minerals
Management Service; and
(B) not located in--
(i) an area in which no funds may be
expended to conduct offshore preleasing,
leasing, and related activities under sections
104 through 106 of the Department of the
Interior, Environment, and Related Agencies
Appropriations Act, 2006 (Public Law 109-54;
119 Stat. 521) (as in effect on August 2,
2005);
(ii) an area withdrawn from leasing under
the ``Memorandum on Withdrawal of Certain Areas
of the United States Outer Continental Shelf
from Leasing Disposition'', from 34 Weekly
Comp. Pres. Doc. 1111, dated June 12, 1998; or
(iii) the 181 Area or 181 South Area.
(7) Gulf producing state.--The term ``Gulf producing
State'' means each of the States of Alabama, Louisiana,
Mississippi, and Texas.
(8) Military mission line.--The term ``Military Mission
Line'' means the north-south line at 8641' W. longitude.
(9) Qualified outer continental shelf revenues.--
(A) In general.--The term ``qualified outer
Continental Shelf revenues'' means--
(i) in the case of each of fiscal years
2007 through 2016, all rentals, royalties,
bonus bids, and other sums due and payable to
the United States from leases entered into on
or after the date of enactment of this Act
for--
(I) areas in the 181 Area located
in the Eastern Planning Area; and
(II) the 181 South Area; and
(ii) in the case of fiscal year 2017 and
each fiscal year thereafter, all rentals,
royalties, bonus bids, and other sums due and
payable to the United States received on or
after October 1, 2016, from leases entered into
on or after the date of enactment of this Act
for--
(I) the 181 Area;
(II) the 181 South Area; and
(III) the 2002-2007 planning area.
(B) Exclusions.--The term ``qualified outer
Continental Shelf revenues'' does not include--
(i) revenues from the forfeiture of a bond
or other surety securing obligations other than
royalties, civil penalties, or royalties taken
by the Secretary in-kind and not sold; or
(ii) revenues generated from leases subject
to section 8(g) of the Outer Continental Shelf
Lands Act (43 U.S.C. 1337(g)).
(10) Coastal political subdivision.--The term ``coastal
political subdivision'' means a political subdivision of a Gulf
producing State any part of which political subdivision is--
(A) within the coastal zone (as defined in section
304 of the Coastal Zone Management Act of 1972 (16
U.S.C. 1453)) of the Gulf producing State as of the
date of enactment of this Act; and
(B) not more than 200 nautical miles from the
geographic center of any leased tract.
(11) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
SEC. 3. OFFSHORE OIL AND GAS LEASING IN 181 AREA AND 181 SOUTH AREA OF
GULF OF MEXICO.
(a) 181 Area Lease Sale.--Except as provided in section 4, the
Secretary shall offer the 181 Area for oil and gas leasing pursuant to
the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) as soon
as practicable, but not later than 1 year, after the date of enactment
of this Act.
(b) 181 South Area Lease Sale.--The Secretary shall offer the 181
South Area for oil and gas leasing pursuant to the Outer Continental
Shelf Lands Act (43 U.S.C. 1331 et seq.) as soon as practicable after
the date of enactment of this Act.
(c) Leasing Program.--The 181 Area and 181 South Area shall be
offered for lease under this section notwithstanding the omission of
the 181 Area or the 181 South Area from any outer Continental Shelf
leasing program under section 18 of the Outer Continental Shelf Lands
Act (43 U.S.C. 1344).
(d) Conforming Amendment.--Section 105 of the Department of the
Interior, Environment, and Related Agencies Appropriations Act, 2006
(Public Law 109-54; 119 Stat. 522) is amended by inserting ``(other
than the 181 South Area (as defined in section 2 of the Gulf of Mexico
Energy Security Act of 2006))'' after ``lands located outside Sale
181''.
SEC. 4. MORATORIUM ON OIL AND GAS LEASING IN CERTAIN AREAS OF GULF OF
MEXICO.
(a) In General.--Effective during the period beginning on the date
of enactment of this Act and ending on June 30, 2022, the Secretary
shall not offer for leasing, preleasing, or any related activity--
(1) any area east of the Military Mission Line in the Gulf
of Mexico;
(2) any area in the Eastern Planning Area that is within
125 miles of the coastline of the State of Florida; or
(3) any area in the Central Planning Area that is--
(A) within--
(i) the 181 Area; and
(ii) 100 miles of the coastline of the
State of Florida; or
(B)(i) outside the 181 Area;
(ii) east of the western edge of the Pensacola
Official Protraction Diagram (UTM X coordinate
1,393,920 (NAD 27 feet)); and
(iii) within 100 miles of the coastline of the
State of Florida.
(b) Military Mission Line.--Notwithstanding subsection (a), the
United States reserves the right to designate by and through the
Secretary of Defense, with the approval of the President, national
defense areas on the outer Continental Shelf pursuant to section 12(d)
of the Outer Continental Shelf Lands Act (43 U.S.C. 1341(d)).
(c) Exchange of Certain Leases.--
(1) In general.--The Secretary shall permit any person
that, as of the date of enactment of this Act, has entered into
an oil or gas lease with the Secretary in any area described in
paragraph (2) or (3) of subsection (a) to exchange the lease
for a bonus or royalty credit that may only be used in the Gulf
of Mexico.
(2) Valuation of existing lease.--The amount of the bonus
or royalty credit for a lease to be exchanged shall be equal
to--
(A) the amount of the bonus bid; and
(B) any rental paid for the lease as of the date
the lessee notifies the Secretary of the decision to
exchange the lease.
(3) Revenue distribution.--No bonus or royalty credit may
be used under this subsection in lieu of any payment due under,
or to acquire any interest in, a lease subject to the revenue
distribution provisions of section 8(g) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1337(g)).
(4) Regulations.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall promulgate
regulations that shall provide a process for--
(A) notification to the Secretary of a decision to
exchange an eligible lease;
(B) issuance of bonus or royalty credits in
exchange for relinquishment of the existing lease;
(C) transfer of the bonus or royalty credit to any
other person; and
(D) determining the proper allocation of bonus or
royalty credits to each lease interest owner.
SEC. 5. DISPOSITION OF QUALIFIED OUTER CONTINENTAL SHELF REVENUES FROM
181 AREA, 181 SOUTH AREA, AND 2002-2007 PLANNING AREAS OF
GULF OF MEXICO.
(a) In General.--Notwithstanding section 9 of the Outer Continental
Shelf Lands Act (43 U.S.C. 1338) and subject to the other provisions of
this section, for each applicable fiscal year, the Secretary of the
Treasury shall deposit--
(1) 50 percent of qualified outer Continental Shelf
revenues in the general fund of the Treasury; and
(2) 50 percent of qualified outer Continental Shelf
revenues in a special account in the Treasury from which the
Secretary shall disburse--
(A) 75 percent to Gulf producing States in
accordance with subsection (b); and
(B) 25 percent to provide financial assistance to
States in accordance with section 6 of the Land and
Water Conservation Fund Act of 1965 (16 U.S.C. 460l-8),
which shall be considered income to the Land and Water
Conservation Fund for purposes of section 2 of that Act
(16 U.S.C. 460l-5).
(b) Allocation Among Gulf Producing States and Coastal Political
Subdivisions.--
(1) Allocation among gulf producing states for fiscal years
2007 through 2016.--
(A) In general.--Subject to subparagraph (B),
effective for each of fiscal years 2007 through 2016,
the amount made available under subsection (a)(2)(A)
shall be allocated to each Gulf producing State in
amounts (based on a formula established by the
Secretary by regulation) that are inversely
proportional to the respective distances between the
point on the coastline of each Gulf producing State
that is closest to the geographic center of the
applicable leased tract and the geographic center of
the leased tract.
(B) Minimum allocation.--The amount allocated to a
Gulf producing State each fiscal year under
subparagraph (A) shall be at least 10 percent of the
amounts available under subsection (a)(2)(A).
(2) Allocation among gulf producing states for fiscal year
2017 and thereafter.--
(A) In general.--Subject to subparagraphs (B) and
(C), effective for fiscal year 2017 and each fiscal
year thereafter--
(i) the amount made available under
subsection (a)(2)(A) from any lease entered
into within the 181 Area or the 181 South Area
shall be allocated to each Gulf producing State
in amounts (based on a formula established by
the Secretary by regulation) that are inversely
proportional to the respective distances
between the point on the coastline of each Gulf
producing State that is closest to the
geographic center of the applicable leased
tract and the geographic center of the leased
tract; and
(ii) the amount made available under
subsection (a)(2)(A) from any lease entered
into within the 2002-2007 planning area shall
be allocated to each Gulf producing State in
amounts that are inversely proportional to the
respective distances between the point on the
coastline of each Gulf producing State that is
closest to the geographic center of each
historical lease site and the geographic center
of the historical lease site, as determined by
the Secretary.
(B) Minimum allocation.--The amount allocated to a
Gulf producing State each fiscal year under
subparagraph (A) shall be at least 10 percent of the
amounts available under subsection (a)(2)(A).
(C) Historical lease sites.--
(i) In general.--Subject to clause (ii),
for purposes of subparagraph (A)(ii), the
historical lease sites in the 2002-2007
planning area shall include all leases entered
into by the Secretary for an area in the Gulf
of Mexico during the period beginning on
October 1, 1982 (or an earlier date if
practicable, as determined by the Secretary),
and ending on December 31, 2015.
(ii) Adjustment.--Effective January 1,
2022, and every 5 years thereafter, the ending
date described in clause (i) shall be extended
for an additional 5 calendar years.
(3) Payments to coastal political subdivisions.--
(A) In general.--The Secretary shall pay 20 percent
of the allocable share of each Gulf producing State, as
determined under paragraphs (1) and (2), to the coastal
political subdivisions of the Gulf producing State.
(B) Allocation.--The amount paid by the Secretary
to coastal political subdivisions shall be allocated to
each coastal political subdivision in accordance with
subparagraphs (B), (C), and (E) of section 31(b)(4) of
the Outer Continental Shelf Lands Act (43 U.S.C.
1356a(b)(4)).
(c) Timing.--The amounts required to be deposited under paragraph
(2) of subsection (a) for the applicable fiscal year shall be made
available in accordance with that paragraph during the fiscal year
immediately following the applicable fiscal year.
(d) Authorized Uses.--
(1) In general.--Subject to paragraph (2), each Gulf
producing State and coastal political subdivision shall use all
amounts received under subsection (b) in accordance with all
applicable Federal and State laws, only for 1 or more of the
following purposes:
(A) Projects and activities for the purposes of
coastal protection, including conservation, coastal
restoration, hurricane protection, and infrastructure
directly affected by coastal wetland losses.
(B) Mitigation of damage to fish, wildlife, or
natural resources.
(C) Implementation of a federally-approved marine,
coastal, or comprehensive conservation management plan.
(D) Mitigation of the impact of outer Continental
Shelf activities through the funding of onshore
infrastructure projects.
(E) Planning assistance and the administrative
costs of complying with this section.
(2) Limitation.--Not more than 3 percent of amounts
received by a Gulf producing State or coastal political
subdivision under subsection (b) may be used for the purposes
described in paragraph (1)(E).
(e) Administration.--Amounts made available under subsection (a)(2)
shall--
(1) be made available, without further appropriation, in
accordance with this section;
(2) remain available until expended; and
(3) be in addition to any amounts appropriated under--
(A) the Outer Continental Shelf Lands Act (43
U.S.C. 1331 et seq.);
(B) the Land and Water Conservation Fund Act of
1965 (16 U.S.C. 460l-4 et seq.); or
(C) any other provision of law.
(f) Limitations on Amount of Distributed Qualified Outer
Continental Shelf Revenues.--
(1) In general.--Subject to paragraph (2), the total amount
of qualified outer Continental Shelf revenues made available
under subsection (a)(2) shall not exceed $500,000,000 for each
of fiscal years 2016 through 2055.
(2) Expenditures.--For the purpose of paragraph (1), for
each of fiscal years 2016 through 2055, expenditures under
subsection (a)(2) and shall be net of receipts from that fiscal
year from any area in the 181 Area in the Eastern Planning Area
and the 181 South Area.
(3) Pro rata reductions.--If paragraph (1) limits the
amount of qualified outer Continental Shelf revenue that would
be paid under subparagraphs (A) and (B) of subsection (a)(2)--
(A) the Secretary shall reduce the amount of
qualified outer Continental Shelf revenue provided to
each recipient on a pro rata basis; and
(B) any remainder of the qualified outer
Continental Shelf revenues shall revert to the general
fund of the Treasury.
Passed the Senate August 1, 2006.
Attest:
Secretary.
109th CONGRESS
2d Session
S. 3711
_______________________________________________________________________
AN ACT
To enhance the energy independence and security of the United States by
providing for exploration, development, and production activities for
mineral resources in the Gulf of Mexico, and for other purposes.