S. 3543

Integrity in Offshore Energy Resources Act of 2008

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Contents

II

110th CONGRESS

2d Session

S. 3543

IN THE SENATE OF THE UNITED STATES

September 23 (legislative day, September 17), 2008

Mr. Menendez (for himself and Mr. Nelson of Florida) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources

A BILL

To improve the administration of the Minerals Management Service, and for other purposes.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Integrity in Offshore Energy Resources Act of 2008.

(b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definitions.

TITLE I—Employees of Service

Sec. 101. Employee ethical standards.

TITLE II—Programs of Service

Sec. 201. Suspension of royalty-in-kind program.

Sec. 202. Audits.

Sec. 203. Annual reports.

Sec. 204. Prohibition on use of royalty-in-kind revenues for administrative costs.

2.

Definitions

In this Act:

(1)

Department

The term Department means the Department of the Interior.

(2)

Mineral

The term mineral has the meaning given the term minerals in section 2 of the Outer Continental Shelf Lands Act (43 U.S.C. 1331).

(3)

Mineral mining

(A)

In general

The term mineral mining means—

(i)

any activity carried out on Federal land on or off a claim (with or without a discovery) for mineral leasing, preleasing, any related activity, prospecting, exploration, development, mining, extraction, milling, beneficiation, processing, or storage of mined or processed materials with respect to any mineral that is under the jurisdiction of the Service and uses reasonably incident to the activity; and

(ii)

any reclamation activity for any mineral and uses reasonably incident to the activity.

(B)

Inclusions

The term mineral activity includes the construction and use of roads, transmission lines, pipelines, utility corridors, and other means of access across Federal land for an ancillary facility.

(4)

Royalty-in-kind program

The term royalty-in-kind program means the program established under—

(A)

section 342 of the Energy Policy Act of 2005 (42 U.S.C. 15902);

(B)

section 36 of the Mineral Leasing Act (30 U.S.C. 192);

(C)

section 27 of the Outer Continental Shelf Lands Act (43 U.S.C. 1353); or

(D)

any other similar provision of law.

(5)

Secretary

The term Secretary means the Secretary of the Interior.

(6)

Service

The term Service means the Minerals Management Service.

I

Employees of Service

101.

Employee ethical standards

(a)

Gifts

(1)

Prohibition

(A)

In general

An employee of the Service may not knowingly accept a gift from an entity that is engaged in the business of mineral mining.

(B)

Exceptions

Except for the value exception, the regulations providing exceptions to the gift rules for Federal employees for gifts from outside sources (5 C.F.R. Part 2635) shall apply to subparagraph (A).

(2)

Violation

Whoever violates paragraph (1) shall be guilty of a felony and fined under title 18, United States Code, or imprisoned for not more than 2 years, or both.

(b)

Financial disclosure

The filing requirements of section 101(f) of the Ethics in Government Act of 1978 shall apply to an employee of the Service in a position classified at an annual income equivalent to GS–13 or higher.

(c)

Divestiture requirement

An employee of the Service may not own stock or any other interest in an entity that is engaged in the business of mineral mining during the period of employment of that employee by the Service.

(d)

Outside employment

An employee of the Service may not be employed by any entity that is engaged in the business of mineral mining during the period of employment of that employee by the Service.

(e)

Revolving door

(1)

Any work for the industry

An employee of the Service shall not work for an entity engaged in the business of mineral mining during the 1 year period after the termination of his or her employment with the Service.

(2)

Violation

Whoever violates paragraph (1) shall be guilty of a felony and punished as provided in section 216 of title 18, United States Code.

II

Programs of Service

201.

Suspension of royalty-in-kind program

(a)

In general

Notwithstanding any other provision of law, the authority of the Secretary to carry out each royalty-in-kind program is suspended during the period—

(1)

beginning on the date of enactment of this Act; and

(2)

ending on the date the Secretary certifies to Congress that the Secretary, acting through the Service, has—

(A)

conducted a comprehensive review to determine if the Service is accurately collecting royalties and reported the results of the review to Congress;

(B)

conducted a thorough review to ensure that metering equipment properly measures what royalties are owed to the Federal Government and reported the results of the review to Congress;

(C)

implemented a robust training program for employees of the Service that culminates in a certification signed by an employee that the employee understands the ethics laws (including regulations); and

(D)

created an ombudsman position that—

(i)

monitors the progress of the Service in carrying out the actions described in this paragraph; and

(ii)

is appointed by, and reports exclusively to, the Inspector General of the Department.

(b)

Application

Subsection (a) applies to a contract entered into on or after the date of enactment of this Act.

202.

Audits

(a)

Number of audits

(1)

In general

The Secretary shall ensure that by fiscal year 2009 the Service shall perform each fiscal year not less that 550 audits of oil and gas leases entered into by the Secretary for which payment is made under a royalty-in-kind program.

(2)

Compliance reviews

For purposes of paragraph (1), a compliance review shall not be considered an audit.

(b)

Standards

Not later than 120 days after the date of enactment of this Act, the Secretary shall promulgate regulations that—

(1)

require that all employees that conduct audits or compliance reviews of oil and gas leases entered into by the Secretary shall meet professional auditor qualifications that are consistent with the latest revision of the Government Auditing Standards issued by the Comptroller General of the United States; and

(2)

ensure that all audits conducted by the Department are performed in accordance with the Standards.

203.

Annual reports

Not later than 1 year after the date of enactment of this Act and each year thereafter, the Inspector General of the Department shall submit to Congress a report that evaluates—

(1)

the performance of the Secretary in carrying out each royalty-in-kind program; and

(2)

whether the royalty-in-kind program costs or saves taxpayer dollars as compared to receiving revenues in cash.

204.

Prohibition on use of royalty-in-kind revenues for administrative costs

Section 342(b)(5) of the Energy Policy Act of 2005 (42 U.S.C. 15902(b)(5)) is amended—

(1)

by striking Limitation.— and all that follows through subparagraph (B), the in subparagraph (A) and inserting Limitation.—The; and

(2)

by striking subparagraph (B).