IB Union Calendar No. 455 117TH CONGRESS 2D SESSION H. R. 1517 [Report No. 117–632] To amend the Mineral Leasing Act to make certain adjustments to the fiscal terms for fossil fuel development and to make other reforms to improve returns to taxpayers for the development of Federal energy resources, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 2, 2021 Ms. PORTER (for herself, Mr. GRIJALVA, and Mr. LOWENTHAL) introduced the following bill; which was referred to the Committee on Natural Resources DECEMBER 14, 2022 Additional sponsors: Mr. CLEAVER, Ms. LEE of California, Ms. SCHAKOWSKY, Ms. DEGETTE, Ms. MCCOLLUM, Mr. COHEN, Mr. WELCH, Mr. LEVIN of California, Mr. CARTWRIGHT, Mr. HORSFORD, Mr. CASTEN, Ms. JAYAPAL, Mr. PAYNE, Mr. MCNERNEY, Mr. QUIGLEY, and Ms. MATSUI DECEMBER 14, 2022 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 March 2, 2021] VerDate Sep 11 2014 22:24 Dec 14, 2022 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H1517.IH H1517 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 1517 RH A BILL To amend the Mineral Leasing Act to make certain adjust- ments to the fiscal terms for fossil fuel development and to make other reforms to improve returns to tax- payers for the development of Federal energy resources, and for other purposes. VerDate Sep 11 2014 22:24 Dec 14, 2022 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H1517.IH H1517 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 1517 RH Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Ending Taxpayer Wel- 4 fare for Oil and Gas Companies Act of 2021’’. 5 SEC. 2. TABLE OF CONTENTS. 6 The table of contents for this Act is the following: 7 Sec. 1. Short title. Sec. 2. Table of contents. Sec. 3. Onshore fossil fuel royalty rates. Sec. 4. Minimum bid amount. Sec. 5. Onshore oil and gas rental rates. Sec. 6. Inspection fee. Sec. 7. Penalties. Sec. 8. Royalty relief. Sec. 9. Royalty in kind. Sec. 10. Amendments to definitions. Sec. 11. Compliance reviews. Sec. 12. Liability for royalty payments. Sec. 13. Recordkeeping. Sec. 14. Adjustments and refunds. Sec. 15. Obligation period. Sec. 16. Tolling agreements and subpoenas. Sec. 17. Appeals. Sec. 18. Assessments. Sec. 19. Pilot project on automatic data transfer. Sec. 20. Penalty for late or incorrect reporting of data. Sec. 21. Required recordkeeping for natural gas plants. Sec. 22. Shared penalties. Sec. 23. Applicability to other minerals. Sec. 24. Entitlements. Sec. 25. Royalties on all extracted methane. SEC. 3. ONSHORE FOSSIL FUEL ROYALTY RATES. 8 The Mineral Leasing Act (30 U.S.C. 181 et seq.) is 9 amended— 10 (1) in section 7— 11 (A) by striking ‘‘121⁄2’’ and inserting 12 ‘‘18.75’’; and 13 (B) by adding at the end the following: 14 VerDate Sep 11 2014 22:24 Dec 14, 2022 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H1517.IH H1517 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 1517 RH ‘‘(d) PERIODIC EVALUATION OF ROYALTY RATES.— 1 The Secretary shall establish a periodic process of evalu- 2 ating increases in royalty rates to achieve a fair market 3 value return for the public. The process should include: 4 ‘‘(1) publishing annually the average, weighted 5 by relative production per State, of the top fossil fuel 6 royalty rates charged by States for fossil fuels produc- 7 tion on State-owned public lands; 8 ‘‘(2) evaluating triennially increases in the Fed- 9 eral fossil fuel royalty rates above the minimum rates 10 required under this Act to match the production- 11 weighted average of State royalty rates. The triennial 12 review shall include and benefit from public partici- 13 pation through written comment, public hearings and 14 other meetings open to all interested parties; and 15 ‘‘(3) submitting the triennial evaluation to Con- 16 gress, including a summary of the views expressed in 17 the public participation processes related to the eval- 18 uation.’’. 19 (2) in section 17, by— 20 (A) striking ‘‘12.5’’ each place such term 21 appears and inserting ‘‘18.75’’; and 22 (B) striking ‘‘121⁄2’’ each place such term 23 appears and inserting ‘‘18.75’’; and 24 VerDate Sep 11 2014 22:24 Dec 14, 2022 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H1517.IH H1517 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 1517 RH (3) in section 31(e), by striking ‘‘162⁄3’’ both 1 places such term appears and inserting ‘‘25’’. 2 SEC. 4. MINIMUM BID AMOUNT. 3 Section 17 of the Mineral Leasing Act (30 U.S.C. 226) 4 is amended— 5 (1) in subsection (b)(1)(B)— 6 (A) by striking ‘‘$2 per acre’’ and inserting 7 ‘‘$10 per acre, except as otherwise provided by 8 this paragraph’’; and 9 (B) by striking ‘‘Federal Onshore Oil and 10 Gas Leasing Reform Act of 1987’’ and inserting 11 ‘‘Ending Taxpayer Welfare for Oil and Gas 12 Companies Act of 2021’’; 13 (2) in subsection (b)(2)(C), by striking ‘‘$2 per 14 acre’’ and inserting ‘‘$10 per acre’’; and 15 (3) by adding at the end the following: 16 ‘‘(q) INFLATION ADJUSTMENT.—The Secretary shall— 17 ‘‘(1) by regulation, at least once every 4 years, 18 adjust each of the dollar amounts that apply under 19 subsections (b)(1)(B), (b)(2)(C), and (d) to reflect the 20 change in the Consumer Price Index for All Urban 21 Consumers published by the Bureau of Labor Statis- 22 tics; and 23 ‘‘(2) publish each such regulation in the Federal 24 Register.’’. 25 VerDate Sep 11 2014 22:24 Dec 14, 2022 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H1517.IH H1517 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 1517 RH SEC. 5. ONSHORE OIL AND GAS RENTAL RATES. 1 The Mineral Leasing Act (30 U.S.C. 181 et seq.) is 2 amended— 3 (1) in section 17(d)— 4 (A) by striking ‘‘$1.50 per acre’’ and insert- 5 ing ‘‘$3 per acre’’; and 6 (B) by striking ‘‘$2 per acre’’ and inserting 7 ‘‘$5 per acre’’; and 8 (2) in section 31(e), by striking ‘‘$10’’ and in- 9 serting ‘‘$20’’. 10 SEC. 6. INSPECTION FEE. 11 (a) IN GENERAL.—Section 108 of the Federal Oil and 12 Gas Royalty Management Act of 1982 (30 U.S.C. 1718) is 13 amended by adding at the end the following: 14 ‘‘(d) INSPECTION FEE.— 15 ‘‘(1) IN GENERAL.—The designated operator 16 under each oil and gas lease on Federal or Indian 17 lands, or each unit and communitization agreement 18 that includes one or more such Federal or Indian 19 leases, that is subject to inspection under subsection 20 (b) and that is in force at the start of fiscal year 21 2021, shall pay a nonrefundable inspection fee in an 22 amount that, except as provided in paragraph (2), is 23 established by the Secretary by regulation and is suf- 24 ficient to recover the full costs incurred by the United 25 VerDate Sep 11 2014 22:24 Dec 14, 2022 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H1517.IH H1517 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 1517 RH States for inspection and enforcement with respect to 1 such leases. 2 ‘‘(2) AMOUNT.—Until the effective date of regula- 3 tions under paragraph (1), the amount of the fee shall 4 be— 5 ‘‘(A) $700 for each lease or unit or 6 communitization agreement with no active or in- 7 active wells, but with surface use, disturbance or 8 reclamation; 9 ‘‘(B) $1,225 for each lease or unit or 10 communitization agreement with 1 to 10 wells, 11 with any combination of active or inactive wells; 12 ‘‘(C) $4,900 for each lease or unit or 13 communitization agreement with 11 to 50 wells, 14 with any combination of active or inactive wells; 15 and 16 ‘‘(D) $9,800 for each lease or unit or 17 communitization agreement with more than 50 18 wells, with any combination of active or inactive 19 wells. 20 ‘‘(3) DUE DATE.—Payment of the fee under this 21 section shall be due not later than 30 days after the 22 Secretary provides notice of the assessment of the fee. 23 ‘‘(4) PENALTY.—If the designated operator fails 24 to pay the full amount of the fee as prescribed in this 25 VerDate Sep 11 2014 22:24 Dec 14, 2022 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H1517.IH H1517 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 1517 RH section, the Secretary may, in addition to utilizing 1 any other applicable enforcement authority, assess 2 civil penalties against the operator under section 109 3 in the same manner as if this section were a mineral 4 leasing law. 5 ‘‘(5) EXEMPTION FOR TRIBAL OPERATORS.—An 6 operator that is a Tribe or is controlled by a Tribe 7 is not subject to paragraph (1) with respect to a lease, 8 unit, or communitization agreement that is located 9 entirely on the lands of such Tribe.’’. 10 (b) ASSESSMENT FOR FISCAL YEAR 2020.—The Sec- 11 retary of the Interior shall assess the fee under the amend- 12 ment made by subsection (a) for fiscal year 2020, and pro- 13 vide notice of such assessment to each designated operator 14 who is liable for such fee, by not later than 60 days after 15 the date of the enactment of this Act. 16 SEC. 7. PENALTIES. 17 (a) MINERAL LEASING ACT.—Section 41 of the Min- 18 eral Leasing Act (30 U.S.C. 195) is amended— 19 (1) in subsection (b), by striking ‘‘$500,000’’ and 20 inserting ‘‘$1,000,000’’; and 21 (2) in subsection (c), by striking ‘‘$100,000’’ and 22 inserting ‘‘$250,000’’. 23 VerDate Sep 11 2014 22:24 Dec 14, 2022 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\H1517.IH H1517 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 1517 RH (b) FEDERAL OIL AND GAS ROYALTY MANAGEMENT 1 ACT OF 1982.—The Federal Oil and Gas Royalty Manage- 2 ment Act of 1982 (30 U.S.C. 1701 et seq.) is amended— 3 (1) in section 109— 4 (A) in subsection (a), by striking ‘‘$500’’ 5 and inserting ‘‘$1,500’’; 6 (B) in subsection (b), by striking ‘‘$5,000’’ 7 and inserting ‘‘$15,000’’; 8 (C) in subsection (c), by striking ‘‘$10,000’’ 9 and inserting ‘‘$25,000’’; and 10 (D) in subsection (d), by striking ‘‘$25,000’’ 11 and inserting ‘‘$75,000’’; and 12 (2) in section 110, by striking ‘‘$50,000’’ and in- 13 serting ‘‘$150,000’’. 14 (c) OUTER CONTINENTAL SHELF LANDS ACT.— 15 (1) CIVIL PENALTY, GENERALLY.—Section 24(b) 16 of the Outer Continental Shelf Lands Act (43 U.S.C. 17 1350(b)) is amended to read as follows: 18 ‘‘(b) CIVIL PENALTIES.— 19 ‘‘(1) IN GENERAL.—Except as provided in para- 20 graph (2), any person who fails to comply with any 21 provision of this Act, or any term of a lease, license, 22 or permit issued pursuant to this Act, or any regula- 23 tion or order issued under this Act, shall be liable for 24 a civil administrative penalty of not more than 25 VerDate Sep 11 2014 22:24 Dec 14, 2022 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H1517.IH H1517 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 1517 RH $75,000 for each day of the continuance of such fail- 1 ure. The Secretary may assess, collect, and com- 2 promise any such penalty. 3 ‘‘(2) OPPORTUNITY FOR A HEARING.—No penalty 4 shall be assessed until the person charged with a vio- 5 lation has been given an opportunity for a hearing. 6 ‘‘(3) ADJUSTMENT FOR INFLATION.—The Sec- 7 retary shall, by regulation at least every 3 years, ad- 8 just the penalty specified in this paragraph to reflect 9 any increases in the Consumer Price Index (all items, 10 United States city average) as prepared by the De- 11 partment of Labor. 12 ‘‘(4) THREAT OF HARM.—If a failure described 13 in paragraph (1) constitutes or constituted a threat 14 of harm or damage to life, property, any mineral de- 15 posit, or the marine, coastal, or human environment, 16 a civil penalty of not more than $150,000 shall be as- 17 sessed for each day of the continuance of the failure.’’. 18 (2) KNOWING AND WILLFUL VIOLATIONS.—Sec- 19 tion 24(c) of the Outer Continental Shelf Lands Act 20 (43 U.S.C. 1350(c)) is amended by striking 21 ‘‘$100,000’’ and inserting ‘‘$1,000,000’’. 22 (3) OFFICERS AND AGENTS OF CORPORATIONS.— 23 Section 24(d) of the Outer Continental Shelf Lands 24 Act (43 U.S.C. 1350(d)) is amended by striking 25 VerDate Sep 11 2014 22:24 Dec 14, 2022 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6203 E:\BILLS\H1517.IH H1517 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 1517 RH ‘‘knowingly and willfully authorized, ordered, or car- 1 ried out’’ and inserting ‘‘authorized, ordered, carried 2 out, or through reckless disregard of the law caused’’. 3 SEC. 8. ROYALTY RELIEF. 4 (a) GULF OF MEXICO ROYALTY RELIEF.—The fol- 5 lowing provisions of the Energy Policy Act of 2005 (42 6 U.S.C. 15801 et seq.) are hereby repealed: 7 (1) Section 344 (42 U.S.C. 15904) (relating to 8 incentives for natural gas production from deep wells 9 in the shallow waters of the Gulf of Mexico). 10 (2) Section 345 (42 U.S.C. 15905) (relating to 11 royalty relief for deep water production). 12 (b) ALASKA ROYALTY RELIEF.— 13 (1) PROVISIONS RELATING TO PLANNING AREAS 14 OFFSHORE ALASKA.—Section 8(a)(3)(B) of the Outer 15 Continental Shelf Lands Act (43 U.S.C. 16 1337(a)(3)(B)) is amended by striking ‘‘and in the 17 Planning Areas offshore Alaska’’ after ‘‘West lon- 18 gitude’’. 19 (2) PROVISIONS RELATING TO NAVAL PETRO- 20 LEUM RESERVE IN ALASKA.—Section 107 of the Naval 21 Petroleum Reserves Production Act of 1976 (42 22 U.S.C. 6506a) is amended— 23 (A) in subsection (i)— 24 (i) by striking ‘‘(1) IN GENERAL’’; and 25 VerDate Sep 11 2014 22:24 Dec 14, 2022 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6203 E:\BILLS\H1517.IH H1517 kjohnson on DSK79L0C42PROD with BILLS 12 •HR 1517 RH (ii) by striking paragraphs (2) through 1 (6); and 2 (B) by striking subsection (k). 3 SEC. 9. ROYALTY IN KIND. 4 (a) ONSHORE OIL AND GAS LEASE ROYALTIES.—Sec- 5 tion 36 of the Mineral Leasing Act (30 U.S.C. 192) is 6 amended by inserting ‘‘, except that the Secretary may not 7 demand such payment in oil or gas if the amount of such 8 payment would exceed the amount necessary to fill the stra- 9 tegic petroleum reserve’’ after ‘‘in oil or gas’’. 10 (b) OFFSHORE OIL AND GAS LEASE ROYALTIES.—Sec- 11 tion 27(a)(1) of the Outer Continental Shelf Lands Act (43 12 U.S.C. 1353(a)) is amended by striking the period at the 13 end and inserting ‘‘, except that the Secretary may not de- 14 mand such payment in oil or gas if the amount of such 15 payment would exceed the amount necessary to fill the stra- 16 tegic petroleum reserve.’’. 17 SEC. 10. AMENDMENTS TO DEFINITIONS. 18 Section 3 of the Federal Oil and Gas Royalty Manage- 19 ment Act of 1982 (30 U.S.C. 1702) is amended— 20 (1) in paragraph (20)(A), by striking ‘‘: Pro- 21 vided, That’’ and all that follows through ‘‘subject of 22 the judi [Text truncated for display. Full text available on Congress.gov.]