[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4301 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 4301
To amend the Mineral Leasing Act to make certain adjustments to the
regulation of surface-disturbing activities and to protect taxpayers
from unduly bearing the reclamation costs of oil and gas development,
and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 22, 2023
Ms. Porter (for herself, Mr. Grijalva, Ms. Barragan, Mr. Huffman, and
Mr. Levin) introduced the following bill; which was referred to the
Committee on Natural Resources
_______________________________________________________________________
A BILL
To amend the Mineral Leasing Act to make certain adjustments to the
regulation of surface-disturbing activities and to protect taxpayers
from unduly bearing the reclamation costs of oil and gas development,
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 referred to as the ``Bonding Reform and Taxpayer
Protection Act of 2023''.
SEC. 2. SURFACE DISTURBANCE AND RECLAMATION.
Section 17(g) of the Mineral Leasing Act (30 U.S.C. 226(g)) is
amended to read as follows:
``(g) Bonding Requirements.--
``(1) Definitions.--In this subsection:
``(A) Interim reclamation plan.--The term `Interim
Reclamation Plan' means an ongoing plan specifying
reclamation steps to be taken on all disturbed areas
covered by any lease issued under this Act that are not
needed for active operations.
``(B) Final reclamation plan.--The term `Final
Reclamation Plan' means a plan describing all
reclamation activity to be conducted for all disturbed
areas, including locations, facilities, trenches,
rights-of-way, roads, and any other surface disturbance
covered by a lease issued under this Act prior to final
abandonment.
``(C) Operator.--The term `operator' means, with
respect to an oil or gas operation, any entity,
including the lessee or operating rights owner, that
has stated in writing to a relevant authority that such
entity is responsible for any portion of such
operation.
``(D) Secretary concerned.--The term `Secretary
concerned' means--
``(i) the Secretary of the Interior for
public lands administered by such Secretary;
and
``(ii) the Secretary of Agriculture for
forest service lands.
``(2) In general.--The Secretary concerned shall regulate
all surface-disturbing activities conducted pursuant to any
lease issued under this Act, and shall determine reclamation
and other actions as required in the interest of conservation
of surface resources.
``(3) Reclamation plans required.--
``(A) Analysis and approval required.--No permit to
drill on an oil and gas lease issued under this Act may
be granted without the analysis and approval by the
Secretary concerned of both an interim reclamation plan
and a final reclamation plan covering proposed surface-
disturbing activities within the lease area.
``(B) Plans of operations.--All Federal plans or
permits submitted pursuant to this Act with the
potential to create surface disturbance shall include
an Interim and Final Reclamation Plan.
``(C) Secretarial review.--The Secretary concerned
shall review each Interim Reclamation Plan at regular
intervals and shall require such plans to be amended as
warranted, subject to the approval of such Secretary.
``(4) Bonding.--
``(A) In general.--
``(i) Regulation.--Not later than 180 days
after the date of enactment of the Bonding
Reform and Taxpayer Protection Act of 2023, the
Secretary concerned shall, by regulation,
require that an adequate bond, surety, or other
financial arrangement be established prior to
the commencement of surface-disturbing
activities on any lease under this Act.
``(ii) Amount of bond.--In determining the
adequacy of a bond, surety, or other financial
instrument required by regulation under clause
(i), the Secretary shall find that such
arrangement is adequate if it is not less than
the greater of--
``(I) the amount necessary for--
``(aa) the complete and
timely reclamation of the lease
tract;
``(bb) the restoration of
any lands or surface waters
adversely affected by lease
operations after the
abandonment or cessation of oil
and gas operations on the
lease; or
``(cc) in the case of an
idled well, the total plugging
and reclamation costs for each
idled well controlled by the
same operator;
``(II) $150,000 in the case of an
arrangement for an individual surface-
disturbing activity of each entity on
an oil or gas lease; or
``(III) $500,000 in the case of an
arrangement for all surface-disturbing
activities of each entity in a State.
``(iii) Adjustment for inflation.--
``(I) In general.--In the
application of clause (ii), the
Secretaries concerned shall jointly at
least once every three years, at the
beginning of the fiscal year, adjust
the dollar amounts in clause (ii) to
account for inflation based on the
Consumer Price Index for all urban
consumer published by the Department of
Labor.
``(II) Rounding.--If any amount as
adjusted under subclause (I) is not a
multiple of $1,000, such amount shall
be rounded to the next higher multiple
of $1000.
``(B) Prohibition.--The Secretary concerned shall
not issue or approve the assignment of any lease under
the terms of this section to any person, association,
corporation, or any subsidiary, affiliate, or person
controlled by or under common control with such person,
association, or corporation, during any period in
which, as determined by the relevant Secretary, such
entity has failed or refused to comply in any material
respect with the reclamation requirements and other
standards established under this section for any prior
lease to which such requirements and standards applied.
``(C) Notice and opportunity for compliance.--Prior
to making a determination not to issue or approve the
assignment of a lease under subparagraph (B) with
respect to an entity the Secretary concerned shall
provide such entity with adequate notification and an
opportunity to comply with such reclamation
requirements and other standards and shall consider
whether any administrative or judicial appeal is
pending. Once the entity has complied with the
reclamation requirement or other standard concerned
each oil or gas lease may be issued to such entity
under this Act.
``(D) Review upon transfer.--The Secretary
concerned shall review the adequacy of a bond, surety,
or other financial instrument anytime a lease or well
under this Act is transferred. The Secretary shall find
such bond, surety, or other financial instrument
adequate if such arrangement--
``(i) meets the requirement described in
subparagraph (A)(ii); and
``(ii) is not for a lesser amount than the
amount maintained by the current operator.
``(E) Requiring higher bond amounts.--The Secretary
concerned shall, at any time that such Secretary
determines that a bond, surety, or other financial
instrument required by a regulation issued pursuant to
subparagraph (A) no longer meets the requirements of
clause (ii) of such subparagraph, increase the required
amount of such financial arrangement to the level
required by subparagraph (A).
``(F) Phasing-in bond increases.--With respect to a
bond increased under subparagraph (E), the Secretary
concerned shall require the operator to meet the
following deadlines in posting the amount of the
increase that results from the operation of such
paragraph:
``(i) 25 percent of the increase by not
later than 1 year after the date on which the
determination was made under subparagraph (D).
``(ii) 75 percent of the increase by not
later than 2 years after such date.
``(iii) 100 percent of the increase by not
later than 3 years after such date.
``(5) Standards.--Not later than 180 days after the date of
enactment of the Bonding Reform and Taxpayer Protection Act of
2023, the Secretary of the Interior and the Secretary of
Agriculture shall, by regulation, establish uniform standards
for all Interim and Final Reclamation Plans. The goal of such
plans shall be the restoration of the affected ecosystem to a
condition approximating or equal to that which existed prior to
the surface disturbance. Such standards shall include
restoration of natural vegetation and hydrology, habitat
restoration, salvage, storage and reuse of topsoils, erosion
control, control of invasive species and noxious weeds and
natural contouring.
``(6) Monitoring.--The Secretary concerned shall not
approve final abandonment and shall not release any bond
required by this Act until the standards and requirement for
final reclamation established pursuant to this Act have been
met.
``(7) Financial assurances.--The Secretary concerned shall
not release the financial assurance established for a lease
until the operator has paid the inspection fees required under
section 4 for the lease covered by the financial assurance
instrument.
``(8) Bond adequacy review.--The Secretary shall conduct
bond adequacy reviews as required under paragraph (4)(D) in
accordance with Bureau of Land Management Instruction
Memorandum No. 2019-014, dated November 15, 2018.
``(9) Orphaned well fee.--The Secretary of the Interior
shall collect a per barrel of oil equivalent fee of not less
than $0.10 on oil and gas produced from Federal lands for the
use of plugging and reclamation of orphaned wells.''.
SEC. 3. CHANGES TO THE BLM PERMIT PROCESSING IMPROVEMENT FUND.
(a) Name of Fund.--Section 35(c)(2)(B) of the Mineral Leasing Act
(30 U.S.C. 191(c)(2)(B)) is amended by striking ``BLM Permit Processing
Improvement Fund'' and inserting ``BLM Administration and
Accountability Fund''.
(b) Additional Uses.--Section 35(c)(3)(A) of such Act (30
191(c)(3)(A)) is amended by adding at the end the following: ``Such
coordination and processing shall include--
``(i) the coordination and review process
for financial assurances for oil and gas leases
and bond releases for oil and gas leases;
``(ii) the inventory of orphaned wells and
coordinate the processing of requests for
delays in the permanent closure of inactive
wells; and
``(iii) coordination and processing related
to environmental and cultural resources reviews
applicable to oil and gas activities.''.
SEC. 4. INSPECTION FEES.
(a) In General.--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.--
``(1) In general.--Except as provided in paragraph (5), the
designated operator under each oil and gas lease on Federal or
Indian lands, or each unit and communitization agreement that
includes one or more such Federal or Indian leases, that is
subject to inspection under subsection (b) and that is in force
at the start of the fiscal year 2023, shall pay a nonrefundable
annual inspection fee in an amount that, except as provided in
paragraph (2), is established by the Secretary by regulation
and is sufficient to recover the full costs incurred by the
United States for inspection and enforcement with respect to
such leases.
``(2) Amount.--Until the effective date of regulations
under paragraph (1), the amount of the fee shall be--
``(A) $700 for each lease or unit or
communitization agreement with no active or inactive
wells, but with surface use, disturbance or
reclamation;
``(B) $1,225 for each lease or unit or
communitization agreement with 1 to 10 wells, with any
combination of active or inactive wells;
``(C) $4,900 for each lease or unit or
communitization agreement with 11 to 50 wells, with any
combination of active or inactive wells; and
``(D) $9,800 for each lease or unit or
communitization agreement with more than 50 wells, with
any combination of active or inactive wells.
``(3) Due date.--Payment of the fee under this section
shall be due, annually, not later than 30 days after the
Secretary provides notice of the assessment of the fee.
``(4) Penalty.--If the designated operator fails to pay the
full amount of the fee as prescribed in this section, the
Secretary may, in addition to utilizing 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) Exemption for tribal operators.--An operator that is
a Tribe or is controlled by a Tribe is not subject to paragraph
(1) with respect to a lease, unit, or communitization agreement
that is located entirely on the lands of such Tribe.
``(6) Adjustment for inflation.--In the application of
paragraph (2), the Secretaries shall at least once every three
years, at the beginning of the fiscal year, adjust the dollar
amounts in paragraph (2) to account for inflation based on the
Consumer Price Index for all urban consumer published by the
Department of Labor.''.
(b) Assessment for Fiscal Year 2024.--The Secretary of the Interior
shall assess the fee under the amendment made by subsection (a) for
fiscal year 2024, and provide notice of such assessment to each
designated operator who is liable for such fee, by not later than 60
days after the date of enactment of this Act.
SEC. 5. BONDING EQUITY FOR NATIONAL WILDLIFE REFUGE SYSTEM LANDS.
Section 4 of the National Wildlife Refuge System Administration Act
of 1966 (16 U.S.C. 668dd et seq.) is amended--
(1) by redesignating subsections (h) through (o), as
subsections (i) through (p), respectively; and
(2) by inserting after subsection (g) the following new
subsection:
``(h) Reclamation, Damages, and Financial Assurance for Oil and Gas
Operations on Refuge Lands.--
``(1) The Secretary, acting through the Director, shall
obtain adequate financial assurances from non-Federal entities
to repair potential damages to refuge resources, prior to the
commencement of surface-disturbing activities as part of the
development of non-Federal minerals below refuge surface
estate, including--
``(A) to ensure the complete and timely reclamation
of the land, and the restoration of any lands or
surface waters adversely affected by operations after
the abandonment or cessation of oil and gas operations
on the land; and
``(B) to meet potential response and assessment
costs and other damages to refuge resources as a result
of oil and gas operations.
``(2) Financial assurances forfeited by a non-Federal
entity under this subsection shall be retained and available to
the Secretary, without further appropriation, and shall remain
available until expended, for--
``(A) plugging and abandoning wells;
``(B) removing structures, equipment, materials,
and other infrastructure;
``(C) response costs and damage assessments
conducted;
``(D) restoration, replacement, or acquisition of
the equivalent refuge resources; and
``(E) monitoring and studying affected refuge
resources.''.
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