,,ii #aai? ,,congress #b;d ,session ,s4 #dgae ,,9 ,,! ,,s5ate ,,( ,,! ,,unit$ ,,/ates ,june #i1 #bjbf,mr4 ,s*iff 7= himself & ,mr4 ,padilla7 introduc$ ! foll[+ bill2 :i* 0 read twice & ref]r$ to ! ,committee on ,en]gy & ,natural ,res\rces ,a ,,bill ,to am5d ! ,out] ,cont95tal ,%elf ,l&s ,act to e/abli% fitness to op]ate /&>ds & decommission+ escr[ acc\nts = (f%ore oil & gas op]ators1 & = o!r purposes4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,(f%ore ,leas+ ,/&>ds & ,acc\ntability ,act ( #bjbf4 #b4 ,fitness to op]ate /&>ds = oil & gas op]ators on ! out] cont95tal %elf 7a7 ,9 g5]al ,! ,out] ,cont95tal ,%elf ,l&s ,act 7#dc ,u4,s4,c4 #acca et seq47 is am5d$ by add+ at ! end ! foll[+3 #cd4 ,fitness to op]ate /&>ds = (f%ore oil & gas activities 7a7 ,requirem5t = approvals ,beg9n+ on ! date on :i* ! ,secret>y issues or revises regulations "u subsection 7b77#e71 ! ,secret>y may n issue1 ext5d ! t]m (1 or approve ! transf] ( a lease1 easem5t1 or "r-(-way = oil or gas exploration1 developm5t1 or production on ! out] ,cont95tal ,%elf ) respect to a recipi5t responsible p>ty unless ! recipi5t responsible p>ty is c]tifi$ z fit to op]ate 9 accordance ) subsection 7b74 7b7 ,c]tification ( fitness ,to op]ate 7#a7 ,9 g5]al ,! ,secret>y %all c]tify a recipi5t responsible p>ty z fit to op]ate bas$ on-- 7,a7 ! pa/ compliance ( ! recipi5t responsible p>ty1 & any cov]$ entity ( ! recipi5t responsible p>ty1 ) ,f$]al1 ,/ate1 & local environm5tal & safety laws & regulations1 includ+ deadl9es & requirem5ts relat$ to environm5tal reclamation1 decommission+1 & work] safety2 7,b7 ! f9ancial solv5cy & capacity ( ! recipi5t responsible p>ty1 & any cov]$ entity ( ! recipi5t responsible p>ty1 to wea!r m>ket %ocks & fulfill curr5t & project$ decommission+ liabilities2 & 7,c7 any o!r crit]ia ) respect to ! recipi5t responsible p>ty1 & any cov]$ entity ( ! recipi5t responsible p>ty1 ! ,secret>y may e/abli% by regulation4 7#b7 ,m9imum qualifications ,! ,secret>y may n c]tify a recipi5t responsible p>ty z fit to op]ate unless ! recipi5t responsible p>ty-- 7,a7 demon/rates1 & ! ,secret>y v]ifies1 t-- 7i7 ! recipi5t responsible p>ty1 & any cov]$ entity ( ! recipi5t responsible p>ty1 did n violate any deadl9e or requirem5t ( ,f$]al1 ,/ate1 or local environm5tal or safety laws or regulations relat$ to environm5tal reclamation1 decommission+1 or work] safety dur+ ! p]iod ( #aj ye>s end+ on 7z applicable7 ! date on :i* ! reque/ = c]tification 0 made or ! date on :i* ! ,secret>y makes an assessm5t "u p>agraph 7#d77;,b72 7ii7 ! recipi5t responsible p>ty1 & any cov]$ entity ( ! recipi5t responsible p>ty1 are n 9 violation ( ?is ,act or any o!r ,f$]al1 ,/ate1 or local environm5tal or safety law or regulation1 includ+ ) respect to any ov]due decommission+ ord]s = oil & gas infra/ructure locat$ on ! out] ,cont95tal ,%elf2 7iii7 ! recipi5t responsible p>ty1 & any cov]$ entity ( ! recipi5t responsible p>ty1 took timely & effective corrective actions to address any work] safety incid5ts1 oil spills1 or o!r unau?oriz$ pollutant dis*>ges1 & infra/ructure failures or disruptions disclos$ "u p>agraph 7,b77iv72 7iv7 ! recipi5t responsible p>ty1 & any cov]$ entity ( ! recipi5t responsible p>ty1 d n owe any r5tals1 royalties1 or o!r fees = any ,f$]al or ,/ate lease1 easem5t1 or "r-(-way2 7v7 a ,f$]al or ,/ate au?ority did n r$uce ! rate = royalties on oil or gas produc$ "u any ,f$]al or ,/ate lease held by ! recipi5t responsible p>ty1 or any cov]$ entity ( ! recipi5t responsible p>ty1 dur+ ! p]iod ( #aj ye>s end+ on 7z applicable7 ! date on :i* ! reque/ = c]tification 0 made or ! date on :i* ! ,secret>y makes an assessm5t "u p>agraph 7#d77;,b72 7vi7 ! recipi5t responsible p>ty1 & any p>5t company ( ! recipi5t responsible p>ty1 possess an inve/m5t grade cr$it rat+ f a nationally recogniz$ /ati/ical rat+ organization1 z su* t]m is def9$ 9 section #c7;a77#fb7 ( ! ,securities ,ex*ange ,act ( #aicd2 7vii7 ! recipi5t responsible p>ty1 & any p>5t company ( ! recipi5t responsible p>ty1 h n fil$ a petition = bankruptcy "u title #aa1 ,unit$ ,/ates ,code1 dur+ ! p]iod ( #aj ye>s end+ on 7z applicable7 ! date on :i* ! reque/ = c]tification 0 made or ! date on :i* ! ,secret>y makes an assessm5t "u p>agraph 7#d77;,b72 & 7viii7 ! recipi5t responsible p>ty1 & any cov]$ entity ( ! recipi5t responsible p>ty1 h suffici5t f9ancial capacity to-- 7,i7 fulfill all curr5t & project$ decommission+ liabilities1 includ+ demon/ration t ! liabilities disclos$ "u subp>agraph 7,b77i77,i7 are fully collat]aliz$ or o!rwise f9ancially secur$2 7,,ii7 implem5t & ma9ta9 up-to-date risk mitigation te*nologies1 environm5tal protection measures1 & work] safety measures1 includ+ ! use ( effective bl[-out prev5t] sy/ems & well-control processes pursuant to ! requirem5ts specifi$ 9 section #bej4gcj ( title #cj1 ,code ( ,f$]al ,regulations 7or any successor regulations72 & 7,,iii7 support a suffici5t am\nt ( /aff ne$$ = ma9t5ance & ov]sight ( oil & gas infra/ructure on ! out] ,cont95tal ,%elf 9 accordance ) environm5tal1 heal?1 & safety requirem5ts2 & 7,b7 provides to ! ,secret>y a disclosure (-- 7i7 curr5t & project$ decommission+ liabilities ( ! recipi5t responsible p>ty1 & any cov]$ entity ( ! recipi5t responsible p>ty1 relat$ to all leases1 easem5ts1 & rights-(-way adm9i/]$ by a ,f$]al or ,/ate au?ority1 includ+-- 7,i7 dome/ic & global oil & gas decommission+ liabilities2 & 7,,ii7 ! value ( decommission+ obligations relative to ! prov5 value ( oil & gas res]ves ( ! areas subject to su* leases1 easem5ts1 & rights-(-way2 7ii7 pa/ results ( inspections ( oil & gas infra/ructure op]at$ by ! recipi5t responsible p>ty & any cov]$ entity ( ! recipi5t responsible p>ty2 7iii7 ! numb]1 l5g? ( own]%ip1 & decommission+ /atus ( ea* non-produc+ oil & gas well locat$ on an area subject to a ,/ate or ,f$]al oil & gas lease held by ! recipi5t responsible p>ty or any cov]$ entity ( ! recipi5t responsible p>ty2 & 7iv7 ! numb] ( work] safety incid5ts1 oil spills or o!r unau?oriz$ pollutant dis*>ges1 & infra/ructure failures or disruptions t h occurr$ on areas subject to ,/ate & ,f$]al oil & gas leases held by ! recipi5t responsible p>ty1 or any cov]$ entity ( ! recipi5t responsible p>ty1 dur+ ! p]iod ( #ae ye>s end+ on 7z applicable7 ! date on :i* ! reque/ = c]tification 0 made or ! date on :i* ! ,secret>y makes an assessm5t "u p>agraph 7#d77;,b74 7#c7 ,initial reque/ = c]tification ,a recipi5t responsible p>ty may reque/ to be c]tifi$ z fit to op]ate pursuant to ! process e/abli%$ by regulation "u p>agraph 7#e74 7#d7 ,ma9t5ance ( c]tification 7,a7 ,requirem5t ,a c]tification t ! hold] ( a lease1 easem5t1 or "r-(-way = oil or gas exploration1 developm5t1 or production on ! out] ,cont95tal ,%elf issu$1 ext5d$1 or transf]r$ aft] ! date on :i* ! ,secret>y issues or revises regulations "u p>agraph 7#e7 is fit to op]ate %all be ma9ta9$ 9 accordance ) subp>agraph 7,b74 7,b7 ,annual compliance v]ification 7i7 ,9 g5]al ,! ,secret>y %all annually assess :e!r ea* hold] ( a lease1 easem5t1 or "r-(-way describ$ 9 subp>agraph 7,a7 rema9s 9 compliance ) /&>ds e/abli%$ pursuant to p>agraph 7#e74 7ii7 ,susp5sion ( c]tification ,if ! ,secret>y det]m9es "u subp>agraph 7,a7 t a hold] ( a lease1 easem5t1 or "r-(-way describ$ 9 subp>agraph 7,a7 is n 9 compliance ) ! /&>ds e/abli%$ pursuant to p>agraph 7#e71 ! ,secret>y %all susp5d ! c]tification & impose "o or m ( ! foll[+ p5alties until su* hold] complies ) su* /&>ds3 7,i7 ,susp5d ! applicable lease1 easem5t1 or "r-(-way pursuant to section #e7;a77#a74 7,,ii7 ,issue f9es or o!r civil p5alties4 7,,iii7 ,require supplem5tal f9ancial assurance 9 an am\nt equal to ! total expect$ co/ ( decommission+4 7,,iv7 ,issue an ord] to ! hold] ( ! lease1 easem5t1 or "r-(-way to comm5ce decommission+1 includ+ a requirem5t t su* entity develop & submit a decommission+ plan pursuant to section #bej4agjd ( title #cj1 ,code ( ,f$]al ,regulations 7or successor regulations71 = approval by ! ,secret>y1 & issue a notice to any previ\s hold]s ( ! lease1 easem5t1 or "r-(-way to comm5ce jo9t & sev]al liability proce$+s4 7#e7 ,regulations ,n lat] ?an #a ye> aft] ! date ( enactm5t ( ?is section1 ! ,secret>y %all issue or revise regulations to-- 7,a7 e/abli% /&>ds :i* ! ,secret>y %all use to det]m9e :e!r to c]tify a recipi5t responsible p>ty z fit to op]ate2 7,b7 e/abli% a process = recipi5t responsible p>ties to reque/ su* c]tification2 & 7,c7 c>ry out any o!r requirem5ts ( ?is section4 7c7 ,report to ,congress ,n lat] ?an #a ye> aft] ! ,secret>y issues or revises regulations "u subsection 7b77#e71 & annually !reaft]1 ! ,secret>y %all submit to ,congress a report t includes-- 7#a7 a summ>y ( ! mo/ rec5t assessm5ts made "u subsection 7b77#d77;,b71 includ+ a li/ (-- 7,a7 ea* p]son t holds an active or inactive lease1 easem5t1 or "r-(-way = oil or gas exploration1 developm5t1 or production on ! out] ,cont95tal ,%elf t fail$ to meet any ( ! /&>ds e/abli%$ pursuant to subsection 7b77#e72 7,b7 ! specific /&>ds = :i* ! p]son is or 0 non-compliant1 disaggregat$ by-- 7i7 p]son2 & 7ii7 lease1 easem5t1 & "r-(-way2 & 7,c7 en=cem5t actions tak5 by ! ,dep>tm5t ( ! ,int]ior aga9/ ea* p]son id5tifi$ "u subp>agraph 7,a72 7#b7 decommission+ co/ e/imates = ea* lease1 easem5t1 & "r-(-way = oil or gas exploration1 developm5t1 or production on ! out] ,cont95tal ,%elf1 z calculat$ by ! ,secret>y pursuant to section #e7k77#b71 & any modifications to su* e/imates s9ce ! previ\s report2 & 7#c7 ! am\nt ( funds curr5tly held 9 ea* decommission+ escr[ acc\nts e/abli%$ pursuant to section #e7k74 7d7 ,au?orization ( appropriations ,!re is au?oriz$ to be appropriat$ to ! ,secret>y #cj1jjj1jjj = ea* ( fiscal ye>s #bjbg ?r\gh #bjca to c>ry out ! requirem5ts ( ?is section4 7e7 ,def9itions ,9 ?is section3 7#a7 ,cov]$ entity ,! t]m cov]$ entity1 ) respect to a recipi5t responsible p>ty1 means-- 7,a7 any p>5t company ( ! recipi5t responsible p>ty2 7,b7 any subsidi>y company ( ! recipi5t responsible p>ty2 7,c7 any entity t ! recipi5t responsible p>ty ent]s into a contract ) to con/ruct1 develop1 or op]ate a facility on ! out] ,cont95tal ,%elf2 & 7,d7 any entity t-- 7i7 %>es (fic]s1 directors1 or key manag]ial p]sonnel ) any entity specifi$ 9 subp>agraph 7,a7 or 7,b72 or 7ii7 is a pr$ecessor to any entity specifi$ 9 subp>agraph 7,a7 or 7,b74 7#b7 ,decommission+ ,! t]m decommission+1 ) respect to oil & gas infra/ructure on ! out] ,cont95tal ,%elf1 means-- 7,a7 end+ oil & gas op]ations2 7,b7 p]man5tly plugg+ all wells2 7,c7 monitor+ ! efficacy ( activities to end su* op]ations1 includ+ monitor+ ! safety & s\ndness ( plugg$ wells2 & 7,d7 return+ ! area subject to ! lease1 easem5t1 or "r-(-way to a condition t meets ! environm5tal reclamation requirem5ts ( ! ,dep>tm5t ( ! ,int]ior & any o!r ,f$]al ag5cy t has jurisdiction ov] su* op]ations4 7#c7 ,p>5t company ,! t]m p>5t company means a company t directly or indirectly controls ano!r company4 7#d7 ,recipi5t responsible p>ty ,! t]m recipi5t responsible p>ty means a p]son seek+ ! issuance1 ext5sion1 or transf] ( a lease1 easem5t1 or "r-(-way = oil or gas exploration1 developm5t1 or production on ! out] ,cont95tal ,%elf4 7#e7 ,subsidi>y company ,! t]m subsidi>y company-- 7,a7 means any company t is own$ or controll$ directly or indirectly by ano!r company2 & 7,b7 includes any subsidi>y ( ! company t is s own$ or controll$4 4 7b7 ,con=m+ am5dm5t ,section #e7;b7 ( ! ,out] ,cont95tal ,%elf ,l&s ,act 7#dc ,u4,s4,c4 #accd7;b77 is am5d$ by ins]t+ 1 includ+ ! regulations issu$ or revis$ "u section #cd relat+ to fitness to op]ate aft] regulations issu$ "u ?is ,act4 #c4 ,decommission+ escr[ acc\nts ,section #e ( ! ,out] ,cont95tal ,%elf ,l&s ,act 7#dc ,u4,s4,c4 #accd7 is am5d$ by add+ at ! end ! foll[+3 7k7 ,escr[ acc\nt = decommission+ liability 7#a7 ,9 g5]al ,! hold] ( an oil & gas lease %all1 9 accordance ) ?is subsection1 make paym5ts to an int]e/-be>+ escr[ acc\nt1 e/abli%$ & adm9i/]$ by ! ,secret>y1 9 ord] to fully meet ! total co/ ( decommission+ ! oil & gas infra/ructure locat$ on ! area subject to ! lease4 7#b7 ,decommission+ co/ e/imate 7,a7 ,9 g5]al ,= ea* oil & gas lease1 ! ,secret>y1 or an indep5d5t ?ird-p>ty entity designat$ by ! ,secret>y1 %all calculate & p]iodically update a probabili/ic e/imate ( ! total co/ ( decommission+ exi/+ & propos$ oil & gas infra/ructure1 includ+ plat=ms1 wells1 & pipel9es1 locat$ on ! area subject to su* lease4 7,b7 ,initial e/imate ,! ,secret>y1 or ! indep5d5t ?ird-p>ty1 %all calculate an initial e/imate ( ! total co/s describ$ 9 subp>agraph 7,a7 prior to ! issuance ( a new lease4 7,c7 ,reevaluation & updates ,! ,secret>y1 or ! indep5d5t ?ird-p>ty1 %all reevaluate &1 if necess>y1 update ! e/imate ( ! total co/s describ$ 9 subp>agraph 7,a7 at a m9imum-- 7i7 n less frequ5tly ?an once e #b ye>s1 to reflect any *anges 9 su* total co/s2 7ii7 prior to ! approval ( a developm5t & production plan pursuant to section #be2 7iii7 prior to ! end ( ! s*$ule = paym5ts e/abli%$ "u p>agraph 7#c72 & 7iv7 foll[+ ! disbursal ( funds f ! escr[ acc\nts = a use approv$ "u p>agraph 7#d74 7#c7 ,paym5t s*$ule 7,a7 ,9 g5]al ,! ,secret>y %all e/abli% a m&atory s*$ule = paym5ts requir$ by p>agraph 7#a74 7,b7 ,deadl9es to e/abli% s*$ules 7i7 ,new leases ,) respect to ! issuance1 ext5sion1 or transf] ( an oil & gas lease aft] ! date ( enactm5t ( ?is subsection1 ! ,secret>y %all e/abli% ! s*$ule = paym5ts prior to su* issuance1 ext5sion1 or transf]4 7ii7 ,exi/+ leases ,) respect to any lease 9 effect z ( ! date ( enactm5t ( ?is subsection1 ! ,secret>y %all e/abli% ! s*$ule = paym5ts by n lat] ?an #a ye> aft] su* date ( enactm5t4 7,c7 ,m9imum paym5ts by #e ye>s ,ea* s*$ule ( paym5ts e/abli%$ "u subp>agraph 7,a7 %all provide t ! total am\nt ( paym5ts made to ! escr[ acc\nt by ! date t is #e ye>s aft] ! s*$ule is e/abli%$ be n less ?an ! total decommission+ co/s = all oil & gas infra/ructure locat$ on ! area ( ! applicable lease4 7,d7 ,initial paym5ts ,no lease may be issu$1 & no developm5t & production plan may be approv$ "u section #be1 unless ! recipi5t responsible p>ty or leasehold] makes a paym5t to ! escr[ acc\nt 9 an am\nt equal to ! great] (-- 7i7 #be p]c5t ( ! av]age co/ to decommission oil & gas infra/ructure locat$ on a typical lease at simil> dep?s2 & 7ii7 #be p]c5t ( ! total decommission+ co/s = all oil & gas infra/ructure propos$ to be in/all$ on ! area subject to ! lease pursuant to ! plan4 7,e7 ,lease ext5sions & transf]s 7i7 ,miss$ paym5ts ,! ,secret>y may n ext5d ! t]m (1 or approve ! transf] (1 a lease if ! hold] ( ! lease owes any out/&+ paym5ts to ! escr[ acc\nt4 7ii7 ,adoption ( paym5t s*$ule ,! ,secret>y may n approve ! transf] ( a lease unless ! recipi5t responsible p>ty agrees to adopt ! s*$ule = paym5ts e/abli%$ = ! lease4 7,f7 ,adju/m5ts ,! ,secret>y %all adju/ a s*$ule = paym5ts e/abli%$ "u subp>agraph 7,a7 to reflect any update to ! applicable co/ e/imate "u p>agraph 7#b77;,c74 7,g7 ,supplem5tal f9ancial assurances ,if ! comb9$ am\nt ( ! funds 9 an escr[ acc\nt = a lease & any supplem5tal f9ancial assurances provid$ by ! hold] ( ! lease exce$s ! total decommission+ co/ e/imate calculat$ by ! ,secret>y pursuant to p>agraph 7#b71 ! ,secret>y %all correspond+ly r$uce ! supplem5tal f9ancial assurances requir$ until ! comb9$ figure is equival5t to ! decommission+ co/ e/imate4 7,h7 ,int]e/ ,any int]e/ paid on funds 9 an escr[ acc\nt e/abli%$ "u p>agraph 7#a7 %all become "p ( ! pr9cipal funds 9 ! acc\nt4 7,i7 ,am\nts f jo9t & sev]al liability ,all funds accru$ f previ\s hold]s ( an oil & gas lease z a result ( jo9t & sev]al liability = ! purposes ( decommission+ %all be deposit$ into ! correspond+ escr[ acc\nt4 7,j7 ,return ( rema9+ funds aft] decommission+ ,aft] decommission+ is complete1 any funds rema9+ 9 an escr[ acc\nt = a lease e/abli%$ "u p>agraph 7#a7 %all be return$ to any p>ties t made paym5ts to ! escr[ acc\nt1 exclud+ any am\nts deposit$ pursuant to subp>agraph 7,i71 bas$ on ! proportion ( ! paym5ts made by ! respective p>ty4 7#d7 ,use ( funds 7,a7 ,9 g5]al ,! hold] ( a lease may only use funds 9 an escr[ acc\nt e/abli%$ "u p>agraph 7#a7-- 7i7 = ! purposes ( decommission+ ! oil & gas infra/ructure locat$ on ! area subject to ! lease2 & 7ii7 if ! use is approv$ by ! ,secret>y4 7,b7 ,no use z collat]al ,no p]son may commit funds held 9 an escr[ acc\nt e/abli%$ "u p>agraph 7#a7 z collat]al4 7#e7 ,p5alties ,if ! requir$ paym5ts into an escr[ acc\nt e/abli%$ "u p>agraph 7#a7 are del9qu5t by m ?an #fj days1 ! ,secret>y %all-- 7,a7 raise ! royalty rate = ! applicable lease at a rate suffici5t to recov] ! del9qu5t am\nt )9 #f mon?s & deposit ! recov]$ am\nt into ! applicable escr[ acc\nt e/abli%$ "u p>agraph 7#a72 or 7,b7 susp5d ! lease1 pursuant to section #e7;a77#b71 until ! hold] ( ! lease provides ! del9qu5t am\nt4 7#f7 ,def9itions ,9 ?is subsection1 ! t]ms decommission+1 p>5t company1 & recipi5t responsible p>ty h ! mean+s giv5 su* t]ms1 respectively1 9 section #cd4 4 #d4 ,re/riction on tempor>y ab&onm5t ( wells ,section #e ( ! ,out] ,cont95tal ,%elf ,l&s ,act 7#dc ,u4,s4,c4 #accd7 is am5d$ by add+ at ! end ! foll[+3 7l7 ,re/riction on tempor>y ab&onm5t ( wells 7#a7 ,9 g5]al ,! ,secret>y-- 7,a7 may n approve ! placem5t ( an oil well 9 tempor>y ab&onm5t /atus = a p]iod long] ?an #c ye>s2 & 7,b7 may only approve su* placem5t aft] submission & validation ( an accompany+ economic analysis v]ify+ ! pot5tial = tempor>y ab&onm5t to improve op]ational /ability ( ! oil well or mitigate environm5tal impacts ( op]at+ ! oil well4 7#b7 ,ext5sion ,not)/&+ p>agraph 7#a77;,a71 ! ,secret>y may1 on a "o-"t basis = an oil well1 ext5d ! maximum p]iod ! oil well may be plac$ 9 tempor>y ab&onm5t /atus to #e ye>s if ! ,secret>y det]m9es su* ext5sion is necess>y to ensure op]ational /ability or environm5tal safety4 4