43 U.S.C. § 1336 — Controversies over jurisdiction; agree-

Page 334 TITLE 43—PUBLIC LANDS § 1336 renewals, or replacements authorized therein, or heretofore authorized by the laws of such State, and (2) such regulations as the Secretary may under section 1334 of this title prescribe within ninety days after making his determination that such lease meets the requirements of sub- section (a) of this section: Provided, however, That any rights to sulphur under any lease maintained under the provisions of this sub- section shall not extend beyond the primary term of such lease or any extension thereof under the provisions of this subsection unless sulphur is being produced in paying quantities or drilling, well reworking, plant construction, or other operations for the production of sul- phur, as approved by the Secretary, are being conducted on the area covered by such lease on the date of expiration of such primary term or extension: Provided further, That if sulphur is being produced in paying quantities on such date, then such rights shall continue to be main- tained in accordance with such lease and the provisions of this subchapter: Provided further, That, if the primary term of a lease being main- tained under this subsection has expired prior to August 7, 1953 and oil or gas is being produced in paying quantities on such date, then such rights to sulphur as the lessee may have under such lease shall continue for twenty-four months from August 7, 1953 and as long thereafter as sul- phur is produced in paying quantities, or drill- ing, well working, plant construction, or other operations for the production of sulphur, as ap- proved by the Secretary, are being conducted on the area covered by the lease. (c) Nonwaiver of United States claims The permission granted in subsection (b) of this section shall not be construed to be a waiv- er of such claims, if any, as the United States may have against the lessor or the lessee or any other person respecting sums payable or paid for or under the lease, or respecting activities con- ducted under the lease, prior to August 7, 1953. (d) Judicial review of determination Any person complaining of a negative deter- mination by the Secretary of the Interior under this section may have such determination re- viewed by the United States District Court for the District of Columbia by filing a petition for review within sixty days after receiving notice of such action by the Secretary. (e) Lands beneath navigable waters In the event any lease maintained under this section covers lands beneath navigable waters, as that term is used in the Submerged Lands Act [43 U.S.C. 1301 et seq.], as well as lands of the outer Continental Shelf, the provisions of this section shall apply to such lease only inso- far as it covers lands of the outer Continental Shelf. (Aug. 7, 1953, ch. 345, § 6, 67 Stat. 465.) Editorial Notes REFERENCES IN TEXT The Submerged Lands Act, referred to in subsec. (e), is act May 22, 1953, ch. 65, 67 Stat. 29, which is classified generally to subchapters I (§ 1301 et seq.) and II (§ 1311 et seq.) of this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 1301 of this title and Tables. Statutory Notes and Related Subsidiaries TRANSFER OF FUNCTIONS Functions of Secretary of the Interior to promulgate regulations under this subchapter which relate to fos- tering of competition for Federal leases, implementa- tion of alternative bidding systems authorized for award of Federal leases, establishment of diligence re- quirements for operations conducted on Federal leases, setting of rates for production of Federal leases, and specifying of procedures, terms, and conditions for ac- quisition and disposition of Federal royalty interests taken in kind, transferred to Secretary of Energy by section 7152(b) of Title 42, The Public Health and Wel- fare. Section 7152(b) of Title 42 was repealed by Pub. L. 97–100, title II, § 201, Dec. 23, 1981, 95 Stat. 1407, and func- tions of Secretary of Energy returned to Secretary of the Interior. See House Report No. 97–315, pp. 25, 26, Nov. 5, 1981. § 1336. Controversies over jurisdiction; agree- ments; payments; final settlement or adju- dication; approval of notice concerning oil and gas operations in Gulf of Mexico In the event of a controversy between the United States and a State as to whether or not lands are subject to the provisions of this sub- chapter, the Secretary is authorized, notwith- standing the provisions of section 1335(a) and (b) of this title and with the concurrence of the At- torney General of the United States, to nego- tiate and enter into agreements with the State, its political subdivision or grantee or a lessee thereof, respecting operations under existing mineral leases and payment and impounding of rents, royalties, and other sums payable there- under, or with the State, its political subdivi- sion or grantee, respecting the issuance or nonissuance of new mineral leases pending the settlement or adjudication of the controversy. The authorization contained in the preceding sentence of this section shall not be construed to be a limitation upon the authority conferred on the Secretary in other sections of this sub- chapter. Payments made pursuant to such agreement, or pursuant to any stipulation be- tween the United States and a State, shall be considered as compliance with section 1335(a)(4) of this title. Upon the termination of such agreement or stipulation by reason of the final settlement or adjudication of such controversy, if the lands subject to any mineral lease are de- termined to be in whole or in part lands subject to the provisions of this subchapter, the lessee, if he has not already done so, shall comply with the requirements of section 1335(a) of this title, and thereupon the provisions of section 1335(b) of this title shall govern such lease. The notice concerning ‘‘Oil and Gas Operations in the Sub- merged Coastal Lands of the Gulf of Mexico’’ issued by the Secretary on December 11, 1950 (15 F.R. 8835), as amended by the notice dated Janu- ary 26, 1951 (16 F.R. 953), and as supplemented by the notices dated February 2, 1951 (16 F.R. 1203), March 5, 1951 (16 F.R. 2195), April 23, 1951 (16 F.R. 3623), June 25, 1951 (16 F.R. 6404), August 22, 1951 (16 F.R. 8720), October 24, 1951 (16 F.R. 10998), De- cember 21, 1951 (17 F.R. 43), March 25, 1952 (17 F.R. 2821), June 26, 1952 (17 F.R. 5833), and De- cember 24, 1952 (18 F.R. 48), respectively, is ap- proved and confirmed. Page 335 TITLE 43—PUBLIC LANDS § 1337 (Aug. 7, 1953, ch. 345, § 7, 67 Stat. 467.) Statutory Notes and Related Subsidiaries TRANSFER OF FUNCTIONS Functions of Secretary of the Interior to promulgate regulations under this subchapter which relate to fos- tering of competition for Federal leases, implementa- tion of alternative bidding systems authorized for award of Federal leases, establishment of diligence re- quirements for operations conducted on Federal leases, setting of rates for production of Federal leases, and specifying of procedures, terms, and conditions for ac- quisition and disposition of Federal royalty interests taken in kind, transferred to Secretary of Energy by section 7152(b) of Title 42, The Public Health and Wel- fare. Section 7152(b) of Title 42 was repealed by Pub. L. 97–100, title II, § 201, Dec. 23, 1981, 95 Stat. 1407, and func- tions of Secretary of Energy returned to Secretary of the Interior. See House Report No. 97–315, pp. 25, 26, Nov. 5, 1981. § 1337. Leases, easements, and rights-of-way on the outer Continental Shelf (a) Oil and gas leases; award to highest respon- sible qualified bidder; method of bidding; royalty relief; Congressional consideration of bidding system; notice (1) The Secretary is authorized to grant to the highest responsible qualified bidder or bidders by competitive bidding, under regulations pro- mulgated in advance, any oil and gas lease on submerged lands of the outer Continental Shelf which are not covered by leases meeting the re- quirements of subsection (a) of section 1335 of this title. Such regulations may provide for the deposit of cash bids in an interest-bearing ac- count until the Secretary announces his deci- sion on whether to accept the bids, with the in- terest earned thereon to be paid to the Treasury as to bids that are accepted and to the unsuc- cessful bidders as to bids that are rejected. The bidding shall be by sealed bid and, at the discre- tion of the Secretary, on the basis of— (A) cash bonus bid with a royalty at not less than 162⁄3 percent, but not more than 183⁄4 per- cent, during the 10-year period beginning on August 16, 2022, and not less than 162⁄3 percent thereafter, fixed by the Secretary in amount or value of the production saved, removed, or sold; (B) variable royalty bid based on a per cen- tum in amount or value of the production saved, removed, or sold, with either a fixed work commitment based on dollar amount for exploration or a fixed cash bonus as deter- mined by the Secretary, or both; (C) cash bonus bid, or work commitment bid based on a dollar amount for exploration with a fixed cash bonus, and a diminishing or slid- ing royalty based on such formulae as the Sec- retary shall determine as equitable to encour- age continued production from the lease area as resources diminish, but not less than 162⁄3 percent, but not more than 183⁄4 percent, dur- ing the 10-year period beginning on August 16, 2022, and not less than 162⁄3 percent thereafter, at the beginning of the lease period in amount or value of the production saved, removed, or sold; (D) cash bonus bid with a fixed share of the net profits of no less than 30 per centum to be derived from the production of oil and gas from the lease area; (E) fixed cash bonus with the net profit share reserved as the bid variable; (F) cash bonus bid with a royalty at not less than 162⁄3 percent, but not more than 183⁄4 per- cent, during the 10-year period beginning on August 16, 2022, and not less than 162⁄3 percent thereafter, fixed by the Secretary in amount or value of the production saved, removed, or sold and a fixed per centum share of net prof- its of no less than 30 per centum to be derived from the production of oil and gas from the lease area; (G) work commitment bid based on a dollar amount for exploration with a fixed cash bonus and a fixed royalty in amount or value of the production saved, removed, or sold; (H) cash bonus bid with royalty at not less than 162⁄3 percent, but not more than 183⁄4 per- cent, during the 10-year period beginning on August 16, 2022, and not less than 162⁄3 percent thereafter, fixed by the Secretary in amount or value of production saved, removed, or sold, and with suspension of royalties for a period, volume, or value of production determined by the Secretary, which suspensions may vary based on the price of production from the lease; or (I) subject to the requirements of paragraph (4) of this subsection, any modification of bid- ding systems authorized in subparagraphs (A) through (G), or any other systems of bid vari- ables, terms, and conditions which the Sec- retary determines to be useful to accomplish the purposes and policies of this subchapter, except that no such bidding system or modi- fication shall have more than one bid variable. (2) The Secretary may, in his discretion, defer any part of the payment of the cash bonus, as authorized in paragraph (1) of this subsection, according to a schedule announced at the time of the announcement of the lease sale, but such payment shall be made in total no later than five years after the date of the lease sale. (3)(A) The Secretary may, in order to promote increased production on the lease area, through direct, secondary, or tertiary recovery means, reduce or eliminate any royalty or net profit share set forth in the lease for such area. (B) In the Western and Central Planning Areas of the Gulf of Mexico and the portion of the Eastern Planning Area of the Gulf of Mexico en- compassing whole lease blocks lying west of 87 degrees, 30 minutes West longitude and in the Planning Areas offshore Alaska, the Secretary may, in order to— (i) promote development or increased pro- duction on producing or non-producing leases; or (ii) encourage production of marginal re- sources on producing or non-producing leases; through primary, secondary, or tertiary recov- ery means, reduce or eliminate any royalty or net profit share set forth in the lease(s). With the lessee’s consent, the Secretary may make other modifications to the royalty or net profit share terms of the lease in order to achieve these purposes. (C)(i) Notwithstanding the provisions of this subchapter other than this subparagraph, with