Limitations on transfer of leases

(a) Definitions In this section: (1) Covered lease The term covered lease means— (A) an oil or gas lease issued pursuant to the Mineral Leasing Act (30 U.S.C. 181 et seq.), and any interest in that lease; and (B) an oil or gas lease issued pursuant to the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.), and any interest in that lease. (2) Parent company The term parent company means a company that directly or indirectly controls another company. (3) Secretary The term Secretary means the Secretary of the Interior. (4) Subsidiary company The term subsidiary company — (A) means any company that is owned or controlled, directly or indirectly, by another company; and (B) includes any subsidiary of the company that is so owned or controlled. (b) Limitations (1) In general A leaseholder may not transfer a covered lease to any person, regardless of whether the lease was issued before, on, or after the date of enactment of this Act, unless the Secretary approves the transfer under paragraph (2). (2) Application (A) In general Prior to transferring a covered lease, a leaseholder shall submit to the Secretary an application containing— (i) a financial risk assessment of the proposed lessee, including an assessment of the adequacy of the proposed financial assurances, credit rating (or lack thereof), and bonding of the lessee; (ii) a complete list of oil and gas leases and wells owned or operated by the proposed lessee, along with the operational status of the wells, including whether any of the wells are idled wells, temporarily abandoned, or shut-in (as those terms are defined in section 17(g) of the Mineral Leasing Act (30 U.S.C. 226(g))); (iii) a complete list of past and ongoing violations of Federal, State, or local laws and regulations applicable to any of the oil and gas operations of the proposed lessee; and (iv) any other information that the Secretary may require. (B) Approval or denial After receiving an application submitted under subparagraph (A), the Secretary shall, subject to subparagraphs (D) and (E)— (i) immediately post the proposed transfer on the website of the Department of the Interior; (ii) invite public comment on the proposed transfer for not less than 30 days; and (iii) not later than 90 days after receiving the application— (I) approve, conditionally approve, or deny that application; and (II) publicly post on the website of the Department of the Interior the reasoning for the approval, conditional approval, or denial, to include whether the decision was based on information provided by the public under clause (ii). (C) Notice Not later than 5 days after making a decision under subparagraph (B), the Secretary shall— (i) notify the leaseholder of that decision; and (ii) post the decision on the website of the Department of the Interior. (D) Additional bonding The Secretary shall conditionally approve an application under subparagraph (B), subject to the condition that the leaseholder acquires additional bonding to offset any financial risks identified during the review of the application by the Secretary. (E) Mandatory denial The Secretary shall deny an application under subparagraph (B) if the proposed lessee— (i) has filed a petition for bankruptcy under title 11, United States Code; (ii) does not, along with any parent company of the proposed lessee, possess an investment grade credit rating from a nationally recognized statistical rating organization (as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))); (iii) has no prior record of safe and compliant oil or gas production operations within the preceding 5 years; or (iv) is a subsidiary company of a parent company and fails to demonstrate a debt-to-equity ratio of less than 2 to 1, unless the parent company provides an unconditional corporate guarantee for all liabilities under the covered lease.