Fitness to operate standards

The Mineral Leasing Act is amended by inserting after section 37 (30 U.S.C. 193) the following: 38. Fitness to operate standards for oil and gas activities (a) Definitions In this section: (1) Covered entity The term covered entity, with respect to a recipient responsible party, means— (A) any parent company of the recipient responsible party; (B) any subsidiary company of the recipient responsible party; (C) any entity with which the recipient responsible party enters into a contract to construct, develop, maintain, or operate a facility on Federal land subject to this Act; and (D) any entity that— (i) shares officers, directors, or key managerial personnel with any entity described in subparagraph (A) or (B); or (ii) is a predecessor to any entity described in subparagraph (A) or (B). (2) Decommissioning The term decommissioning, with respect to oil and gas infrastructure on Federal land subject to this Act, means— (A) ending an oil and gas operation; (B) permanently plugging a well; (C) monitoring the efficacy of activities to end an oil and gas operation, including monitoring the safety and soundness of a plugged well; and (D) returning the area subject to the lease, right-of-way, permit, or other authorization to a condition that meets the environmental reclamation requirements of the Department of the Interior and any other Federal agency that has jurisdiction over the oil and gas operation. (3) Parent company The term parent company means a company that directly or indirectly controls another company. (4) Recipient responsible party The term recipient responsible party means an entity seeking the issuance, extension, or transfer of a lease, right-of-way, permit, or other authorization for oil or gas exploration, development, or production on Federal land subject to this Act. (5) Secretary The term Secretary means the Secretary of the Interior. (6) 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) Requirement for approvals Beginning on the date on which the Secretary issues or revises regulations under subsection (c)(4), the Secretary may not issue, extend the term of, or approve the transfer of, a lease, right-of-way, permit, or other authorization for oil or gas exploration, development, or production on Federal land subject to this Act with respect to a recipient responsible party, unless the recipient responsible party is certified as fit to operate in accordance with subsection (c). (c) Certification of fitness To operate (1) In general The Secretary shall certify a recipient responsible party as fit to operate based on— (A) the past compliance of the recipient responsible party, and any covered entity of the recipient responsible party, with Federal, State, and local environmental and safety laws and regulations, including deadlines and requirements related to environmental reclamation, decommissioning, and worker safety; (B) the financial solvency and capacity of the recipient responsible party, and any covered entity of the recipient responsible party, to weather market shocks and fulfill current and projected decommissioning liabilities; and (C) any other criteria with respect to the recipient responsible party, and any covered entity of the recipient responsible party, as the Secretary determines appropriate. (2) Initial request for certification A recipient responsible party may request to be certified as fit to operate pursuant to the process established by regulation under paragraph (4). (3) Maintenance of certification (A) Requirement A certification that the holder of a lease, right-of-way, permit, or other authorization for oil or gas exploration, development, or production on Federal land subject to this Act issued, extended, or transferred after the date on which the Secretary issues or revises regulations under paragraph (4) is fit to operate shall be maintained in accordance with subparagraph (B). (B) Annual compliance verification (i) In general The Secretary shall annually assess whether each holder of a lease, right-of-way, permit, or other authorization described in subparagraph (A) remains in compliance with standards established pursuant to paragraph (4). (ii) Suspension of certification If the Secretary determines under subparagraph (A) that a holder of a lease, right-of-way, permit, or other authorization described in subparagraph (A) is not in compliance with the standards established pursuant to paragraph (4), the Secretary shall suspend the certification and impose 1 or more of the following penalties until that holder complies with the standards: (I) Suspend the applicable lease, right-of-way, permit, or other authorization pursuant to section 5(a)(1). (II) Issue a fine or other civil penalties. (III) Require supplemental financial assurance in an amount equal to the total expected cost of decommissioning, as applicable. (IV) Issue an order to the holder of the lease, right-of-way, permit, or other authorization to commence decommissioning, including a requirement that the entity develop and submit a decommissioning plan pursuant to section 3162.3–4 of title 43, Code of Federal Regulations (or a successor regulation), for approval by the Secretary, and issue a notice to any previous holders of the lease, right-of-way, permit, or other authorization to commence joint and several liability proceedings. (4) Regulations Not later than 1 year after the date of enactment of the Stop Orphaned Wells Act, the Secretary shall promulgate or revise regulations— (A) to establish standards, in accordance with this section, that the Secretary shall use to determine whether to certify a recipient responsible party as fit to operate; (B) to establish a process for recipient responsible parties to request such certification; and (C) to carry out any other requirements of this section. (d) Report to Congress Not later than 1 year after the Secretary issues or revises regulations under subsection (c)(4), and annually thereafter, the Secretary shall submit to Congress a report that includes a summary of the most recent assessments made under subsection (c)(3)(B), including a list of— (1) each person that holds an active or inactive lease, right-of-way, permit, or other authorization for oil or gas exploration, development, or production on Federal land subject to this Act that failed to meet any of the standards established pursuant to subsection (c)(4); (2) the specific standards for which the person is or was non-compliant, disaggregated by— (A) person; and (B) lease, right-of-way, permit, and other authorizations; and (3) enforcement actions taken by the Secretary against each person identified under paragraph (1). (e) Authorization of appropriations There is authorized to be appropriated to the Secretary to carry out this section $30,000,000 for each of fiscal years 2028 through 2032..