Sponsor
Kimberlyn King-Hinds
Representative · R-MP
Representative · R-MP
The bill directs a substantial share of covered offshore leasing revenues to Guam, American Samoa, and the Northern Marianas and strengthens bonding and payment rules to protect federal receipts and taxpayers, but it raises industry costs, reduces budgetary flexibility for other programs, and creates potential administrative and legal frictions.
Residents of Guam, American Samoa, and the Northern Mariana Islands will receive a dedicated share of covered offshore leasing revenues (50% of covered leasing revenues allocated to a special account and split among qualifying territories) beginning in FY2027, providing new local funds for coastal restoration, infrastructure, mitigation, or fiscal stabilization.
Taxpayers will face reduced risk of bearing cleanup and restoration costs because the bill requires minimum and supplemental financial assurances (an initial bond of at least $100,000 plus additional bonds sized to cover decommissioning and environmental restoration).
Federal receipts will be more consistent because the bill prohibits waiving or reducing payments (bonuses, rentals, royalties) for covered outer continental shelf leases, preventing ad hoc revenue losses to the Treasury.
Prospective lessees (including utilities, energy companies, and smaller bidders) will face higher upfront and potentially increased ongoing bonding costs, which could raise project costs, reduce returns, or discourage some companies from bidding on OCS leases.
Federal programs or initiatives that previously drew on offshore leasing receipts may receive less flexible funding because the bill directs 50% of covered leasing revenues into the Treasury special account for territories, changing how receipts are available for other oil and mineral programs.
The prohibition on waiving or suspending payments removes administrative flexibility for the Secretary, which could force rigid enforcement during extraordinary circumstances (e.g., industry shocks, bankruptcies) and increase the risk of litigation or operational challenges for federal staff and industry.
Based on analysis of 2 sections of legislative text.
Tightens financial-assurance and payment rules for certain OCS leases, requires a seabed-mitigation study, and splits covered leasing revenues 50/50 with a Treasury account for nearby U.S. territories starting FY2027.
Official title: To amend the Outer Continental Shelf Lands Act to enhance the economic security of Pacific territories adjacent to seabed mining through revenue sharing, and for other purposes.
Introduced September 8, 2026 by Kimberlyn King-Hinds · Last progress September 8, 2026
Prohibits reductions or waivers of bonus, rental, royalty, or other payment obligations for certain Outer Continental Shelf (OCS) leases, requires an initial minimum financial assurance and case-by-case supplemental surety before production, and directs a one-year study on seabed-mining environmental mitigation. Beginning in fiscal year 2027, it splits covered leasing revenues 50/50 between the general fund and a Treasury special account for disbursement to nearby U.S. territories.