
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC7420]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle C--Navy and Marine Corps
 
                     PART IV--GENERAL ADMINISTRATION
 
                  CHAPTER 641--NAVAL PETROLEUM RESERVES
 
Sec. 7420. Definitions

    In this chapter:
        (1) The term ``national defense'' includes the needs of, and the 
    planning and preparedness to meet, essential defense, industrial, 
    and military emergency energy requirements relative to the national 
    safety, welfare, and economy, particularly resulting from foreign 
    military or economic actions.
        (2) The term ``naval petroleum reserves'' means the naval 
    petroleum and oil shale reserves established by this chapter, 
    including Naval Petroleum Reserve Numbered 1 (Elk Hills), located in 
    Kern County, California, established by Executive order of the 
    President, dated September 2, 1912; Naval Petroleum Reserve Numbered 
    2 (Buena Vista), located in Kern County, California, established by 
    Executive order of the President, dated December 13, 1912; Naval 
    Petroleum Reserve Numbered 3 (Teapot Dome), located in Wyoming, 
    established by Executive order of the President, dated April 30, 
    1915; Oil Shale Reserve Numbered 1, located in Colorado, established 
    by Executive order of the President, dated December 6, 1916, as 
    amended by Executive order dated June 12, 1919; Oil Shale Reserve 
    Numbered 2, located in Utah, established by Executive order of the 
    President, dated December 6, 1916; and Oil Shale Reserve Numbered 3, 
    located in Colorado, established by Executive order of the 
    President, dated September 27, 1924.
        (3) The term ``petroleum'' includes crude oil, gases (including 
    natural gas), natural gasoline, and other related hydrocarbons, oil 
    shale, and the products of any of such resources.
        (4) The term ``Secretary'' means the Secretary of Energy.
        (5) The term ``small refiner'' means an owner of a refinery or 
    refineries (including refineries not in operation) who qualifies as 
    a small business refiner under the rules and regulations of the 
    Small Business Administration.
        (6) The term ``maximum efficient rate'' means the maximum 
    sustainable daily oil or gas rate from a reservoir which will permit 
    economic development and depletion of that reservoir without 
    detriment to the ultimate recovery.

(Added Pub. L. 94-258, title II, Sec. 201(1), Apr. 5, 1976, 90 Stat. 
307; amended Pub. L. 96-513, title V, Sec. 513(30), Dec. 12, 1980, 94 
Stat. 2933; Pub. L. 100-26, Sec. 7(k)(5), Apr. 21, 1987, 101 Stat. 284.)


                               Amendments

    1987--Pub. L. 100-26 substituted colon for dash at end of 
introductory provisions, inserted ``The term'' in each par., substituted 
periods for semicolons in pars. (1) to (4) and period for ``; and'' in 
par. (5).
    1980--Pub. L. 96-513 in introductory text struck out ``(a)'' before 
``In'', in par. (2) struck out provisions relating to Naval Petroleum 
Reserve Numbered 4, and in par. (4) substituted ``Energy'' for ``the 
Navy''.


                    Effective Date of 1980 Amendment

    Amendment by Pub. L. 96-513 effective Dec. 12, 1980, see section 
701(b)(3) of Pub. L. 96-513, set out as a note under section 101 of this 
title.


                  Disposal of Naval Petroleum Reserves

    Pub. L. 105-261, div. C, title XXXIV, Oct. 17, 1998, 112 Stat. 2265, 
as amended by Pub. L. 106-398, Sec. 1 [div. C, title XXXIV, 
Sec. 3403(a), (c)], Oct. 30, 2000, 114 Stat. 1654, 1654A-484, 1654A-489, 
provided that:
``SEC. 3401. DEFINITIONS.
    ``In this title:
        ``(1) The term `naval petroleum reserves' has the meaning given 
    the term in section 7420(2) of title 10, United States Code.
        ``(2) The term `Naval Petroleum Reserve Numbered 2' means the 
    naval petroleum reserve, commonly referred to as the Buena Vista 
    unit, that is located in Kern County, California, and was 
    established by Executive order of the President, dated December 13, 
    1912.
        ``(3) The term `Naval Petroleum Reserve Numbered 3' means the 
    naval petroleum reserve, commonly referred to as the Teapot Dome 
    unit, that is located in the State of Wyoming and was established by 
    Executive order of the President, dated April 30, 1915.
        ``(4) The term `Oil Shale Reserve Numbered 2' means the naval 
    petroleum reserve that is located in the State of Utah and was 
    established by Executive order of the President, dated December 6, 
    1916.
        ``(5) The term `antitrust laws' has the meaning given the term 
    in section 1(a) of the Clayton Act (15 U.S.C. 12(a)), except that 
    the term also includes--
            ``(A) the Act of June 19, 1936 (15 U.S.C. 13 et seq.; 
        commonly known as the Robinson-Patman Act); and
            ``(B) section 5 of the Federal Trade Commission Act (15 
        U.S.C. 45), to the extent that such section applies to unfair 
        methods of competition.
        ``(6) The term `petroleum' has the meaning given the term in 
    section 7420(3) of title 10, United States Code.
``SEC. 3402. AUTHORIZATION OF APPROPRIATIONS.
    ``(a) Amount.--There are hereby authorized to be appropriated to the 
Secretary of Energy $22,500,000 for fiscal year 1999 for the purpose of 
carrying out--
        ``(1) activities under chapter 641 of title 10, United States 
    Code, relating to the naval petroleum reserves;
        ``(2) closeout activities at Naval Petroleum Reserve Numbered 1 
    upon the sale of that reserve under subtitle B of title XXXIV of the 
    National Defense Authorization Act for Fiscal Year 1996 (Public Law 
    104-106; 10 U.S.C. 7420 note); and
        ``(3) activities under this title relating to the disposition of 
    Naval Petroleum Reserve Numbered 2, Naval Petroleum Reserve Numbered 
    3, and Oil Shale Reserve Numbered 2.
    ``(b) Period of Availability.--Funds appropriated pursuant to the 
authorization of appropriations in subsection (a) shall remain available 
until expended.
``SEC. 3403. DISPOSAL OF NAVAL PETROLEUM RESERVE NUMBERED 2.
    ``(a) Disposal of Ford City Lots Authorized.--(1) Subject to section 
3406, the Secretary of Energy may dispose of the portion of Naval 
Petroleum Reserve Numbered 2 that is located within the town lots in 
Ford City, California, which are identified as `Drill Sites Numbered 3A, 
4, 6, 9A, 20, 22, 24, and 26' and described in the document entitled 
`Ford City Drill Site Locations--NPR-2,' and accompanying maps on file 
in the office of the Deputy Assistant Secretary for Naval Petroleum and 
Oil Shale Reserves of the Department of Energy.
    ``(2) The Secretary of Energy shall carry out the disposal 
authorized by paragraph (1) by competitive sale or lease consistent with 
commercial practices, by transfer to another Federal agency or a public 
or private entity, or by such other means as the Secretary considers 
appropriate. Any competitive sale or lease under this subsection shall 
provide for the disposal of all right, title, and interest of the United 
States in the property to be conveyed. The Secretary of Energy may use 
the authority provided by the Act of June 14, 1926 (43 U.S.C. 869 et 
seq.; commonly known as the Recreation and Public Purposes Act), in the 
same manner and to the same extent as the Secretary of the Interior, to 
dispose of the portion of Naval Petroleum Reserve Numbered 2 described 
in paragraph (1).
    ``(3) Section 2696(a) of title 10, United States Code, regarding the 
screening of real property for further Federal use before disposal, 
shall apply to the disposal authorized by paragraph (1).
    ``(b) Transfer of Administrative Jurisdiction Authorized.--(1) The 
Secretary of Energy shall continue to administer Naval Petroleum Reserve 
Numbered 2 (other than the portion of the reserve authorized for 
disposal under subsection (a)) in accordance with chapter 641 of title 
10, United States Code, until such time as the Secretary makes a 
determination to abandon oil and gas operations in Naval Petroleum 
Reserve Numbered 2 in accordance with commercial operating practices.
    ``(2) After oil and gas operations are abandoned in Naval Petroleum 
Reserve Numbered 2, the Secretary of Energy may transfer to the 
Secretary of the Interior administrative jurisdiction and control over 
all public domain lands included within Naval Petroleum Reserve Numbered 
2 (other than the portion of the reserve authorized for disposal under 
subsection (a)) for management in accordance with the general land laws.
    ``(c) Relationship to Antitrust Laws.--This section does not modify, 
impair, or supersede the operation of the antitrust laws.
``SEC. 3404. DISPOSAL OF NAVAL PETROLEUM RESERVE NUMBERED 3.
    ``(a) Administration Pending Termination of Operations.--The 
Secretary of Energy shall continue to administer Naval Petroleum Reserve 
Numbered 3 in accordance with chapter 641 of title 10, United States 
Code, until such time as the Secretary makes a determination to abandon 
oil and gas operations in Naval Petroleum Reserve Numbered 3 in 
accordance with commercial operating practices.
    ``(b) Disposal Authorized.--After oil and gas operations are 
abandoned in Naval Petroleum Reserve Numbered 3, the Secretary of Energy 
may dispose of the reserve as provided in this subsection. Subject to 
section 3406, the Secretary shall carry out any such disposal of the 
reserve by sale or lease or by transfer to another Federal agency. Any 
sale or lease shall provide for the disposal of all right, title, and 
interest of the United States in the property to be conveyed and shall 
be conducted in accordance with competitive procedures consistent with 
commercial practices, as established by the Secretary.
    ``(c) Relationship to Antitrust Laws.--This section does not modify, 
impair, or supersede the operation of the antitrust laws.
``SEC. 3405. DISPOSAL OF OIL SHALE RESERVE NUMBERED 2.
    ``(a) Definitions.--In this section:
        ``(1) NOSR-2.--The term `NOSR-2' means Oil Shale Reserve 
    Numbered 2, as identified on a map on file in the Office of the 
    Secretary of the Interior.
        ``(2) Moab site.--The term `Moab site' means the Moab uranium 
    milling site located approximately three miles northwest of Moab, 
    Utah, and identified in the Final Environmental Impact Statement 
    issued by the Nuclear Regulatory Commission in March 1996 in 
    conjunction with Source Materials License No. SUA-917.
        ``(3) Map.--The term `map' means the map depicting the 
    boundaries of NOSR-2, to be kept on file and available for public 
    inspection in the offices of the Department of the Interior.
        ``(4) Tribe.--The term `Tribe' means the Ute Indian Tribe of the 
    Uintah and Ouray Indian Reservation.
        ``(5) Trustee.--The term `Trustee' means the Trustee of the Moab 
    Mill Reclamation Trust.
    ``(b) Conveyance.--(1) Except as provided in paragraph (2) and 
subsection (e), all right, title, and interest of the United States in 
and to all Federal lands within the exterior boundaries of NOSR-2 
(including surface and mineral rights) are hereby conveyed to the Tribe 
in fee simple. The Secretary of Energy shall execute and file in the 
appropriate office a deed or other instrument effectuating the 
conveyance made by this section.
    ``(2) The conveyance under paragraph (1) does not include the 
following:
        ``(A) The portion of the bed of Green River contained entirely 
    within NOSR-2, as depicted on the map.
        ``(B) The land (including surface and mineral rights) to the 
    west of the Green River within NOSR-2, as depicted on the map.
        ``(C) A \1/4\ mile scenic easement on the east side of the Green 
    River within NOSR-2.
    ``(c) Conditions on Conveyance.--(1) The conveyance under subsection 
(b) is subject to valid existing rights in effect on the day before the 
date of the enactment of the Floyd D. Spence National Defense 
Authorization Act for Fiscal Year 2001 [Oct. 30, 2000].
    ``(2) On completion of the conveyance under subsection (b), the 
United States relinquishes all management authority over the conveyed 
land, including tribal activities conducted on the land.
    ``(3) The land conveyed to the Tribe under subsection (b) shall not 
revert to the United States for management in trust status.
    ``(4) The reservation of the easement under subsection (b)(2)(C) 
shall not affect the right of the Tribe to use and maintain access to 
the Green River through the use of the road within the easement, as 
depicted on the map.
    ``(5) Each withdrawal that applies to NOSR-2 and that is in effect 
on the date of the enactment of the Floyd D. Spence National Defense 
Authorization Act for Fiscal Year 2001 [Oct. 30, 2000] is revoked to the 
extent that the withdrawal applies to NOSR-2.
    ``(6) Notwithstanding that the land conveyed to the Tribe under 
subsection (b) shall not be part of the reservation of the Tribe, such 
land shall be deemed to be part of the reservation of the Tribe for the 
purposes of criminal and civil jurisdiction.
    ``(d) Administration of Unconveyed Land and Interests in Land.--(1) 
The land and interests in land excluded by subparagraphs (A) and (B) of 
subsection (b)(2) from conveyance under subsection (b) shall be 
administered by the Secretary of the Interior in accordance with the 
Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701 et seq.).
    ``(2) Not later than three years after the date of the enactment of 
the Floyd D. Spence National Defense Authorization Act for Fiscal Year 
2001 [Oct. 30, 2000], the Secretary of the Interior shall submit to 
Congress a land use plan for the management of the land and interests in 
land referred to in paragraph (1).
    ``(3) There are authorized to be appropriated to the Secretary of 
the Interior such sums as are necessary to carry out this subsection.
    ``(e) Royalty.--(1) Notwithstanding the conveyance under subsection 
(b), the United States retains a nine percent royalty interest in the 
value of any oil, gas, other hydrocarbons, and all other minerals that 
are produced, saved, and sold from the conveyed land during the period 
beginning on the date of the conveyance and ending on the date the 
Secretary of Energy releases the royalty interest under subsection (i).
    ``(2) The royalty payments shall be made by the Tribe or its 
designee to the Secretary of Energy during the period that the oil, gas, 
hydrocarbons, or minerals are being produced, saved, sold, or extracted. 
The Secretary of Energy shall retain and use the payments in the manner 
provided in subsection (i)(3).
    ``(3) The royalty interest retained by the United States under this 
subsection does not include any development, production, marketing, and 
operating expenses.
    ``(4) The Tribe shall submit to the Secretary of Energy and to 
Congress an annual report on resource development and other activities 
of the Tribe concerning the conveyance under subsection (b).
    ``(5) Not later than five years after the date of the enactment of 
the Floyd D. Spence National Defense Authorization Act for Fiscal Year 
2001 [Oct. 30, 2000], and every five years thereafter, the Tribe shall 
obtain an audit of all resource development activities of the Tribe 
concerning the conveyance under subsection (b), as provided under 
chapter 75 of title 31, United States Code. The results of each audit 
under this paragraph shall be included in the next annual report 
submitted under paragraph (4).
    ``(f) River Management.--(1) The Tribe shall manage, under Tribal 
jurisdiction and in accordance with ordinances adopted by the Tribe, 
land of the Tribe that is adjacent to, and within \1/4\ mile of, the 
Green River in a manner that--
        ``(A) maintains the protected status of the land; and
        ``(B) is consistent with the government-to-government agreement 
    and in the memorandum of understanding dated February 11, 2000, as 
    agreed to by the Tribe and the Secretary of the Interior.
    ``(2) An ordinance referred to in paragraph (1) shall not impair, 
limit, or otherwise restrict the management and use of any land that is 
not owned, controlled, or subject to the jurisdiction of the Tribe.
    ``(3) An ordinance adopted by the Tribe and referenced in the 
government-to-government agreement may not be repealed or amended 
without the written approval of both the Tribe and the Secretary of the 
Interior.
    ``(g) Plant Species.--(1) In accordance with a government-to-
government agreement between the Tribe and the Secretary of the 
Interior, in a manner consistent with levels of legal protection in 
effect on the date of the enactment of the Floyd D. Spence National 
Defense Authorization Act for Fiscal Year 2001 [Oct. 30, 2000], the 
Tribe shall protect, under ordinances adopted by the Tribe, any plant 
species that is--
        ``(A) listed as an endangered species or threatened species 
    under section 4 of the Endangered Species Act of 1973 (16 U.S.C. 
    1533); and
        ``(B) located or found on the NOSR-2 land conveyed to the Tribe.
    ``(2) The protection described in paragraph (1) shall be performed 
solely under tribal jurisdiction.
    ``(h) Horses.--(1) The Tribe shall manage, protect, and assert 
control over any horse not owned by the Tribe or tribal members that is 
located or found on the NOSR-2 land conveyed to the Tribe in a manner 
that is consistent with Federal law governing the management, 
protection, and control of horses in effect on the date of the enactment 
of the Floyd D. Spence National Defense Authorization Act for Fiscal 
Year 2001 [Oct. 30, 2000].
    ``(2) The management, control, and protection of horses described in 
paragraph (1) shall be performed solely--
        ``(A) under tribal jurisdiction; and
        ``(B) in accordance with a government-to-government agreement 
    between the Tribe and the Secretary of the Interior.
    ``(i) Remedial Action at Moab Site.--(1)(A) The Secretary of Energy 
shall prepare a plan for remediation, including ground water 
restoration, of the Moab site in accordance with title I of the Uranium 
Mill Tailings Radiation Control Act of 1978 (42 U.S.C. 7911 et seq.). 
The Secretary of Energy shall enter into arrangements with the National 
Academy of Sciences to obtain the technical advice, assistance, and 
recommendations of the National Academy of Sciences in objectively 
evaluating the costs, benefits, and risks associated with various 
remediation alternatives, including removal or treatment of radioactive 
or other hazardous materials at the site, ground water restoration, and 
long-term management of residual contaminants. If the Secretary prepares 
a remediation plan that is not consistent with the recommendations of 
the National Academy of Sciences, the Secretary shall submit to Congress 
a report explaining the reasons for deviation from the National Academy 
of Sciences' recommendations.
    ``(B) The remediation plan required by subparagraph (A) shall be 
completed not later than one year after the date of the enactment of the 
Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 
[Oct. 30, 2000], and the Secretary of Energy shall commence remedial 
action at the Moab site as soon as practicable after the completion of 
the plan.
    ``(C) The license for the materials at the Moab site issued by the 
Nuclear Regulatory Commission shall terminate one year after the date of 
the enactment of the Floyd D. Spence National Defense Authorization Act 
for Fiscal Year 2001, unless the Secretary of Energy determines that the 
license may be terminated earlier. Until the license is terminated, the 
Trustee, subject to the availability of funds appropriated specifically 
for a purpose described in clauses (i) through (iii) or made available 
by the Trustee from the Moab Mill Reclamation Trust, may carry out--
        ``(i) interim measures to reduce or eliminate localized high 
    ammonia concentrations in the Colorado River, identified by the 
    United States Geological Survey in a report dated March 27, 2000;
        ``(ii) activities to dewater the mill tailings at the Moab site; 
    and
        ``(iii) other activities related to the Moab site, subject to 
    the authority of the Nuclear Regulatory Commission and in 
    consultation with the Secretary of Energy.
    ``(D) As part of the remediation plan for the Moab site required by 
subparagraph (A), the Secretary of Energy shall develop, in consultation 
with the Trustee, the Nuclear Regulatory Commission, and the State of 
Utah, an efficient and legal means for transferring all responsibilities 
and title to the Moab site and all the materials therein from the 
Trustee to the Department of Energy.
    ``(2) The Secretary of Energy shall limit the amounts expended in 
carrying out the remedial action under paragraph (1) to--
        ``(A) amounts specifically appropriated for the remedial action 
    in an appropriation Act; and
        ``(B) other amounts made available for the remedial action under 
    this subsection.
    ``(3)(A) The royalty payments received by the Secretary of Energy 
under subsection (e) shall be available to the Secretary, without 
further appropriation, to carry out the remedial action under paragraph 
(1) until such time as the Secretary determines that all costs incurred 
by the United States to carry out the remedial action (other than costs 
associated with long-term monitoring) have been paid.
    ``(B) Upon making the determination referred to in subparagraph (A), 
the Secretary of Energy shall transfer all remaining royalty amounts to 
the general fund of the Treasury and release to the Tribe the royalty 
interest retained by the United States under subsection (e).
    ``(4)(A) Funds made available to the Department of Energy for 
national security activities shall not be used to carry out the remedial 
action under paragraph (1), except that the Secretary of Energy may use 
such funds for program direction directly related to the remedial 
action.
    ``(B) There are authorized to be appropriated to the Secretary of 
Energy to carry out the remedial action under paragraph (1) such sums as 
are necessary.
    ``(5) If the Moab site is sold after the date on which the Secretary 
of Energy completes the remedial action under paragraph (1), the seller 
shall pay to the Secretary of Energy, for deposit in the general fund of 
the Treasury, the portion of the sale price that the Secretary 
determines resulted from the enhancement of the value of the Moab site 
as a result of the remedial action. The enhanced value of the Moab site 
shall be equal to the difference between--
        ``(A) the fair market value of the Moab site on the date of the 
    enactment of the Floyd D. Spence National Defense Authorization Act 
    for Fiscal Year 2001 [Oct. 30, 2000], based on information available 
    on that date; and
        ``(B) the fair market value of the Moab site, as appraised on 
    completion of the remedial action.
``SEC. 3406. ADMINISTRATION.
    ``(a) Protection of Existing Rights.--At the discretion of the 
Secretary of Energy, the disposal of property under this title shall be 
subject to any contract related to the United States ownership interest 
in the property in effect at the time of disposal, including any lease 
agreement pertaining to the United States interest in Naval Petroleum 
Reserve Numbered 2.
    ``(b) Deposit of Receipts.--Notwithstanding any other law, all 
monies received by the United States from the disposal of property under 
this title, including any monies received from a lease entered into 
under this title, shall be deposited in the general fund of the 
Treasury.
    ``(c) Treatment of Royalties.--Any petroleum accruing to the United 
States as royalty from any lease of lands transferred under this title 
shall be delivered to the United States, or shall be paid for in money, 
as the Secretary of the Interior may elect.
    ``(d) Elements of Lease.--A lease under this title may provide for 
the exploration for, and development and production of, petroleum, other 
than petroleum in the form of oil shale.
    ``(e) Waiver of Requirements Regarding Consultation and Approval.--
Section 7431 of title 10, United States Code, shall not apply to the 
disposal of property under this title.
    ``(f) Oil Shale Reserve Numbered 2.--This section does not apply to 
the transfer of Oil Shale Reserve Numbered 2 under section 3405.''
    Pub. L. 104-106, div. C, title XXXIV, subtitle B, Feb. 10, 1996, 110 
Stat. 631, as amended by Pub. L. 106-65, div. A, title X, Sec. 1067(6), 
Oct. 5, 1999, 113 Stat. 774, provided that:
``SEC. 3411. DEFINITIONS.
    ``For purposes of this subtitle:
        ``(1) The terms `Naval Petroleum Reserve Numbered 1' and 
    `reserve' mean Naval Petroleum Reserve Numbered 1, commonly referred 
    to as the Elk Hills Unit, located in Kern County, California, and 
    established by Executive order of the President, dated September 2, 
    1912.
        ``(2) The term `naval petroleum reserves' has the meaning given 
    that term in section 7420(2) of title 10, United States Code, except 
    that the term does not include Naval Petroleum Reserve Numbered 1.
        ``(3) The term `unit plan contract' means the unit plan contract 
    between equity owners of the lands within the boundaries of Naval 
    Petroleum Reserve Numbered 1 entered into on June 19, 1944.
        ``(4) The term `effective date' means the date of the enactment 
    of this Act [Feb. 10, 1996].
        ``(5) The term `Secretary' means the Secretary of Energy.
        ``(6) The term `appropriate congressional committees' means the 
    Committee on Armed Services of the Senate and the Committee on Armed 
    Services and the Committee on Commerce [now Committee on Energy and 
    Commerce] of the House of Representatives.
``SEC. 3412. SALE OF NAVAL PETROLEUM RESERVE NUMBERED 1.
    ``(a) Sale of Reserve Required.--Subject to section 3414, not later 
than two years after the effective date, the Secretary of Energy shall 
enter into one or more contracts for the sale of all right, title, and 
interest of the United States in and to all lands owned or controlled by 
the United States inside Naval Petroleum Reserve Numbered 1. Chapter 641 
of title 10, United States Code, shall not apply to the sale of the 
reserve.
    ``(b) Equity Finalization.--(1) Not later than eight months after 
the effective date, the Secretary shall finalize equity interests of the 
known oil and gas zones in Naval Petroleum Reserve Numbered 1 in the 
manner provided by this subsection.
    ``(2) The Secretary shall retain the services of an independent 
petroleum engineer, mutually acceptable to the equity owners, who shall 
prepare a recommendation on final equity figures. The Secretary may 
accept the recommendation of the independent petroleum engineer for 
final equity in each known oil and gas zone and establish final equity 
interest in Naval Petroleum Reserve Numbered 1 in accordance with the 
recommendation, or the Secretary may use such other method to establish 
final equity interest in the reserve as the Secretary considers 
appropriate.
    ``(3) If, on the effective date, there is an ongoing equity 
redetermination dispute between the equity owners under section 9(b) of 
the unit plan contract, the dispute shall be resolved in the manner 
provided in the unit plan contract within eight months after the 
effective date. The resolution shall be considered final for all 
purposes under this section.
    ``(c) Notice of Sale.--Not later than two months after the effective 
date, the Secretary shall publish a notice of intent to sell Naval 
Petroleum Reserve Numbered 1. The Secretary shall make all technical, 
geological, and financial information relevant to the sale of the 
reserve available to all interested and qualified buyers upon request. 
The Secretary, in consultation with the Administrator of General 
Services, shall ensure that the sale process is fair and open to all 
interested and qualified parties.
    ``(d) Establishment of Minimum Sale Price.--(1) Not later than seven 
months after the effective date, the Secretary shall retain the services 
of five independent experts in the valuation of oil and gas fields to 
conduct separate assessments, in a manner consistent with commercial 
practices, of the value of the interest of the United States in Naval 
Petroleum Reserve Numbered 1. The independent experts shall complete 
their assessments within 11 months after the effective date. In making 
their assessments, the independent experts shall consider (among other 
factors)--
        ``(A) all equipment and facilities to be included in the sale;
        ``(B) the estimated quantity of petroleum and natural gas in the 
    reserve; and
        ``(C) the net present value of the anticipated revenue stream 
    that the Secretary and the Director of the Office of Management and 
    Budget jointly determine the Treasury would receive from the reserve 
    if the reserve were not sold, adjusted for any anticipated increases 
    in tax revenues that would result if the reserve were sold.
    ``(2) The independent experts retained under paragraph (1) shall 
also determine and submit to the Secretary the estimated total amount of 
the cost of any environmental restoration and remediation necessary at 
the reserve. The Secretary shall report the estimate to the Director of 
the Office of Management and Budget, the Secretary of the Treasury, and 
Congress.
    ``(3) The Secretary, in consultation with the Director of the Office 
of Management and Budget, shall set the minimum acceptable price for the 
reserve. The Secretary may not set the minimum acceptable price below 
the higher of--
        ``(A) the average of the five assessments prepared under 
    paragraph (1); and
        ``(B) the average of three assessments after excluding the high 
    and low assessments.
    ``(e) Administration of Sale; Draft Contract.--(1) Not later than 
two months after the effective date, the Secretary shall retain the 
services of an investment banker or an appropriate equivalent financial 
adviser to independently administer, in a manner consistent with 
commercial practices and in a manner that maximizes sale proceeds to the 
Government, the sale of Naval Petroleum Reserve Numbered 1 under this 
section. Costs and fees of retaining the investment banker or financial 
adviser may be paid out of the proceeds of the sale of the reserve.
    ``(2) Not later than 11 months after the effective date, the 
investment banker or financial adviser retained under paragraph (1) 
shall complete a draft contract or contracts for the sale of Naval 
Petroleum Reserve Numbered 1, which shall accompany the solicitation of 
offers and describe the terms and provisions of the sale of the interest 
of the United States in the reserve.
    ``(3) The draft contract or contracts shall identify--
        ``(A) all equipment and facilities to be included in the sale; 
    and
        ``(B) any potential claim or liability (including liability for 
    environmental restoration and remediation), and the extent of any 
    such claim or liability, for which the United States is responsible 
    under subsection (g).
    ``(4) The draft contract or contracts, including the terms and 
provisions of the sale of the interest of the United States in the 
reserve, shall be subject to review and approval by the Secretary, the 
Secretary of the Treasury, and the Director of the Office of Management 
and Budget. Each of those officials shall complete the review of, and 
approve or disapprove, the draft contract or contracts not later than 12 
months after the effective date.
    ``(f) Solicitation of Offers.--(1) Not later than 13 months after 
the effective date, the Secretary shall publish the solicitation of 
offers for Naval Petroleum Reserve Numbered 1.
    ``(2) Not later than 18 months after the effective date, the 
Secretary shall identify the highest responsible offer or offers for 
purchase of the interest of the United States in Naval Petroleum Reserve 
Numbered 1 that, in total, meet or exceed the minimum acceptable price 
determined under subsection (d)(3).
    ``(3) The Secretary shall take such action immediately after the 
effective date as is necessary to obtain from an independent petroleum 
engineer within 10 months after that date a reserve report prepared in a 
manner consistent with commercial practices. The Secretary shall use the 
reserve report in support of the preparation of the solicitation of 
offers for the reserve.
    ``(g) Future Liabilities.--To effectuate the sale of the interest of 
the United States in Naval Petroleum Reserve Numbered 1, the Secretary 
may extend such indemnities and warranties as the Secretary considers 
reasonable and necessary to protect the purchaser from claims arising 
from the ownership in the reserve by the United States.
    ``(h) Maintaining Production.--Until the sale of Naval Petroleum 
Reserve Numbered 1 is completed under this section, the Secretary shall 
continue to produce the reserve at the maximum daily oil or gas rate 
from a reservoir, which will permit maximum economic development of the 
reservoir consistent with sound oil field engineering practices in 
accordance with section 3 of the unit plan contract.
    ``(i) Noncompliance With Deadlines.--At any time during the two-year 
period beginning on the effective date, if the Secretary determines that 
the actions necessary to complete the sale of the reserve within that 
period are not being taken or timely completed, the Secretary shall 
transmit to the appropriate congressional committees a written 
notification of that determination together with a plan setting forth 
the actions that will be taken to ensure that the sale of the reserve 
will be completed within that period. The Secretary shall consult with 
the Director of the Office of Management and Budget in preparing the 
plan for submission to the committees.
    ``(j) Oversight.--The Comptroller General shall monitor the actions 
of the Secretary relating to the sale of the reserve and report to the 
appropriate congressional committees any findings on such actions that 
the Comptroller General considers appropriate to report to the 
committees.
    ``(k) Acquisition of Services.--The Secretary may enter into 
contracts for the acquisition of services required under this section 
under the authority of paragraph (7) of section 303(c) of the Federal 
Property and Administrative Services Act of 1949 (41 U.S.C. 253(c)), 
except that the notification required under subparagraph (B) of such 
paragraph for each contract shall be submitted to Congress not less than 
7 days before the award of the contract.
``SEC. 3413. EFFECT OF SALE OF RESERVE.
    ``(a) Effect on Existing Contracts.--(1) In the case of any 
contract, in effect on the effective date, for the purchase of 
production from any part of the United States' share of Naval Petroleum 
Reserve Numbered 1, the sale of the interest of the United States in the 
reserve shall be subject to the contract for a period of three months 
after the closing date of the sale or until termination of the contract, 
whichever occurs first. The term of any contract entered into after the 
effective date for the purchase of the production shall not exceed the 
anticipated closing date for the sale of the reserve.
    ``(2) The Secretary shall exercise the termination procedures 
provided in the contract between the United States and Bechtel Petroleum 
Operation, Inc., Contract Number DE-ACO1-85FE60520 so that the contract 
terminates not later than the date of closing of the sale of Naval 
Petroleum Reserve Numbered 1 under section 3412.
    ``(3) The Secretary shall exercise the termination procedures 
provided in the unit plan contract so that the unit plan contract 
terminates not later than the date of closing of the sale of reserve.
    ``(b) Effect on Antitrust Laws.--Nothing in this subtitle shall be 
construed to alter the application of the antitrust laws of the United 
States to the purchaser or purchasers (as the case may be) of Naval 
Petroleum Reserve Numbered 1 or to the lands in the reserve subject to 
sale under section 3412 upon the completion of the sale.
    ``(c) Preservation of Private Right, Title, and Interest.--Nothing 
in this subtitle shall be construed to adversely affect the ownership 
interest of any other entity having any right, title, and interest in 
and to lands within the boundaries of Naval Petroleum Reserve Numbered 1 
and which are subject to the unit plan contract.
    ``(d) Transfer of Otherwise Nontransferable Permit.--The Secretary 
may transfer to the purchaser or purchasers (as the case may be) of 
Naval Petroleum Reserve Numbered 1 the incidental take permit regarding 
the reserve issued to the Secretary by the United States Fish and 
Wildlife Service and in effect on the effective date if the Secretary 
determines that transfer of the permit is necessary to expedite the sale 
of the reserve in a manner that maximizes the value of the sale to the 
United States. The transferred permit shall cover the identical 
activities, and shall be subject to the same terms and conditions, as 
apply to the permit at the time of the transfer.
``SEC. 3414. CONDITIONS ON SALE PROCESS.
    ``(a) Notice Regarding Sale Conditions.--The Secretary may not enter 
into any contract for the sale of Naval Petroleum Reserve Numbered 1 
under section 3412 until the end of the 31-day period beginning on the 
date on which the Secretary submits to the appropriate congressional 
committees a written notification--
        ``(1) describing the conditions of the proposed sale; and
        ``(2) containing an assessment by the Secretary of whether it is 
    in the best interests of the United States to sell the reserve under 
    such conditions.
    ``(b) Authority to Suspend Sale.--(1) The Secretary may suspend the 
sale of Naval Petroleum Reserve Numbered 1 under section 3412 if the 
Secretary and the Director of the Office of Management and Budget 
jointly determine that--
        ``(A) the sale is proceeding in a manner inconsistent with 
    achievement of a sale price that reflects the full value of the 
    reserve; or
        ``(B) a course of action other than the immediate sale of the 
    reserve is in the best interests of the United States.
    ``(2) Immediately after making a determination under paragraph (1) 
to suspend the sale of Naval Petroleum Reserve Numbered 1, the Secretary 
shall submit to the appropriate congressional committees a written 
notification describing the basis for the determination and requesting a 
reconsideration of the merits of the sale of the reserve.
    ``(c) Effect of Reconsideration Notice.--After the Secretary submits 
a notification under subsection (b), the Secretary may not complete the 
sale of Naval Petroleum Reserve Numbered 1 under section 3412 or any 
other provision of law unless the sale of the reserve is authorized in 
an Act of Congress enacted after the date of the submission of the 
notification.
``SEC. 3415. TREATMENT OF STATE OF CALIFORNIA CLAIM REGARDING RESERVE.
    ``(a) Reservation of Funds.--After the costs incurred in the conduct 
of the sale of Naval Petroleum Reserve Numbered 1 under section 3412 are 
deducted, nine percent of the remaining proceeds from the sale of the 
reserve shall be reserved in a contingent fund in the Treasury for 
payment to the State of California for the Teachers' Retirement Fund of 
the State in the event that, and to the extent that, the claims of the 
State against the United States regarding production and proceeds of 
sale from Naval Petroleum Reserve Numbered 1 are--
        ``(1) settled by agreement with the United States under 
    subsection (c); or
        ``(2) finally resolved in favor of the State by a court of 
    competent jurisdiction, if a settlement agreement is not reached.
    ``(b) Disposition of Funds.--In such amounts as may be provided in 
appropriation Acts, amounts in the contingent fund shall be available 
for paying a claim described in subsection (a). After final disposition 
of the claims, any unobligated balance in the contingent fund shall be 
credited to the general fund of the Treasury. If no payment is made from 
the contingent fund within 10 years after the effective date, amounts in 
the contingent fund shall be credited to the general fund of the 
Treasury.
    ``(c) Settlement Offer.--Not later than 30 days after the date of 
the sale of Naval Petroleum Reserve Numbered 1 under section 3412, the 
Secretary shall offer to settle all claims of the State of California 
against the United States with respect to lands in the reserve located 
in sections 16 and 36 of township 30 south, range 23 east, Mount Diablo 
Principal Meridian, California, and production or proceeds of sale from 
the reserve, in order to provide proper compensation for the State's 
claims. The Secretary shall base the amount of the offered settlement 
payment from the contingent fund on the fair value for the State's 
claims, including the mineral estate, not to exceed the amount reserved 
in the contingent fund.
    ``(d) Release of Claims.--Acceptance of the settlement offer made 
under subsection (c) shall be subject to the condition that all claims 
against the United States by the State of California for the Teachers' 
Retirement Fund of the State be released with respect to lands in Naval 
Petroleum Reserve Numbered 1, including sections 16 and 36 of township 
30 south, range 23 east, Mount Diablo Principal Meridian, California, or 
production or proceeds of sale from the reserve.
``SEC. 3416. STUDY OF FUTURE OF OTHER NAVAL PETROLEUM RESERVES.
    ``(a) Study Required.--The Secretary of Energy shall conduct a study 
to determine which of the following options, or combinations of options, 
regarding the naval petroleum reserves (other than Naval Petroleum 
Reserve Numbered 1) would maximize the value of the reserves to the 
United States:
        ``(1) Retention and operation of the naval petroleum reserves by 
    the Secretary under chapter 641 of title 10, United States Code.
        ``(2) Transfer of all or a part of the naval petroleum reserves 
    to the jurisdiction of another Federal agency for administration 
    under chapter 641 of title 10, United States Code.
        ``(3) Transfer of all or a part of the naval petroleum reserves 
    to the Department of the Interior for leasing in accordance with the 
    Mineral Leasing Act (30 U.S.C. 181 et seq.) and surface management 
    in accordance with the Federal Land Policy and Management Act [of 
    1976] (43 U.S.C. 1701 et seq.).
        ``(4) Sale of the interest of the United States in the naval 
    petroleum reserves.
    ``(b) Conduct of Study.--The Secretary shall retain an independent 
petroleum consultant to conduct the study.
    ``(c) Considerations Under Study.--An examination of the value to be 
derived by the United States from the transfer or sale of the naval 
petroleum reserves shall include an assessment and estimate of the fair 
market value of the interest of the United States in the naval petroleum 
reserves. The assessment and estimate shall be made in a manner 
consistent with customary property valuation practices in the oil and 
gas industry.
    ``(d) Report and Recommendations Regarding Study.--Not later than 
June 1, 1996, the Secretary shall submit to Congress a report describing 
the results of the study and containing such recommendations (including 
proposed legislation) as the Secretary considers necessary to implement 
the option, or combination of options, identified in the study that 
would maximize the value of the naval petroleum reserves to the United 
States.''
