119 STAT. 698
PUBLIC LAW 109–58—AUG. 8, 2005
(3) any other Federal law governing leasing of Federal land for oil and gas development. (b) TERMS AND CONDITIONS.—All royalty accruing to the United States shall, on the demand of the Secretary, be paid in-kind. If the Secretary makes such a demand, the following provisions apply to the payment: (1) SATISFACTION OF ROYALTY OBLIGATION.—Delivery by, or on behalf of, the lessee of the royalty amount and quality due under the lease satisfies royalty obligation of the lessee for the amount delivered, except that transportation and processing reimbursements paid to, or deductions claimed by, the lessee shall be subject to review and audit. (2) MARKETABLE CONDITION.— (A) DEFINITION OF MARKETABLE CONDITION.—In this paragraph, the term ‘‘in marketable condition’’ means sufficiently free from impurities and otherwise in a condition that the royalty production will be accepted by a purchaser under a sales contract typical of the field or area in which the royalty production was produced. (B) REQUIREMENT.—Royalty production shall be placed in marketable condition by the lessee at no cost to the United States. (3) DISPOSITION BY THE SECRETARY.—The Secretary may— (A) sell or otherwise dispose of any royalty production taken in-kind (other than oil or gas transferred under section 27(a)(3) of the Outer Continental Shelf Lands Act (43 U.S.C. 1353(a)(3)) for not less than the market price; and (B) transport or process (or both) any royalty production taken in-kind. (4) RETENTION BY THE SECRETARY.—The Secretary may, notwithstanding section 3302 of title 31, United States Code, retain and use a portion of the revenues from the sale of oil and gas taken in-kind that otherwise would be deposited to miscellaneous receipts, without regard to fiscal year limitation, or may use oil or gas received as royalty taken in-kind (referred to in this paragraph as ‘‘royalty production’’) to pay the cost of— (A) transporting the royalty production; (B) processing the royalty production; (C) disposing of the royalty production; or (D) any combination of transporting, processing, and disposing of the royalty production. (5) LIMITATION.— (A) IN GENERAL.—Except as provided in subparagraph (B), the Secretary may not use revenues from the sale of oil and gas taken in-kind to pay for personnel, travel, or other administrative costs of the Federal Government. (B) EXCEPTION.—Notwithstanding subparagraph (A), the Secretary may use a portion of the revenues from royalty in-kind sales, without fiscal year limitation, to pay salaries and other administrative costs directly related to the royalty in-kind program. (c) REIMBURSEMENT OF COST.—If the lessee, pursuant to an agreement with the United States or as provided in the lease, processes the royalty gas or delivers the royalty oil or gas at a point not on or adjacent to the lease area, the Secretary shall—
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