(d) The term "inland waters" means all navigable waters within said coast line of the United States, and also all navigable lakes and rivers. The Great Lakes, within the international boundary of the United States, are inland waters.

(e) The term "navigable" means navigable at the time of the admission of a State into the Union under the laws of the United States.

(f) The term "State" means any State of the Union.

(g) The term “coastal States" shall mean those States, any portion of which borders upon the Atlantic Ocean, the Gulf of Mexico, or the Pacific Ocean.

(h) The term "person" means a citizen of the United States, an association of such citizens, a State, a political subdivision of a State, or a private, public, or municipal corporation organized under the laws of the United States or of any State.

(i) The term "lease" whenever used with reference to action by a State or its political subdivision or grantee prior to January 1, 1949, shall be regarded as including any form of authorization for the development or production of natural resources, and the term "lessee" whenever used in such connection, shall be regarded as including any person having the right to develop or produce natural resources under any such form of authorization.

(j) The term "grantees" includes (without limiting the generality thereof) all political subdivisions, municipalities and persons holding grants from a State to submerged coastal lands if such grants were issued in accordance with the constitution, statutes, and decisions of the courts of the State in which such lands are situated: Provided, however, That nothing herein shall be construed as conferring upon said grantees any greater rights or interests than are described in their respective grants from the State.

(k) The term "Mineral Leasing Act" shall mean the Act of February 25, 1920 (41 Stat. 437; 30 U. S. C., sec. 181 and the following), and all Acts heretofore enacted which are amendatory thereof or supplementary thereto.

SEC. 3. JURISDICTION OVER CONTINENTAL SHELF.-(a) It is hereby declared to be the policy of the United States that the natural resources of the subsoil and sea bed of the continental shelf appertain to the United States and are subject to its jurisdicion, control, and power of disposition. Except to the extent that it is exercised in a manner inconsistent with applicable Federal laws, the police power of each coastal State may extend to that portion of the continental shelf which would be within the boundaries of such State if extended seaward to the outer margin of the continental shelf. The police power includes, but is not limited to, the power of taxation, conservation, and control of the manner of conducting geophysical explorations. This Act shall be construed in such manner that the character as high seas of the waters above the continental shelf and the right to their free and unimpeded navigation shall not be affected.

(b) Oil and gas deposits in the continental shelf shall be subject to control and disposal only in accordance with the provisions of this Act and no rights in or claims to such deposits, whether based upon applications filed or other action taken heretofore or hereafter, shall be recognized except in accordance with the provisions of this Act.

SEC. 4. PROVISIONS FOR FEDERAL LEASING OF CONTINENTAL SHELF.-(a) When requested by any responsible and qualified person interested in purchasing oil and gas leases on any area of the continental shelf not then under lease issued by the abutting State or the Federal Government, or when in the Secretary's opinion there is a demand for the purchase of such leases, the Secretary may offer for sale on competitive, sealed bidding, oil and gas leases on such area. Subject to the other terms and provisions hereof, sales of leases shall be made to the responsible and qualified bidder bidding the highest cash bonus ner leasing unit. Notice of sale of oil and gas leases shall be published at least thirty days before the date of sale in accordance with rules and regulations promulgated by the Secretary, which publication shall contain (i) a description of the tracts into which the area to be leased has been subdivided by the Secretary for leasing purposes, such tracts being herein called "leasing units"; (ii) the minimum bonus per acre which will be accepted by the Secretary on each leasing unit; (iii) the amount of royalty; (iv) the amount of rental per acre per annum on each leasing unit; and (v) the time and place at which all bids shall be opened in public.

(b) The leasing units shall be in reasonably compact form and of such area and dimensions as may be determined by the Secretary, but shall not be less than six hundred and forty acres nor more than two thousand five hundred and sixty acres, if within the known geologic structure of a producing oil or gas field and

shall not be less than two thousand five hundred and sixty acres nor more than seven thousand six hundred and eighty acres if not within any known geologic structure of a producing oil or gas field.

(c) Oil and gas leases sold under the provisions of this section shall be for the primary term of five years and shall continue so long thereafter as oil or gas is produced therefrom in paying quantities. Each lease shall contain provisions requiring the exercise of reasonable diligence, skill, and care in the operation of the lease, and requiring the lessee to conduct his operations thereon in accordance with sound and efficient oil-field practices to prevent waste of oil or gas discovered under said lease or the entrance of water through wells drilled by him to the oil or gas sands or oil- and gas-bearing strata or the injury or destruction of the oil and gas deposits.

(d) Each lease shall provide that on or after the discovery of oil or gas, the lessee shall pay a royalty of 121⁄2 per centum in amount or value of the production saved, removed, or sold from the leasing unit. If after discovery of oil or gas the production thereof should cease from any cause, the lease shall not terminate if lessee commences additional drilling or reworking operations within ninety days thereafter or, if it be within the primary term, commences or resumes the payment or tender of rentals or commences operations for drilling or reworking on or before the rental paying date next ensuing after the expiration of ninety days from date of cessation of production. All leases issued hereunder shall be conditioned upon the payment by the lessee of a rental of $1 per acre per annum for the second and every lease year thereafter, all such rentals to be payable on or before the beginning of each lease year.

(e) If at the expiration of the primary term of any lease oil or gas is not being produced in paying quantities on a leasing unit, but drilling operations, commenced not less than one hundred eighty days prior to the end of the primary term, have been and are being diligently prosecuted and the lessee has otherwise performed his obligations under the lease, the lease shall remain in force so long as drilling operations are prosecuted with reasonable diligence and in a good and workmanlike manner, and if they result in the production of oil or gas so long thereafter as oil or gas is produced therefrom in paying quantities.

(f) Should a lessee in a lease issued under the provisions of this Act fail to comply with any of the provisions of this Act or of the lease, such lease may, upon proper showing, be canceled in an appropriate court proceeding because of such failure; but before the institution of such a court proceeding the Secretary shall allow the lessee twenty days in which to show cause in writing why the proceeding should not be instituted, and any submission made by the lessee during that period shall be given consideration by the Secretary in determining whether to recommend to the Attorney General that a court proceeding be instituted against the lessee. If a lease or any interest therein is owned or controlled, directly or indirectly, in violation of any of the provisions of this Act, the lease may be canceled, or the interest so owned or controlled may be forfeited or the person so owning or controlling the interest may be compelled to dispose of the interest in an appropriate court proceeding.

(g) The provisions of sections 17, 17 (b), 28, 30, 30 (a), 30 (b), 32, 36, and 39 of the Mineral Leasing Act to the extent that such provisions are not inconsistent with the terms of this Act, are made applicable to lands leased or subject to lease by the Secretary under this Act.

(h) Each lease shall contain such other terms and provisions consistent with the provisions of this Act as may be prescribed by the Secretary. The Secretary may delegate his authority under this Act to officers or employees of the Depart ment of the Interior and may authorize subdelegation to the extent that he may deem proper.

(i) Citizens of another country, the laws, customs, or regulations of which deny similar or like privileges to citizens or corporations of this country, shall not directly or by stock ownership, stock holding, stock control, trusteeship, or otherwise, own or control any interest in any lease acquired under the provisions of this section. Any ownership or interest forbidden in this section which may be acquired by descent, will, judgment, or decree may be held for two years and not longer after its acquisition. No lands leased under the provisions of this section shall be subleased, trusteed, possessed, or controlled by any device or in any manner whatsoever so that they form a part of or are in anywise controlled by any combination in the form of an unlawful trust, with the consent of the lessee, or form the subject in whole or in part of any contract, agreement, understanding, or conspiracy, entered into by the lessee, to restrain trade or commerce in the production or sale of oil or gas or to control the price of oil or gas.

(j) Any lease obtained through the exercise of fraud or misrepresentation, or which is not performed in accordance with its terms or with this law, may by appropriate court action be invalidated.

SEC. 5. EXCHANGE OF EXISTING STATE LEASES IN CONTINENTAL SHELF FOR FEDERAL LEASES.-(a) The Secretary is authorized and directed to issue a lease to any person in exchange for a lease covering lands in the continental shelf issued by any State or its political subdivision or grantee prior to January 1, 1949, if the State officer or agency having jurisdiction certifies to the Secretary that the lessee is in compliance with the terms and provisions of the lease and the governing law of the State. Any lease issued pursuant to this section shall be for a period equal to the unexpired portion of the term of the old lease as fixed by such lease or by the law of the State issuing the same, shall cover the same natural resources and the same portion of the continental shelf as the old lease, shall provide for payment to the United States of the same rentals, royalties, and other payments as are provided for in the old lease, and shall include such other terms and provisions, consistent with the provisions of this Act, as may be prescribed by the Secretary. Operations under such old lease may be conducted as therein provided until the issuance of an exchange lease hereunder or until it is determined that no such exchange lease shall be issued. No lease which has been determined by appropriate court action to have been obtained by fraud or misrepresentation shall be accepted for exchange under this section.

(b) No such exchange lease shall be issued unless, (i) an application therefor, accompanied by a copy of the lease from the State or its political subdivision or grantee offered in exchange, is filed with the Secretary within six months from the effective date of this Act, or within such further period as provided in section 19 hereof, or as may be fixed from time to time by the Secretary; (ii) the applicant states in his application that the lease applied for shall be subject to the same overriding royalty obligations as the lease issued by the State or its political subdivision or grantee; (iii) the applicant pays to the United States all rentals, royalties, and other sums due to the lessor under the old lease which have or may become payable after January 1, 1949, and which have not been paid to the lessor under the old lease; and (iv) the applicant furnishes such surety bond, if any, as the Secretary may require and complies with such other reasonable requirements as the Secretary may deem necessary to protect the interests of the United States.

(c) All rents, royalties, and other sums payable under any such lease on or before the issuance of an exchange lease as herein provided may be paid to the State or its political subdivision or grantee as in the lease provided, and such State, its political subdivisions and grantees, promptly shall account to the United States for all rents, royalties, and other sums received after the effective date of this Act, as the lessor of lands of the continental shelf.

(d) In the event any lease covers lands of the continental shelf as well as other lands, the provisions of this section shall apply to such lease insofar only as it covers lands of the continental shelf.

SEC. 6. ACTIONS INVOLVING CONTINENTAL SHELF.-Any court proceeding involving the continental shelf may be instituted in the United States district court for the district in which the lessee, or person owning or controlling the lease interest, may be found or for the district in which the leased property, or some part thereof, is located; or, if no part of the leased property is within any district, for the district nearest to the property involved.

SEC. 7. DIVISION OF PROCEEDS FROM CONTINENTAL SHELF.-Each coastal State is hereby vested with the right to 50 per centum of all moneys received by the United States, after the effective date of this Act, as bonus payments, rents, and royalties with respect to operations for oil, gas, or other minerals in lands in the continental shelf which would be within the boundaries of such State, if extended seaward to the outer margain of the continental shelf; and the Secretary of the Treasury within ninety days after the expiration of each fiscal year shall pay to each such State the moneys to which it is so entitled. All other moneys received by the United States from operations in the continental shelf, under the provisions of this Act, shall be paid into the Treasury of the United States and credited to miscellaneous receipts. If and whenever the United tates shall take and reecive in kind or any part of the royalties referred to in this section, the value of such royalties so taken in kind shall be deemed to be the prevailing market price thereof at the time and place of production, and there shall be paid to the State entitled thereto, as provided in this section, 50 per centum of the value of such royalties.

SEC. 8. REFUNDS.-Where it appears to the satisfaction of the Secretary that any person has made a payment to the United States in connection with any lease under this Act in excess of the amount he was lawfully required to pay, such excess shall be repaid to such person or his legal representative, if a request for repayment of such excess is filed with the Secretary within two years after the issuance of the lease or the making of the payment. The Secretary shall certify the amounts of all such repayments to the Secretary of the Treasury, who is authorized and directed to make such repayments out of any moneys not otherwise appropriated and to issue his warrant in settlement thereof.

SEC. 9. RIGHTS AND POWERS OF THE STATES OVER MARGINAL BELT AND DIVISION OF PROCEEDS.-(a) Each coastal State, and each political subdivision and municipal corporation which is a grantee of the State, shall continue to manage, administer, lease, and develop the oil, gas, and other minerals in the marginal belt within their respective boundaries in accordance with applicable State law, without interference, however, with the exercise, subject to the provisions of this Act, of all other paramount rights and powers of the United States and to such rights as are reserved to the United States by section 12 of this Act. (b) No rights in or claim to oil, gas, or other minerals within the marginal belt shall be recognized, whether based on application filed or other action taken heretofore or hereafter, except in accordance with the provisions of this Act. (c) Each coastal State, and each political subdivision and municipal corporation, which is a grantee of the State, is hereby vested with the right to 622 per centum of all moneys received after the effective date of this Act as lessor of oil, gas, or other minerals within such State's margainal belt as bonus payments, rents, and royalties, and such State, political subdivision, or municipal corporation, within ninety days after the expiration of such State's fiscal year, shall pay to the Treasury of the United States for credit to miscellaneous receipts the remaining moneys. If and whenever any such coastal State, political subdivision, or municipal corporation shall take and receive in kind all or any part of the royalties referred to in this section, the value of such royalties so taken in kind shall be deemed to be the prevailing market price thereof at the time and place of production, and there shall be paid to the United States 371⁄2 per centum of the value of such royalties.

SEC. 10. LEASES IN MARGINAL BELT.-(a) Each lease of lands of the marginal belt granted by any State or political subdivision or grantee thereof prior to January 1, 1949, which is on the effective date of this Act in force and effect in accordance with the terms and provisions of such lease or the law of such State, and all acts of the lessee authorized thereunder, are hereby validated, and operations thereunder may be conducted as therein provided, subject only to the rights reserved to the United States by section 12 of this Act. Any lease obtained through the exercise of fraud or misrepresentation, or which has not been performed in accordance with its terms or with the law of the State, may by appropriate court action be invalidated.

(b) All rents, royalties, and other sums payable under any such lease after the effective date of this Act may be paid to the State, its political subdivision, or grantee, as in the lease provided, and subject to the provisions of section 9 (c) of this Act, may be retained by such State, its political subdivision, or grantee, as the case may be.

(c) In the event any lease covers lands of the marginal belt as well as other lands, the provisions of this section shall apply to such lease insofar only as it covers lands of the marginal belt.

SEC. 11. WAIVER OF LIABILITY FOR PAST OPERATIONS.-(a) No State, or political subdivision or grantee thereof, shall be liable to or required to account to the United States in any way for entering upon, exploring for, developing, producing, or disposing of natural resources from any submerged coastal lands prior to the effective date of this Act.

(b) No lessee under any lease of submerged coastal lands granted by any State or political subdivision or grantee thereof prior to the effective date of this Act shall be liable or required to account to the United States for any natural resources produced, extracted, or removed under such lease or for the value thereof, nor shall any person who has purchased or otherwise acquired such natural resources be liable to account to the United States therefor or for the value thereof.

(c) If it shall be determined by appropriate court action that fraud has been practiced in the obtaining of any lease referred to herein or in the operations thereunder, the waivers provided in this section shall not be effective.

SEC. 12. POWERS RESERVED TO THE UNITED STATES.-The United States reserves and retains

(a) in time of war or when necessary for national defense, and when so prescribed by the Congress or the President, the right (i) of first refusal to purchase at the prevailing market price all or any portion of the oil or gas that may be produced from the submerged coastal lands; (ii) to suspend operations under or to terminate any lease issued or authorized pursuant to or validated by this Act, in which event the United States shall be liable to the lessee for such compensation as is required to be paid under the Constitution of the United States; and payment of rentals, minimum royalty, and royalty prescribed by such lease shall likewise be suspended during any period of suspension of operations, and the term of any suspended lease shall be extended by adding thereto any suspension period;

(b) the right to designate by and through the Secretary of Defense, with the approval of the President, as restricted, those areas of the submerged coastal lands needed for navigational purposes or for national defense; and so long as such designation remains in effect no exploration or operations may be conducted on any part of the surface of such area except with the concurrence of the Secretary of Defense; and if operations or production under any lease theretofore issued on lands within any such restricted area shall be suspended, and payment of rents, minimum royalty, and royalty prescribed by such lease likewise shall be suspended during such period of suspension of operation and production, and the term of such lease shall be extended by adding thereto any such suspension period, and the United States shall be liable to the lessee for such compensation as is required to be paid under the Constitution of the United States;

(c) the ownership of and the right to extract helium from all gas produced from submerged coastal lands subject to any lease issued pursuant to or validated by this Act under such general rules and reguations as shall be prescribed by the Secretary, but in the extraction of helium from such gas it shall be so extracted as to cause no substantial delay in the delivery of gas produced to the purchaser of such gas.

SEC. 13. GEOLOGICAL AND GEOPHYSICAL EXPLORATIONS.-The right of any person, subject to applicable provisions of law, and of any agency of the United States to conduct geological and geophysical explorations in the continental shelf, which do not interfere with or endanger actual operations under any lease issued pursuant to this Act, is hereby recognized.

SEC. 14. CONFIRMATION OF STATE TITLE TO LANDS BENEATH INLAND WATERS.(a) The United States hereby recognizes in and confirms to the several States, their respective grantees, lessees, or successors in interest thereof, and the persons lawfully entitled thereto under the law of such States, the title to all lands beneath inland waters within the boundaries of the respective States, and the natural resources within said lands and waters, and to all lands which were formerly submerged coastal lands and which have been filled or reclaimed and all improvements thereon and natural resources therein.

(b) There are excepted from the operation of this section the beds of streams in lands now or heretofore constituting a part of the public lands of the United States if such streams were not meandered in connection with the public survey of such lands under the laws of the United States.

SEC. 15. EXCEPTIONS AS TO POWER, NAVIGATION, AND FLOOD CONTROL.—(a) Nothing in section 14 of this Act shall affect the use, development, improvement, and control by or under the authority of the United States of inland waters for the purpose of navigation, flood control, or the production or distribution of power insofar as the United States has the constitutional authority to produce power, or be construed as the release or relinquishment of any rights of the United States arising under the authority of Congress to regulate or improve navigation or under such authority as Congress may have to provide for flood control or the production or distribution of power. The term "natural resources", as used in this Act, shall not include water power or the use of water for the production of power.

(b) Nothing contained in section 14 of this Act shall be construed to amend, modify, or repeal the Acts of July 26, 1866 (14 Stat. 251), July 9, 1870 (16 Stat. 217), March 3, 1877 (19 Stat. 377), and June 17, 1902 (32 Stat. 388), and Acts amendatory thereof or supplementary thereto.