H.R. 3742 — Offshore Energy Modernization Act of 2025

This section designates the Act as the “Offshore Energy Modernization Act of 2025” and includes a table of contents.

This section directs the Secretary of the Interior, in consultation with the Secretary of Energy and other relevant federal agencies and state governments, to establish and periodically update national goals for offshore wind energy production on the outer Continental Shelf. The section further requires the Secretary to seek, through management of the outer Continental Shelf, to issue permits authorizing production of electricity from offshore wind energy projects of not less than (1) 30 gigawatts by 2030 and (2) 50 gigawatts by 2035.

This section amends the Outer Continental Shelf Lands Act (OCSLA) as follows: **(a)** In the definitions section, it redesignates the definition of "State" (as added by the Inflation Reduction Act) as subsection (t) and adds a new definition of "offshore renewable energy project" as a project under OCSLA section 8(p)(1)(C) related to wind, solar, wave, or tidal energy. **(b)** It revises the national policy statement in OCSLA section 3(3) to prioritize expeditious development of the outer Continental Shelf (OCS) for zero-emission electricity generation, transmission, and storage while maintaining competition and supporting State, Tribal, and Federal renewable energy mandates; redesignates paragraphs (5) and (6) as (6) and (7); and inserts new paragraph (5) requiring a robust, transparent stakeholder process, including engagement with ocean users, Federal, State, Tribal, and local governments, for identifying OCS lease areas for offshore renewable energy projects. **(c)** It amends OCSLA section 8(p) leasing provisions by (1) in paragraph (2)(B), decreasing the maximum size of a lease area to 17 square nautical miles (from 27), increasing the maximum length of an easement or right-of-way to 100 nautical miles (from 3 and 15, respectively); adding paragraph (2)(C) to direct 10% of Federal revenues from such leases, easements, and rights-of-way to grants (without appropriation) for State, local, and Tribal governments and nonprofits to fund marine habitat protection, restoration, mitigation, research, and organizational capacity; and adding paragraph (2)(D) to deposit another 10% of such revenues into the Offshore Renewable Energy Compensation Fund; and (2) revising paragraph (3) to authorize competitive or noncompetitive leases (if no competitive interest after public notice), require a publicly noticed and periodically updated schedule of potential future lease areas (including site identification, designation, size, sale timing, and locations), and permit multi-factor competitive bidding that may consider bidder commitments to workforce training (including apprenticeships), domestic supply chains and infrastructure, community benefit agreements, ecosystem and wildlife mitigation, shared transmission, and Tribal cultural resource preservation.

This section establishes in the Treasury the Offshore Renewable Energy Compensation Fund to provide payments for verified claims and mitigation grants to covered entities (i.e., communities, stakeholders, Tribal interests using lease areas or resources therein that are directly and adversely impacted by offshore renewable energy projects, or their representatives). The fund consists of royalties, fees, rents, bonuses, and other payments from offshore renewable energy leases under section 8(p)(2)(D) of the Outer Continental Shelf Lands Act, divided into separate area accounts based on where damages occur; is available without fiscal year limitation; and allows the Secretary of the Interior to use up to 15% of annual deposits for administrative expenses. Payments under the fund cover replacing or repairing gear lost or damaged by project activities or replacing lost income, are based on verified claim scope, provided fairly and transparently, and reduced by any direct compensation received via community benefit agreements. If sufficient funds exist in an area account after all claims, the Secretary may award grants for mitigation (e.g., gear changes, navigation technology) to covered entities and others. If funds are insufficient, the Secretary may require leaseholders in the area to contribute up to $3 per acre once per calendar year. The section further directs the Secretary to (1) issue regulations for claim verification/processing and grant applications; (2) establish an advisory group including representatives from recreational and commercial fishing, Tribal interests, National Marine Fisheries Service, fisheries science, and other relevant expertise, with travel expense reimbursement; and (3) submit annual reports to Congress on claims, payments, and grants. (Thus, the fund compensates fisheries and other OCS users for impacts from offshore renewable energy development—primarily wind—on the outer Continental Shelf.)

This section appropriates $50 million to the Bureau of Ocean Energy Management (BOEM) for FY2026, available until expended, for hiring and training personnel, developing programmatic environmental documents, procuring technical services for environmental and cultural reviews, enhancing Tribal consultations, supporting ocean data portals and environmental data systems, stakeholder engagement, updating the Marine Cadastre, purchasing equipment, and coordinating permitting for offshore renewable energy projects. It also appropriates $45 million to the National Oceanic and Atmospheric Administration (NOAA) for FY2026, available until expended, for similar activities plus adapting scientific and fisheries surveys to facilitate timely environmental reviews for offshore renewable energy permitting.

This section directs the Secretary of the Interior to submit to Congress, and make publicly available, a report not later than 10 years after the date of enactment evaluating decommissioning options for offshore renewable energy projects and associated electric transmission infrastructure. The report must assess the potential for lease, easement, or right-of-way holders to keep facilities in place or convert them to artificial reefs to support marine habitats, provided such facilities will not adversely impact navigation, national security, the marine environment, Tribal uses, or other competing uses of the outer Continental Shelf.

This section establishes the Offshore Power Administration as a separate entity within the Department of Energy, headed by an Administrator appointed by the Secretary of Energy, not later than one year after enactment of this Act. The Administration may construct, finance, facilitate, plan, operate, maintain, acquire, and study covered transmission infrastructure (subject to Outer Continental Shelf Lands Act lease requirements), but may not construct such infrastructure in any region until at least three years after enactment and only after the Secretary of Energy determines, in consultation with the Secretary of the Interior, that relevant state governments, regional transmission organizations, offshore renewable energy developers, and other stakeholders have failed to adequately coordinate on shared infrastructure. (1) The Secretary of the Treasury shall make loans to the Administration, without appropriation or fiscal year limitation and up to $10 billion in aggregate outstanding repayable balances (including deferred interest), at market interest rates, to carry out these activities; (2) the Administration shall use qualified revenue (i.e., infrastructure operation revenue net of operation, maintenance, and ancillary service costs) to repay principal and interest; and (3) any remaining loan balances shall be forgiven at the end of the infrastructure's useful life or, for unconstructed study projects, upon notification to Treasury. The Administrator may enter into agreements and partnerships, maintain accounts subject to annual independent audits, incur necessary expenses, and require prevailing wages for laborers and mechanics on funded construction work.

This section directs the Secretary of Energy, in consultation with the Secretary of the Interior, the interagency comprehensive digital mapping initiative under section 388(b) of the Energy Policy Act of 2005, and other relevant Federal, State, Tribal, and local agencies, to periodically conduct studies and make public recommendations on siting offshore transmission infrastructure that (1) achieves sufficient transmission capacity to support offshore energy development meeting State, Tribal, or Federal renewable or clean electricity mandates, targets, or goals; (2) promotes safety, national security, Tribal sovereignty, and environmental protection while minimizing impacts to cultural and living marine resources, including Tribal cultural resources; and (3) leads to efficient development of onshore points of interconnection. It authorizes $10 million to the Secretary of Energy for this purpose, to remain available until expended.

This section directs the Secretary of Energy to complete and publish, not later than two years after enactment, a study assessing needs and challenges in developing interoperable electric grid components, systems, and technologies for shared offshore transmission networks, including recommendations for Congress, governments, manufacturers, transmission organizations, project developers, and standards organizations. The section further establishes a program to identify, develop, support, document, and promote adoption of interoperability standards to accelerate delivery of offshore-generated electricity via shared infrastructure—with goals of harmonizing specifications across manufacturers, hastening shared infrastructure adoption to reduce delays and costs while enhancing grid resilience, reliability, and cybersecurity, and identifying specifications for monitoring and protecting infrastructure—and authorizes grants to facilitate stakeholder collaboration, challenge identification, and voluntary standards development. The section authorizes $5 million to the Secretary to carry out these activities, to remain available until expended.

This section establishes a Department of Energy (DOE) grant program to provide grants to shipyard owners and operators, vessel fabricators, and component suppliers for the refurbishment, retooling, expansion, modernization, and establishment of facilities to fabricate, repair, or convert vessels used in offshore wind energy project pre-construction, construction, operation, and maintenance; requires contractors and subcontractors on such grant-funded work to pay Davis-Bacon prevailing wages as determined by the Secretary of Labor (with associated enforcement authority); applies a 20% non-federal cost share; and authorizes $100 million to DOE, to remain available until expended. The section also amends the DOE loan guarantee program under section 1703 of the Energy Policy Act of 2005 to include projects that increase the supply of domestically produced vessels for offshore wind projects, including wind turbine installation vessels (notwithstanding existing eligibility restrictions in subsection (a)(1)).

This section states the sense of Congress that fishing and boating access, and Tribal cultural activities and lifeways, in and around offshore renewable energy projects will be maintained with narrow exceptions for construction and maintenance activities.