[Congressional Record Volume 141, Number 184 (Saturday, November 18, 1995)]
[Senate]
[Pages S17432-S17439]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               ANWR PROVISION OF THE RECONCILIATION BILL

  Mr. MURKOWSKI. Mr. President, with the passage of the conference 
report on the reconciliation bill last night I thought there should be 
an explanation of the provision on the leasing of the coastal plain of 
the Arctic National Wildlife Refuge for oil and gas exploration and 
production. The Senate and the House versions of the budget 
reconciliation had responsible provisions for the leasing of the area. 
However, there was a substantial difference in the approach and 
language in the two measures. As chairman of the Energy and Natural 
Resources Committee I thought it would be important to outline the 
intent of the conferees on the ANWR provision. I ask unanimous consent 
that a section-by-section analysis which provides a detailed 
description of the ANWR provision, and other material, be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                      Section-by-Section Anaylsis

     Section 5312. Short Title.
       This section adopts the chapter from section 5201 of the 
     Senate bill. The purpose of this section is self-explanatory.
     Section 5322. Definitions.
       This section adopts the language of section 5203 of the 
     Senate bill with minor modifications. The intent of this 
     section is self-explanatory.
     Section 5333. Leasing Program for Lands Within the Coastal 
         Plain.
       Subsection 5333(a). Authorization.
       Subsection 5333(a) adopts the language in section 5204(a) 
     of the Senate bill with minor modifications. This subsection 
     directs the Secretary and other appropriate Federal officers 
     and agencies to take such actions as are necessary to 
     establish and implement a competitive oil and gas leasing 
     program that will result in an environmentally sound program 
     for the exploration, development, and production of the oil 
     and gas resources of the Coastal Plain. In doing so, the 
     Secretary is to ensure receipt of the fair market value of 
     the mineral resources to be leased. The subsection requires 
     the Secretary to ensure that activities will result in ``no 
     significant adverse effect on fish and wildlife, their 
     habitat, and the environment.'' Operations on the Coastal 
     Plain must also be conducted using the ``best commercially 
     available technology for oil and gas exploration, development 
     and production.''
       This ``environmental standard'' is based on the provisions 
     of Title VII of S. 1220, authored by Senator Johnston and 
     reported by the Senate Energy and Natural Resources 
     Committees on June 5, 1991. This is the strongest standard 
     ever imposed on Federal oil and gas activities. The companion 
     provision of the House bill was based on the 1981 oil and gas 
     leasing authorization for the National Petroleum Reserve-
     Alaska. Oil and gas leases have been issued under this 
     authorization and standard. It has worked well to protect the 
     environment, land and fish and wildlife on the North Slope.
       In making its decision to authorize and direct an oil and 
     gas leasing program in the Coastal Plain, the Conferees find 
     that oil and gas activities authorized and conducted on the 
     Coastal Plain pursuant to the chapter so as to result in no 
     significant adverse effect on fish and wildlife, their 
     habitat, and the environment, are compatible with the major 
     purposes for which the Arctic National Wildlife Refuge was 
     established. No further findings, decisions or reviews are 
     required to implement this Congressional authorization. The 
     Conferees specifically find that no further determination of 
     compatibility by the Secretary under the National Wildlife 
     Refuge System Administration Act is necessary to implement 
     this Congressional authorization and direction. The Conferees 
     believe the 

[[Page S 17433]]
     provisions of the conference report in general are very clear on this 
     point. Subsection (c) of this section again reiterates this 
     policy and Congressional intent on this matter.
       Subsection 5333(b). Repeal
       Subsection 5333(b) adopts the language in section 5204(b) 
     of the Senate bill and is substantially similar to section 
     9002(f) of the House bill. This subsection repeals the 
     prohibitions and limitations on leasing and development of 
     oil and gas resources on lands within the Coastal Plain set 
     forth in section 1003 of the Alaska National Interest Lands 
     Conservation Act of 1980, 16 U.S.C. Sec. 3143.
       Subsection 5333(c). Compatibility
       Subsection 5333(c) adopts the language in section 9002(c) 
     of the House bill. This subsection provides that the oil and 
     gas activities authorized by this chapter in the Coastal 
     Plain are compatible with the purposes for which the Arctic 
     National Wildlife Refuge was established, and that no further 
     findings or decisions are required to implement this 
     determination. This subsection recognizes the wealth of study 
     and review that has already occurred pursuant to 
     environmental, natural resources, and other statutes. Based 
     on these reports and on the concrete experience of 
     environmental safety of on-shore development in neighboring 
     Prudhoe Bay and other large, producing oil and gas fields on 
     the North Slope of Alaska, the Conferees find that 
     development of the 1002 area is consistent with the 
     conservation purposes for which the Arctic National Wildlife 
     Refuge was established. This subsection reflects the intent 
     of the Conferees that the activities authorized in this 
     chapter commence as soon as possible, without any intervening 
     delay that might be occasioned by further findings or 
     decisions. This provision is, of course, repetitive of the 
     purposes of this chapter as expressed in other sections.
       Subsection 5333(d). Sole authority
       Subsection 5333(d) adopts the language of subsection 
     5204(c) of the Senate bill with modifications. This 
     subsection provides that this chapter and the authorities 
     referenced therein shall be the sole authority for oil and 
     gas leasing on the Coastal Plain. This chapter directs a 
     specific program of environmentally responsible leasing for 
     the Coastal Plain. The Conferees intend that this program be 
     carried forward and implemented in good faith by the 
     Secretary and the Administration. The purposes and directives 
     of this chapter are not to be frustrated or delayed by other 
     provisions of existing law or the provisions of any treaty or 
     international agreement to which the United States is a 
     party. The subsection also explicitly provides that this 
     chapter does not preempt State and local regulatory 
     authority. The State of Alaska and the North Slope Borough 
     (NSB) have a long record of competent and environmentally 
     responsible regulation of oil and gas activities on the North 
     Slope. It is the Conferees clear intent that the State and 
     the NSB shall continue to exercise their existing regulatory 
     responsibilities to ensure good land use planning, 
     environmental protection, proper fish and wildlife 
     management, and continuation of important subsistence 
     activities.
       Subsection 5333(e). Federal land
       Subsection 5333(e) adopts the language of subsection 
     5204(d) of the Senate bill. This subsection provides that the 
     Coastal Plain shall be considered ``Federal land'' for 
     purposes of the Federal Oil and Gas Royalty Management Act of 
     1982 (FOGRMA). As provided in section 304 of FOGRMA, 30 
     U.S.C. Sec. 1753, that Act applies only to the extent it is 
     not inconsistent with this chapter. In particular, the 
     penalty provisions of sections 109-112 of the Act, 30 U.S.C. 
     Sec. Sec. 1719-1722, are incorporated by reference by this 
     subsection and apply to the activities authorized by this 
     chapter.
       Subsection 5333(f). Special areas
       Subsection 5333(f) adopts the language of subsection 
     5207(d) of the Senate bill with modifications. This 
     subsection permits the Secretary to close up to 45,000 acres 
     of the Coastal Plain to leasing if, after consulting with the 
     State of Alaska and the North Slope Borough, he determines 
     that the areas to be closed require special management and 
     regulatory protection due to unique character or interest. 
     The Conference Committee contemplates that the Secretary may 
     use this provision to provide any special protection needed 
     for areas such as the Sadlerochit Hot Springs. The House bill 
     authorized 30,000 acres and the Senate 60,000 acres. This 
     provision is a compromise on the acreage. This subsection 
     permits the Secretary to issue oil and gas leases in such 
     Special Areas provided that the protection needed can be 
     attained by limiting surface use and occupancy, but 
     permitting the use of the very significant advances made in 
     recent years in horizontal drilling technology.
       Subsection 5333(g). Limitation on closed areas
       Subsection 5333(g) adopts language from subsection 
     9002(g)(3)(B) of the House bill with minor modifications. 
     This subsection provides that the Secretary's sole authority 
     to close lands within the Coastal Plain to oil and gas 
     leasing and to exploration, development, and production is 
     that set forth in this chapter. The language provides, and 
     the Conferees intend, that only the provisions of the chapter 
     may be used by the Secretary to close Coastal Plain lands to 
     the activities authorized by this chapter. No other provision 
     of law or international agreement may be used by the 
     Secretary for this purpose.
       Subsection 5333(h). Conveyance
       Subsection 5333(h) adopts language from subsection 9002(j) 
     of the House bill with minor modifications. The subsection 
     directs the Secretary to convey certain surface interests in 
     land to Kaktovik Inupiat Corporation in order to fulfill the 
     corporation's outstanding legal entitlement under section 12 
     of the Alaska Native Claims Settlement Act (ANCSA). The 
     Secretary must also convey the subsurface interests in these 
     lands to Arctic Slope Regional Corporation in order to 
     fulfill the August 9, 1983 agreement between Arctic Slope 
     Regional Corporation and the United States of America. These 
     lands have been previously identified and the United States 
     has a legal obligation to complete the transfer of chapter in 
     accordance with the provisions of ANCSA and the 1983 
     Agreement. The conveyance of these lands will remove clouds 
     on title of lands and clarify land ownership patterns within 
     the Coastal Plain, maximizing federal revenues by ensuring 
     the availability of federal lands for leasing.
     Section 5334. Rules and regulations
       Subsection 5334(a). Promulgation.
       Subsection 5334(a) adopts the language of section 5205(a) 
     of the Senate bill. This subsection provides that the 
     Secretary shall prescribe such rules and regulations as may 
     be necessary to carry out the purposes and provisions of this 
     chapter, including rules and regulations relating to 
     protection of the environment and resources of the Coastal 
     Plain. Such rules and regulations shall be promulgated within 
     fourteen (14) months after the date of enactment of this 
     chapter.
       In the formulation and promulgation of rules and 
     regulations under this chapter, the Conferees expect that the 
     Secretary will request and give due consideration to the 
     views of appropriate officials of the State of Alaska, the 
     North Slope Borough, and the Village of Kaktovik, and, where 
     consistent with this chapter and the laws and policy of the 
     United States, the views of others who have legitimate 
     interests in the activities authorized and the manner in 
     which they are carried out.
       The Conferees also expect that the Secretary shall prepare 
     and promulgate regulations, lease terms, conditions, 
     restrictions, prohibitions, stipulations, and other measures 
     in a manner designed to ensure that the activities undertaken 
     in the Coastal Plain and authorized by the chapter are 
     conducted in a manner consistent with the purposes and the 
     environmental requirements of this chapter. In preparing and 
     promulgating regulations, lease terms, conditions, 
     restrictions, prohibitions, and stipulations under this 
     chapter, the Conferees recommend and expect that the 
     Secretary will consider:
       (1) the environmental protection standards which governed 
     the initial Coastal Plain seismic exploration program (50 
     C.F.R. Sec. 37.31-33);
       (2) the land use stipulations for exploratory drilling on 
     the KIC-ASRC private lands which are set forth in Appendix 2 
     of the August 9, 1983 Land Exchange Agreement between Arctic 
     Slope Regional Corporation and the United States; and
       (3) the operational stipulations for Koniag ANWR Interest 
     lands contained in the draft Agreement between Koniag, Inc. 
     and the United States of America on file with the Secretary 
     of the Interior on December 1, 1987.
       The Conferees further expect that the proposed regulations, 
     lease terms, conditions, restrictions, prohibitions, and 
     stipulations for the leasing program authorized by this 
     chapter will require compliance with applicable provisions of 
     Federal, State and local environmental law and may also 
     require compliance with:
       (1) the safety and environmental mitigation measures set 
     forth in items 1 through 29 at pages 167 through 169 of the 
     ``Final Legislative Environmental Impact Statement'' (April 
     1987) on the Coastal Plain;
       (2) seasonal limitations on exploration, development and 
     related activities, where reasonably necessary, to avoid 
     significant adverse effects during periods of concentrated 
     fish and wildlife breeding, denning, nesting, spawning and 
     migration;
       (3) limitations on exploration activities, except for 
     surface geological studies, to the period between 
     approximately November 1 and May 1, and requirements that 
     exploration activities will be supported by ice roads, winter 
     trails with adequate snow cover, ice pads, ice airstrips, and 
     air transport methods, but that such exploration activities 
     may be permitted at other times if special circumstances 
     exist necessitating that exploration activities be conducted 
     at other times of the year and such exploration will have no 
     significant adverse effect on fish and wildlife, their 
     habitat, and the environment of the Coastal Plain;
       (4) appropriate design safety and construction standards 
     for pipelines and any access and service roads to avoid--
       (A) adverse effects upon the passage of migratory species, 
     including caribou; and
       (B) adverse effects upon the flow of surface water by 
     requiring the use of culverts, bridges and other structural 
     devices;
       (5) any reasonable prohibitions on public access and use on 
     pipeline access and service roads;
       (6) appropriate reclamation and rehabilitation 
     requirements, consistent with the standards set forth in this 
     chapter, requiring the removal from the Coastal Plain of all 
     oil and gas development and production facilities, structures 
     and equipment upon completion of oil and gas production 
     operations, but that the Secretary may exempt from these 

[[Page S 17434]]
     requirements those facilities, structures or equipment which the 
     Secretary determines would assist in the management of the 
     Arctic National Wildlife Refuge and which are donated to the 
     United States for that purpose;
       (7) appropriate and reasonable restrictions on access by 
     modes of transportation;
       (8) appropriate and reasonable restrictions on necessary 
     sand and gravel extraction;
       (9) consolidation of facility siting;
       (10) appropriate and reasonable restrictions on use of 
     explosives;
       (11) the avoidance, to the extent practicable, of springs, 
     streams and river systems; protection of natural surface 
     drainage patterns, wetlands, and riparian habitats; and 
     reasonable regulation of methods or techniques for developing 
     or transporting adequate supplies of water for exploratory 
     drilling;
       (12) appropriate and reasonable restrictions on air 
     traffic-related activities which might disturb fish and 
     wildlife;
       (13) accepted industry standards for the treatment and 
     disposal of hazardous and toxic wastes, solid wastes, reserve 
     pit fluids, drilling muds and cuttings, if any, and domestic 
     wastewater, in accordance with applicable Federal and State 
     environmental law;
       (14) applicable fuel storage and oil spill contingency 
     planning;
       (15) reasonable research, monitoring and reporting 
     requirements;
       (16) appropriate field crew environmental briefings;
       (17) avoidance of any reasonably anticipated significant 
     adverse effects upon subsistence hunting, fishing, and 
     trapping by subsistence users;
       (18) applicable air and water quality standards;
       (19) appropriate seasonal and safety zone designations 
     around oil and gas well sites within which subsistence 
     hunting and trapping would be limited;
       (20) reasonable stipulations for protection of cultural and 
     archeological resources; and
       (21) other protective environmental stipulations, 
     restrictions, terms, and conditions which are reasonably 
     deemed necessary by the Secretary and based upon prior 
     regulatory requirements.
       The Conference Committee further expects that the 
     regulations will also provide for appropriate plans to 
     govern, guide, and direct the siting and construction of 
     facilities for the exploration, development, production, and 
     transportation of Coastal Plain oil and gas resources. Any 
     such plans shall have the following objectives:
       (1) avoiding unnecessary duplication of facilities and 
     activities;
       (2) encouraging consolidation of common facilities and 
     activities;
       (3) locating or confining facilities and activities to 
     areas which will minimize impact on fish and wildlife, their 
     habitat, and the environment;
       (4) utilizing existing facilities wherever practicable; and
       (5) enhancing compatibility between wildlife values and 
     development activities.
       Subsection 5334(b). Revision of regulations
       Subsection 5334(b) adopts the language of subsection 
     5205(b) of the Senate bill. This subsection provides that the 
     Secretary shall periodically review and, where and if 
     appropriate, revise the rules and regulations to reflect new 
     and significant data and information.
     Section 5335. Adequacy of the Department of the Interior's 
         legislative environmental impact statement
       Section 5335 adopts language from section 5206 of the 
     Senate bill with modifications. This section provides that 
     the ``Final Legislative Environmental Impact Statement'' 
     (April 1987) on the Coastal Plain, prepared by the Department 
     of the Interior pursuant to section 1002 of the ANILCA and 
     section 102(2)(C) of the National Environmental Policy Act of 
     1969 (NEPA), is found by the Congress to be adequate to 
     satisfy the legal and procedural requirements under NEPA with 
     respect to actions authorized to be taken by the Secretary to 
     develop and promulgate the regulations for the establishment 
     of the leasing program, to conduct the first lease sale 
     authorized by the chapter, and, in addition, to grant all 
     rights-of-way and easements to carry out the purposes of this 
     chapter.
       Except as provided in this section, nothing in this chapter 
     shall be considered or construed as otherwise limiting or 
     affecting in any way the applicability of section 102(2)(C) 
     of the National Environmental Policy Act of 1969 to other 
     phases of exploration, development and production and related 
     activities conducted under or associated with the leasing 
     program authorized by this chapter.
     Section 5336. Lease sales
       Subsection 5336(a). Lease sales
       Subsection 5336(a) adopts language from section 5207(a) of 
     the Senate bill. This subsection provides that lands in the 
     Coastal Plain may be leased pursuant to the provisions of 
     this chapter to any person who is qualified to obtain a lease 
     for deposits of oil and gas under the Mineral Leasing Act, as 
     amended.
       Subsection 5336(b). Procedures
       Subsection 5336(b) adopts language from section 5207(b) of 
     the Senate bill with modifications. This subsection provides 
     that the Secretary shall, by regulation, establish procedures 
     for nominating and designating areas to be included or 
     excluded from the lease sale. In reviewing nominations and 
     considering lands to be offered for leasing, the Secretary 
     shall engage in periodic consultation with the State of 
     Alaska, the North Slope Borough and other affected local 
     governments in Alaska, prospective oil and gas lessees, and 
     representatives of other individuals or organizations engaged 
     in activity in or on the Coastal Plain, including those 
     engaged in subsistence uses.
       Subsection 5336(c). Lease sales on coastal plain
       Subsection 5336(c) adopts language from section 5207(c) of 
     the Senate bill with modifications based on the House bill. 
     This subsection provides that the Secretary shall, by 
     regulation, provide for oil and gas lease sales of the lands 
     located within the Coastal Plain. For the first lease sale, 
     the Secretary shall offer for lease those acres receiving the 
     greatest number of nominations, but not less than 200,000 and 
     no more than 300,000 acres shall be offered for sale by 
     competitive bid. If the total acreage nominated is less than 
     200,000 acres, the Secretary shall include in such sale any 
     other acreage which he believes has the highest resource 
     potential, but in no event shall more than 300,000 acres of 
     the Coastal Plain be offered in any such sale. Thereafter, no 
     less than 200,000 acres of the Coastal Plain may be leased in 
     any one lease sale. The initial lease sale shall be held 
     within twenty (20) months of the date of enactment of this 
     chapter. The second lease sale shall be held 24 months after 
     the initial sale, with additional sales conducted no later 
     than every twelve (12) months thereafter so long as 
     sufficient interest in development exists to warrant the 
     conduct of such competitive lease sales.
     Section 5337. Grant of leases by the Secretary
       Subsection 5337(a). In general
       Subsection 5337(a) adopts language from subsection 5208(a) 
     of the Senate bill. This subsection provides that the 
     Secretary is authorized to grant to the highest responsible 
     qualified bidder by sealed competitive cash bonus bid any 
     lands to be leased on the Coastal Plain upon payment by the 
     lessee of such bonus as may be accepted by the Secretary and 
     such royalty as contained in the lease. Royalties shall be 
     not less than 12\1/2\ per centum in amount or value of the 
     production removed or sold from the lease.
       Subsection 5337(b). Antitrust review
       Subsection 5337(b) adopts language from subsection 5208(b) 
     of the Senate bill. This subsection provides that following 
     each notice of a proposed lease sale and before the 
     acceptance of bids, the Secretary shall allow the Attorney 
     General, in consultation with the Federal Trade Commission, 
     30 days to conduct an antitrust review of each lease sale.
       Subsection 5337(c). Subsequent transfers
       Subsection 5337(c) adopts language from subsection 5208(c) 
     of the Senate bill. This subsection provides that no lease 
     issued under the chapter may be sold, exchanged, assigned, or 
     otherwise transferred except with the approval of the 
     Secretary. Prior to any such approval, the Secretary shall 
     consult with, and give due consideration to the views of, the 
     Attorney General.
       Subsection 5337(d). Immunity
       Subsection 5337(d) adopts language from subsection 5208(d) 
     of the Senate bill. This subsection provides that nothing in 
     the chapter shall be deemed to convey to any person, 
     association, corporation, or other business organization 
     immunity from civil or criminal liability, or to create 
     defenses to actions, under any antitrust law. It is the 
     intent of the conferees that the findings of any antitrust 
     review shall not create any immunity or defenses in any 
     private or government antitrust actions.
       Subsection 5337(e). Definitions
       Subsection 5337(e) adopts language from subsection 13106(e) 
     of the Senate bill. This subsection sets forth definitions of 
     ``antitrust review'' and ``antitrust laws.''
     Section 5338. Lease terms and conditions
       Section 5338 adopts language from section 5209 of the 
     Senate bill with modifications based on the House bill. 
     Paragraph (1) provides that lease tracts shall consist of a 
     compact area not to exceed 5,760 acres, or 9 surveyed or 
     protracted sections, whichever is larger.
       Paragraph (2) provides that oil and gas leases shall be for 
     an initial period of ten years and shall be extended for so 
     long thereafter as oil or gas is produced in paying 
     quantities from the lease or unit area to which the lease is 
     committed or for so long as drilling or reworking operations, 
     in accordance with law and as approved by the Secretary, are 
     conducted on the lease or unit area.
       Paragraph (3) provides that leases shall require the 
     payment of royalty of not less than 12\1/2\ per centum in 
     amount or value of the production removed or sold from the 
     lease or unit area.
       Paragraph (4) provides that exploration activities pursuant 
     to any lease issued or maintained under this chapter shall be 
     conducted in accordance with an exploration plan or a 
     revision of such plan approved by the Secretary. Prior to 
     commencing exploration pursuant to any oil and gas lease 
     issued or maintained under this chapter, the holder of the 
     lease will submit an exploration plan to the Secretary for 
     approval. The Secretary shall act expeditiously in reviewing 
     such plans. Such plan may apply to more than one lease held 
     by a lessee in any region of the Coastal Plain, or by a group 
     of 

[[Page S 17435]]
     lessees acting under a unitization, pooling, or drilling agreement, and 
     shall be approved by the Secretary if the Secretary finds 
     that such plan is consistent with the provisions of this 
     chapter and other applicable law.
       Paragraph (5) requires that all development and production 
     pursuant to a lease issued or maintained pursuant to a lease 
     issued or maintained pursuant to this chapter shall be 
     conducted in accordance with an approved development and 
     production plan. Such plans may apply to more than one lease 
     held by a lessee in any region of the Coastal Plain, or by a 
     group of lessees acting under a unitization, pooling, or 
     drilling agreement, and shall be approved by the Secretary if 
     the Secretary finds that such plan is consistent with the 
     provisions of this chapter and other applicable law.
       The Conferees further expect that the Secretary, in the 
     regulations promulgated pursuant to the chapter, will require 
     lessees to include in any exploration or development plans 
     submitted, appropriate and relevant information concerning 
     the plan.
       The Conferees also expect that the Secretary will provide 
     in the regulations for the expeditious consideration of any 
     exploration or development plans submitted. After an 
     exploration or development and production plan is submitted 
     for approval, the regulations should provide that the 
     Secretary shall promptly publish notice of the submission and 
     availability of the text of the proposed plan in the Federal 
     Register and a newspaper of general circulation in the State 
     of Alaska and provide an opportunity for written public 
     comment. The Conferees expect that, within one hundred twenty 
     days after receiving an exploration or development and 
     production plan, the Secretary will determine, after taking 
     into account any comments received, whether the activities 
     proposed in the plan are consistent with this chapter and 
     other applicable provisions of Federal law. The Secretary, as 
     a condition of approving any plan under this section may 
     require modifications to the plan that the Secretary 
     determines necessary to make the plan consistent with this 
     chapter. The Secretary may assess reasonable fees or charges 
     for the reimbursement of all necessary and reasonable costs 
     associated with reviewing the plan and monitoring its 
     implementation. The Secretary may also require such periodic 
     reports regarding the carrying out of the drilling and 
     related activities.
       Paragraph (6) provides for the posting of bond by lessees 
     as required by section 13108.
       Paragraph (7) provides that the Secretary may close, on a 
     limited seasonal basis, portions of the Coastal Plain to 
     protect calving during years caribou and other species use 
     such areas.
       Paragraph (8) provides that an oil and gas lease shall 
     contain such rental and other reasonable fees as the 
     Secretary may prescribe at the time of offering the area for 
     lease.
       Paragraph (9) provides that the Secretary may direct or 
     assent to the suspension of operations and production under 
     any lease granted under the terms of the chapter in the 
     interest of conservation of the resource or where there is no 
     available system to transport the resource. If such a 
     suspension is directed or assented to by the Secretary, any 
     payment of rental prescribed by such lease shall be suspended 
     during such period of suspension of operations and 
     production, and the term of the lease shall be extended by 
     adding any such suspension period thereto.
       Paragraph (10) provides that whenever the owner of a 
     nonproducing lease fails to comply with any of the provisions 
     of the chapter, or of any applicable provision of Federal or 
     State environmental law, or of the lease, or of any 
     regulation issued under this chapter, the lease may be 
     canceled by the Secretary if the default continues for a 
     period of more than thirty (30) days after mailing of notice 
     by registered letter to the lease owner at the lease owner's 
     record post office address.
       Paragraph (11) provides that whenever the owner of any 
     producing lease fails to comply with any of the provisions of 
     the chapter, or of any applicable provision of Federal or 
     State environmental law, or of the lease, or of any 
     regulation issued under this chapter, the lease may be 
     forfeited and canceled by any appropriate proceeding brought 
     by the Secretary in any United States district court having 
     jurisdiction under the provisions of this chapter.
       Paragraph (12) provides that cancellation of a lease under 
     this chapter shall in no way release the owner of the lease 
     from the obligation to provide for reclamation of the lease 
     site or other area disturbed by the lessees activities.
       Paragraph (13) provides that the lessee may, at the 
     discretion of the Secretary, be permitted at any time to make 
     written relinquishment of all rights under any lease issued 
     pursuant to this chapter. The Secretary shall accept the 
     relinquishment by the lessee of any lease issued under this 
     chapter where there has not been surface disturbance on the 
     lands covered by the lease.
       Paragraph (14) provides that, for the purpose of conserving 
     the natural resources of any oil or gas pool, field, or like 
     area, or any part thereof, and in order to avoid the 
     unnecessary duplication of facilities, to protect the 
     environment of the Coastal Plain, and to protect correlative 
     rights, the Secretary shall require, to the greatest extent 
     practicable, that lessee unite with each other in 
     collectively adopting and operating under a cooperative or 
     unit plan of development for operation of such pool, field, 
     or like area, or any part thereof. The Secretary is also 
     authorized and directed to enter into such agreements as are 
     necessary or appropriate for the protection of the United 
     States against drainage.
       Paragraph (15) requires that the holder of a lease or 
     leases on lands within the Coastal Plain shall be fully 
     responsible and liable for the reclamation of any lands 
     within the Coastal Plain and any other Federal lands 
     adversely affected in connection with exploration, 
     development, or transportation activities on a lease within 
     the Coastal Plain by the holder of a lease or as a result of 
     activities conducted on the lease by any of the leaseholder's 
     subcontractors or agents.
       Paragraph (16) provides that the holder of a lease may not 
     delegate or convey, by contract or otherwise, this 
     reclamation responsibility and liability to another party 
     without the express written approval of the Secretary.
       Paragraph (17) provides that the leases issued pursuant to 
     this chapter shall include the standard of reclamation of 
     lands required to be reclaimed under this chapter, to a 
     condition capable of supporting the uses which the lands were 
     capable of supporting prior to any exploration, development, 
     or production activities, or upon application by the lessee, 
     to a higher or better use as approved by the Secretary. In 
     the case of roads, drill pads and other gravel-foundation 
     structures, reclamation and restoration shall be to a 
     condition as closely approximating the original condition of 
     such lands as is feasible using the best commercially 
     available technology. Reclamation of lands shall be conducted 
     in a manner that will not itself impair or cause significant 
     adverse effects on fish or wildlife, their habitat, 
     subsistence uses or the environment.
       Paragraph (18) requires that the leases issued pursuant to 
     this chapter contain terms and conditions relating to 
     protection of fish and wildlife, their habitat, subsistence 
     uses and the environment to avoid any significant adverse 
     effects.
       Paragraph (19) provides that the leaseholder, its agents, 
     and its contractors use their best efforts to provide a fair 
     share, as determined by the level of obligation described in 
     the 1974 agreement implementing section 29 of the Federal 
     Agreement and Grant of Right of Way for the Operation of the 
     Trans-Alaska Pipeline, of employment and contracting for 
     Alaska Natives and Alaska Native Corporations from throughout 
     the State.
       The Conference Committee members are fully aware of the 
     Department of the Interior's failure to monitor and enforce 
     section 29 of the 1974 Right of Way Agreement for TAPS. The 
     Committee intends that the Department as well as lessees use 
     all best efforts to enforce and comply with this statutory 
     provision and directed lease term and condition of leases and 
     other Coastal Plain authorizations.
       Paragraph (20) provides that the leases issued pursuant to 
     this chapter shall contain such other provisions as the 
     Secretary determines necessary to ensure compliance with the 
     provisions of this chapter and the regulations issued 
     thereunder.
     Section 5339. Bonding requirements to ensure financial 
         responsibility of lessee and avoid federal liability
       Subsection 5339(a). Requirement
       Subsection 5339(a) adopts language from subsection 5210(a) 
     of the Senate bill. This subsection sets forth the 
     requirement for a bond, surety or other financial arrangement 
     to ensure reclamation of the lease tract and restoration of 
     any lands or surface waters adversely affected by lease 
     operations. The provisions of the subsection are self-
     explanatory.
       Subsection 5339(b). Amount
       Subsection 5339(b) adopts language from subsection 5210(b) 
     of the Senate bill. This subsection sets forth the 
     requirements relating to the amount of the bond, surety, or 
     other financial arrangement. The provisions of the subsection 
     are self-explanatory.
       Subsection 5339(c). Adjustment
       Subsection 5339(c) adopts language from subsection 5210(c) 
     of the Senate bill. This subsection provides that in the 
     event that an approved exploration or development and 
     production plan is revised, the Secretary may adjust the 
     amount of the bond, surety or financial arrangement to 
     conform to such modified plan.
       Subsection 5339(d). Duration
       Subsection 5339(d) adopts language from subsection 5210(d) 
     of the Senate bill. This subsection provides that the 
     responsibility and liability of the lessee and its surety 
     under the bond, surety or other financial arrangement shall 
     continue until such time as the Secretary determines that 
     there has been compliance with the terms and conditions of 
     the lease and all applicable law.
       Subsection 5339(e). Termination
       Subsection 5339(e) adopts language from subsection 13108(e) 
     of the Senate bill. This subsection provides that within 60 
     days after determining that there has been compliance with 
     the terms and conditions of the lease and all applicable 
     laws, the Secretary, after consultation with affected Federal 
     and State agencies, shall notify the lessee that the period 
     of liability under the bond, surety or financial arrangement 
     has been terminated.
     Section 5340. Oil and gas information
       Section 5340 adopts language from section 5211 of the 
     Senate bill. This section sets forth requirements relating to 
     oil and gas information. The provisions of the section are 
     self-explanatory. 

[[Page S 17436]]

     Section 5341. Expedited judicial review
       Section 5341 adopts language from section 5212 of the 
     Senate bill. This section addresses judicial review. It 
     requires that all challenges to this chapter or to any action 
     of the Secretary under this chapter, including the 
     promulgation of the regulations under this chapter, be 
     brought in a timely manner and not be raised by a defendant 
     for review during an enforcement proceeding. The remaining 
     provisions of the section are self-explanatory.
     Section 5342. Rights-of-way across the Coastal Plain
       Section 5342 adopts language from section 5213 of the 
     Senate bill. This section provides that, notwithstanding 
     Title XI of ANILCA, the Secretary is authorized and directed 
     to grant under section 28, subsections (c) through (t) and 
     (v) through (y) of the Mineral Leasing Act of 1920, rights-
     of-way and easements across the Coastal Plain for the 
     transportation of oil and gas under such terms and conditions 
     as may be necessary so as not to result in a significant 
     adverse effect on the fish and wildlife, their habitat, 
     subsistence resources and users and the environment of the 
     Coastal Plain. Such terms and conditions shall include 
     requirements that facilities be sited or modified so as to 
     avoid unnecessary duplication for roads and pipelines. The 
     comprehensive oil and gas leasing and development regulations 
     issued pursuant to this chapter shall include provisions 
     regarding the granting of rights-of-way across the Coastal 
     Plain. Section 28 is not, of course, applicable to privately 
     owned lands located within the Coastal Plain, which have a 
     guaranteed right of access to private lands under section 
     1110 of ANILCA.
     Section 5343. Enforcement of safety and environmental 
         regulations to ensure compliance with terms and 
         conditions of lease
       Subsection 5343(a). Responsibility of the secretary
       Subsection 5343(a) adopts language from section 5214(a) of 
     the Senate bill. This subsection provides that the Secretary 
     shall diligently enforce all regulations, lease terms, 
     conditions, restrictions, prohibitions, and stipulations 
     promulgated pursuant to this chapter.
       Subsection 5343(b). Responsibility of holders of lease
       Subsection 5343(b) adopts language from section 5214(b) of 
     the Senate bill. This subsection sets forth responsibilities 
     of holders of a lease. The provisions of this subsection are 
     self-explanatory.
       Subsection 5343(c). On-site inspection
       Subsection 5343(c) adopts language from section 5214(c) of 
     the Senate bill. This subsection provides that the Secretary 
     shall promulgate regulations to provide for on-site 
     inspection of facilities. The provisions of this subsection 
     are self-explanatory.
     Section 5344. New revenues
       Section 5344 adopts language from section 5215 of the 
     Senate bill with modifications. Section 5344 provides that 
     the distribution of new revenues (bonus bids, royalty and 
     rental, but not corporate or other income tax) derived from 
     leasing the oil and gas resources of the Coastal Plain shall 
     be equally divided between the United States Treasury and the 
     State of Alaska. Section 5344 provides that: ``Fifty percent 
     of all revenues . . . shall be paid by the Secretary of the 
     Treasury semiannually to the State of Alaska. . . .'' 
     (Section 5344(a)(2)). There has been some concern expressed 
     about the change in law regarding the distribution of 
     revenues derived from oil and gas leases on Coastal Plain. 
     The following provides information regarding the distribution 
     of the revenues from the leasing of the Coastal Plain.
       Following the issuance of the 1987 Department of the 
     Interior Report and LEIS pursuant to which the then Secretary 
     recommended opening the Coastal Plain to an environmentally 
     responsible program of oil and gas leasing, some opponents of 
     leasing have alleged that the State might receive 90 percent, 
     rather than 50 percent, of such revenues. This allegation is 
     based upon a provision of the 1958 Alaska Statehood Act which 
     granted Alaska 90 percent of revenues derived from oil and 
     gas resources located on public lands in Alaska. After this 
     contention was first made, Senator Johnston, then Chairman of 
     the Senate Energy and Natural Resources Committee, requested 
     the Solicitor of the Department of the Interior to prepare a 
     legal memorandum and opinion on the legal validity of this 
     contention. The Solicitor's legal opinion, reprinted as 
     Appendix A following this statement, was completed and 
     transmitted to Senator Johnston and the Congress on November 
     4, 1987. The Solicitor's legal memorandum and opinion found 
     that under the Property Clause of the United States 
     Constitution, the Congress has full authority to determine 
     the future distributions of revenues derived from oil and gas 
     leases on public lands generally and on the Coastal Plain in 
     particular.
       Finally, when this contention was made again in recent 
     weeks during this Congress, Governor Tony Knowle's of Alaska 
     submitted a letter to the Congress in which he volunteered to 
     submit legislation to the State Legislature to amend the 
     Statehood Compact to make clear that the State would agree to 
     accept only 50 percent of Coastal Plain oil and gas lease 
     revenues. Ms. Drue Pearce, President of Alaska State Senate, 
     and Ms. Gail Phillips, Speaker of Alaska Legislature's House 
     of Representatives, supported Governor Knowles position and, 
     again, in letters to the Congress pledged their best efforts 
     to secure the Legislature's enactment of such legislation. 
     Copies of these letters are attached as Appendix B.
       Subsection 5344(a). Distribution of revenues
       Paragraphs (1) and (2) of subsection 5344(a), similar to 
     paragraph (1) of subsection 9002(I) of the House bill, 
     provide that notwithstanding any other provision of law, all 
     revenues received from competitive bids, sales, bonuses, 
     royalties, rents, fees, or interest derived from the leasing 
     of oil and gas resources on Federal lands within the Arctic 
     National Wildlife Refuge, Alaska shall be distributed to the 
     U.S. Treasury, with 50 percent of such revenues to be 
     distributed to the State of Alaska on a semiannual basis.
       Subparagraph (3)(A) generally follows the last clause of 
     subsection 5215(a) of the Senate bill. It requires that the 
     Secretary of the Treasury monitor the total amount of bonus 
     bid revenue deposited into the Treasury from oil and gas 
     leases issued under the authority of this chapter. All monies 
     deposited in the Treasury in excess of $2,600,000,000 shall 
     be distributed as follows: 50 per centum to the State of 
     Alaska and 50 per centum into a special fund established in 
     the Treasury of the United States known as the ``National 
     Park, Refuge and Fish and Wildlife Renewal and Protection 
     Fund'' (``Renewal Fund''). While the terminology for the 
     Renewal Fund comes from subsection 5215(a) of the Senate 
     bill, the Renewal Fund is also intended to incorporate the 
     purposes of the National Endowment for Fish and Wildlife that 
     would have been established under subsection 9002(n), 
     paragraph (1) of the House bill.
       Subparagraph (3)(B) is similar to subsection 9002(n), 
     subparagraph (2)(B) of the House bill. It caps deposits into 
     the Renewal Fund at $250,000,000. Subparagraph (2)(C) 
     provides that deposits into the Renewal Fund shall remain 
     available until expended and requires the Secretary to 
     develop procedures for the use of the Fund to ensure 
     accountability and demonstrable results.
       Subsection 5344(b). Use of renewal fund
       Subsection 5344(b) explains the purposes for which the 
     Renewal Fund shall be used. These purposes are drawn from 
     subsection 5215(b) of the Senate bill as well as subsection 
     9002(n)(4) of the House bill. While subsection 5344(b) would 
     not establish a Fish and Wildlife Conservation Commission as 
     provided for under subsection 9002(n)(3) of the House bill, 
     the conferees intend that the Secretary would fulfill 
     essentially the same fish and wildlife conservation purposes 
     of the Commission under subsection 5344(b), as well as other 
     purposes. Specifically, subsection 5344(b) provides for a 
     distribution of Renewal Fund resources as follows: (1) 25 
     percent for the National Park System, similar to requirements 
     of the Senate language; (2) 25 percent for the National 
     Wildlife Refuge System, similar to requirements of the Senate 
     language; (3) 25 percent for the acquisition of privately 
     held habitat of threatened or endangered species, similar to 
     requirements of the House language; and (4) 25 percent for 
     wetlands projects under the North American Wetlands 
     Conservation Act, similar to the House language.
       Subsection 5344(c). Community assistance
       Subsection 5344(c) mostly follows subsection 9002(l) of the 
     House bill. This subsection would establish a Community 
     Assistance Fund for distribution, upon application, of funds 
     to organized boroughs, other municipal subdivisions of the 
     State of Alaska, and recognized Indian Reorganization Act 
     entities which are directly impacted by the exploration and 
     production of oil and gas on the Coastal Plain authorized by 
     this chapter. These organizations, in turn, shall use the 
     funding to provide public and social services. The Secretary 
     shall have at his or her disposal $30,000,000, and $5,000,000 
     or less may be distributed in grant form in any given year.
       The Conferees anticipate that the services provided by 
     local and Native organizations would likely bear some 
     relation to the activities authorized by this chapter. 
     However, the Conferees have chosen not to limit the purposes 
     for which a local or Native organization may devote Fund 
     proceeds. Thus, a local or Native organization could provide 
     services such as a transportation shuttle, a job training and 
     placement service, or a conservation program, which would be 
     directly related to the activities authorized by this 
     chapter. Nevertheless, out of deference to local 
     decisionmakers, subsection 5344(c) would not prohibit a local 
     or Native program addressing immunization, education, or 
     another service less directly related to oil and gas leasing 
     on the Coastal Plain.
       Subsection 5344(c) allows funds to be distributed only to 
     groups ``directly'' impacted by the activities authorized 
     under this chapter. The choice of the word ``directly'' is a 
     deliberate effort to provide funds only to those groups with 
     a direct nexis to Coastal Plain activities. The subsection 
     does not specify a bright-line test of physical proximity, 
     dollar impact, or any other criterion, but any group seeking 
     a grant from the Community Assistance fund must demonstrate 
     an actual, ``direct'' impact. The conferees anticipate that 
     demonstration of a ``direct'' impact would be similar to the 
     demonstration necessary to obtain standing in a federal 
     court--there must be an actual impact, clearly traceable to 
     the activities authorized by this chapter. 

[[Page S 17437]]

       The Conferees expect that funds will be distributed to 
     communities and groups representing the Inupiat Eskimo people 
     on Alaska's North Slope who will clearly be impacted by 
     exploration and development activities in the Coastal Plain. 
     The Conferees anticipate that funds may also be made 
     available to communities or organizations representing the 
     Gwich'in Indians in the event that these representatives 
     demonstrate an impact from activities in the Coastal Plain.
                                                                    ____


                               Appendix A

                                       Department of the Interior,


                                      Office of the Solicitor,

                                 Washington, DC, November 4, 1987.
     M-36957.
     CLC.SO.0001.
     Memorandum to: Secretary.
     From: Solicitor.
     Subject: Division of Receipts from Oil and Gas Development 
         from the Arctic National Wildlife Refuge.
       You have asked whether the Alaska Statehood Act (ASA), Pub. 
     L. 85-508, 72 Stat. 339 (1958), in any way limits Congress' 
     ability to enact a revenue distribution scheme for oil and 
     gas revenues from new leases in federal wildlife refuges that 
     is different from the revenue distribution scheme set out in 
     the Mineral Leasing Act of 1920 (MLA), 30 U.S.C. Sec. 181. 
     Your question refers specifically to the Arctic National 
     Wildlife Refuge (ANWR). The MLA formula provides for the 
     distribution to Alaska (the State) of 90 percent of revenues 
     received by the United States from oil and gas leasing on 
     public lands within the State. For the reasons discussed 
     below, we conclude that the ASA in no way restricts Congress 
     to the distribution scheme set out in the MLA when it enacts 
     legislation to provide for distribution of revenues from new 
     mineral leases in federal wildlife refuges.


                               background

       At issue is the authority of Congress to determine the 
     distribution of revenues from oil and gas leases on public 
     lands in Alaska, and, specifically, from lands that are part 
     of the National Wildlife Refuge System. At present, a 
     distinction is made between revenues from acquired lands and 
     those from reserved public domain refuge lands. Federal oil 
     and gas revenues from acquired lands within refuges are 
     distributed according to a schedule set out in the Wildlife 
     Refuge Revenue Sharing Act (WRRSA) \1\ which allots 25 
     percent to the county in which the refuge is located and 75 
     percent to the Migratory Bird Conservation Fund, while 
     federal revenues from reserved public domain lands within 
     refuges are distributed in accordance with the Mineral 
     Leasing Act,\2\ which allots 50 percent to the states, except 
     Alaska, in which the refuge is located, 40 percent to the 
     Reclamation Fund, and 10 percent to miscellaneous receipts in 
     the U.S. Treasury. Alaska receives 90 percent of MLA lease 
     revenues derived from within the State. The remaining 10 
     percent goes to miscellaneous receipts in the U.S. 
     Treasury. As the refuge currently at issue, ANWR, is on 
     reserved public domain land, we will focus on the 
     provisions of the Mineral Leasing Act in analyzing the 
     issue presented to us.
     Footnotes at end of article.
---------------------------------------------------------------------------
       The distribution system set out in the Mineral Leasing Act 
     was extended to Alaska in section 28(b) of the Alaska 
     Statehood Act, as follows:
       (b) Section 35 of the Act entitled ``An Act to promote the 
     mining of coal, phosphate, oil, shale, gas and sodium on the 
     public domain'', approved February 25, 1920, as amended (30 
     U.S.C. 191), is hereby amended by inserting immediately 
     before the colon preceding the first proviso thereof the 
     following:'', and of those from Alaska 52\1/2\ per centum 
     thereof shall be paid to the State of Alaska for disposition 
     by the legislature thereof.''
       After amendment, section 35 of the Mineral Leasing Act read 
     as follows:
       All money received from sales, bonuses, royalties, and 
     rentals of public lands under the provisions of sections 181-
     184, 185-188, 189-192, 193, 194, 201, 202-209, 211-214, 223, 
     224-226, 226d-229a, 241, 251, and 261-263 of this title shall 
     be paid into the Treasury of the United States; 37\1/2\ per 
     centum thereof shall be paid by the Secretary of the Treasury 
     as soon as practicable after December 31 and June 30 of each 
     year to the State within the boundaries of which the leased 
     lands or deposits are or were located; said moneys to be used 
     by such State or subdivisions thereof for the construction 
     and maintenance of public roads or for the support of public 
     schools or other public educational institutions, as the 
     legislature of the State may direct; and, excepting those 
     from Alaska, 52\1/2\ per centum thereof shall be paid into, 
     reserved and appropriated, as part of the reclamation fund 
     created by sections 372, 373, 381, 383, 391, 392, 411, 416, 
     419, 421, 431, 432, 434, 439, 461, 491, and 498 of Title 43, 
     and of those from Alaska 52\1/2\ per centum thereof shall be 
     paid to the State of Alaska for disposition by the 
     legislature thereof: Provided, That all moneys which may 
     accrue to the United States under the provisions of sections 
     181-184, 185-188, 189-192, 193, 194, 201, 202-209, 211-214, 
     223, 224-226, 226d-229a, 241, 251, and 261-263 of this title 
     from lands within the naval petroleum reserves shall be 
     deposited in the Treasury as ``miscellaneous receipts'', as 
     provided by section 524 of Title 34. All moneys received 
     under the provisions of sections 181-184, 185-188, 189-192, 
     193, 194, 201, 202-209, 211-214, 223, 224-226, 226d-229a, 
     241, 251, and 261-263 of this title not otherwise disposed of 
     by this section shall be credited to miscellaneous receipts. 
     (Feb. 25, 1920, ch. 85, Sec. 35, 41 Stat. 450; May 27, 1947, 
     ch. 83, 61 Stat. 119; Aug. 3, 1950, ch. . . . 282; July 7, 
     1958, Pub. L. 85-508, Sec. Sec. 6(k), 28(b), 72 Stat. 343, 
     351.) \3\ (Emphasis added.)
       The United States Senate is presently considering a bill, 
     S. 735, that would change the distribution system as applied 
     to revenues derived from oil and gas leasing within units of 
     the National Wildlife Refuge System. Specifically, the bill 
     provides that 50 percent of such revenues would go to the 
     state, 25 percent to the Land and Water Conservation Fund and 
     25 percent to the federal government. If the bill passes, it 
     will apply to all leases in any wildlife refuge issued after 
     enactment, but it is expected that the refuge most 
     immediately affected will be ANWR.
       In recent testimony on S. 735 before the Senate Energy and 
     Natural Resources Subcommittee on Public Lands, National 
     Parks and Forests, and in documents submitted to us in 
     connection with our consideration of this issue, 
     representatives of the State of Alaska have argued that 
     Congress cannot legally enact a revenue distribution formula 
     that provides Alaska less than 90 percent of mineral leasing 
     revenues from the leasing of public lands in Alaska without 
     the consent of the State.\4\


                                analysis

       The enactment of legislation establishing a distribution 
     formula for federal revenues obtained from the leasing of 
     federally owned minerals falls within the power of Congress 
     enumerated in the Property Clause of the Constitution:
       The Congress shall have Power to dispose of and make all 
     needful Rules and Regulations respecting the Territory or 
     other Property belonging to the United States. * * *

     U.S. Constitution, art. IV, Sec. 3, cl. 2.
       The Mineral Leasing Act of 1920 is an example of the use of 
     this power. Once having enacted such a system of mineral 
     leasing, Congress has the authority under the Property Clause 
     to change the distribution schedule set up with regard to the 
     revenues resulting from those leases. As indicated in United 
     States v. Locke, 471 U.S.S. 84, 104 (1985), ``[t]he United 
     States, as owner of the underlying fee title to the public 
     domain, maintains broad powers over the terms and conditions 
     upon which the public lands can be used, leased, and 
     acquired,'' In the Locke case, the Supreme Court was called 
     upon to determine the constitutionality of a legislative 
     provision that subjected holders of unpatented mining claims 
     to forfeiture of those claims if they failed to comply with 
     the annual filing requirements of the Federal Land Policy and 
     Management Act of 1976, 43 U.S.C. Sec. 1701. In holding the 
     regulation to be constitutional, the Supreme Court indicated 
     that ``[c]laimants thus must take their mineral interests 
     with the knowledge that the Government retains substantial 
     regulatory power over those interests.'' [The Court 
     compared this holding to Energy Resources Group, Inc. v. 
     Kansas Power and Light Co., 459 U.S. 400 (1983), dealing 
     with the impairment of contractual relations.] Id. at 
     105.\5\
       Against this background, Alaska must sustain a heavy burden 
     to show that Congress lacks the authority under the Property 
     Clause to change the distribution system for federal revenues 
     derived from oil and gas leases on federal lands, including 
     wildlife refuges.
       Alaska's primary \6\ argument against Congress' power to 
     enact a distribution formula for receipts from the lease of 
     refugee minerals that is different from the formula set out 
     in the MLA is that the MLA distribution scheme was 
     incorporated into and made a part of the compact of 
     statehood. According to that argument, the MLA was so 
     incorporated by virtue of the inclusion in the Alaska 
     Statehood Act of a section amending the MLA to apply it to 
     Alaska. The State argues that Congress made the distribution 
     formula part of the compact as a vehicle granting Alaska a 
     permanent property interest in mineral revenues from public 
     lands.\7\ According to the argument, as a grant made to the 
     State in the compact of statehood, the property interest may 
     not be changed. Thus the State argues that the distribution 
     system comes within the narrow confines of Beecher v. 
     Wetherby, 95 U.S. (5 Otto) 517 (1877), a case holding that a 
     grant made in a statehood act is an ``unalterable condition 
     of the admission [of the State into the Union], binding upon 
     the United States.''
       We do not dispute that a grant made in a statehood act may 
     be unalterable. However, we believe that in this instance, 
     Alaska paints too broadly the compact of statehood. Rather 
     than being a grant incorporated into that compact, the 
     distribution system applied to Alaska in section 28(b) is 
     nothing more than an exercise of Congress' powers under the 
     Property Clause to dispose of and make needful rules for the 
     public's property.
       Judicial precedent instructs that not every provision in a 
     statehood act is an irrevocable grant to the state. Thus, we 
     must look carefully at the provisions of the ASA to ascertain 
     what must be included within the terms of its statehood 
     compact with the United States. The Supreme Court has had 
     occasion to consider the different kinds of authority 
     Congress may exercise in passing a statehood act and what 
     provisions of a statehood act may properly be considered part 
     of the compact entered into at statehood. In Coyle v. 
     Oklahoma, 221 U.S. 559 (1911), the Court held 

[[Page S 17438]]
     that certain conditions contained in Oklahoma's statehood act were not 
     part of the compact of statehood. The Supreme Court pointed 
     out that in admitting a new state into the Union, Congress 
     may simultaneously exercise other of its powers, such as the 
     power to regulate commerce or the power ``to make all needful 
     rules and regulations respecting the territory of other 
     property of the United States'' (citing Pollard's Lessee v. 
     Hagan, How. 212 (1845)). The Supreme Court concluded that 
     provisions contained in a statehood act that are enacted 
     under one of these other powers, ``cannot operate as a 
     contract between the parties, but are binding as law.'' 
     Coyle, at 571. The Court then went on to say:
       It may well happen that Congress should embrace in an 
     enactment introducing a new state into the Union legislation 
     intended as a regulation of commerce among the states, or 
     with Indian tribes situated within the limits of such new 
     state, or regulations touching the sole care and disposition 
     of the public lands or reservations therein, which might be 
     upheld as legislation within the sphere of the plain power of 
     Congress. But in every such case such legislation would 
     derive its force not from any agreement or compact with the 
     proposed new state, nor by reason of its acceptance of such 
     enactment as a term of admission, but solely because the 
     power of Congress extended to the subject.* * *

     Id, at 574.\8\
       Section 28 of the ASA is just such an enactment. It is 
     based on Congress' power under the Property Clause to 
     administer federal property interests. The MLA itself was 
     similarly based, and the amendment to it contained in the ASA 
     cannot be used to alter its origins or elevate it to compact 
     status so that it cannot be amended.
       Section 28 of the ASA, on its face, does not purport to be 
     either a part of the compact between the United States and to 
     the State of Alaska or a permanent grant of mineral revenues 
     to the State. In fact, section 28 did nothing more than amend 
     a statute that had already been in existence for over 30 
     years before the ASA was enacted and had long been applied to 
     federal lands in all other states.\9\ Further, section 28 is 
     but one of several sections added at the end of the ASA to 
     amend existing law to apply it specifically to Alaska. 
     Section 28(b) in particular was a necessary and timely 
     expedient because Congress wanted to extend to and adapt for 
     Alaska the revenue distribution system already in place in 
     other states.
       Futher, section 28(b) is very limited in that it is 
     applicable only to lands leased under the MLA, not to other 
     federally owned lands leased under other authority. For 
     example, section 35 of the MLA gave Alaska no share of 
     receipts from the navel petroleum reserves, and Naval 
     Petroleum Reserve No. 4 (now NPR-A), constituting roughly 23 
     million acres in Alaska, was separately addressed in Section 
     11 of the ASA, This separate treatment indicates that 
     Congress did not intend, as argued by the State, that the MLA 
     be a vehicle for an irrevocable 90 percent interest in 
     revenues from all federal mineral lands.\10\ This point is 
     further supported by a 1981Supreme Court decision in which 
     the Court found that a 1964 amendment to the Wildlife Refuge 
     Revenue sharing Act, which included mineral revenues within 
     its 75/25 distribution schedule, was properly applied to oil 
     and gas leasing revenues from wildlife refuges on acquired 
     federal lands in Alaska Watt v. Alaska, 451 U.S. 259 
     (1981).\11\
       Further, section 28 of the ASA did not purport to grant 
     Alaska a 90 percent royalty interest in the minerals 
     themselves. Rather, the section amended an entirely separate 
     statute, the MLA, which itself does not grant the state any 
     interest in minerals, but merely prescribes a formula for the 
     distribution of certain federal oil and gas revenues. We have 
     previously considered the issue of what interest states have 
     in federal oil and gas under the the MLA and concluded that 
     they have no economic interest in the oil in place. As stated 
     in Solicitor's Opinion M-36929, 87 I.D. 661, at 664, 665 
     (1980):
       States have no pecuniary or legal interest in federally 
     owned oil until that oil is leased, extracted and the royalty 
     payments are made to the federal government. In sum, sec. 35 
     simply provides for the disposition of federal royalty 
     revenue; it does not confer on states an economic interest in 
     the oil in place. * * *
       Therefore, under the amendment of the MLA contained in the 
     ASA, the State receives only a periodic distribution of 90 
     percent of the revenues produced each year from the leasing 
     and production of minerals under the MLA. Alaska receives no 
     revenues under the MLA unit such revenues are produced, and 
     more importantly, receives its MLA royalty distribution only 
     by virtue of the provisions of the MLA, not by virtue of the 
     ASA.\12\
       Our conclusion must be, then, that Congress was using the 
     amendment to the MLA contained in section 38 not as a vehicle 
     for granting the state a perpetual 90 percent interest in 
     federal minerals in Alaska, but rather as an exercise of its 
     authority under the Property Clause to dispose of and make 
     needful rules for certain federal property, in this case, to 
     set out the distribution scheme applicable to minerals leased 
     under the MLA.
       Our view that the MLA was not incorporated into the compact 
     between the State and the federal government and that it does 
     not amount to a permanent grant is supported by examples of 
     cases in which Congress has exorcized its Property Clasuse 
     powers to amend the MLA since Alaska gained statehood to the 
     detriment of Alaska's 90 percent interest in revenues from 
     mineral leases. For example, on December 18, 1971, Congress 
     passed the Alaska Native Claims settlement Act (ANCSA), 43 
     U.S.C. Sec. 1601, et seq., amending the royalty distribution 
     ratio of the MLA to reduce the State's share of royalties and 
     pay a portion to Alaska Native corporations. Section 9 of 
     ANCSA, 43 U.S.C. Sec. 1608, provided in part that a royalty 
     of 2 per centum of the gross value of minerals and 2 per 
     centum of all rentals and bonuses would be deducted from the 
     mineral revenues from public lands and paid to the Alaska 
     Native Fund. Prior to ANCSA, the standard royalty on oil and 
     gas leased was 12.5 percent of production. This meant 1.25 
     percent went to the U.S. Treasury, and 11.25 percent went to 
     the state of Alaska, whereas after ANCSA these percentages 
     were 1.05 and 9.45, respectively.
       Similarly, the Crude Oil Windfall Profit Tax of 1980, Pub. 
     L. No. 96-223, 94 Stat. 229 (1980), exacts a tax on MLA 
     revenues prior to the application of the revenue sharing 
     formula New Mexico v. U.S. 11 CL. CT. 429 (1986), affirmed --
     --F.2d----, No. 87-1210 (1987), See also, Solicitor's Opinion 
     M-36929 supra.
       These examples clearly demonstrate Congress' continuing 
     authority to change the distribution scheme for mineral 
     revenues from federal land whenever it perceives a need to do 
     so.


                               CONCLUSION

       For the reasons stated, we must conclude that Congress has 
     the authority under the Property Clause of the Constitution 
     to alter the distribution formula set out in the Mineral 
     Leasing Act for oil and gas revenues from the Arctic national 
     Wildlife Refuge. The State of Alaska has not met the heavy 
     burden of persuasion with respect to the argument that those 
     Property Clause powers were terminated by the section in the 
     Statehood Act amending the MLA to include Alaska in the act's 
     revenue distribution formula. We can find no support in the 
     Alaska Statehood Act for the proposition that the MLA was 
     incorporated into the compact between the federal government 
     and the State. In fact, opposite the proposition, we find 
     other instances in which Congress has amended the MLA in a 
     manner which adversely affected the State's interests.
                                                    Ralph W. Tarr.


                               footnotes

     \1\ Section 401, 16 U.S.C. Sec. 715s(c); Watt v. Alaska, 451 
     U.S. 259 (1981).
     \2\ Section 35, as amended, 30 U.S.C. Sec. 191.
     \3\ The net effect of the amendment was to accord Alaska both 
     the 37\1/2\ percent share enjoyed by all other states and the 
     52\1/2\ percent that would otherwise have gone to the 
     Reclamation Fund, for a total of 90 percent. A succession of 
     subsequent amendments to section 35, most recently in section 
     104(a) of the Federal Oil and Gas Royalty Management Act, 30 
     U.S.C. Sec. 1701, has changed these figures to 50 percent for 
     states and 40 percent for the Reclamation Fund in states 
     other than Alaska, and 90 percent for Alaska, to be 
     distributed on a monthly basis.
     \4\ Alaska also raises a number of political and policy 
     issues arising from the historic relationship between the 
     federal government and the states and, specifically, federal 
     government and * * *.
     \5\ The people of Alaska implicitly acknowledged the powers 
     reserved to Congress under the Property Clause when they 
     agreed in the Alaska State Constitution that:
     ``The State of Alaska and its people forever disclaim all 
     right and title or to any property belonging to the United 
     States or subject to its disposition, and not granted or 
     confirmed to the State or its political subdivisions, by or 
     under the act admitting Alaska to the Union. The State and 
     its people further disclaim all right or title in or to any 
     property, including fishing rights, the right or title to 
     which may be held by or for any Indian, Eskimo, or Aleut, or 
     community thereof, as that right or title is defined in the 
     act of admission. The State and its people agree that, unless 
     otherwise provided by Congress, the property, as described in 
     this section, shall remain subject to the absolute 
     disposition of the United States. They further agree that no 
     taxes will be imposed upon any such property, until otherwise 
     provided by the Congress. This tax exemption shall not apply 
     to property held by individuals in fee without restrictions 
     on alienation.'' (Alaska Constitution, art, 12, Sec. 12.)
     \6\ Alaska also argues that a change in the distribution, 
     such as that proposed in S. 735 would result in the State 
     being treated differently than other states. Specifically, 
     Alaska argues that it is the only state that has a refuge 
     producing oil and gas revenues on reserved lands and, 
     therefore, is the only state that will be impacted by a 
     provision changing the distribution formula for reserved 
     wildlife refuges. Although this appears to be primarily a 
     policy issue, Alaska does suggest that the equal footing 
     doctrine may be implicated by such unequal treatment. 
     However, after reviewing this matter, we do not believe that 
     it raises substantial legal questions. Factually, the 
     proposed law would apply to all new leases on all wildlife 
     refuges. As a factual matter, it is not clear that it would 
     have an unequal impact in the long run. As a legal matter, 
     even if there were an unequal impact, this impact would not 
     constitute a violation of the equal footing doctrine. In 
     Nevada v. U.S., 512 F. Supp. 166 (D. Nev. 1981), a case in 
     which the State of Nevada challenged a moratorium on the 
     disposal of public lands under the equal footing doctrine, 
     the court accurately summarized this doctrine as follows:
     ``Federal regulation which is otherwise valid is not a 
     violation of the `equal footing' doctrine merely because its 
     impact may differ between various states because of 
     geographic or economic reasons. Island Airlines, Inc. v. CAB, 
     363 F.2d 120 (9th Cir. 1966). The doctrine applies only to 
     political rights and sovereignty; it does not cover economic 
     matters, for there never has been equality among the states 
     in that sense, U.S. v. Texasm 339 U.S. 707 (1950). Said case 
     points out that, when they entered the Union, some states 
     contained large tracts of land belonging to the federal 
     government, whereas others has none. ``The requirements of 
     equal footing was designed not to wipe out these diversities 
     but to create parity as respects political standing and 
     sovereignty,' Id., at 716. Accordingly, Congress may cede 
     property to one state without a corresponding cession to all 
     states. * * * the equal footing doctrine 

[[Page S 17439]]
     does not affect Congress' power to dispose of federal property. * * *''
     \7\ In documents submitted to us, the State cites several 
     instances in the legislative history of ASA in which Members 
     of Congress expressed an intent to provide Alaska with 
     sufficient revenues to function as a state, and several other 
     instances in which congressman or reports cited the 90/10 
     distribution system. However, these expressions of intent do 
     not answer the question of whether the 90/10 distribution was 
     to be a permanent grant of a property interest and whether, 
     by setting out such a formula in 1958, Congress sought to 
     terminate its Property Clause powers with regard to federal 
     mineral revenues from federal lands forever. Our analysis of 
     the statutes and judicial precedent compel a negative answer 
     to both questions that is not changed by the suggestion a 
     general intention to provide the new state with revenue.
     \8\ See also, Nevada v. U.S., 512 F. Supp. at 171-172: 
     ``Regulations dealing with the care and disposition of public 
     lands within the boundaries of a new state may properly be 
     embraced in its act of admission, as within the sphere of the 
     plain power of Congress.'' (Citing, U.S. v. Sandoval, 231 
     U.S. 28 (1913).
     \9\ All of the contiguous lower 48 states had already been 
     admitted to the Union when the MLA was passed in 1920. The 
     MLA was not ``incorporated'' into the statehood act of any 
     other state.
     \10\ The State's argument implies that 90 percent of MLA 
     revenues goes to all states, not just Alaska. This argument 
     appears to be based on an interpretion of the MLA whereby the 
     40 percent of MLA revenues which is earmarked for the 
     Reclamation Fund ultimately is returned to the states in the 
     form of reclamation projects. This argument has several 
     problems. The assertion that the 40 percent of MLA receipts 
     from states other than Alaska is returned to the generating 
     states if illusory. In fact, any such money that are returned 
     to the states arrive there only through an express 
     appropriation from Congress after competing with other 
     appropriations proposals, and there is absolutely no 
     guarantee that such moneys as are appropriated will be 
     proportionately returned to the states from which they were 
     generated. The 90 percent provided to Alaska, however, is 
     distributed directly to the State, to be disposed of as the 
     state legislature directs. To the extent Alaska argues that 
     it has been treated the same as other states in receiving the 
     90 percent share of MLA revenues, it implicitly admits that 
     equal treatment would allow Congress to change the MLA 
     formula for Alaska, because Congress clearly has the power to 
     amend the MLA to affect the royalty shares of the other 
     states. New Mexico v. U.S., 11 Cl. Ct. 429 (1986); 
     affirmed,--F.2d--, 87-1210 (1987).
     \11\ The case cited in the text focused on section 401 of the 
     Revenue Sharing Act, 16 U.S.C. Sec. 715s(c), which after the 
     1964 amendment provided that 25 percent of the receipts, 
     including mineral receipts, generated by a refuge would go to 
     the county in which the refuge was located and 75 percent to 
     the Migratory Bird Conservation Fund. The Kenai Borough (the 
     county in which the Kenai Moose Range is located), and the 
     State of Alaska, each filed suit to challenge the federal 
     interpretation that this formula applied to oil and gas 
     revenues generated from the refuge. The U.S. District Court, 
     District of Alaska, and the Ninth Circuit Court of appeals 
     each found in favor of the state of Alaska, that is, that 
     section 35 of the MLA and not section 401 of the WRRSA, 
     controlled the distribution of receipts from Kenai Moose 
     Range. The Supreme Court held that the 1964 amendment clearly 
     covered oil and gas receipts, but also found that it has not 
     been the intent of Congress to amend section 35 of the MLA. 
     Therefore, the court ruled that the WRRSA applied to oil and 
     gas receipts from acquired lands in wildlife refuges, but not 
     to reserved public lands in wildlife refuges. Watt v. Alaska, 
     U.S. 259 (1981). Even though the Court distinguished between 
     acquired lands in refuges and public domain, this decision 
     supports the proposition that Congress is not bound by the 
     ASA to give Alaska 90 percent of oil and gas leasing revenues 
     from all federally owned land.
     \12\ In contrast for example, the ASA explicitly granted 
     Alaska 103,350,000 acres of land, which * * *.
                                                                    ____

         Department of Justice, Environment and Natural Resources 
           Division
                                      Washington, DC, May 8, 1991.
     Re Artic National Wildlife Refuge.
     Mr. Paul Symth,
     Acting Associate Solicitor, Energy and Resources, Department 
         of the Interior, Washington, DC.
       Dear Mr. Smyth: I have reviewed Solicitor's Opinion M-36957 
     concerning the eventual division of oil and gas revenues from 
     the Arctic National Wildlife as you recently requested. I 
     concur in its conclusion that for ANWR Congress may alter the 
     90/10 distribution set out in the Mineral Leasing Act.
       Although it may be premature to say that we would arrive at 
     our conclusion through the same analysis followed in the 
     Opinion, we are convinced that Congress may authorize the 
     altered distribution and would certainly feel comfortable 
     defending that conclusion in court.
       Thank you for making us aware of this potential issue in 
     advance of litigation. We would be interested in knowing what 
     Congress ultimately decides.
           Sincerely,
                                                   Myles E. Flint,
     Deputy Assistant Attorney General.
                                                                    ____


                               Appendix B

                                                  State of Alaska,


                                       Office of the Governor,

                                     Juneau, AK, October 17, 1995.
     Hon. Frank Murkowski,
     U.S. Senate,
     Washington, DC.
       Dear Senator Murkowski: During my recent visit to 
     Washington, DC, it became clear to me that a central issue in 
     the debate related to oil development in the Arctic National 
     Wildlife Refuge (ANWR) is the allocation of the revenue 
     between the State of Alaska and the federal government. 
     Accordingly, I am writing to you to reiterate my position on 
     this issue.
       By your legislation, and that of Congressman Young, you 
     have concluded that fifty percent of the revenues of ANWR 
     should be used to reduce the Federal budget in order to 
     accomplish Congressional approval.
       The state is entitled to receive ninety percent of oil and 
     gas revenues generated from federal lands in Alaska. 
     According to your reports, Congressional action is highly 
     unlikely unless Congress sees some direct benefit to the 
     federal budget. In addition to all of the other strong 
     arguments in support of opening ANWR, it has been made clear 
     to us that a fifty-fifty split of the revenue is necessary to 
     attain favorable Congressional action. I support your 
     strategy to split the revenues evenly between the state and 
     federal governments.
       If there is federal enactment of the fifty-fifty revenue 
     split, it would constitute an amendment of the Alaska 
     Statehood Act. According to the Alaska Department of Law, an 
     amendment to the Statehood Act requires state concurrence. 
     This concurrence must occur through the enactment of a bill 
     by the Alaska Legislature and approval by the Governor.
       Therefore, I will introduce and pursue legislation to 
     accept such a change if Congress adopts a fifty-fifty revenue 
     split. In this way, Alaska's elected officials in Juneau will 
     have a full opportunity to debate the merits of agreeing to 
     any modification of the ninety-ten revenue formula.
       I firmly believe any amendment of the ninety-ten revenue 
     split should apply to ANWR only. I will continue to insist, 
     by way of the statehood compact lawsuit, that Alaska receive 
     its full entitlement on the development of other federal 
     lands in Alaska.
       The State of Alaska stands ready to assist you in attaining 
     Congressional approval of opening ANWR.
           Sincerely,
                                                     Tony Knowles,
                                                         Governor.


                                                              


                                     Alaska State Legislature.

                                     Juneau, AK, October 17, 1995.
     Hon. Newt Gingrich,
     Speaker of the House,
     Washington, DC.
       Dear Speaker Gingrich: On behalf of the Alaska State 
     Legislature, we would like to thank you for taking the time 
     to meet with us during our recent visits to Washington, D.C. 
     and for your support of oil and gas leasing in ANWR.
       As the Republican leaders of the state Senate and House, we 
     would like to state our unqualified support for current 
     congressional plans to allow oil and gas development on the 
     coastal plain of ANWR and to share lease revenues 50-50 
     between the state and federal governments.
       We are aware that some House Republicans have expressed 
     concern about this revenue sharing in light of Alaska's right 
     under its statehood compact to receive 90% of revenues from 
     oil and gas leases on federal lands.
       Governor Tony Knowles announced on September 28th before 
     the National Press Club that he backs the 50-50 state-federal 
     split of ANWR lease revenues as proposed in the budget 
     reconciliation act. He is on record saying he will introduce 
     legislation to change the statehood compact to provide a 50-
     50 revenue split for ANWR lease revenues.
       As the U.S. House and Senate works to complete action on 
     the budget reconciliation act, Members of Congress should 
     know that we will do everything in our power to ensure that 
     such a bill passes the Alaska State Legislature and becomes 
     law.
           Sincerely,
     Drue Pearce,
       Senate President.
     Gail Phillips,
       House Speaker.

                          ____________________