[Congressional Record Volume 144, Number 56 (Thursday, May 7, 1998)]
[Extensions of Remarks]
[Page E804]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              ``OVERTURN THE ROYALTY GIVEAWAY AMENDMENT''

                                 ______
                                 

                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                         Thursday, May 7, 1998

  Mr. MILLER of California. Mr. Speaker, last week, legislative larceny 
was committed in the conference committee on the Emergency 
Supplemental. As happens too often in this Congress, the hold up was 
committed by wealthy interests who want to make themselves still richer 
with money that belongs to the taxpayers of this country.
  Senator Barbara Boxer put up a valiant fight to prevent the committee 
from accepting the oil companies' $66 million royalty giveaway 
amendment, but the industry had the conference wired. The oil industry, 
which has been cheating taxpayers for years, won.
  Today, we are introducing legislation to reverse that legislative 
maneuver and restore the money to the people who own the oil: the 
taxpayers of the United States.
  I wrote the provision of the offshore oil law in 1978 that requires 
that coastal states receive a share from the oil produced from federal 
lands adjacent to their coasts. But the oil companies have been 
cheating taxpayers and the states by underestimating the value of the 
oil and underpaying royalties to the tune of hundreds of millions of 
dollars. The Department of Interior's Minerals Management Service 
drafted rules to end this underpayment fraud and assure that taxpayers 
get the money they deserve.
  But the royalty giveaway amendment stops the Interior Department from 
implementing new rules that would require more accurate pricing of oil 
produced from public lands. Those rules, the product of long 
investigations, would base the value of the oil on actual market prices 
instead of on the much lower prices reported by the oil companies. 
Delaying this rule from going into effect will cost taxpayers $66 
million a year--$5.5 million for each month that the rule is delayed. 
That means a loss of $1.8 million a year for California alone.
  Our state turns federal oil and gas royalties over to the public 
schools, and most other states share a portion of these revenues with 
their schools--money that could be used to buy computers or pay 
teachers' salaries or reduce class size. If the federal government had 
collected the royalties we were due, California could have paid the 
salaries of 45 teachers next year. Instead, thanks to this sneaky 
amendment, that money will line the oil industry's pockets.
  Senator Hutchison, who sponsored this amendment, claims more time is 
needed to study the issue. We already spent years studying the issue. A 
task force has filed its report documenting hundreds of millions of 
dollars in underpayments.
  The current system must be changed. The Justice Department recently 
decided to intervene in litigation accusing four major oil companies of 
knowingly having underpaid hundreds of millions of dollars in royalties 
from federal and Indian leases in the Gulf of Mexico, Wyoming, New 
Mexico and California. There is no justification for preventing the 
Interior Department from performing its legal mandate: to ensure that 
we get fair market value from the production from public lands.
  The giveaway rider ignores substantial evidence of underpayments 
developed by the House Government Reform and Oversight Committee, 
thanks to the leadership of Congresswoman Carolyn Maloney, who joins us 
this morning. We call on the Congress to reverse this greedy and 
unwarranted action and pass the Miller-Boxer bill to restore the 
royalties that the taxpayers, and the schoolchildren, of this nation 
deserve.

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