[Congressional Record Volume 144, Number 123 (Wednesday, September 16, 1998)]
[Senate]
[Pages S10401-S10415]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS ACT, 
                                  1999

  The Senate continued with the consideration of the bill.
  Mr. MURKOWSKI addressed the Chair.


                           Amendment No. 3594

  The PRESIDING OFFICER. Who yields time to the Senator from Alaska?
  Mr. DOMENICI. Mr. President, I would like to ask Senator Boxer--we 
have been going back and forth. Senator Murkowski just wants to speak 
for 3 minutes, and I wonder if we could then have Senator Thomas speak 
for up to 10 minutes.
  Mrs. BOXER. Absolutely.
  Mr. DOMENICI. Then we would go to your side.
  Mrs. BOXER. Fine.
  Mr. DOMENICI. I yield to the two Senators in that order.
  Mr. MURKOWSKI addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. MURKOWSKI. I rise as chairman of the Committee on Energy and 
Natural Resources. I would like to advise my colleagues that we had an 
oversight hearing in June on the MMS oil valuation issue. The results 
of that hearing indicated that we should initiate a dialogue with the 
principals. That dialogue was entered into. I felt gratified that we 
were making progress relative to this complex issue and was chagrined 
to find at a later date that the advances we thought we were making 
simply had been overturned by the policymakers of the Department of the 
Interior and the administration.
  As a consequence, this conversation about corporate welfare, big oil, 
and big business is incorrect because we are talking about small 
companies in many cases. The oil and gas industry has lost a quarter of 
a million jobs. This is an industry that now finds itself moving 
overseas where there is a favorable climate for exploration and 
production.
  As evidence of that, Mr. President, in 1973 and 1974, we were 37-
percent dependent on imported oil; today, we are 52-percent dependent. 
The Department of Energy suggests we are going to be 66-percent 
dependent in the year 2004 or 2005.
  The amendment offered by Senator Domenici and Senator Hutchison 
during committee markup would delay the implementation of the final 
rules on Federal oil valuation until October 1999, or until a 
negotiated rule can be achieved.
  The oil and gas industry is struggling in a declining market. This is 
an industry where we have lost a quarter of a million jobs. We are 
talking about implementation of regulations that would drive this 
industry out of the United States and make us more dependent on 
imported oil. It is unconscionable. The taxes paid by this industry and 
mortgage payments made by industry employees in their communities are 
contributions being overlooked in this general climate of ``well, throw 
it out--because somehow big business is cheating,'' if you will. And 
that is simply unconscionable, Mr. President.
  As Senator Domenici and Senator Hutchison indicated, they personally 
met twice with Interior Department officials and industry executives to 
resolve what amounts to a handful of issues concerning the rulemaking. 
It is rather interesting, because if you look at the MMS proposal, it 
attempts to set the oil royalty away from the lease; that is, 
downstream, almost near the burner, not as required by law, and set it 
on the value added by the companies

[[Page S10402]]

through their extraordinary efforts to market the product. And by 
denying the companies an allowance for reasonable marketing costs, MMS 
unnecessarily and artificially raises the price of oil on which the 
royalty is based. That is what they are doing here.
  So, Mr. President, do not be misled by these generalities that 
somehow this is corporate welfare. This is an effort to help an 
industry be competitive. The policy of the Department of the Interior 
to mandate royalty valuation, through rulemaking, would be detrimental 
and not resolve the issue, and would leave many unanswered questions 
relative to the industry's ability to be internationally competitive. 
It is beyond me, Mr. President.
  I thought when the Interior officials met, they were going to meet in 
good faith. It appears that Interior did little more than pay 
lipservice to that effort. The rule is just as unfair now as it was 
when discussions of it took place. Only now, Interior is trying to put 
its spin on the issue by saying, ``We gave the industry its meeting. We 
addressed their concerns. Why do we need to have any further delay?''
  Mr. President, it appears the Interior Department is going to 
continue to base its oil royalty on market factors away from the lease. 
Any attempts to strip the Domenici amendment away should be opposed. 
And there are three specific reasons. Then I will conclude.
  First, contrary to what Interior claims, the amendment was scored by 
CBO as having zero effect on the current baseline. Interior's claim 
that it will save $65 million a year is simply puffery and nothing 
more.
  Second, with world oil prices depressed, we do not need to add what 
amounts to a new tax on this industry, particularly the independents, 
the small oil companies. Do not talk to me about big business.
  Third, delaying oil valuation rules is nothing new. Congress did it 
in 1987. Delay will allow better public policy to be formulated.
  So I urge my colleagues to join in opposing the removal of the oil 
valuation amendment from the Interior appropriations bill.
  I yield the floor to Senator Thomas.
  Mr. THOMAS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized.
  Mr. THOMAS. Thank you, Mr. President.
  I rise in strong opposition to the Boxer amendment. Contrary to what 
we have heard over there about withdrawal and cheating and all these 
things, there are some real issues here, issues that many of us, 
particularly those of us who live in public land States, have been 
working on for a very long time.
  That is the question--how do you have regulations that extract one-
eighth of the value of Federal oil into the Federal Treasury? Nobody 
objects to that. That is the law. Nobody argues with that. There are 
some real issues here.
  For instance, what is the value in Chugwater, WY, as compared to 
Oklahoma City? What is the value when you are close to a collection 
point as opposed to having to carry the oil for a very long time? Where 
do you apply the value? Do you have to pay for the transportation to 
where it is going in order to have one-eighth of it? There are some 
real issues here, and we have not been able to come together with the 
bureaucracy to have a satisfactory solution. And that is why this 
amendment is there--to have a moratorium on time so that this can, 
indeed, be resolved.
  I have been involved in some of these meetings here in which we have 
tried to find a solution. I, by the way, have not seen any of my 
friends from the other side of the aisle there participating in trying 
to find a solution. All they do is come up and complain. I am, frankly, 
a little offended at the idea that seems to be promoted that somehow if 
you are not for this it is because you may have gotten a contribution 
from an oil company. I am offended by that.

  People believe in what they are doing here. They believe it is 
important to their communities and to their States. They believe there 
ought to be jobs. They believe we ought to have a domestic oil 
industry. These are beliefs. I do not hear anyone saying they are where 
they are because the environmentalists are having TV ads to support 
their candidacy. I suppose you could say that. I do not think that is a 
great idea.
  What we have is some real confusion. Let me give you a little 
example. We had an independent who was brought back before the agency 
because they did what someone in the agency told them to do. They did 
what the employee told them to do. And the director of MMS says, 
``Well, you can't go by that because that might not be what the 
Assistant Secretary meant to happen.'' Give me a break. You mean a 
citizen who goes to an employee of an agency cannot rely on the 
information they get there because it might not be consistent with what 
someone said who is Assistant Secretary? That is the kind of thing we 
are dealing with here and the kind of thing we need to get resolved.
  We have met with MMS on a number of occasions. I must tell you, I 
have been working with this since I was in the House 4 years ago, where 
I suggested, and would suggest again, that the States do the actual 
collection of the mineral royalty and share it with the Feds. We are 
duplicating it now.
  MMS is one of the most inefficient agencies we have in this 
Government in terms of their cost. It is not clear what it is that they 
are doing. It is clear that it is not a workable situation. When you 
take the NYMEX and apply it to a place in Oklahoma City, and out in 
Wyoming, that is not a workable way to determine what the market value 
is. We need to do something about that.
  Mr. President, I do not think we ought to be fooled by arguments of 
the proponents that they are not getting a fair share of the royalties. 
This amendment is not about reasonable valuation, collection. This 
amendment is not about schoolchildren. This amendment is quite simply 
one that wants to attack the oil industry by those who are critical of 
business, those who think that this is some kind of an environmental 
question. And it is not.
  It is important that the MMS rule be understood, that it does not 
only impact large petroleum producers. If that were the case, why would 
the independents be involved? Why would the independents be interested 
in bringing some kind of court action? It is because they are very much 
impacted.
  We have also heard over the last several days that the Governors are 
not for this. I just bring to the attention of my colleagues a letter 
by the Governor of Wyoming.

       . . . I strongly object to Senator Barbara Boxer's 
     amendment to the Department of Interior's Appropriations 
     Bill. . . . The amendment would allow the Department to 
     implement new and untested federal royalty crude oil pricing 
     regulations.

  And it goes on, in opposition to that.
  Minerals Management has proposed rules that are complicated, that are 
unworkable, that result in hardship to the producer, result in a loss 
of jobs, a loss to the economy of our State of Wyoming, and I think a 
security issue to this country when we have 55, nearly 60 percent of 
our oil imported. We have an opportunity here.
  Simply put, this valuation rule is a job killer. We ought not to go 
forward without having some time to make it work.
  I think the current language in the appropriations bill is fair and 
reasonable. Instead of taking reckless actions and getting up in broad 
generalities and talking about the evils of business, we ought to craft 
some rules that work. We can, in fact, do this.
  Again, I urge my friends in the Senate to vote against the Boxer 
amendment and continue to resolve the question in a way that is 
workable and a way that really deals with some regulations that will 
cause us to be able to collect these royalties, as we are all willing 
to do.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from California is recognized.
  Mrs. BOXER. Mr. President, as we agreed before, I will speak 5 
minutes now and then I will yield 20 minutes to Senator Dorgan.
  There were many misstatements made here, but I will start from the 
top. The Senator from Wyoming said that he didn't see me or any Members 
on this side at some closed-door meetings that were held between oil 
companies, the Department of Interior, and Members of the Senate.
  A, I was never invited to even one of those meetings. B, had I been 
invited, I wouldn't have gone, because I don't

[[Page S10403]]

think it is right for Senators to meet with regulators and companies 
that are being regulated by those regulators. A, I wasn't invited; and 
B, I wouldn't have gone, and I would have expressed my opinion as to 
why I declined the invitation.
  There were comments made by the Senator saying those of us who oppose 
the rider in this bill are antibusiness. I want to make something 
clear: 95 percent of the oil companies are doing right by the American 
people. They are paying their fair share of royalties. I applaud that. 
As a matter of fact, Atlantic Richfield has stepped away from the big 
oil companies and said, ``You know what? We will be a good corporate 
citizen. We are going to pay the right royalty based on the market 
price.''
  So, please, let no one say that this Senator is antibusiness when I 
support 95 percent of the oil companies in this particular matter.
  I also want to point out that we have a letter addressed to Senator 
Bingaman, which I ask unanimous consent to have printed in the Record, 
from a number of commissioners of public land, including New Mexico, 
Texas, Arkansas, South Dakota, Montana, North Dakota, Colorado, and 
Robert Hight from California, who support the Boxer amendment, as well 
as a letter to Senator Gorton.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                                The Western States


                                 Land Commissions Association,

                                                September 4, 1998.
     Hon. Jeff Bingaman,
     U.S. Senator, Hart Senate Office Building,
     Washington, DC.
       Dear Senator Bingaman: We, the undersigned Lands 
     Commissioners who are members of the Western States Lands 
     Commissions Association, urge your support for Senator 
     Barbara Boxer's amendment to the Department of Interior's 
     Appropriations Bill, S. 2237, to allow the Department of 
     Interior to implement new federal royalty crude oil pricing 
     regulations. The Department's proposed regulations would 
     ensure that oil companies would pay no more and no less than 
     fair market value for federal royalty oil. S. 2237 currently 
     includes a provision which continues the ban on implementing 
     the proposed regulations for the next fiscal year. This delay 
     is costing taxpayers $5 Million per month.
       The state agencies that are members of the Western States 
     Land Commissioner's Association have a strong interest in 
     ensuring that oil companies pay the market value of federal 
     royalty oil. The member states of the Association share in 
     the revenues collected by the Department of Interior. The 
     failure of the oil companies to pay market value for federal 
     royalty crude reduces the revenues obtained by the federal 
     government and the states.
       The Department's Mineral Management Service (MMS) has been 
     eminently fair in proposing its new regulations. MMS has held 
     numerous public and private meetings for over two and a half 
     years to allow the industry to comment and the industry has 
     filed over two thousand pages of comments. Based on industry 
     concerns, MMS has revised its proposed regulations a number 
     of times to take into account industry's suggestions and 
     criticisms. For example, MMS has revised its proposed 
     regulations to recognize regional differences, particularly 
     for the Rocky Mountain Area.
       The proposed MMS regulations are very reasonable. If oil 
     companies sell royalty crude on arm's-length transactions, 
     they pay on the basis of the prices they receive. If they do 
     not sell the oil on arm's-length transactions, they pay on 
     the basis of prices at market centers, adjusted for location 
     and quality differences, which are universally recognized to 
     result from competition among innumerable buyers and sellers.
       Oil companies presently use their posted prices to value 
     royalty oil. Posted prices are unilaterally set by individual 
     oil companies less than the market value of those crudes. In 
     contrast, the market prices proposed by MMS to value royalty 
     crude not sold by arm's-length transactions are set by 
     innumerable buyers and sellers and are publicly reported on a 
     daily basis.
       MMS' proposed switch from posted prices to market prices is 
     not a radically new concept:
       (1) The State of Alaska uses the spot price of Alaska North 
     Slope crude oil quoted for delivery in the Los Angeles Basin 
     as the basis for royalties;
       (2) Arco, since the early 1990's, uses spot prices as the 
     basis of payments of royalties throughout the country;
       (3) The recent State of Texas Chevron and State of Texas 
     Mobil settlements rely on the use of spot prices for royalty 
     valuation purposes.
       Mobil recently settled for $45 million a case brought by 
     The United States Department of Justice that Mobil had 
     underpaid federal royalties throughout the United States.
       The Department's comprehensive proposal is the logical 
     alternative to posted prices.
       Industry's efforts to require the federal government to 
     take and sell its royalty oil-in-kind should be rejected. 
     MMS, numerous states and more recently the General Accounting 
     Office (GAO) have voiced legitimate objections to industry's 
     proposal. Mandatory sales of royalty-in-kind oil would not 
     work for the thousands of federal leases which produce low 
     volumes of crude and in remote locations. Moreover, the 
     federal government's lack of easy access to pipelines, and 
     the major oil companies' unwillingness to pay more than 
     posted prices for their crude oil, would also mean that the 
     mandatory in-kind sales would generate even less revenue than 
     are presently generated.
       Thank you for your consideration.
           Sincerely,
         Ray Powell, Commissioner of Public Lands, New Mexico 
           State Land Office; Curt Johnson, Commissioner, South 
           Dakota Office of School and Public Lands; Jeff Hasener, 
           Administrator, Montana Department of Natural Resources 
           & Conservation; Robert C. Hight, Executive Officer, 
           California State Lands Commission; Garry Mauro, 
           Commissioner, Texas General Land Office; Charlie 
           Daniels, Commissioner, Arkansas Commissioner of State 
           Lands; Robert J. Olheiser, North Dakota Commissioner of 
           University and School Lands; John Brejcha, Deputy 
           Director, Colorado State Board of Land Commissioners.
                                  ____



                              Department of Natural Resources,

                                   Olympic, WA, September 3, 1998.
     Hon. Slade Gorton,
     U.S. Senator, Hart Senate Office Building,
     Washington, DC.
       Dear Senator Gorton: I'm writing to urge your support for 
     Senator Barbara Boxer's amendment to the Department of the 
     Interior's Appropriations Bill, S. 2237, to allow the 
     Department of the Interior to implement new federal royalty 
     crude oil pricing regulations. The department's proposed 
     regulations would ensure that oil companies would pay no more 
     and no less than fair market value for federal royalty oil. 
     S. 2237 currently includes a provision that continues the ban 
     on implementing the proposed regulations for the next fiscal 
     year. This delay is costing taxpayers $5 million per month.
       The members of the Western States Land Commissioners 
     Association, of which the State of Washington is a member, 
     have a strong interest in ensuring that oil companies pay the 
     market value of federal royalty oil. The association's member 
     states share in the revenues collected by the Department of 
     the Interior. The failure of oil companies to pay market 
     value for federal royalty crude reduces the revenues obtained 
     by the federal government and the states.
       The Department of the Interior's Mineral Management Service 
     has been eminently fair in proposing its new regulations. The 
     service has held numerous public and private meetings for 
     over two and a half years to allow the industry to comment 
     and the industry has filed over two thousand pages of 
     comments. Based on industry concerns, the service revised its 
     proposed regulations a number of times to take into account 
     industry's suggestions and criticisms. For example, the 
     service revised its proposed regulations to recognize 
     regional differences, particularly for the Rocky Mountain 
     area.
       The proposed Mineral Management Service regulations are 
     very reasonable. If oil companies sell royalty crude by means 
     of arm's-length transactions, they pay on the basis of the 
     prices they receive. If they do not sell the oil by arm's-
     length transactions, they pay on the basis of prices at 
     market centers, adjusted for location and quality 
     differences, which are universally recognized to result from 
     competition among innumerable buyers and sellers.
       Many companies presently use their posted prices to value 
     royalty oil. Posted prices are unilaterally set by individual 
     oil companies and are set at a level lower than the market 
     value of those crudes. In contrast, the market prices 
     proposed by the Mineral Management Service to value royalty 
     crude not sold by arm's-length transactions are set by 
     innumerable buyers and sellers and are publicly reported on a 
     daily basis.
       The service's proposed switch from posted prices to market 
     prices is not a radically new concept:
       (1) The State of Alaska uses the spot price of Alaska North 
     Slope crude oil quoted for delivery in the Los Angeles Basin 
     as the basis for royalties;
       (2) ARCO, since the early 1990s, uses spot prices as the 
     basis of payments of royalties throughout the country; and
       (3) The recent State of Texas/Chevron settlement relies on 
     the use of spot prices for royalty valuation purposes.
       The Department of the Interior's comprehensive proposal is 
     the logical alternative to posted prices.
       Industry's efforts to require the federal government to 
     take and sell its royalty oil-in-kind should be rejected. The 
     Mineral Management Service, numerous states, and, more 
     recently, the General Accounting Office, have voiced 
     legitimate objections to industry's proposal. Mandatory sales 
     of royalty-in-kind oil would not work for the thousands of 
     federal leases that produce low volumes of crude and in 
     remote locations. Moreover, the federal government's lack of 
     easy access to pipelines, and the major oil companies' 
     unwillingness to pay more than posted prices for their crude 
     oil, would also mean that the mandatory in-kind sales would 
     generate even less revenue than is presently

[[Page S10404]]

     generated. In addition, it makes sense to evaluate the 
     results of the current Mineral Management Service 
     demonstration program before requiring an approach nationwide 
     to locations that are likely to lose money.
       The bottom line for states is: These are assets that belong 
     to the beneficiaries of the states' trust lands and they 
     should be fairly compensated when those assets are sold. 
     Thank you for your consideration of my position on Senator 
     Boxer's amendment.
           Sincerely,
                                              Jennifer M. Belcher,
                                     Commissioner of Public Lands.

  Mrs. BOXER. Mr. President, I also will read into the Record the 
groups that support the Boxer amendment: American Association of School 
Administrators, American Bioenergy Association, Americans for Clean 
Energy, American Wind Energy Association, Arkansas State Lands 
Commission, California State Lands Commission, California State 
Superintendent of Public Instruction, Colorado State Board of Land 
Commissioners, Council of Chief State School Officers, Friends of the 
Earth, Global Biorefineries, Inc., Montana Department of Natural 
Resources and Conservation, National Association of State Boards of 
Education, National Education Association, National Parent-Teachers 
Association--the PTA--National School Boards Association, The Navajo 
Nation, National Trust for Historic Preservation, New Mexico State 
Lands Commissioner, Project on Government Oversight, Public Citizen, 
Safe Energy Communication Council, South Dakota State Lands 
Commissioner, SUN DAY Campaign, Taxpayers for Common Sense, Texas State 
Lands Commissioner, U.S. Public Interest Research Group, The Wilderness 
Society, and the Washington State Lands Commissioner.
  Later, after Senator Dorgan has finished and colleagues on the other 
side have had a chance to speak, I want to read what the States are 
saying as to how they view this rule and how they support the fact that 
there is a process going on to make sure that the largest of the oil 
companies--5 percent--pay their fair share of royalty payments so that 
the taxpayers get what is due them.
  Those who are supporting the Boxer amendment are standing with the 
taxpayers. That is very, very clear. I am very honored to have been 
able to offer this amendment.
  Again, I want to thank Senator Gorton for his indulgence in allowing 
us to have adequate time to debate this amendment.
  I yield up to 20 minutes to Senator Dorgan.
  Mr. DOMENICI. Senator Boxer, I thought when I proposed that we go 
next, that I had little statements, not 20-minute ones, and three of 
them could go because they were short.
  Mrs. BOXER. If Senator Dorgan would yield--I thought it was only two.
  Mr. DOMENICI. I wanted Senator Burns to discuss his 5-minute 
statement.
  Mrs. BOXER. I ask unanimous consent, when Senator Burns completes his 
statement, Senator Dorgan get 20 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The distinguished Senator from Montana is recognized.
  Mr. BURNS. I thank my friend from New Mexico. I will not be long, I 
say to my friend and neighbor from North Dakota.
  I want to put some things in perspective. Yes, the lands belong to 
the United States of America and are held in trust for the citizens of 
this country. But the citizens of this country and the taxpayers in 
this country do not participate in the expense of drilling the well. 
There is no argument on the eighth that is the royalty that goes to the 
surface owner. After all, the oil companies did buy the leases. They 
paid hard money for those leases. If there is a resource--in this case, 
oil--under the ground, they go and find it.
  That is not to say that every well they put in the ground is 
successful. We have more dry wells than we have wells producing. The 
American people did not make any investment in drilling that so-called 
dry hole, and they didn't even participate in footing the bill; the 
expense of putting the well down is a producer's.
  There is no argument with the eighth. I can simplify this very 
easily. ``In kind'' would be right. If you want to participate in the 
value added to compute your royalty, as the chairman of the Energy 
Committee said is being attempted by MMS, then MMS should participate 
in the transportation and the cost of the value added. That is only 
fair.
  Now, if that is not fair, then I suggest that the Interior Department 
go out to the well site, take their truck, and every eight buckets of 
oil that come out of the ground, they get the eighth one, put it in 
their truck, and do with it whatever they want to do with it--go on 
open markets, like the independents or even the big companies do. It 
doesn't make any difference. That is their eighth. They have been paid. 
The market goes up, the market goes down; the risk is the same for the 
surface owner as it is for the one who is bringing it up. That is very 
simple. No argument with the eighth.
  What we are saying is: Fair is fair. If you want to collect the 
royalty on the value-added product, then there has to be expense 
incurred by those who want to participate in that part of the process 
of getting oil to gasoline and the energy that we need in this country.
  Senator Domenici brought up the point a while ago that people are 
paying more for their bottled water in the grocery store than they are 
for their gasoline. There is another aspect of this--and I think 
Senator Dorgan from North Dakota will agree with this--in this economy 
today, nobody who produces a raw product is making any money. Our 
farmers understand that. I will give my old ``F-U'' line here, old 
farmers union line they call it: Go and price Wheaties at the grocery 
store at $3.75 a pound and the farmer can't even get $1.75 for a 60-
pound bushel of wheat.
  Something is out of whack here. So we are not arguing about the 
eighth. We are arguing where do you take the eighth and what our 
investment or our part of the expense should be. You can't let 
everybody else pay all the expenses and you just participate in the 
harvest of those dollars. It is a very, very simple thing. There is 
nothing difficult about understanding that. But I think that is what we 
ought to do. Yes, we are worried about children in schools. I sure am. 
I am worrying about the children of those folks who work awfully hard 
in the oil patch to feed their families, participate in their 
communities, and take care of the obligations they have as citizens of 
the United States of America.
  Mr. President, I yield the floor.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. DORGAN. Mr. President, this is an interesting debate.
  Mr. DOMENICI. Mr. President, if the Senator will yield briefly, I ask 
unanimous consent that the next speaker on our side be Senator Nickles 
and he be allowed 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from North Dakota is recognized.
  Mr. DORGAN. Mr. President, this is an interesting debate that likely 
will get very little attention, given the proclivity of the press to 
cover other things going on in our country these days.
  I rise today to support the amendment offered by Senator Boxer. There 
is a charming quote from Abraham Lincoln that came during his debates 
with Douglas. At one point, very exasperated because he simply could 
not get Douglas to understand a point he was making, Lincoln turned to 
Douglas and said, ``Tell me, how many legs does a cow have?'' Douglas 
said, ``Four, of course.'' Lincoln said, ``Now, assume that the tail 
were a leg; how many legs would the cow have?'' Douglas said, ``Five.'' 
Lincoln said, ``You see, that's where you are wrong. Just calling it a 
leg doesn't make it a leg at all.''
  As I heard members discuss this amendment on the floor of the Senate, 
saying this amendment affects independent oil companies, I thought it 
was easy to say, but it was totally removed from the facts. This bill 
has no impact on independent oil companies. It does not have an impact 
on independent oil companies. It has nothing to do with the fact that 
commodity prices are collapsing which is true on the farm and true for 
energy companies. It has nothing to do with that either. In fact, the 
lower the price for oil, the less royalty fee would be required to be 
paid by the oil industry. So that is not what this issue is about.
  A lot of folks want to confuse the issue. It is not about that. It is 
not

[[Page S10405]]

about independent oil companies who are not affected, and not about the 
price of oil. When the price of oil goes down, royalty fees go down.
  Let me describe what it is about. It is very simple. The companies 
who drill for oil on Federal lands pay a 12-percent royalty to the 
American people for the privilege of doing that on the oil that they 
bring up out of those lands and sell. They are required, because they 
are drilling on lands that are owned by the American people, to pay a 
royalty fee. That is fair. I suppose some think they ought to drill and 
keep all the money. But it is fair.
  Over many years, we have decided that if they are going to get 
something the public has, they will pay a fee. That is the 12-percent 
royalty fee. A fair portion of that fee that goes to the States is used 
for education. That is an important part of the revenue base of our 
States. A large part, no, but an important part. How much do we get 
from these royalties? When someone wants to produce oil on public 
lands, how much do we get from the royalties of 12 percent? Well, it is 
12 percent of the price of the oil. What is the price of the oil with 
respect to the independent oil companies that produce it and sell it? 
That sale price is the price of the oil. They are then required to pay 
a royalty fee on the price of the oil. So an arm's length transaction 
between a willing buyer and a willing seller establishes the market 
price for oil. That is not a problem. That is not a matter of 
contention.
  But what about a company that is a large integrated company that 
produces oil and then, as a producer, sells it to itself as a 
wholesaler or a retailer and it produces the oil and prices it and 
sells it to itself? What about that company? What then is the price of 
the oil, and how much in royalty payments do the American people get 
from that transaction? The answer is, the price of that oil in a large 
integrated oil company is whatever the company says the price of the 
oil is.
  What if they say, gee, well, the price of our oil is $4 a barrel, and 
you get 12 percent of that? Are we being cheated if, in fact, oil is 
selling for $12 a barrel and they say, ``Ours is only worth $4 because 
we are selling it to ourselves, and we have artificially priced it 
because we want to avoid paying your fees, avoid paying our fair share 
to the American people?''
  Are we being cheated? Of course we are being cheated. The question 
is, Who cares about that in here? Does anybody care? Does anybody care 
if the American people get taken to the cleaners by somebody that wants 
to underprice something they sell to themselves and, as a result, pay 
the American people something less than they were supposed to pay? Does 
anybody care about that? A few of us do. We will have a vote on it to 
see who cares.
  So what is the royalty fee we get? It is 12 percent times the value 
of the oil. Who establishes the value of the oil? In most cases--95 
percent of the cases, with all of the independents and some others--it 
is the fair market value, a willing buyer and a willing seller in an 
open market transaction, which establishes a price upon which a 12-
percent royalty payment is made.
  This amendment isn't even a close call, by any standard. I want to 
use this example to talk about two other things that relate exactly to 
this, which give me as much concern as this does. In fact, this is not 
a very large issue. It is an issue of $66 million a year; $66 million 
is a lot of money, but in the construct of a trillion dollars, or a 
trillion and a half--the $1.6 trillion budget that we have, and the 
$135 billion of revenue here and there--I mean, it is not that big an 
issue. Yet, they are waging a fight; the major integrated oil companies 
are waging a fight, and you would think you were taking away their last 
oil truck.
  Let me tell you about an exact replica of this debate. We lost it on 
the floor of the Senate. We have the exact same issue on taxation--
corporations, especially foreign corporations, but domestic as well, 
that sell to themselves and then tell us at what price they sell the 
product to themselves, a wholly owned subsidiary, and therefore how 
much profit they made and how much income tax they will pay to the 
Federal Government. And 65 percent of the foreign corporations doing 
business in this country, most of whose names you will recognize, do 
tens of billions of dollars of business in America and pay zero in 
income tax--not a penny. Zero. How do they do that? Let me give you one 
example. A company sells a piano to its affiliated subsidiary and 
prices it at $50. Would you like to buy a piano for $50? It is exactly 
the same thing we are talking about with pricing oil you sell 
yourself--undervalue it and pay a tax, or in this case, a royalty, 
based on evaluation that is artificially low so you can avoid paying 
the royalty, or as in the case I described, avoid paying the income 
tax.
  How about a tractor tire? I don't know if anybody in here buys and 
sells tractor tires. Probably not, but $7.60 is the price of a tractor 
tire in a transaction between a corporation--a foreign corporation--and 
its wholly owned subsidiary in the U.S. Why $7.60? The company 
artificially prices it low so that it doesn't pay income taxes in the 
U.S. We voted on that. We voted on something that corrects that 
problem. We have people in this Chamber, sufficient numbers, who have 
said, ``We don't want to correct that. We don't even want to debate 
whether it is cheating. We don't want to deal with it because big 
business doesn't want that to be changed.''
  We don't intend to change it. It is the same principle here. Big, 
integrated oil companies sell to themselves, underprice what they are 
selling to themselves, and, therefore, cheat the American people out of 
royalty payments that they ought to be making. Then members come to the 
floor of the Senate and say to us, ``Gee, you are being unfair.'' We 
are not being unfair. We are required to stand up for the interests of 
the American people. They own that land. They own that land on which 
drilling takes place. They are owed the 12-percent royalty based on a 
fair computation of the price of that oil.
  I will tell you one more story. I served in State office before I 
came here. In our State, we assess a tax on railroads. It is exactly 
the same principle we are talking about here today. We assess a tax on 
railroads. When I assumed office as Tax Commissioner, which was an 
elective office, and assumed responsibility for that tax, I asked one 
of the folks who were responsible for that tax--which is an ad valorem 
property tax on the railroad system--``How do you do that?'' He said, 
``Sit down and I will show you.'' He said, ``Because the railroads 
aren't bought and sold, you look at all of the stocks and all of the 
debt. Assuming you bought all of their stock and debt, that is the 
value of the railroad.'' I said, ``Tell me a little more about that.'' 
He said, ``Here is the stock. I sell you this railroad. Here is the 
stock.'' I said, ``Gee, what price are you using, par value?'' ``Par 
value,'' he said.
  Remember, we have been doing that for 25 years. The railroads 
indicated to us that that is the value. Using the par value, of course, 
is absolutely ridiculous. Par value has nothing to do with the value of 
the railroad stock. But the industry had convinced the people in our 
State who value railroads to use an artificially low, absurd value for 
the railroad stock. They were fat and happy for dozens of years 
underpaying their taxes. They loved it. The minute I decided to change 
it, they said ``Holy cow. What are you doing to us? Why on Earth are 
you being unfair to us?'' I said, ``I am not being unfair. I am asking 
you to do what every other American does--pay your fair share of the 
taxes.''
  That is the principle and the issue on which we will be voting. The 
principle and the issue here is not about ma and pa. It is not about 
independents and not whether you support the oil industry. I do. I have 
cast a lot of votes on behalf of the independents, and support the 
majors as well, because I think they play an important contributing 
role for this country in providing energy for our future. But in cases 
like this where you have integrated companies who are undervaluing 
their oil so they can underpay the royalty fee they owe to the people 
of the United States, I say let's correct it.
  Some of my colleagues say that underpayment is not happening.
  Let's take a look at the rates. Alaska settled with the oil companies 
for over $2.5 billion. Is that because somebody was making arithmetic 
errors? I don't think so. California, $350 million; Texas, $17.1 
million.

[[Page S10406]]

  My point is that the States have been plodding their way through this 
issue with respect to royalties owed to the States. Can we not have the 
strength to stand up here and say to the integrated oil companies, 
``You have a responsibility to be fair to the people of the United 
States? We are not asking for more than you owe. Your oil prices have 
declined. Therefore, you should pay the new price.'' We understand 
that. ``We are not asking for more than you owe; not a penny more. We 
are asking you on behalf of the people of this country to pay your fair 
share.''
  What is happening today--and in this bill that came to the floor of 
the Senate--is an attempt to intercept a rule that will require these 
folks to pay their fair share of royalties. And a bunch of folks here 
in the Senate stand up and say, ``No, no, no. We want to protect the 
old order.'' The old order is to let people sell oil to themselves, to 
underprice it, undervalue it, and avoid paying the American people what 
they owe them in royalty fees. That is what is wrong.
  If we turned out the lights and voted on this, people in this Chamber 
would express that view. I hope when we have a vote on this we will all 
decide that there is a right and wrong answer. The right answer is to 
just ask the integrated majors who sell oil to themselves to price it 
fairly and abide by the new MMS rules. They have been studied and 
worked on and they are fair. Do this the right way.
  The Senator from California is not on the floor trying to attack an 
industry. The Senator from California is not offering an amendment that 
in any way affects the independent oil producers. Ninety-five percent 
of the oil producers in this country will be unaffected by this 
amendment, 95 percent of them. In fact, some of those who have been 
unaffected have been convinced to send us letters saying that they are 
going to be affected by it. I assume they have been convinced by their 
bigger cousins, or bigger uncles. But the fact is, it is wrong. Calling 
a tail a leg doesn't make it a leg at all, as Lincoln said. Saying this 
affects independents doesn't make it affect independents. It does not. 
It is a very simple, direct approach to say to the integrated oil 
companies who sell oil to themselves that they have a responsibility to 
price oil fairly so that the American people get what they deserve.
  Mr. President, I yield the floor.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. DOMENICI. Mr. President, will Senator Nickles yield for an 
inquiry?
  Mr. NICKLES. Certainly.
  Mr. DOMENICI. Mr. President, I would like to state for anybody who 
would like to speak in opposition to the Boxer amendment that we have a 
few minutes left. I would like to ask unanimous consent that on our 
side, when appropriate, that the following order for our speakers be 
the order: Following Senator Nickles, who will speak for 10 minutes, 
the Senator from Louisiana will speak for up to 5 minutes; then Senator 
Hutchison for 25 minutes. That will leave some additional time for 
additional Senators, or for me. We would like to do it in that order 
pursuant to the rotation from one side to another.
  I ask unanimous consent that be the order.
  Mrs. BOXER. Mr. President, may I ask the Senator? That sounds fine to 
me. In other words, all of your three speakers will include Senator 
Hutchison, and we will finish up with our time. Is that what the 
Senator is suggesting?
  Mr. DOMENICI. I don't want to do that. I said that Senator Nickles 
will go next. If you have somebody, they will be next. If you don't, 
Senator Landrieu will go next, and back and forth. But our times are 
now set for three Senators. As Republicans are recognized, they will 
speak in that order.
  Mrs. BOXER. That is fine.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. I thank the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I want to compliment my colleague, 
Senator Domenici, as well as Senator Hutchison, for their leadership on 
this issue.
  Mr. President, I want to correct what I hear from my colleagues, the 
proponents of this amendment, and make a couple of statements that I 
think are factual.
  One, I think I heard somebody say on the other side--Senator Durbin--
that there were not any hearings. We had a hearing. I conducted the 
hearing. I don't conduct hearings very often, but when this issue came 
up, I knew a hearing was needed. Some people have demagogued this issue 
and tried to use it for whatever purposes, political or otherwise. I 
wanted to know the facts. I am chairman of the relevant subcommittee in 
the Energy Committee so we scheduled a hearing. We had the hearing, I 
believe, in June of this year.
  There are just a couple of points that I would like to make. One, in 
testimony before the House subcommittee, the director of MMS said the 
purpose of the regulations were not to raise money. She said, that the 
regulations are to be revenue neutral. I hear all of the list of the 
groups who are supposedly proponents of the Boxer amendment--
schoolboards and so on--thinking they are going to get a lot more 
money. The proposed regulations are supposed to be revenue neutral. It 
is not supposed to raise any money. Proponents are saying, ``Oh well. 
If we don't pass this amendment, the schoolboard is going to be out of 
some money,'' and so on. That is false. It is not the case. It is 
contrary to what the director of MMS has testified to.
  I don't happen to agree with the director of MMS, or the Assistant 
Secretary of the Interior in proposing this oil valuation regulation. I 
think they have gone too far. I happen to like Mr. Armstrong. But I 
don't think their regulation makes sense. That is one of the reasons we 
had hearings.
  One of the things we don't do enough of in the Senate and House is we 
don't have oversight over our various agencies. A lot of times the 
agencies propose rules and regulations, and sometimes those rules and 
regulations don't make sense. They may be well intended, and they may 
have stated goals of simplicity, clarity, and definability, but they 
may do just exactly the opposite.
  Unfortunately, the regulations that MMS has come up with--at least 
according to the people who work in the industry--the regulations won't 
clarify anything. They won't even raise the Government any money--maybe 
not as much money as they are raising right now. What they will raise 
is litigation. That doesn't help anybody. That doesn't help the 
Government. That doesn't help the schoolboard. That doesn't help the 
tribes. That doesn't help the States or anybody, except for maybe the 
lawyers who are involved in the litigation.
  Some of us have looked at this. This is one of the regulations that 
we need to review. I mentioned that we had a hearing. Several of us 
have had meetings with members of the administration, the Department of 
the Interior, and MMS proponents of this regulation, and people who 
work in the industry. We tried to pull them together.
  Both Senators from Louisiana, both Senators from New Mexico, Senator 
Hutchison from Texas, and myself have met with MMS and said, ``Can't we 
figure this out? Can't we come up with workable, definable, clearly 
understandable regulations on how to determine royalty evaluations?'' 
We have had interesting meetings. But, unfortunately, sometimes it 
appears that MMS is not really listening to some of the complaints and 
really hasn't made the necessary changes to the regulations to make 
them workable.
  I would take issue with some of my colleagues who said, ``Well, these 
big oil companies, they are cheating, they are selling to an affiliate, 
and they lowball the price, and they make more money, and the 
Government is being cheated.''
  I do not think that is the case. If it is the case, the government 
has every right to take the company to court, and maybe they can win.
  What we want to do is have clarity. We want to have definability. We 
want people to pay exactly what they owe in royalties--not a dime more, 
not a dime less. And that is our objective. It is easier said than 
done. And the MMS came up with some proposed regulations. They said, 
``Oh, well, we will put out some prices that are on the exchange, and 
that will be what the royalty will be based on, on that given date.''

[[Page S10407]]

  But wait a minute. What if there is an arm's length transaction where 
somebody actually bought and sold? Maybe they didn't buy or sell at the 
same price posted on the exchange. Market valuation on some exchanges 
is based on some transactions, but you have some transactions below it 
and some above it; you have some transactions that might be a little 
higher because of a little different weight of oil or different grade 
of oil or a transportation problem or a little different sulfur 
content. There are lots of variables in the equation.
  So to have some bureaucrat say, well, I am going to pick this market 
index or this posted price somewhere and that will be the value of what 
the Federal Government will be paid on instead of the actual value of 
an arm's length transaction, that doesn't make sense. I will tell you, 
in my own State we have several different prices on different types of 
oil. We have Texas crude; we have Oklahoma sweet, Texas sweet; we have 
Cushing prices; we have a lot of different prices, posted prices, and 
so on.
  So I just mention to my colleagues, I don't think the oil companies 
are trying to cheat anybody. I think the proposed regulations are not 
clear; they need to be clarified. We need to work with MMS to try to 
come up with better regulations that are clear and work. They haven't 
done it yet. And their proposal leaves a lot to be desired. Their 
proposal would result in more litigation, and that is not going to help 
any schoolboard in the country.
  And so I think we have the responsibility in Congress as maybe the 
countervailing branch of Government, the branch of Government that 
listens to our constituents when we find a regulatory agency that is 
not listening, that is not working, that is not promulgating 
regulations that will work, to get their attention. We have an 
obligation to make them work with us to come up with something that is 
reasonable and sound. And if they continue to come up with regulations 
that will not work, that do not make sense, then we should stop that. 
This is called checks and balances. It is called balance of power. We 
cannot allow regulatory agencies to run amok.
  And so I think we have a constitutional responsibility to try to make 
some progress in this area. If we find regulatory agencies that are not 
doing what they are supposed to be doing, we should hold them in check. 
That is what this provision, that the Senator from California is trying 
to strike, strives to do. This provision doesn't say that MMS cannot go 
further on their proposed regulations. It basically says let's put out 
regulations that are reasonable and sound. And many of us have tried to 
facilitate meetings to make that happen.
  My colleagues on the other side said that this proposed rule exempts 
95 percent of the companies. Independents are not covered. Independents 
tell me they are covered. The regulations are written for all oil 
producers; 100 percent of all oil producers are covered by these 
regulations. Some of my colleagues have said: Oh, no; it just applies 
to those companies who are selling to marketing affiliates. Guess what. 
More and more companies today are selling into a company that maybe 
they have a little piece of or something--a natural gas marketing 
company, an oil marketing company, and so on. They are banding together 
in these types of organizations. And so this regulation certainly 
reaches, I would say--I don't know what percentage, but according to 
the independent petroleum producers--I happen to think they would know 
more about it than anybody else--it says 100 percent. The independent 
producers say in a memo, ``Percentage of oil producers impacted by the 
proposed oil royalty rule, 100 percent.'' I happen to think they know 
what they are talking about.
  And so again I compliment my colleagues, Senator Hutchison and 
Senator Domenici, for including this provision in this bill. I think 
they are right in doing so. I think MMS needs to work with Congress and 
with the affected parties to make sure that every company pays exactly 
what they owe--no more, no less.
  If colleagues are interested in trying to raise money, they should 
try to raise the royalty rate, and we can have a debate on that. That 
is certainly within their rights. I don't think they will be 
successful, but they have the right to try that. But to try to raise 
the royalty rates by changing the regulations or trying to change the 
regulations in a way so that they will raise money is a tax increase by 
a regulatory agency, I reject that emphatically. Congress has the power 
to raise taxes, not some unelected bureaucrat in the Minerals 
Management Service.
  To all the arguments that our colleagues from California and others 
made, that this proposed regulation is going to raise so much money and 
it is going to help schools, and so on--no; what we have to do is make 
sure that every company pays exactly what they owe--no more, no less. 
The current system is not correct. It needs to be improved. However, 
the regulations proposed by the MMS do not fit the bill. They need to 
be revised. We are trying to get their attention so they will revise 
those rules in a workable, definable, understandable way that is clear, 
so that everyone will know exactly what should be paid and will pay 
that much and no more.
  Mr. President, again I thank my colleagues for their efforts, and I 
urge my colleagues to support our effort to defeat the amendment of our 
colleague from California.
  Mr. BUMPERS addressed the Chair.
  The PRESIDING OFFICER (Mr. Hutchinson). The Senator from California.
  Mrs. BOXER. I would like to yield 10 minutes to my colleague from 
Arkansas, Senator Bumpers, but I want to just make a point on the 
comments of Senator Nickles.
  We have here a chart that shows how many meetings were held before 
this rule was put into place. I want to make sure that colleagues 
understand there were actually many, many months of proposals. That it 
is a fact that the purpose of this rule is not to raise additional 
revenue. But, if companies pay their fair share, the Mineral Management 
Service has shown us, if they do in fact pay the royalty payment on the 
market price rather than a made-up price when a company sells to its 
own affiliate, taxpayers will receive $66 million in additional 
revenue. That is why all these various schoolboards are for it and many 
state land commissioners.
  I wanted to point out, when the rule was beginning, there were very, 
very favorable comments from Louisiana, Wyoming, New Mexico, Alaska, 
and there is a reason for it. We see that these States have had to sue 
in the past, I say to my friend from Oklahoma, for the fair share of 
the royalty payments that they believed they were owed. And I think 
that the States are saying to us: ``We don't want to go this route. We 
don't want to be litigious. We don't want to be in court every day. We 
want a fair rule.'' I know my friend from Oklahoma wants a fair rule. 
The issue is, How do you go about it? Do you go about it by shutting 
down the ability of the Interior Department to proceed on what many in 
the States are saying is fair, even New Mexico? The Tax Revenue 
Department said, ``The MMS should be commended for the effort they have 
made in developing oil valuation regulations that are fair to all 
interested parties.''
  We can see that the oil companies settled for $2.5 billion in Alaska; 
in New Mexico, $8 million; in California, $350 million; in Texas, $17.5 
million. The fact is, oil companies are settling because they are not 
in a strong position. When you pay a royalty payment based on a made-up 
price and not a market price, you open yourself up to lawsuits.
  I also wanted to point out that if you really look at the companies 
that are affected by this--and we have put this in the Record--they 
make in the billions of dollars, and these royalty payments are a tiny 
percent. As a matter of fact, what we have learned is that one of the 
companies, Shell Oil, which would see the greatest increase in their 
royalty payment, that great ``increase'' is equal to 7-100ths of 1 
percent of Shell Oil's revenue every year.
  So, we are not talking about huge sums of money to these giant oil 
companies. What we are really fighting about here is the principle, the 
issue that they should pay their fair share. And even if $66 million 
does not look like a lot of money to some of my colleagues, it is a lot 
of money when it goes into various States and into classrooms.
  I yield 10 minutes to Senator Bumpers at this time.

[[Page S10408]]

  The PRESIDING OFFICER. The Senator from Arkansas is recognized.
  Mr. BUMPERS. Mr. President, I thank the Senator from California for 
yielding to me.
  Mr. President, just to put this thing in perspective, I call on all 
of my colleagues to recall the number of times they have appeared 
before their local chamber of commerce and Rotary Clubs and told them 
that, once they get to the U.S. Senate, or even the House of 
Representatives, it is going to be a new day. They are going to protect 
the people's rights. They are going to take care of their money. We 
have pledged: ``I will treat your property and your money as though it 
were my own.''
  I have made that speech, and I daresay 99 other Senators have made it 
as well. So I say, we have to ask ourselves, are we fulfilling our 
commitment and our solemn vow to the people back home? Ask yourself 
this question: If you had an oil well, and you discovered that your 
lessee was selling your oil to an affiliate or a wholly-owned 
subsidiary, and they were selling it at a price considerably less than 
published spot prices of that oil--would that be acceptable to you as a 
private landowner? Let's assume your lessee is selling your oil to an 
affiliate for $12 a barrel, but the spot price of that oil is $14 a 
barrel--if you were the royalty owner, wouldn't you question that? 
Would you tolerate it?
  I read a story in USA Today from which I quote:

       States, native American tribes and landowners are suing for 
     the full, open-market price fees, and a few oil companies 
     have begun to cut settlement deals from Alabama to New 
     Mexico, rather than face trial. According to the Watchdog 
     Project on government oversight, there is more than $2 
     billion in uncollected Federal royalties at open-market 
     prices, and the total grows by $1 million every week.

  When you vote against Senator Boxer's amendment, are you keeping 
faith with the people back home who own this oil? It does not belong to 
the U.S. Senate, it belongs to the taxpayers of America. When the 
Secretary of the Interior signs a lease with Exxon, Mobil, or whoever, 
the lessees agree to pay a royalty, usually 12.5 percent, on the oil 
they take from the Federal land. However, having agreed to that, they 
now are not paying that. While I appreciate that oil prices are 
currently low, that does not provide justification to cheat the 
taxpayers of America out of the fair royalty on their oil.
  If this case did not have any merit, why did Mobil recently settle 
with the U.S. Government for $45 million on this very issue? They have 
essentially agreed to the very same thing Senator Boxer is saying they 
owe. Why are Native Americans suing for royalties? Why are States 
collecting big, big settlements with the oil companies? Precisely for 
the very reason Senator Boxer brought this amendment up. All she is 
saying is let's collect on the lease for what the oil brings, not for 
some fictitious price created by selling to yourself, by selling to an 
affiliate. If you are going to treat the taxpayers' money as though it 
were your own, ask yourself what would you do? Why, you wouldn't 
tolerate this for 10 seconds, would you, if you found out that the oil 
company that had the lease on your land had been selling oil to a 
wholly-owned affiliate at $2 under the spot price for which they could 
have sold it?
  This reminds me of a coal case. We found out that Ohio Power Company, 
a utility company in Ohio, had been buying coal from one of its wholly 
owned affiliates for 100 percent more than they could have bought it on 
the open market. You talk about a cozy relationship. This was a 
slightly different situation, but I am just telling you, these things 
happen. So, if you vote against Senator Boxer's amendment, don't go 
home and tell people how you are treating their property as if it was 
your own, because you wouldn't tolerate it for a second.
  Mr. President, the Minerals Management Service is the agency we 
depend on to manage royalties on Federal lands leased for oil and gas. 
We expect them to get the most for it they can get. Congress has set 
the royalties on oil here. We say the Secretary of the Interior cannot 
lease it for less than 12.5 percent, and then say to the Minerals 
Management Service, ``But if you catch the oil companies pulling 
shenanigans, don't do anything about it''? If Senator Boxer's amendment 
fails, that is what we are saying.
  So I regret that the price of oil is low, and the Senator from Texas 
has made that point a number of times; oil prices are low. Most of you 
know I have spent 9 years trying to make the Federal Government make 
the hard rock mining companies pay royalty on the land we give them for 
$2.50 an acre. I faced it. I am leaving here at the end of this year. I 
don't know what will happen after that, but I can tell you one thing, I 
tried for 9 years. I stood where I have been standing right now for 9 
years and squealed like a pig under a gate, saying the same thing I am 
saying now: You are cheating the American taxpayers.
  You think about us giving away 3.2 million acres of land in this 
country for the last 130 years for $2.50 an acre, land that had 
billions and billions of dollars of minerals under it, and what did the 
taxpayers get back? They got 557,000 abandoned mine sites that are 
going to cost them $70 billion to reclaim. Royalties? Zip. Nothing. Not 
a dime. I lose it every year, and the people who vote against me go 
back to the Chamber of Commerce and say, ``Oh, I'll treat your property 
just as though it were my own.'' If you believe that is the truth, you 
ought to be in a mental institution. If that is your idea of treating 
property the way you would treat it if it were your own, you need a 
guardian. The situation here is essentially the same thing.
  The other day when I tried to raise another issue, just an 
environmental issue on how we are going to mine these hard rock 
minerals, I lost. I got 40 votes. I knew I was going to lose. The same 
people who voted against me will go back home and say they are 
environmentalists, even though they do not want the Interior Department 
to regulate how we mine and how we reclaim the land after we mine. I 
just got killed on it, 58 to 40. As I say, I am leaving, so the other 
side won. I know a couple of people here who I think will take it on, 
and it will be in capable hands, but I forewarn you: ``It ain't an easy 
battle.'' That is the most egregious case I have ever run across in my 
life--billions in gold and palladium and silver taken off the land over 
the years and taxpayers don't get a nickel for it. All they get is a 
big environmental Superfund site.
  Mr. President, in this case I will plead with my colleagues, the 
States favor this. I understand Wyoming has kicked the traces over, but 
the rest of them favor this amendment, and they are cutting deals with 
the oil companies right now. Senator Hutchison said no, the United 
States is not going to cut a deal; if the Indian tribes and the States 
want to, that is their business, but oil prices are low, and we are 
just not going to bother with it.
  Gold prices are low, too, and I know that.
  Mr. President, I will close by simply reminding my colleagues that I 
have heard in the last 24 hours that one of the principal candidates 
planning to run for President says he is reconsidering because he 
doesn't know whether he wants to subject his family to what goes on up 
here.
  Mr. President, I ask unanimous consent for 2 additional minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BUMPERS. He says he doesn't want to subject his family to the 
kind of things to which politicians are being subjected. There are two 
sides to that story, and I understand that.
  When I ran for Governor 28 years ago--I won the Democratic primary 
almost 28 years ago today--I had a slogan: ``Let's get our State 
together.'' We had been bickering and nothing was happening in the 
State. I said, ``Let's get our State together,'' and when I was 
Governor, I called people together, Republicans and Democrats, and we 
worked well together. We had 4 great years, if you will pardon a self-
serving statement.
  I always said politics is a noble profession. My father said it a 
long time before Jack Kennedy did. He believed it. He served in the 
legislature. He wanted his two sons to go into politics. How long has 
it been since a parent has said they want their son or daughter to go 
into politics?
  In any event, he didn't say all politicians are noble, he said public 
service is an honorable, noble profession. I have always believed that. 
I think it

[[Page S10409]]

still is. I think what a tragedy it is that the country is in the 
situation it is right now and the effect that has on people and their 
willingness to serve and their wanting to serve as I did. I think about 
us voting on things here where it is obvious to me--I don't want to 
seem arrogant about this, but this is not even a debatable amendment 
about what is fair and what is right. We all know what it is. So I 
plead with you, do your duty. I yield the floor.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Louisiana is recognized.
  Ms. LANDRIEU. Thank you, Mr. President.
  Mr. DOMENICI. I ask the Senator if she will yield for 2 minutes.
  Ms. LANDRIEU. Yes, I yield.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I say to Senator Bumpers, in particular 
I speak of the last 2 minutes of his statement. I commend him for what 
he said and his concerns about the condition of our country, and in 
particular--I use a different word--but the cynicism that is generating 
by leaps and bounds about politicians and people in public life. We 
can't have our democracy and have that continue indefinitely. It will 
go right to the heart of it.
  Having said that, I was going to say something a little bit more 
jovial and just suggest that your eloquence is going to be greatly 
missed, but the fact that you keep losing, could it mean that you 
happen to be wrong? I yield the floor.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Ms. LANDRIEU. Mr. President, I say to my wonderful colleague from 
Arkansas before I get into the substance of my remarks, I have 
tremendous respect for him for his tremendous fight over such a long 
period of time on issues like this. Yesterday, we were together in our 
arguments because we have very similar feelings, which I think is 
shared by many in this body, about paying the taxpayer their fair share 
when it comes to minerals. I say to Senator Bumpers, he is going to be 
missed. I am going to pick up the fight, as I told him before, on hard 
rock mining, but there are some big differences between what we talked 
about on mining yesterday and what we are speaking about today.
  One of those big differences is in hard rock mining there are no 
royalties paid. It is a system that cries out for reform and change. In 
this instance--and I know you say, ``Well, there is Landrieu; she's 
from an oil and gas State. We knew she was going to say this.'' Trust 
me, when this issue first came up, I didn't know what I was going to 
say, for a number of reasons. Maybe I should say something about that 
first.
  Before you came here, you were a Governor, but I was a State 
treasurer and I managed a billion dollars that came from the Outer 
Continental Shelf. Because we are a poor State, because we haven't 
managed our resources as well as we could have in the past, and because 
of other issues--we didn't have computers in the classrooms--I managed 
that money more carefully than I manage my own. It came from these 
royalties, and I treasured every single penny, because with every dime, 
we could then hire a new teacher or put a computer in a classroom or 
buy software for kids. I am there with you on that 100 percent. We had 
that billion dollars, and it is growing every day and we are happy for 
it in Louisiana.
  I believe as deeply as I can express that we want the taxpayers to 
receive their absolute fair share to the penny because these dollars 
can be put to good use, and I hope they will be put to better use, 
because the other point I want to make is I am getting ready to 
introduce--I hope with Senator Bumpers and others and Senator Hutchison 
from Texas--a bill that will help redistribute these royalties that we 
get and have been getting since 1955 to the tune of $120 billion, which 
the Federal Government has received from these royalties; to 
redistribute it in a better way; to invest it in our environment; to 
invest it in the expansion of our national parks; to invest it for the 
expansion of our urban parks; to prevent species from becoming 
endangered, a real investment in our environment, a real payback in the 
right and noble sense to the taxpayer.
  I am 100 percent on the record for just royalties being paid, for 
substantial royalties being paid when appropriate, so I don't want 
there to be a question--and I so much respect the Senator for his 
fight--but this issue is about really litigation and lawsuits and 
unclear regulations. It is not necessarily an environmental or 
antienvironmental issue, and it shouldn't be a drilling or a 
nondrilling issue.
  It is about whether we should adopt a rule that is either going to 
stop the litigation, or we are going to adopt this new rule that isn't 
going to stop the litigation. The rule that we have to consider for 
which we are now asking for a suspension is not going to do anything, 
as much respect as I have for Senator Boxer, in stopping the 
litigation.
  To put this in perspective, let me say to my colleagues that last 
year, Minerals Management Service received $6 billion from royalties. 
At issue here is $66 million, which is less than 1 percent of the 
total. This isn't about oil companies not wanting to pay royalties. I 
say to the distinguished Senator from California, they sent to the 
Federal Treasury $6 billion last year, and the year before it was $4 
billion, and since 1955 it has been $120 billion. They are not opposed 
to sending their fair share, but because the regulations are 
complicated, they are difficult--the oil industry is reorganizing 
itself, driven by technology and the pressures--may I have 2 more 
minutes?
  Mr. DOMENICI. I yield 2 more minutes.
  Ms. LANDRIEU. The oil industry is reorganizing itself in such a way 
that all it is asking for, I say to the Senator from California and 
others, is a fair rule that is clearly understood so that they can pay 
their fair share, get out of the courtrooms, cut their cost of their 
lawyers and accountants, pay the taxpayers their fair share, and get on 
with their business.
  It is in nobody's interest for this to continue in this way--not for 
business, not for jobs, not for the taxpayer. That is what this 
argument is about, with all due respect to everyone who has said, I 
think, very tough things about oil companies wanting to cheat.
  Most of the oil companies I know do not want to cheat. Most of the 
oil companies are happy to pay their tab, they just would like a clear 
signal about what tab it is that they owe. And they do not want to 
spend their time in court.
  I am afraid if we let this rule go through, we are going to spend 
more time in court, waste more taxpayer money and not move us 5 feet 
down the ballfield on this subject. So that is why I am opposing 
Senator Boxer's amendment and supporting to give us additional time to 
work out some language so that everybody can pay their fair share, and 
the taxpayers can benefit, and we can all get out of the courtrooms and 
get on to running our businesses.
  Thank you so much.
  Mrs. BOXER addressed the Chair.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER. I yield myself 3 minutes.
  The PRESIDING OFFICER. The Senator is recognized.
  Mrs. BOXER. Thank you very much.
  I thank my dear colleague from Louisiana for giving us her 
perspective from her State. And I greatly respect it. I want to pick up 
on something she said. She said, ``It's in nobody's interest to 
continue in this way.'' And what is ``this way''? This way is lawsuit 
after lawsuit after lawsuit. And she is right, we should not continue 
in this way.
  We have seen Louisiana sue the oil companies and collect $10 million 
because the oil companies are cheating on their royalty payments. They 
settled. The oil companies would not have settled for these large sums 
were they not cheating. Alaska settled for $2.5 billion; California 
$350 million so far; New Mexico, $8 million so far; private royalty 
interests $15 million so far; and Texas $17.5 million so far.
  In other words, given the current status, without a change in the 
rule, which Interior is trying to put into place, we will continue in 
this way--lawsuit after lawsuit. And no one can say--I mean, you would 
have to be born on another planet to say that oil companies would 
settle for over $2.5 billion

[[Page S10410]]

if they had not been making a mistake on their royalty payments which 
they send to the taxpayers of this great Nation.
  I think the issue here is: Do we want to continue in this way, which 
is what the rider does? It keeps us for another 12 months, for a total 
delay of 15 months, in this way of litigation and lawsuit and 
aggravation and all the rest.
  What we are saying with our amendment is: It is time to change the 
way we do things. And my friends are saying, ``Oh, all we need to do is 
meet and we'll fix it up,'' and so on. ``Everything will be fine. We 
know we can resolve this. We can negotiate it.''
  This rule started back in December of 1995. We are headed toward the 
end of 1998. There were 14 pubic hearings, 5 solicitations for comment, 
all sorts of things, to resolve this matter. The basic issue is this: 
Companies that sell to their affiliates are paying a royalty on a made-
up price, a phantom price, rather than paying it on the fair market 
price--which 95 percent of the oil companies are doing.
  Just 5 percent of the oil companies are involved in this and will 
have to pay a fair share. It is not the mom and pop folks. It is a list 
here, a page and a half long, compared to 34 pages long of those 
unaffected. Shell makes $29 billion a year in total revenue, Exxon $134 
billion. We are talking about the biggest corporations who, in fact, 
themselves are admitting by settling all these myriad of lawsuits, that 
they have not paid their fair share to the States or to the Federal 
Government.
  The PRESIDING OFFICER. The Senator has used her 3 minutes.
  Mrs. BOXER. I ask for 1 additional minute.
  The PRESIDING OFFICER. The Senator is recognized.
  Mrs. BOXER. Here is where we are. Here is the market price, the real 
price. You know, this is a capitalistic system. I am stunned by my 
friends on the other side of the aisle. I used to be a stockbroker, so 
I know what supply and demand means. A market price is supply and 
demand. It is the fair price. When the market price goes down, the 
royalty payment goes down. When the market price goes up, the royalty 
payment goes up.
  But they are not paying on the market price, these 5 percent of the 
companies who own their affiliates and sell to their affiliates. They 
make up the price and they pay a royalty on that price. How would you 
like to be able to do that in your life? It is a pretty sweet deal; and 
it is wrong. I think that the various States are saying, thank you very 
much to the Minerals Management Service for moving forward. All of them 
here are saying: We commend you. ``The Minerals Management Service must 
be complimented,'' said Wyoming's Governor in 1997. Louisiana said it, 
Alaska said it.
  I withhold for the remainder of the debate.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Texas is recognized for 25 minutes.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Will the Senator from Texas permit me to use a minute 
off our time?
  Mrs. HUTCHISON. Of course.
  Mr. DOMENICI. Not off your time; off the bill.
  Mr. President, let me just say, immediately after Senator Landrieu 
spoke, I wanted to get up, but I did not timely, so Senator Boxer 
spoke. But I commend her. I think she made a very brief statement 
today, but I think it was right on point. For those who are looking for 
a succinct wrap-up of what this issue is about, that 5 minutes is a 
very good summary.
  The issue is whether the new set of rules is going to solve the 
problem of litigation and of making things clear and reasonable and 
easy to understand, or is it going to invite more litigation? And I 
think the industry, small and large, come down on the side that it is 
too complex, leaves too much to the subjectivity of the Mineral 
Management Service, and has a number of rules that are so arbitrary and 
onerous that this is not going to help us out of the mess we are in. I 
am saying it my way; I think Senator Landrieu said it her way. But 
before we are finished, we will talk about that some more.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mrs. HUTCHISON. Mr. President, I want to answer some of the arguments 
that have been made earlier in the debate. First, it keeps being said 
that the oil companies are not paying their fair share, that they are 
in lawsuits about it, and that they have been settling the lawsuits and 
therefore they must be guilty. All of this is totally separate from the 
amendment before us today.
  There is a disagreement between the oil companies and several States 
about how the valuations under the present regulation have been made. I 
want the oil companies to pay their fair share. So does the Senator 
from California, so does the Senator from New Mexico, so does the 
Senator from Louisiana. These matters are in court, and they will be 
settled in court. They have nothing to do with the amendment before us 
today. In fact, as the Senator from New Mexico and the Senator from 
Louisiana have said, the oil royalty valuation process is very 
complicated.
  The new MMS proposal is very complicated. In fact, I would make the 
case that we do not change anything in the process as far as making it 
clear what is owed. It is just a matter of the Mineral Management 
Service raising the rates on oil companies at a time when oil prices 
are at an all-time low. That is the issue.
  A second argument has been made that this only affects big oil 
companies. I would just say that I have received a memo from the 
Independent Producers Association of America that represents the small 
independent oil producers. And what they say is: ``Percentage of oil 
producers impacted by proposed oil royalty rule--100 percent.'' Because 
everyone who is in this industry knows that whatever is the standard 
for royalties on public lands is also the standard throughout the 
industry.
  So to say that we are only talking about 5 percent of the large oil 
companies in America is absolutely untrue. We are talking about small 
producers, independent producers, and we are talking about marginal 
producers. Those are the ones that are drilling 15 barrels or less a 
day. They are operating at very low margins. With the oil prices at 11- 
and 12-year lows, they are not even making a profit in many instances. 
So we are affecting oil jobs in our country.

  Now, it was said by the Senator from Illinois that the amendment 
delaying the rule was put on an emergency supplemental appropriations 
bill. That is true. It was put on an emergency supplemental 
appropriations bill and passed by both Houses of Congress and signed by 
the President. The reason it was put on is because the Bureau of 
Mineral Management Services announced they were going to finalize a 
rule without going through the congressional process that they had been 
told they must do. There was no alternative but to immediately stop 
that. Otherwise, they were going to implement a rule without reporting 
to the appropriate congressional committees.
  Of course, Congress exercised its prerogative to say no, that is not 
what we told you to do. After all, we do make the laws and the policies 
of this country. Raising taxes is the prerogative of Congress for a 
very good reason--because we are accountable to the people. If we are 
going to set the policies of this country, we must consider many 
things. We must consider jobs, we must consider crises, we must 
consider security, how much of our oil needs to be imported, is there a 
security issue in our country. The reason that elected representatives 
make policy is because we are accountable. We look at other factors 
such as how much of our oil we are importing, how many jobs are going 
to be affected, and what is the overall situation in the economy of our 
country.
  I want to talk about the first part of a policy decision that 
Congress considers, and that is jobs. Oil prices are at a 12-year low 
in this country. I refer to a chart for the jobs at risk in our country 
if we now raise the cost of drilling on oil companies. Let's take some 
examples: In California, 115,000 jobs are at stake; in Missouri, 31,000 
jobs are at stake; in Montana, over 9,000; New Hampshire, over 3,000; 
New Jersey, almost 30,000; Nevada, over 7,000; Ohio, 54,000; 
Pennsylvania, 48,000; Texas, 253,000; Virginia, almost 30,000.
  Now, those are the jobs at stake.
  Let me just read to Members recent articles that talk about the job 
layoffs

[[Page S10411]]

that are occurring right now because, of course, the industry is on its 
knees.

  August 28, 1998:

       J. Ray McDermott, a builder of offshore petroleum 
     platforms, has laid off 41 employees in Houston [Texas], 
     cutting about 10 percent of that office's staffing.
       [McDermott] left open the possibility that more layoffs 
     could result if the oil market remains in a slump.

  August 29, 1998, Halliburton lays off 100:

       The state of the oil industry is being blamed for the 
     layoffs of about 100 employees at Halliburton Energy Services 
     [in Oklahoma.]

  August 12, 1998:

       Schlumberger laid off several hundred people in the second 
     quarter and plans further cuts, as falling oil prices lower 
     demand for its services and products.
       Schlumberger's news comes as a number of oil-field-service 
     companies have been cutting staff in recent months. The 
     industry is struggling with some of the lowest crude oil 
     prices in 12 years.

  Oil and Gas Journal, August 3, 1998:

       Triton Energy Ltd., Dallas, laid off 65 employees from its 
     Dallas office as a part of a corporate restructuring and 
     cost-reduction plan. The move cuts Triton's Dallas staff by 
     more than one third.

  August 18, 1998:

       Low prices particularly hurt small producers who rely on 
     marginal, or stripper, wells producing less than 10 barrels 
     of oil a day. Some 74 percent of New Mexico's 24,000 wells 
     are considered marginal.
       Some small producers have cut back or eliminated new 
     drilling projects. . . .
       Others have shut-in wells--stopping pumping, a solution 
     intended to be temporary but which often results in permanent 
     loss of production.
       Tom Dugan of Dugan Production Corp. in Farmington [New 
     Mexico], said, ``Essentially our income has been cut in half 
     within the last six or seven months.''
       Dick Frank, the state Department of Labor's area director 
     in Lea County [New Mexico], said the unemployment rate in the 
     oil rich county has been climbing, reaching 6.7 percent in 
     June.

  Oil and Gas Journal, July 20, 1998:

       An independent Petroleum Association of Mountain States 
     survey has found that the plunge in oil prices is forcing 
     marginal well shut-ins in the U.S. Rocky mountains. Twenty 
     producers have shut in more than 200 marginal wells. . . .

  Big U.S. Independent Union Pacific Resources said it will slash its 
rig count from 49 to 18 for the balance of the year, further depressing 
an already shaking North America land rig market.
  Oryx Energy battened down the hatches, July 28, saying it will cut 
its 1,000-worker payroll costs 20 percent, or $14 million a year, and 
sell another 35 million of properties in response to continued weak oil 
prices.
  I think it is very important that we look at the impact on people, on 
their families, their lives, on States that are not going to have sales 
tax revenue if people don't have jobs in States that will have to start 
paying unemployment compensation because people don't have jobs.
  Yesterday, in the debate on the mining bill, Senator Harry Reid from 
Nevada said, ``These are the best blue-collar workers in America,'' and 
he was talking about gold prices being the lowest in years. I can make 
the same arguments today. The Senate voted for keeping the mining 
industry intact yesterday. As Senator Bumpers said, he lost his 
argument.
  The same arguments apply today. We have oil prices at their lowest in 
11 years and we have the best blue-collar jobs in America. In fact, oil 
and gas jobs are among the highest paid in our economy. In Montana, for 
example, the average oil and gas jobs pay $32,380 compared to $20,500, 
which is the average of jobs in Montana. Every oil industry job creates 
an average of 2.3 service-related jobs.
  This is a very important issue for jobs in our country. As you can 
see, almost every State is affected. It not only creates jobs in the 
industry, but over two jobs in the service industry are related to oil 
production in our country. What could be bad about that? Yet, we are 
talking about raising fees and taxes on the companies that are on their 
knees, with low prices, that are laying people off as we speak. It 
doesn't make sense.
  The other side has said, ``We are losing $5.5 million a month.'' In 
fact, I thought Senator Landrieu made a very important point. We are 
talking about $6 billion in revenue to the Federal and State 
Governments, and they want to tear it down, saying they are going to 
add $5 million a month. You would jeopardize a steady stream of revenue 
from an industry that is on its knees, that is shutting down wells as 
we speak, to try to gain $5.5 million a month. Even if you thought you 
were going to get $5.5 million a month, you would have to assure that 
the companies are going to stay in business.
  If they go under, you are not going to get $5.5 million a month; you 
could lose $5.5 million a month, and those are jobs that we now have in 
place. Why would we jeopardize those and risk losing revenue, when you 
hope they will stay in business and gain revenue? That is not a very 
good hope when the industry is on its knees.
  Let's talk about the policy of raising taxes. In fact, we have shown, 
both in Congress and in 13 States, that lowering the taxes on the oil 
and gas industry have actually increased revenues. In fact, the 
Congress passed the Offshore Drilling Deep Water Royalty Relief Act in 
1995. They gave tax relief, they gave tax breaks, lowered taxes, to 
companies that would go out and do the expensive drilling in the water, 
especially the Gulf of Mexico. For doing this, the Government has 
received $3.1 billion in bids on those leases in the gulf. This has 
created over 3,500 direct jobs to manage the increased activity. In 
fact, it has created $3 billion in revenue. So we have shown that when 
we lower revenue, we increase the amount that comes into the Federal 
Government.
  When we lower taxes, we increase revenue. This has been duplicated in 
my State of Texas, where they have given tax relief to drill the 
marginal wells which are less than 15 barrels a day in Texas. Or if 
someone goes in and unplugs a plugged well, they will get a tax break. 
Here is what that has done in Texas: 6,000 wells were returned to 
production; $1.65 billion came into the Texas economy; 10,000 direct 
and indirect jobs were created every year; and $22 million more went 
into the Texas treasury--$22 million by giving a tax break. Thirteen 
States have inactive well recovery programs that are doing the same 
thing.
  Yet, the amendment before us today would go in exactly the opposite 
direction. It would increase the amount that the oil companies would 
have to pay, putting many of these small producers in jeopardy because 
that will be the industry standard, creating a loss of jobs and, I 
submit, a loss in revenue.
  I have a chart that shows the economic effect of the abandonment of 
marginal wells just in 1997. The lost revenue to California was $45 
million; Kansas, $24 million; Louisiana, $8 million; New Mexico, $19 
million; Oklahoma, $29 million; Texas, $97 million. These are lost 
revenues because marginal wells went under. They had to plug the wells. 
This doesn't even address the lost jobs or the lost sales tax revenue 
to these States.
  So I think we have the evidence that raising taxes is going to cost 
revenue to the Federal Government, not raise revenue to the Federal 
Government, because so many of the wells in this country are marginal; 
they produce under 15 barrels a day. So if they go under, these States 
are not going to get more money for their schoolchildren, they are 
going to get less. That is what the amendment before us would do.
  Let's talk about another policy issue that Congress must address when 
we increase taxes on an industry. We import over 50 percent of the oil 
that we need in this country--the oil we need to drive our cars to 
work, the oil we need to operate our plants, the oil we need to produce 
fuel for every home in America. Fifty percent is imported. This is a 
national security issue. It is an economic issue.
  Does anybody remember what it was like when we had the severe oil 
shortage several years ago and people had lined up for 5 hours to get 
gas for their cars? They could not fill them up; they were limited. 
They were limited in the amount or the number of gallons they could put 
in because we had an oil shortage.
  This country cannot depend on imports if we are going to have control 
of our own economy. How could we be talking about shutting down wells 
and causing our dependency to become greater? It does not make sense. 
It would be highly irresponsible of this Senate to do something that 
would jeopardize every person driving a car in this country, every 
plant that operates, and every home that depends on

[[Page S10412]]

oil or gas for its energy. We should not be even considering something 
so irresponsible.
  I have letters of support from many organizations. I ask unanimous 
consent that they be printed in the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                            Citizens Against Government Waste,

                               Washington, DC, September 10, 1998.
     Hon. ------ ------,
     U.S. Senate
     Washington, DC.
       Dear Senator: On behalf of the 600,000 members of Council 
     for Citizens Against Government Waste, we respectfully ask 
     you to oppose any efforts in the Senate to strike the 
     provision in the Interior Appropriations Bill that delays the 
     implementation of a final crude oil valuation rule, unless a 
     resolution between MMS and industry can be reached. The 
     Minerals Management Service (MMS) proposed new oil valuation 
     rules that would eventually raise taxes on producers. The 
     rulemaking effort has involved several revisions to the 
     original proposal, but remains ambiguous, unworkable, and 
     would create even greater uncertainty and unnecessary 
     litigation.
       Passage of this provision in the Interior Appropriations 
     Bill will provide the time necessary for the MMS and the 
     industry to reach a fair and workable agreement on the rule, 
     benefiting both sides. The taxpayers have a vested interest 
     in this issue, because the rule proposed by the MMS would 
     lead to an unnecessary administrative burden for both the 
     government and the private industry as auditors, accountants, 
     and lawyers attempt to resolve innumerable disputes over the 
     correct amounts due.
       Please take this opportunity to prevent the current 
     proposed rule, which benefits no one, from being implemented. 
     We urge you to oppose any amendment to strike the provision 
     for delay of final valuation rule in the Interior 
     Appropriations Bill as it reaches the floor for debate in the 
     full Senate this week.
       It is my hope that you give this suggestion serious 
     consideration. If I can be of further assistance, please do 
     not hesitate to contact me.
           Regards,
                                                  Council Nedd II,
     Director, Government Affairs and Grassroots.
                                  ____



                                 Citizens for a Sound Economy,

                               Washington, DC, September 11, 1998.
       Dear Senator: I write on behalf of the 250,000 members of 
     Citizens for a Sound Economy regarding the Boxer amendment to 
     S. 2337, the Interior Appropriations bill. This amendment 
     allows the Executive branch to operate unchecked in its 
     efforts to legislate through regulation.
       Our members have long opposed the reckless regulating that 
     is consuming some federal agencies. Historically, the cost of 
     this type regulation is passed on to the consumer in the form 
     of higher prices for commodities. Specifically, the Boxer 
     amendment circumvents the authority of Congress to ensure 
     that agencies of the federal government operate within the 
     bounds of the law, and it will have the ultimate effect of 
     increase the cost of oil and gas for every American. The 
     appropriators have attempted to support sensible 
     environmental policy through the appropriations process. The 
     Boxer amendment will reverse their sensible policies.
       As the Senate considers S. 2337, I ask you to consider the 
     effect the Boxer amendment will have on consumers and their 
     wallets and vote to defeat the Boxer amendment.
           Sincerely,
                                                       Matt Kibbe,
     Executive Vice President.
                                  ____

                                                    National Black


                                          Chamber of Commerce,

                                    Washington, DC, June 10, 1998.
     Re Oil Royalties.
     Hon. Kay Bailey Hutchison,
     U.S. Senate,
     Washington, DC.
       Dear Senator Hutchison: The membership of the NBCC wants to 
     applaud you for your courageous stand taken against the 
     Minerals Management Services attempt to totally control the 
     method (or madness) of collecting oil royalties. Your 
     leadership is certainly pro-business and ensures us of a 
     continued prosperous economy.
       The cost of fuel is extremely influential in most levels of 
     our economy and our competitiveness in the global market. Any 
     approach in how we assess royalties is very critical to each 
     and every one of us. Congress should certainly be involved as 
     they truly represent the people, not bureaucrats.
       Thank you for your strong position and consider us your 
     ally on this issue.
           Sincerely,
                                                  Harry C. Alford,
     President and CEO.
                                  ____



                                           People for the USA,

                                    Pueblo, CO, September 4, 1998.
     Hon.------ ------,
     U.S. Senate,
     Washington, DC.
       Dear Senator: We understand that when the full Senate 
     debates the Interior Appropriations bill next week, there may 
     be an effort to remove the provision which prevents the 
     Minerals Management Service (MMS) from issuing a new ruling 
     on oil royalty valuations until Oct. 1, 1999. On behalf of 
     the 25,000 members of our grassroots People for the USA 
     campaign, I am respectfully asking you to resist any such 
     efforts to remove this provision.
       We feel very strongly that this provision will be critical 
     to helping devise a royalty collection system that is truly 
     fair to the federal government and the oil industry. The 
     provision requires the MMS to take the time to develop a more 
     workable rule and not undermine Congress by changing yet 
     another law through bureaucratic regulation.
       The new rule proposed by MMS is far too complex and could 
     lead to the loss of hundreds of thousands of jobs in the 
     energy industry, where so many of our members are employed. 
     Please oppose any amendment that would strip this provision 
     out of the Interior Appropriations bill. Our members and 
     their communities are counting on you.
           Respectfully yours,
                                                Jeffrey P. Harris,
                                               Executive Director.

  Mrs. HUTCHISON. First is Citizens Against Government Waste. In part, 
they write:

       On behalf of the 600,000 members of the Council for 
     Citizens Against Government Waste, we respectfully ask you to 
     oppose any efforts in the Senate to strike the provision in 
     the Interior Appropriations Bill that delays the 
     implementation of a final crude oil valuation rule, unless a 
     resolution between MMS and industry can be reached. The 
     Minerals Management Service proposed new oil valuation rules 
     that would eventually raise taxes on producers.

  They go on to say:

       Passage of this provision in the Interior Appropriations 
     Bill will provide the time necessary for MMS and the industry 
     to reach a fair and workable agreement on the rule, 
     benefiting both sides.

  Here is a letter from the Citizens for a Sound Economy:

       I write on behalf of the 250,000 members of Citizens for a 
     Sound Economy regarding the Boxer amendment to the Interior 
     Appropriations bill. . . . Historically, the cost of this 
     type regulation is passed on to the consumer in the form of 
     higher prices for commodities.

  Of course, it makes sense that if we are going to raise the rates 
that producers have to pay, it is going to raise the price of every 
gallon of gas that you buy at the pump.

       Specifically, the Boxer amendment circumvents the authority 
     of Congress to ensure that agencies of the Federal Government 
     operate within the bounds of the law, and it will have the 
     ultimate effect of increasing the cost of oil and gas for 
     every American.

  This is in a letter from the National Black Chamber of Commerce:

       The cost of fuel is extremely influential in most levels of 
     our economy and our competitiveness in the global market. Any 
     approach in how we assess royalties is very critical to each 
     and every one of us. Congress should certainly be involved as 
     they truly represent the people, not bureaucrats.

  This is from the People for the USA:

       The new rule proposed by MMS is far too complex and could 
     lead to the loss of hundreds of thousands of jobs in the 
     energy industry, where so many of our members are employed. . 
     . .
       On behalf of the 25,000 members of our grassroots People 
     for the USA campaign, I am respectfully asking you to resist 
     any such efforts to remove this provision.

  Mr. President, we are talking about tax policy in this country. If 
you vote for the amendment before us today, we are saying that the 
Mineral Management Service can walk away from Congress and the 
congressional intent and congressional mandate that they report to us 
about any kind of fees or increases.
  If they do this--and if we allow them to do this--we will shut down 
marginal wells throughout our country, which we have already seen 
happening because of the low prices. Thousands of people will be out of 
jobs. We will lose revenue in our States and our Federal Government, 
hurting the schoolchildren of our States when they are not able to have 
that income stream that is now steady--$6 billion worth of steady 
income stream--which will become shaky from marginal producers because 
they cannot make ends meet. They are laying off people every day 
because of the low price of oil.
  This is not the time to raise prices. We should not let unelected 
bureaucrats do it, and we should not jeopardize the energy independence 
of our country by allowing a bureaucracy to raise taxes when that is 
the prerogative of Congress.
  Thank you. Mr. President, I thank Senator Domenici for his 
leadership, along with the bipartisan group that is trying to make sure 
we keep jobs and energy independence and gasoline pumps filled 
throughout our country.

[[Page S10413]]

  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER (Mr. Ashcroft). The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, parliamentary inquiry. How much time 
does Senator Boxer have and how much time do I have?
  The PRESIDING OFFICER. The time remaining for Senator Boxer is 7 
minutes 15 seconds. The time remaining for the Senator from New Mexico 
is 13 minutes 10 seconds.
  Mr. DOMENICI. Thank you. Mr. President, I thank Senator Boxer for 
agreeing to this unanimous consent. I very much appreciate it for some 
personal reasons.
  I ask unanimous consent that when all debate time is consumed, or 
yielded, that the amendment be set aside until the hour of 5:50; and, 
at that time, there be 10 minutes for debate for closing remarks prior 
to the vote on the motion to table the Boxer amendment.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. DOMENICI. Mr. President, since I have considerably more time than 
the distinguished Senator from California, I would like to make a few 
remarks and then save a few minutes for Senator Gorton, the manager of 
the bill.
  Mr. President, fellow Senators, first of all, there has been a lot of 
talk about lawsuits that are out there that have been going on for 
years on end. Essentially, fellow Senators, the reason that a new set 
of regulations and rules were supposed to be adopted was so we wouldn't 
have all of that litigation; so that we have a more clear-cut 
definition of what is market value for oil and gas, rather than leave 
so much to subjectivity, to arguments and disputes.
  Let me suggest, if that is the case, that I can almost promise the 
U.S. Senate that if the rules that the Minerals Management Service is 
proposing to adopt are adopted that they will all be back in court over 
and over again, because they are unintelligible. They leave many 
opportunities for the Minerals Management Service to second-guess. They 
leave at times many opportunities to go back in an audit and even undo 
the market value as determined by a company upon the advice of people 
from the MMS.
  Mr. President, when I was a Senator in the middle of the Iranian-
prompted crisis where we had lines--Senator Hutchison's statement was 
that they even shot at each other in New York in one of those lines 
early in the morning because somebody thought one car was moving ahead 
of them. You might have been Governor, I say to the occupant of the 
Chair, when that happened. You may remember that.
  During that period of time, a gentleman in my State, who is currently 
one of the most successful and marvelous businessmen in the retail 
marketing of oil and gas products in my State, was down in a little 
office where his business was beginning. He begged me to come and see 
him. I went to see him. And a grown man was on the brink of falling 
apart. Whenever he would talk, he would cry, because the then-U.S. 
Government Energy Department had been told by Congress to enforce some 
very vague rules about gouging.
  Here comes auditors to that man's office. He can't give them enough. 
They come back month after month, and his business is floundering. And 
they want more information. They want to go back further in time. They 
want him to bring in his customers and let them talk to the enforcing 
agency about the various arrangements.
  I pledged to him right then that, not knowing the facts, I would see 
that he was treated fairly. He was. He succeeded in getting around 
that, and is surviving, as I have just indicated, bountifully.
  Mr. President, what we don't want to let happen is we don't want a 
new set of regulations that permit a bureaucracy, however much we must 
rely on them--the MMS--to go into American energy producers in the 
manner that I have just described for my good friend down in Artesia, 
NM.
  I contend that is what is going to happen, because, pursuant to 
congressional requests, some of us, Democrats and Republicans, sat down 
at the table with the MMS and the industry. And it is absolutely a 
cinch based upon the disagreements that occurred around that table and 
the failure on the part of the MMS to consider what many of us thought 
to be a very reasonable request; that if we let these get adopted, we 
haven't seen anything yet with reference to tying up this money in 
litigation and arguments. As a matter of fact, there is even a position 
in these new rules where the MMS can actually contend that a company 
would sell below market value to avoid the 12.5-percent royalty. Does 
that make sense to anyone? When you sell below market and give 
something away, you are giving away 12.5 percent to the Government, but 
you are keeping 87.5 percent of your own money. Right? But there is 
something in here to make sure they don't sell below market. There are 
so many nuances. I am not sufficiently expert. Again, I think I know 
when I see something that isn't going to work.
  Let me conclude. Industry is not to blame for the current rule. The 
MMS wrote it. All producers are affected by it--not 5 percent. Under 
current law, MMS can collect the royalties that are fair market value. 
Nothing is stopping them. Anybody thinking we are going to stop 
collecting royalties is mistaken. We are going to keep on collecting 
them under a set of rules that are very unreasonable and complicated. 
But why substitute another set that we think is going to do equally as 
bad and maybe move even more arbitrarily against the producers of 
energy in this country? There is a concept within it that you are 
guilty until proven innocent. There is, as I said before, a notion that 
producers will sell cheaply to avoid a royalty. Why would anybody do 
that? I just explained that to the Senate.
  There is extensive opportunity for second-guessing. The scourge of 
the regulated is to have regulators second-guess. That is the scourge. 
You have one answer and you thought you were abiding by it. But they 
second-guess it and you get audited. And there is another set of rules. 
These rules are unworkable. One well, 10 different valuation 
calculations for on-shore oil; one well, 8 different valuation 
calculations for off-shore.
  For whatever has been said here today about who we are working for in 
opposing the Boxer amendment, actually what I believe is happening is 
we are saying to a bureaucracy of the U.S. Government that we have had 
a good view of how you make rules, we think you are doing it in an 
unreasonable manner, and we would like you to do it better, so we are 
not going to give you any money to enforce what you have proposed to 
do.
  Essentially, all the arguments have been made about how important gas 
and oil production is for our Nation. We understand that. But this is 
not an issue about anybody cheating. It is an issue about whether a new 
set of rules is better than the old ones when we firmly believe they 
are not.
  I reserve the remainder of my time.
  Mrs. BOXER. Mr. President, how much time do I have?
  The PRESIDING OFFICER. The Senator from California is recognized for 
7 minutes 15 seconds.
  Mrs. BOXER. I would like to ask my friend if it is OK if when we come 
back I close the debate with 5 minutes. Would that be all right with 
the Senator from New Mexico?
  Mr. DOMENICI. We each get 5 minutes.
  Mrs. BOXER. Yes. I would like to close. I ask unanimous consent that 
I get to close the debate.
  Mr. DOMENICI. When we do our 5 minutes each.
  Mrs. BOXER. Yes.
  Mr. DOMENICI. Of course.
  Mrs. BOXER. I thank the Senator so much. I just want to say to my 
friends, Senator Domenici and Senator Gorton, again, how much I 
appreciate their courtesies. This is a very important issue.
  Mr. President, I ask if you would advise me when I have 2 minutes 
remaining.
  The PRESIDING OFFICER. The Chair will advise the Senator when she has 
used all but 2 minutes of her time.
  Mrs. BOXER. Mr. President, I have really enjoyed this debate. I was 
saying to Senator Gorton I thought it was very important to have it 
because when it was raised in committee, it was a truncated debate. 
This has given us a chance to really show both sides.
  I think another reason I have enjoyed the debate is because it goes 
to the

[[Page S10414]]

heart and soul of why I want to be in the Senate; and that is to look 
out for real people, the real people who make this country go, who get 
up every day and go to work and save to get a car and hopefully save to 
get a condominium or a home and to get the American dream.
  I think there is another part of that American dream that sometimes 
gets overlooked, and that is our heritage; that we have much more as 
Americans than our personal possessions, important though they are. We 
own the parks. We own the waters, the coastal waters. And others cannot 
destroy those because they belong to us.
  I think it is important for us to note that we are talking about the 
most powerful oil companies--5 percent of oil companies, some of which 
make in the many billions of dollars. And I pointed this out before. 
For example, Exxon, in 1996, generated $134 billion in revenue from oil 
and gas. And the vast majority of the oil companies impacted by this 
rule are huge. The impact on Exxon, for example, would be one one-
hundredth of 1 percent of their revenue.
  My friend from Texas says that is going to cause a disaster. Well, 
the one good thing about royalty payments, as they are owed to the 
hard-working Americans of this country, because it is, in fact, oil 
drilled on their land which they own, that we all own as Americans, is 
that the royalty payments go down with the price of oil. So it is very 
fair. And here you see, again, the lease that is signed by the oil 
companies wherein they promise to pay a fixed royalty which is a 
percentage of the value of the production, and therefore when oil 
prices are up, the American people get more. It is a rent that is 
basically paid on a floating basis depending on the market price of 
oil.
  Now, my friend from New Mexico, for whom I have the greatest respect 
and admiration, says it is very complicated to figure out what is the 
market price of oil. And as I said before, I was a stockbroker in a 
former life, and I know that oil prices are posted and listed every 
day. I would place into the Record this publication, ``Platts Oil Price 
Report.'' If you look at it, you will see every single day, every 
single market. The market price listed here reflects the price of oil. 
So when my colleague worries that the Interior Department is off on the 
wrong track, I would say I agree with the New Mexico Tax Revenue 
Department which said:

       The MMS should be commended for the effort they have made 
     in developing oil valuation regulations that are fair to all 
     interested parties. They should also be commended for 
     recognizing an issue and following through with it to 
     resolution, in an environment where litigation abounds, 
     unfounded criticism is made public and political mechanisms 
     are used to mandate positions.

  You cut through that and what they are saying is very clear, that the 
MMS is, in fact, working hard to come up with a solution to this 
problem.

  Now, I showed before, I think, the most telling chart of all. Mr. 
President, this is where we are. The oil companies sign a lease with 
us, the American people, promising to pay rent, in essence, for 
drilling on Federal lands. It is supposed to be based on market price, 
and here you see with ARCO in the west Texas market, the market price 
very clearly shown and the ARCO posted price, which is their, in 
essence, made-up price.
  The PRESIDING OFFICER. The Senator has 2 minutes remaining.
  Mrs. BOXER. I thank you, Mr. President. I will take another 30 
seconds and withhold. What we are going after is this difference. We 
think the taxpayers deserve to have the fair royalty payment paid. That 
is why I raise this issue.
  I will reserve the remainder of my time to close this debate.
  Mr. DOMENICI. I yield 3 minutes to Senator Gorton and the remaining 
time to Senator Gramm of Texas.
  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. I have been in the Chamber through most of this debate as 
I am the manager of the bill under discussion now. I believe that I am 
the only one, at least on this side of the issue, who has no immediate 
constituent interest in the subject. But I do have certain observations 
from listening to the debate on the part of others.
  The Senator from Oklahoma, Mr. Nickles, mentioned at one point that 
the Minerals Management Service had said that this was a revenue-
neutral proposal, although in fact it seems not to be that case. The 
proponents of this amendment emphasize that there is a lot of money 
involved here for schools and for parks and for other purposes.
  It occurs to me that if this is a debate over revenues to the Federal 
Government, we are in effect talking about a tax, a tax on certain 
companies engaged in the oil business. And if we are speaking about a 
tax, it seems to me we ought to be deciding that question here in the 
Congress of the United States. Under our Constitution, taxes are not 
levied by regulatory agencies of the Government. They are determined 
and they are levied by the Congress.
  If, in fact, this amendment will produce tens of millions of dollars 
for various governmental purposes, then it is inevitable that someone 
is going to pay for those purposes. One of two things is going to 
happen, it seems to me. And one of my colleagues can correct me if I am 
wrong. Either it will be reflected in the price of gasoline and other 
petroleum products that every consumer in the United States pays and 
will be in effect an increase in the gas tax, or if these companies can 
simply import more and produce less domestically, it will simply drive 
American producers out of business because their cost of business will 
be increased.
  But one of those two consequences seems to me to be inevitable. 
Either this is going to be a tax on the American people by increasing 
the cost of their gasoline, or it is going to increase our dependence 
on foreign oil and drive American producers out of business. I think 
that conclusion is absolutely inevitable. I think that is a policy 
decision that should be made by the Congress of the United States and 
not by an obscure Federal agency, and for that reason I oppose the 
amendment.
  Mr. DOMENICI. Mr. President, I send a letter to the desk and ask 
unanimous consent it be printed in of the Record from the Revenue 
Department of New Mexico indicating they support the oil moratorium.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                              State of New Mexico,


                              Taxation and Revenue Department,

                                      Santa Fe, NM, July 20, 1998.
     Hon. Pete Domenici,
     U.S. Senate,
     Washington, DC.
       Dear Senator Domenici: Thank you for giving me the 
     opportunity to comment on your appropriation rider placing a 
     moratorium on MMS oil valuation regulations. After careful 
     consideration, we have determined that the moratorium would 
     allow MMS and the industry more time to reach a consensus, 
     therefore we are in favor of the moratorium.
       If I can be of further assistance, please contact me.
           Sincerely,
                                                   John J. Chavez,
                                                        Secretary.

  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mr. GRAMM. I congratulate my colleagues, especially my dear colleague 
from New Mexico and my fellow Senator from Texas, for doing an 
outstanding job. I think anybody who has listened to the debate, and 
who started the debate with an open mind that was not totally empty, 
would conclude that you are right and this amendment should be tabled.
  My opposition to the amendment is very simple. Congress should make 
decisions about collecting fees and imposing taxes. Article I, section 
8, clause 1 of the Constitution says, ``The Congress shall have the 
power to lay and collect taxes, duties, imposts and excises.''
  We should not be granting our constitutional powers to faceless 
bureaucrats who have agendas that may not reflect the will of the 
American people. If our colleagues wanted to mandate by law that we 
raise royalty fees, that would be one thing. But to simply set a 
process in place where bureaucrats are going to effectively raise 
taxes, I think, is fundamentally wrong. So I want to urge my colleagues 
to reject this amendment, and I want to especially congratulate those 
who I believe have made an excellent case in opposition to the 
amendment.
  I reserve the remainder of my time.
  Mrs. BOXER addressed the Chair.
  The PRESIDING OFFICER. The Senator from California is recognized.
  Mrs. BOXER. There is little time remaining. I just want to say again 
what

[[Page S10415]]

the USA Today editorial said, because I think it sums it up beautifully 
and it doesn't come up with the same conclusion that the Senator from 
Texas, Mr. Gramm, comes up with. It comes up with another conclusion, 
and that is, ``Industry's effort to avoid paying full fees hurts 
taxpayers and others.''
  Since 1920 when Congress passed the Mineral Leasing Act, the MMS has 
been acting to set the rules that guide the payments of royalties. So, 
now, all of a sudden we have a move to say this is wrong. I think is 
kind of interesting, all of a sudden it is wrong, something that has 
been in place since 1920. This is what the MMS is supposed to do. So I 
think this editorial really says it.
  Imagine being able to compute your own rent payments and grocery 
bills, giving yourself a 3 percent to 10 percent discount off the 
market price. Over time, that would add up to really big bucks. And 
imagine having the political clout to make sure that nothing threatened 
to change that cozy arrangement.
  And they basically say, ``Taxpayers have been getting the unfair end 
of this deal for far too long.''
  Mr. President, I say to Senators, we have an opportunity to end this 
cozy deal today. I know some of my colleagues feel they need more time, 
they want to work on a more fair way to collect these royalties. I 
cannot imagine, as someone who knows supply and demand--I am an 
economics major, I was a stockbroker--it is pretty simple. You have the 
market price. Pay the royalty based on the market price. This is a 
capitalistic system. We do not have industry executives sitting in and 
deciding what the market price is in the dead of night in the back of 
their corporate headquarters. These 5 percent of oil companies, the oil 
giants, are the ones who are getting away with thievery. Let's end it 
now. Support this amendment.
  I yield the floor.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington is recognized.
  Mr. GORTON. Mr. President, has all time now been used on this 
amendment?
  The PRESIDING OFFICER. All but 8 seconds.
  Mr. GORTON. We yield back that 8 seconds.
  What now is the order before the Senate?
  The PRESIDING OFFICER. The amendment is set aside until 5:50, at 
which time there will be 10 minutes equally divided between the parties 
for debate.


                           Amendment No. 3581

  Mr. GORTON. Then what is the matter before the Senate at this point?
  The PRESIDING OFFICER. The matter before the Senate at this time is 
the Daschle amendment to S. 2237.
  Mr. DASCHLE addressed the Chair.

                          ____________________