[House Report 105-771]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
2d Session                                                      105-771
_______________________________________________________________________


 
                   LEASING RESERVED MINERAL INTERESTS

                                _______
                                

October 5, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3878]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 3878) to subject certain reserved mineral interests of 
the operation of the Mineral Leasing Act, and for other 
purposes, having considered the same, report favorably thereon 
without amendment and recommend that the bill do pass.

                          purpose of the bill

    The purpose of H.R. 3878 is to subject certain reserved 
mineral interests to the operation of the Mineral Leasing Act.

                  background and need for legislation

    Public land near Big Piney, Wyoming, was sold at auction 
several decades ago under the 1964 Public Land Sale Act [Public 
Law 88-608; 78 Stat. 988]. This Act required the mineral estate 
to be reserved to the United States in the patents because the 
Bureau of Land Management recognized that the lands were 
valuable for oil, gas, and coal. The 1964 Sale Act provided 
that the reserved federal minerals would be closed to mineral 
leasing because the lands were expected to be improved as part 
of expected local community growth after the sale and patenting 
of the surface.
    However, the subject lands remain grazing lands of the same 
type that are under multiple use for grazing and oil and gas 
exploration and development throughout southwestern Wyoming. 
Sublette County, Wyoming, where the affected parcels are 
located, hosts the Jonah gas fields, described as the largest 
recent onshore discovery of natural gas on public lands. 
Legislation is required to allow development of the reserved 
federal oil and gas estate. Air quality, wildlife and other 
public resource concerns can and will be addressed and 
protected through federal lease stipulations, just as was and 
is done for all the federal acreage currently under lease 
throughout the Big Piney-Labarge area.

                            committee action

    H.R. 3878 was introduced on May 14, 1998, by Congresswoman 
Barbara Cubin (R-WY). The bill was referred to the Committee on 
Resources, and within the Committee to the Subcommittee on 
Energy and Mineral Resources. On July 21, 1998, the 
Subcommittee held a hearing on H.R. 3878, at which Mr. Carson 
``Pete'' Culp, Assistant Director for Minerals, Realty and 
Resource Protection, Bureau of Land Management, testified the 
Administration had no objection to H.R. 3878. On August 5, 
1998, the Committee on Resources met to consider H.R. 3878. The 
Subcommittee on Energy and Mineral Resources was discharged 
from further consideration of H.R. 3878. No amendments were 
offered and the bill was ordered favorably reported to the 
House of Representatives by voice vote.

                      section-by-section analysis

Section 1. Leasing of certain reserved mineral interests

    Section 1(a) of H.R. 3878 opens to federal oil and gas 
leasing the reserved federal mineral interests with patents No. 
49-71-0059 and No. 49-71-0065.
    Section 1(b) protects the rights of the surface owner by 
requiring consent by that owner, or failing that by the 
successful lessee posting a reclamation bond deemed sufficient 
by the Secretary of the Interior. Furthermore, the lessee of the 
United States interests must recompense any damage to crops and 
tangible improvements (if any) of the surface owner in the conduct of 
the oil and gas operation.
    Section 1(c) validates the oil and gas lease improvidently 
issued by the Bureau of Land Management in 1997 for the 
reserved mineral within patent No. 49-71-0065.

            committee oversight findings and recommendations

    With respect to the requirements of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives, and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee on Resources' oversight findings and 
recommendations are reflected in the body of this report.

                   constitutional authority statement

    Article I, section 8, and Article IV, section 3 of the 
Constitution of the United States grant Congress the authority 
to enact H.R. 3878.

                        cost of the legislation

    Clause 7(a) of rule XIII of the rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs which would be incurred in carrying out 
H.R. 3878. However, clause 7(d) of that rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act of 1974.

                     compliance with house rule xi

    1. With respect to the requirement of clause 2(l)(3)(B) of 
rule XI of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, H.R. 
3878 does not contain any new budget authority, credit 
authority, or an increase or decrease in expenditures. 
According to the Congressional Budget Office, enactment of H.R. 
3878 could affect offsetting receipts (which is classified as 
direct spending), but any effect on direct spending would be 
less than $500,000 per year over the 1999-2003 time period.
    2. With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 3878.
    3. With respect to the requirement of clause 2(l)(3)(C) of 
rule XI of the Rules of the House of Representatives and 
section 403 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 
3878 from the Director of the Congressional Budget Office.

               congressional budget office cost estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 27, 1998.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3878, a bill to 
subject certain reserved mineral interests to the operation of 
the Mineral Leasing Act, and for other purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Victoria V. 
Heid (for federal costs), and Marjorie Miller (for the state 
and local impact).
            Sincerely,
                                          Paul Van de Water
                                   (For June E. O'Neill, Director).
    Enclosure.

H.R. 3878--A bill to subject certain reserved mineral interests of the 
        operation of the Mineral Leasing Act, and for other purposes

    Summary: H.R. 3878 would allow two parcels of federal 
subsurface estate in the state of Wyoming to be leased for oil 
and gas development. CBO estimates that enacting H.R. 3878 
would have no significant impact on the federal budget. Because 
enacting the bill could affect offsetting receipts (which are 
classified as direct spending), pay-as-you-go procedures would 
apply; however, we estimate that any effect on direct spending 
would total less than $500,000 each year over the 1999-2003 
period.
    H.R. 3878 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: H.R. 3878 would 
allow the Secretary of the Interior to lease two parcels of 
federal subsurface estate consisting of about 400 acres in the 
state of Wyoming for oil and gas development. The lease 
authority would apply retroactively to one parcel, which was 
leased erroneously in 1997.
    The surface land above the mineral estate is privately 
owned. The bill provides that lessees to the federal mineral 
estate could occupy as much of the surface land as necessary to 
develop the leases. As a condition of that occupancy, lessees 
would be required to either secure consent from the owner of 
the surface land, or, in the absence of such consent, provide a 
financial guarantee to assure reclamation and to pay the 
surface owner for damages and any loss of income.
    The subsurface estate addressed by the bill is currently 
closed to oil and gas development but in 1997 the Bureau of 
Land Management (BLM) erroneously leased one of the parcels. 
The federal government received a bonus bid for that lease of 
about $20,000, which was shared with the state of Wyoming. 
Under current law, the federal government must cancel that 
lease and return the bonus bid and subsequent rental payments 
to the lessee. H.R. 3878 would allow the lease to continue, 
thereby avoiding a reimbursement to the lessee that would 
otherwise be required under a cancellation. Furthermore, 
enacting H.R. 3878 would allow the second parcel to be leased 
and allow oil and gas development to proceed on both parcels. 
Based on information from BLM, CBO estimates that the bill 
would reduce direct spending by increasing offsetting receipts 
from the two parcels, but we estimate that the net change would 
total less than $500,000 each year over the 1999-2003 period.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. CBO 
estimates that enacting H.R. 3878 would reduce direct spending 
by increasing offsetting receipts from oil and gas development, 
but we estimate that the net effect would total less than 
$500,000 each year over the 1999-2003 period.
    Estimated impact of State, local, and tribal governments: 
H.R. 3878 contains no intergovernmental mandates as defined in 
UMRA and would impose no costs on State, local, or tribal 
governments. States receive a portion of receipts from oil and 
gas development on federal lands within their borders. 
Enactment of this bill would lead to a small increase in such 
receipts in the State of Wyoming, so payments to that State 
would increase.
    Estimated impact on the private sector: This bill would 
impose no new private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal costs: Victoria V. Heid. 
Impact on State, local, and tribal governments: Marjorie 
Miller.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    H.R. 3878 contains no unfunded mandates.

                        CHANGES IN EXISTING LAW

    If enacted, H.R. 3878 would make no changes in existing 
law.

                                
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