[House Report 108-612]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-612

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                 SODA ASH ROYALTY REDUCTION ACT OF 2004

                                _______
                                

 July 19, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Pombo, from the Committee on Resources, submitted the following

                              R E P O R T

                        [To accompany H.R. 4625]

    The Committee on Resources, to whom was referred the bill 
(H.R. 4625) to reduce temporarily the royalty required to be 
paid for sodium produced on Federal lands, 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. 4625 is to reduce temporarily the 
royalty required to be paid for sodium produced on Federal 
lands, and for other purposes.

                  BACKGROUND AND NEED FOR LEGISLATION

    The U.S. soda ash (sodium carbonate) industry, which until 
recently was the largest in the world, is comprised of four 
companies in Wyoming, one company in California and one company 
in Colorado. Wyoming supplies about 90 percent of the Nation's 
soda ash. Glass-making consumes about half of soda ash output, 
followed by the chemical industry, which uses about a quarter 
of the output. Other uses include soap, paper manufacturing, 
and water treatment.
    The total estimated value of domestic soda ash produced in 
2003 was $800 million. The U.S. has traditionally exported 
natural soda ash derived from trona. The Wyoming trona industry 
employs about 2,500 mine and processing plant workers. The U.S. 
soda ash industry pays about $100 million in taxes to federal, 
state and local governments. Current challenges to the industry 
include a slump in export demand due to new competition for the 
export market, particularly from synthetic soda ash from China 
which is highly subsidized by the Chinese government and not 
subject to the same environmental regulations as the domestic 
industry.
    In 1996, the Department of the Interior increased the 
royalty rate on sodium compounds and related products from 5 
percent to 6 percent for renewed leases and 5 percent to 8 
percent for new leases. This increase was in addition to other 
significant federal lease costs such as bonds, acreage rental 
fees, sodium prospecting permit application fees, and permit 
bonds. Since the increase in the royalty rate, over 700 jobs 
have been lost in the domestic industry. Reducing the royalty 
rate on sodium compounds and related products produced on 
federal land will provide relief to the domestic industry, 
allowing it to remain competitive, to increase exports in 
emerging world markets, and to create new jobs in the United 
States.
    H.R. 4625 will temporarily reduce the royalty rate on 
sodium to 2 percent for five years.

                            COMMITTEE ACTION

    H.R. 4625 was introduced on June 21, 2004, 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 June 24, 2004, the 
Subcommittee held a hearing on the bill. On July 14, 2004, the 
Full Resources Committee met to consider the bill. The 
Subcommittee on Energy and Mineral Resources was discharged 
from further consideration of the bill by unanimous consent. No 
amendments were offered and the bill was ordered favorably 
reported to the House of Representatives by unanimous consent.

            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Resources' oversight findings and recommendations 
are reflected in the body of this report. Based on information 
supplied by the Mineral Management Service, enactment of this 
bill would result in approximately $5-6 million in foregone 
royalties per year. Half of these royalties are distributed to 
the States and the rest are retained by the federal government. 
Therefore, over the five-year royalty reduction granted by the 
bill, the total loss to the federal treasury would be 
approximately $13-15 million. It is possible that the lower 
royalty rate could result in increased production which might 
offset this loss, but we have no way to quantify this.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Article I, section 8 of the Constitution of the United 
States grants Congress the authority to enact this bill.

                    COMPLIANCE WITH HOUSE RULE XIII

    1. Cost of Legislation. Clause 3(d)(2) 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 this bill. Based
    2. Congressional Budget Act. As required by clause 3(c)(2) 
of rule XIII of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, this 
bill does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in tax 
expenditures. According to Minerals Management Service data, 
enactment of this bill would result in foregone royalty 
receipts of approximately $5 million a year (for a total of $25 
million).
    3. General Performance Goals and Objectives. This bill does 
not authorize funding and therefore, clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives does not 
apply.
    4. Congressional Budget Office Cost Estimate. Under clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has requested but not received a cost 
estimate for this bill from the Director of the Congressional 
Budget Office.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    This bill contains no unfunded mandates.

                PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

    This bill is not intended to preempt any State, local or 
tribal law.

                        CHANGES IN EXISTING LAW

    If enacted, this bill would make no changes in existing 
law.

                                  
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