[Senate Report 111-67]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 150
111th Congress                                                   Report
                                 SENATE
 1st Session                                                     111-67

======================================================================



 
                  UTAH RECREATIONAL LAND EXCHANGE ACT

                                _______
                                

                 August 4, 2009.--Ordered to be printed

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 1275]

    The Committee on Energy and Natural Resources, to which was 
referred the Act (H.R. 1275) to direct the exchange of certain 
land in Grand, San Juan, and Uintah Counties, Utah, and for 
other purposes, having considered the same, reports favorably 
thereon without amendment and recommends that the Act do pass.

                                PURPOSE

    The purpose of H.R. 1275 is to provide for a land exchange 
between the Bureau of Land Management and the Utah School and 
Institutional Trust Lands Administration in Grand, San Juan, 
and Uintah Counties, Utah.

                          BACKGROUND AND NEED

    The Utah School and Institutional Trust Lands 
Administration (SITLA) manages approximately 3.5 million acres 
of land and 4.5 million acres of mineral estate within the 
State of Utah primarily for the benefit of the schools of the 
State of Utah. Many of these parcels are scattered and 
interspersed with public lands managed by the Bureau of Land 
Management.
    Over the past five years, the BLM has disposed of 110,178 
acres in Utah while acquiring 112,842 acres through exchange. 
The vast majority of this was completed under the direction of 
Congress through the Utah West Desert Land Exchange Act (Public 
Law 106-301).
    H.R. 1275 would authorize and direct the exchange of 
approximately 45,731 acres of lands managed by SITLA for 
approximately 35,684 acres of BLM-managed Federal lands. Many 
of the lands that the State is proposing to transfer to the BLM 
are lands that the BLM has a high degree of interest in 
acquiring because they would consolidate Federal ownership 
within wilderness study areas, Areas of Critical Environmental 
Concern, and other sensitive lands, including lands and 
minerals near Utah's Colorado River Corridor, the Book Cliffs, 
and Dinosaur National Monument.

                          LEGISLATIVE HISTORY

    H.R. 1275, sponsored by Representative Matheson, passed the 
House of Representatives by a vote of 423-0 on July 8, 2009. 
Companion legislation, S. 563, was introduced by Senators 
Bennett and Hatch on March 10, 2009.
    The Committee considered similar legislation during the 
110th Congress. The Subcommittee on Public Lands and Forests 
held a hearing on S. 390, also sponsored by Senators Bennett 
and Hatch, on May 3, 2007 (S. Hrg. 110-91). The Committee 
ordered S. 390 favorably reported, with an amendment in the 
nature of a substitute on September 11, 2008. No further action 
was taken on the bill. Senators Bennett and Hatch also 
introduced related legislation in the 109th Congress, S. 1135, 
although no action was taken on the bill.

                        COMMITTEE RECOMMENDATION

    The Committee on Energy and Natural Resources, in an open 
business session on August 4, 2009, by a unanimous voice vote 
of a quorum present, recommends that the Senate pass H.R. 1275.

                      SECTION-BY-SECTION ANALYSIS

    Section 1 provides the short title, the ``Utah Recreational 
Land Exchange Act of 2009''.
    Section 2 defines key terms used in the bill.
    Section 3 describes the terms of the land exchange between 
the State of Utah, as trustee for the Utah School and 
Institutional Trust Lands Administration, and the Department of 
the Interior.
    Subsection (a) provides that if the State offers to convey 
to the United States title to the non-Federal land identified 
in the referenced maps, the Secretary of the Interior 
(Secretary) shall accept the offer and upon receipt of the non-
Federal land, convey to the State all right, title, and 
interest of the United States to the Federal land, as depicted 
on the referenced maps.
    Subsection (b) provides that the land exchange is subject 
to any valid existing rights, and except as otherwise provided 
by this Act, section 206 of the Federal Land Policy and 
Management Act of 1976 (FLPMA; 43 U.S.C. 1716), and any other 
applicable laws. The subsection further provides all costs 
associated with the land exchange, including appraisals, 
surveys, and related costs, shall be paid equally between the 
State of Utah and the United States. The exchange is also 
subject to any additional terms and conditions agreed to by the 
Secretary and the State.
    Subsection (c) requires that title to the Federal and non-
Federal land exchanged under this Act be in a form acceptable 
to the Secretary and the State.
    Subsection (d) states that the value of the Federal and 
non-Federal lands to be exchanged shall be determined by 
appraisals conducted in accordance with section 206 of FLPMA. 
The subsection provides for an adjustment if the value of any 
parcel of Federal land is attributed to minerals subject to 
leasing under the Mineral Leasing Act. In that case, the value 
shall be reduced by the estimated value of the payments that 
would have been made to the State of Utah from bonuses, 
rentals, and royalties that the United States would have 
received if such minerals had been leased. All final 
appraisals, appraisal reviews, and determinations of value are 
to be available for public review in the Utah State Office of 
the Bureau of Land Management at least 30 days before the 
conveyance of the applicable parcels.
    Subsection (e) authorizes the conveyance of Federal and 
non-Federal parcels in three phases, beginning on the date on 
which the appraised values of the parcels included in the 
applicable phase are approved under this subsection, even if 
appraisals for all of the parcels to be conveyed may not have 
been approved. The three phases include the lands identified on 
the referenced map as ``phase one'' (approximately 30,281 
acres), ``phase two'' (approximately 8,382 acres), and ``phase 
three'' (approximately 7,619 acres), respectively. The parties 
are authorized to set aside an individual parcel of land from 
one of the identified phases if agreement to exchange has not 
been reached, allowing the remainder of the parcels in the 
phase to be exchanged. Paragraph (4) of subsection (e) states 
that it is the intent of Congress that at least the first phase 
of the land exchange be completed not later than 360 days after 
the date on which the State offers to convey the non-Federal 
lands to the Secretary.
    Subsection (f) directs the Secretary to reserve from 
Federal lands containing oil shale resources, an interest in 
the portion of the mineral estate that contains such resource. 
The interest shall consist of 50 percent of any bonus bid or 
other payment received by the State as consideration for 
securing any lease or authorization to develop oil shale 
resources; the amount that would have been received by the 
Federal government under the applicable royalty rate if the oil 
shale resources had been retained in Federal ownership; and 50 
percent of any other payment received by the State pursuant to 
any lease or authorization to develop the oil shale resources. 
The subsection clarifies that the State is not obligated to 
lease or otherwise develop oil shale resources on lands in 
which the United States retains an interest and that the value 
of any lands in which the United States retains an interest 
shall be appraised without regard to the presence of oil shale 
and in accordance with subsection (d).
    Subsection (g) withdraws, subject to valid existing rights, 
the Federal lands from disposition under the public land laws 
(other than as provided in section 4); location, entry, and 
patent under the mining laws; and from operation of the mineral 
leasing laws, geothermal leasing, and the minerals materials 
laws. The withdrawal is to begin on the date of enactment of 
this Act and ends on the earlier of the date that the Federal 
land is removed from the exchange or the date on which the 
Federal land is conveyed under this Act.
    Subsection (h) provides that any conveyance of a parcel of 
Federal or non-Federal land under this Act shall include the 
conveyance of water rights appurtenant to the parcel conveyed.
    Subsection (i)(1) requires that the value of the Federal 
land and non-Federal land to be exchanged under this Act shall 
be equal, or shall be made equal.
    Paragraph (2) provides that if the value of the Federal 
land exceeds the value of the non-Federal land, they are to be 
equalized in a way determined by the Secretary and the State to 
be appropriate, by one or more of the following: by reducing 
the acreage of the Federal land to be conveyed; by adding 
additional State land to the non-Federal land to be conveyed; 
or, consistent with section 206(b) of FLPMA, by cash 
equalization payments of not more than 5 percent of the total 
value of the lands to be transferred out of Federal ownership.
    Paragraph (3) requires that if lands are added to or 
removed from the exchange, the Secretary or the State shall 
publish in a newspaper of general circulation in Salt Lake 
County, Utah, a notice that identifies where the revised map is 
available for public inspection, and also transmit a copy of 
the revised map to the House and Senate committees. The 
Secretary and the State may not add or remove land from the 
exchange until at least 30 days after the date on which notice 
is published and the maps are transmitted.
    Section 4(a) provides that the non-Federal land acquired by 
the United States under this Act shall become part of, and 
managed as part of the Federal administrative area in which the 
land is located. Any land acquired by the United States that is 
identified on the referenced maps as ``Withdrawal Parcels'' 
(approximately 23,466 acres) is withdrawn from the operation of 
the mineral leasing and mineral material disposal laws. Any 
mineral receipts derived from land acquired by the United 
States shall be paid into the Treasury and shall not be subject 
to the revenue sharing provisions under section 35 of the 
Mineral Leasing Act (30 U.S.C. 191).
    Subsection (b)(1) allows for the continuation of grazing 
for the remainder of the term, permit, or lease, on lands 
exchanged under this Act, subject to the related terms and 
conditions of user agreements, including permitted stocking 
rates, grazing fee levels, access rights, and ownership of 
range improvements.
    Paragraph (2) states that, to the extent allowed by Federal 
or State law, the holder of a lease, permit, or contract, shall 
be entitled to a preference right to renew the grazing lease, 
permit, or contract.
    Paragraph (3) provides that nothing in this Act prevents 
the Secretary or the State from cancelling or modifying a 
grazing permit, lease, or contract if the underlying land is 
sold or transferred or leased for non-grazing purposes.
    Paragraph (4) clarifies that if grazing land is used to 
meet the base property requirements for a Federal grazing 
permit or lease, the land shall continue to qualify as base 
property for the remaining term of the lease or permit and any 
renewals or extensions.
    Subsection (c) directs the Secretary, and the State, as a 
condition of the exchange, to make available for review and 
inspection any record relating to hazardous materials on the 
lands to be exchanged, with costs of remedial actions paid by 
those entities responsible for the costs under applicable law.
    Subsection (d) affirms a scenic easement and road right-of-
way previously granted to the National Park Service for 
Dinosaur National Monument.
    Section 5 provides that the provisions of this Act shall 
terminate 5 years after the date of enactment of this Act.
    Section 6 authorizes the appropriation of such sums as are 
necessary to carry out this Act.

                   COST AND BUDGETARY CONSIDERATIONS

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

H.R. 1275--Utah Recreational Land Exchange Act of 2009

    H.R. 1275 would authorize a land exchange between the 
federal government and the state of Utah. The bill would 
specify certain procedures for equalizing the values of lands 
and interests exchanged and other conditions on the 
transaction. In particular, under the bill, the federal 
government would reserve an interest in any oil shale resources 
conveyed to the state.
    CBO estimates that enacting H.R. 1275 would have no 
significant net impact on discretionary or mandatory spending 
and no effect on revenues. The bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act and would impose no costs on 
state, local, or tribal governments.
    Based on information provided by the Bureau of Land 
Management (BLM), CBO estimates that the approximately 36,000 
acres of federal lands to be conveyed under H.R. 1275 currently 
generate net offsetting receipts (a credit against direct 
spending) totaling less than $50,000 annually, primarily for 
grazing. Although some of those lands have the potential for 
mineral development, CBO expects that they are unlikely to be 
leased over the next 10 years; therefore, we estimate that 
forgone net receipts under the bill over the 2010-2019 period 
would be minimal, as would any new receipts that might be 
earned on the approximately 46,000 acres that would be received 
from the state.
    Also, under H.R. 1275, the federal government would reserve 
a 50 percent interest in future royalties, bonus bids, and 
other payments that Utah might receive if the lands to be 
transferred to it are ever developed for oil shale. Because BLM 
typically retains half of any receipts from mineral leasing on 
federal land under current law, CBO expects that this provision 
would, on average, have no significant effect on the federal 
budget.
    The CBO staff contacts for this estimate are Deborah Reis 
and Megan Carroll. The estimate was approved by Theresa Gullo, 
Deputy Assistant Director for Budget Analysis.

                      REGULATORY IMPACT EVALUATION

    In compliance with paragraph 11(b) of Rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out H.R. 1275. The Act is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of H.R. 1275, as ordered reported.

                   CONGRESSIONALLY DIRECTED SPENDING

    H.R. 1275 does not contain any congressionally directed 
spending items, limited tax benefits, or limited tariff 
benefits as defined in rule XLIV of the Standing Rules of the 
Senate.

                        EXECUTIVE COMMUNICATIONS

    Because H.R. 1275 is similar to legislation considered by 
the Committee in the 109th Congress, the Committee did not 
request Executive Agency views. The testimony provided by the 
Department of the Interior at hearing before the House Natural 
Resources Subcommittee on National Parks, Forests, and Public 
Lands on March 24, 2009 follows:

   Testimony of Michael Nedd, Acting Deputy Director, Bureau of Land 
                 Management, Department of the Interior

    Thank you for the opportunity to testify on H.R. 1275, the 
Utah Recreational Land Exchange Act. The bill would legislate a 
large-scale land exchange between the Bureau of Land Management 
(BLM) and the State of Utah. We support the completion of major 
land exchanges which further public policy goals and enhance 
resource protection. However, we have several concerns with 
H.R. 1275 and we request that the Committee defer any action on 
the bill until we can address our concerns with the sponsors 
and the Committee. We look forward to working with the sponsors 
and the Committee on this legislation.


                               background


    The Utah School and Institutional Trust Lands 
Administration (SITLA) manages approximately 3.5 million acres 
of land and 4.5 million acres of mineral estate within the 
State of Utah primarily for the benefit of the schools of the 
State of Utah. Many of these parcels are interspersed with 
public lands managed by the BLM.
    Managing 22.8 million acres of land within the State of 
Utah, the BLM's mission is to sustain the health, diversity, 
and productivity of the public lands for the use and enjoyment 
of present and future generations. As the nation's largest 
Federal land manager, the BLM administers the public lands for 
a wide range of multiple uses, including energy production, 
recreation, livestock grazing and conservation uses. The 
Federal Land Policy and Management Act (FLPMA) provides the BLM 
with a clear multiple-use mandate which the BLM implements 
through its land use planning process.
    Section 206 of FLPMA provides the BLM with the authority to 
undertake land exchanges. Among other purposes, exchanges allow 
the BLM to acquire environmentally-sensitive lands while 
transferring public lands into non-Federal ownership for local 
needs and the consolidation of scattered tracts. Over the past 
ten years the BLM in Utah has completed two large-scale 
exchanges with the State of Utah at the direction of Congress 
through the Utah West Desert Land Exchange Act of 2000 (Public 
Law 106-301) and the Utah Schools and Land Exchange Act of 1998 
(Public Law 105-335). Over 262,000 acres of Federal land were 
conveyed to the State of Utah and the United States acquired 
over 571,000 acres from the state through these exchanges.


                               h.r. 1275


    H.R. 1275 directs the exchange of approximately 46,300 
acres of land and mineral estate managed by SITLA for 
approximately 35,700 acres of BLM-managed Federal lands and 
mineral estate primarily in Grand and Uintah Counties, and 
further specifies that the exchange shall be of equal value.
    The first hearing on this proposal was held in 2005 by this 
Committee. The BLM in Utah is currently revisiting the specific 
parcels identified for exchange on the maps accompanying H.R. 
1275 to assess any changes in status in the intervening years, 
and whether the acquisition of all of these parcels is in the 
public interest. The BLM will inform the Committee if we find 
any conditions that raise concerns about the transfer of 
specific parcels and we would request that the Committee delay 
any further action on this legislation until we have a chance 
to complete this review.
    Many of the lands that the State is proposing to transfer 
to the BLM are lands the BLM has an interest in acquiring in 
order to consolidate Federal ownership within wilderness study 
areas, Areas of Critical Environmental Concern, or other 
sensitive lands. Among these are:
           1,280 acres and 420 acres along the Colorado 
        River west and east of Moab which includes Corona Arch 
        and other popular recreation sites within the BLM's 
        Colorado Riverway Management Area;
           4,500 acres within the Castle Valley 
        watershed which also has important wildlife habitat and 
        scenic values;
           1,280 acres of land currently leased by the 
        BLM and Grand County from the State for recreation-
        related activities associated with the Sand Flats 
        Recreation Area and the famous Slickrock Mountain Bike 
        Trail;
           800 acres within the Nine Mile Canyon 
        containing significant cultural and recreational 
        resources; and,
           8,600 acres in the Dolores Triangle 
        containing prime habitat for elk and deer which is 
        therefore a focus area for hunting.
    The BLM supports the provisions of the bill that establish 
a phased process which prioritizes the transfer of lands from 
SITLA to the BLM. This will allow the BLM to make best use of 
Federal resources in the appraisal and review process.
    The lands and mineral estate the bill directs be 
transferred to SITLA from the BLM are primarily parcels with 
high energy potential. These lands are located in the highly 
productive Uintah Basin, with producing oil and natural gas 
wells within close proximity of these parcels. Some of the 
parcels which would be transferred to SITLA under this 
legislation would improve manageability and encourage local 
development in the state; for example 80 acres adjacent to 
Canyonlands Field municipal airport in Grand County.
    It is typical in administrative exchanges between 
governmental entities that costs of the exchange, including but 
not limited to appraisals, surveys, and clearances, are split 
equally between the two parties. We trust that is the intention 
of H.R. 1275, but it is not specified and we recommend that 
this be made clear.
    Section 3(i) provides that the exchange shall be equal 
value and provides for a mechanism of equalizing those values. 
The BLM supports section 3(i), but notes that it is often 
impossible to reach complete equalization through land values 
alone. We recommend allowing for a minimal cash equalization 
payment or waiver of payment by either party as authorized by 
Section 206(b) of FLPMA. Any difference in values would be 
minimized to the extent possible through the addition or 
elimination of land.
    Section 4 of H.R. 1275 addresses management of the lands 
post-exchange. In general the lands exchanged to the government 
are to be managed as a part of the Federal administrative unit 
in which the land is located. However, section 4(a)(2)(A) 
further provides that all of the lands acquired by the Federal 
government from SITLA should be withdrawn from the mineral 
leasing laws for the later of two years after the date of 
enactment of this Act or the signing of the Record of Decision 
(ROD) for the applicable Resource Management Plans (RMPs). The 
RODs for the Moab and Vernal RMPs were signed on October 31, 
2008, and therefore the temporary withdrawal language is no 
longer necessary since new land use plans governing management 
of these lands is now in place. Furthermore, section 4(a)(2)(B) 
permanently withdraws from the mineral leasing and mineral 
materials laws more than half of the acres acquired from the 
state. We understand that the intent of this withdrawal is to 
protect lands which would be specifically acquired for 
conservation purposes.
    The status of existing grazing permits on both the lands to 
be exchanged to SITLA and to the BLM is addressed in section 
4(b). In the case of state lands transferred to the BLM, it 
might be more advantageous to both the rancher and the BLM to 
simply include the new lands in existing grazing leases under 
existing laws and regulations rather than have them continue as 
if under state law. The Utah BLM office believes that the 
lessees of the state land would be the same as those on 
adjacent BLM land. Maintaining separate grazing systems on 
small inholdings within larger grazing allotments could be 
administratively burdensome for both the BLM and the permittee 
and would increase costs for the permittee as state grazing 
fees are higher than those charged by the Federal Government. 
We would like to discuss with the Committee the inclusion of a 
transition period for full integration of the state leases into 
the preexisting BLM permits.
    Many of the parcels proposed for transfer from SITLA to the 
BLM are encumbered with mineral leases. The BLM has concerns 
with acquiring existing mineral leases because we do not 
typically do so, and we would like the opportunity to more 
fully understand the implications of these encumbered parcels. 
For example, managing leases under terms established by the 
state of Utah (which may differ substantially from terms the 
BLM would impose established through our planning process) may 
pose management challenges. The legislation does not 
specifically address this issue and we are reviewing options at 
this time.
Valuation and appraisal
    The valuation and appraisal provisions of H.R. 1275, are 
found in sections 3(d) and 3(f). These differ from standard 
methods in some cases. While there may be circumstances in 
which the Congress may decide that alternative methods of 
valuation are appropriate for achieving worthwhile public 
policy objectives, the Department seeks to be clear and 
transparent about where those differences lie and where they 
raise concerns.
    Section 3(d)(2) states that appraisals ``shall be conducted 
in accordance with section 206 of the Federal Land Policy and 
Management Act'' (FLPMA). While we do not disagree with this 
statement, the legislation omits the language typically 
included in legislated land sales and exchanges stating that 
the appraisals shall be conducted ``in accordance with the 
Uniform Appraisal Standards for Federal Land Acquisitions and 
the Uniform Standards of Professional Appraisal Practice.'' The 
omission of this language could raise questions about the 
intent of Congress and the Department recommends its inclusion.
    Section 3(d)(4) provides a limitation on the appraisal that 
raises additional concerns. As noted earlier, the lands 
proposed for exchange from the BLM to SITLA are lands with high 
oil and gas mineral potential. The BLM does not typically 
exchange such lands out of Federal ownership. Section 3(d)(4) 
requires the appraiser to reduce the value of parcels with 
attributable mineral value (under the Mineral Leasing Act--MLA) 
by the percentage of the Federal revenue sharing with the 
states under the MLA. Presumably, the premise is that the state 
would have received a revenue stream had there been production 
under Federal ownership. However, Federal revenue sharing with 
the states under the MLA is 50% of royalties, bonus bids and 
rentals which is different than the total value of the parcels. 
The Federal royalty is 12.5% of production, with a resulting 
state share of 6.25%. Thus, the relationship between the 50% 
discount in mineral value and the 50% of the revenue stream the 
State would have received had there been production under 
Federal ownership is unclear. The Department opposes this 
provision and recommends that the bill be amended to clearly 
require that standard appraisal practices are utilized to 
ensure that the taxpayer is made whole and is treated the same 
as if these exchanges were undertaken administratively.
    Section 3(f) of H.R. 1275 is critically important to the 
legislation and we strongly support it. In addition to the oil 
and gas reserves that underlie the lands to be exchanged to 
SITLA from the BLM, there is significant, but speculative, high 
potential for oil shale resources. Under current standard 
appraisal practices, potential oil shale values would likely 
not factor into appraisals because of their speculative nature. 
Using a standard appraisal process might therefore result in 
properties with significant oil shale resources having no 
additional value attributed to them in spite of the presence of 
this resource. This could lead to the criticism that the United 
States is ``giving away'' millions of dollars in potential oil 
shale revenues. Section 3(f) addresses this risk by reserving a 
Federal interest in the oil shale, thus ensuring that the 
United States receives the value for any future oil shale 
development it would have received if the Federal Government 
had retained the lands and leased them. This reserved interest 
arrangement is common in the private sector and protects 
sellers from disposing entirely of some unknown future mineral 
wealth.
Additional concerns
    There are a number of additional issues that should be 
addressed before the bill moves forward. Many of these are no 
doubt oversights and technical in nature, but nonetheless 
significant. For example, while the bill addresses hazardous 
materials inventory and remediation, it should make clear that 
these actions should be undertaken consistent with FLPMA, the 
Comprehensive Environmental Response, Compensation, and 
Liability Act (CERCLA) and other relevant laws. Furthermore, we 
believe the legislation should make it clear that SITLA and the 
Federal Government should have equivalent obligations with 
respect to inventory and remediation of their respective 
properties. Additionally, the bill and its provisions are open-
ended with no sunset date. To avoid unexchanged lands being 
held indefinitely without any certainty as to their status, we 
believe a 10 year sunset provision would be reasonable. We look 
forward to working with the Committee and sponsor to resolve 
these issues and other technical concerns.


                               conclusion


    Large-scale land exchanges can resolve management issues, 
improve public access, and facilitate greater resource 
protection. We support such exchanges. To that end, we are 
ready to work with the Committee and the sponsor to resolve 
remaining issues in the bill. I would be happy to answer any 
questions.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of Rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by the Act H.R. 1275, as 
ordered reported.

                                  
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