[Senate Report 111-67]
[From the U.S. Government Publishing Office]
Calendar No. 150
111th Congress Report
SENATE
1st Session 111-67
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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.