[House Report 112-655]
[From the U.S. Government Publishing Office]


112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     112-655

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



 
           MINNESOTA EDUCATION INVESTMENT AND EMPLOYMENT ACT

                                _______
                                

 September 10, 2012.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. Hastings of Washington, from the Committee on Natural Resources, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 5544]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 5544) to authorize and expedite a land exchange 
involving National Forest System land in the Laurentian 
District of the Superior National Forest and certain other 
National Forest System land in the State of Minnesota that has 
limited recreational and conservation resources and lands owned 
by the State of Minnesota in trust for the public school system 
that are largely scattered in checkerboard fashion within the 
Boundary Waters Canoe Area Wilderness and have important 
recreational, scenic, and conservation resources, and for other 
purposes, having considered the same, reports favorably thereon 
with an amendment and recommends that the bill as amended do 
pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Minnesota Education Investment and 
Employment Act''.

SEC. 2. LAND EXCHANGE, BOUNDARY WATERS CANOE AREA WILDERNESS AND 
                    SUPERIOR NATIONAL FOREST, MINNESOTA.

  (a) Findings.--Congress makes the following findings:
          (1) The State of Minnesota owns multiple parcels of land in 
        the Boundary Waters Canoe Area Wilderness in the Superior 
        National Forest that were granted to the State through sections 
        16 and 36 of the Enabling Act of 1857 to be held in trust for 
        the benefit of the public school system in the State (in this 
        section referred to as ``State trust lands'').
          (2) The State trust lands were acquired by the State long 
        before the establishment of either the National Forest System 
        or the wilderness area and are scattered in a largely 
        checkerboard fashion amid the Superior National Forest and the 
        wilderness area.
          (3) The presence of State trust lands in the wilderness area 
        makes land and resource management in the wilderness area more 
        difficult, costly, and controversial for the United States and 
        the State.
          (4) Although the State trust lands were granted to the State 
        to generate financial support for the public school system 
        through the sale or development of natural resources, 
        development of those resources in the wilderness area may be 
        incompatible with managing the wilderness area for 
        recreational, natural, and conservation purposes.
          (5) The United States owns land and interests in land in 
        other parts of the State that can be transferred to the State 
        in exchange for the State trust lands without jeopardizing 
        Federal management objectives or needs.
          (6) It is in the public interest to exchange, on terms that 
        are fair to the United States and the State, National Forest 
        System land in the State that has limited recreational and 
        conservation resources for State trust lands located in the 
        wilderness area with important recreational, scenic, and 
        conservation resources for permanent public management and use.
          (7) The Legislature of the State of Minnesota, meeting in its 
        87th Legislative Session, passed (and on April 27, 2012, the 
        Governor of Minnesota approved) S.F No. 1750 (Chapter 236), 
        section 4 of which adds section 92.80 to the Minnesota Statutes 
        to expedite the exchange of a portion of the State trust lands 
        located within the Boundary Waters Canoe Area Wilderness.
  (b) Land Exchange Required.--The Secretary of Agriculture shall 
consummate a land exchange with the State of Minnesota pursuant to 
section 4 of S.F No. 1750 (Chapter 236) of the Legislature of the State 
of Minnesota (section 92.80 of the Minnesota Statutes) to acquire all 
right, title, and interest of the State in and to certain State trust 
lands identified as provided in such section in exchange for all right, 
title, and interest of the United States in and to National Forest 
System land in the State for inclusion in the State trust lands.
  (c) Valuation of Lands for Exchange.--Subdivision 4 of section 4 of 
S.F No. 1750 (Chapter 236) of the Legislature of the State of Minnesota 
(section 92.80 of the Minnesota Statutes) shall control for purposes of 
the examination and value determination of the lands to be exchanged.
  (d) Survey and Administrative Costs.--The exact acreage and legal 
description of the land to be exchanged under subsection (b) shall be 
determined by a survey satisfactory to the Secretary. The State of 
Minnesota shall be responsible for the costs of the survey and all 
other administrative costs related to the land exchange.
  (e) Boundaries and Management of Acquired Land.--
          (1) Land acquired by secretary.--
                  (A) In general.--The land acquired by the Secretary 
                under subsection (b) shall be added to and administered 
                as part of the Boundary Waters Canoe Area Wilderness 
                established pursuant to section 3 of the Wilderness Act 
                (16 U.S.C. 1132(a)), and the Secretary shall modify the 
                boundaries of the wilderness area to reflect inclusion 
                of the acquired lands. Subject to subparagraph (B), the 
                land acquired by the Secretary shall be managed in 
                accordance with the Wilderness Act (16 U.S.C. 1131 et 
                seq.) and other laws and regulations applicable to the 
                National Wilderness Preservation System.
                  (B) No effect on existing fishing and hunting 
                rights.--The acquisition of land by the United States 
                under subsection (b) and inclusion of the land in the 
                Boundary Waters Canoe Area Wilderness shall not alter 
                or otherwise affect--
                          (i) any fishing and hunting rights in 
                        existence with respect to the land immediately 
                        before the conveyance of the land to the United 
                        States; or
                          (ii) the use of such rights after conveyance.
          (2) Land acquired by state.--The land acquired by the State 
        of Minnesota under subsection (b) shall be deemed to be State 
        trust lands and shall be held in trust for the benefit of the 
        public school system in the State. It is the sense of Congress 
        that, whenever the land acquired by the State of Minnesota 
        under subsection (b) is not being used for revenue-generating 
        activities, the State should make the land available for other 
        compatible uses, including hunting, fishing, hiking, biking, 
        snowmobiling, and trail riding.
          (3) Boundaries of superior national forest.--The Secretary 
        shall modify the boundaries of the Superior National Forest to 
        reflect the land exchange conducted under this section.
  (f) Relation to Other Laws.--
          (1) Land and water conservation fund act.--For purposes of 
        section 7 of the Land and Water Conservation Fund Act of 1965 
        (16 U.S.C. 460l-9), the boundaries of the Superior National 
        Forest, as modified by subsection (e)(3), shall be considered 
        to be boundaries of the Superior National Forest as of January 
        1, 1965.
          (2) Not a major federal action.--The land exchange conducted 
        under this section shall not be considered to be a major 
        Federal action.
  (g) No Impact on Other Land Exchanges.--The land exchange described 
in subsection (b) does not affect any land exchange involving National 
Forest System land in the State of Minnesota underway as of the date of 
the enactment of this Act.
  (h) Report.--If the Secretary fails to complete the land exchange 
described in subsection (b) before the end of the 18-month period 
beginning on the date of the enactment of this Act, the Secretary shall 
submit to Congress, not later than 30 days after the end of such 
period, a report--
          (1) specifying the reasons why the exchange has not been 
        completed; and
          (2) stating the date by which the Secretary anticipates the 
        conveyance will be completed.

                          PURPOSE OF THE BILL

    The purpose of H.R. 5544, as ordered reported, is to 
authorize and expedite a land exchange involving National 
Forest System land in the Laurentian District of the Superior 
National Forest and certain other National Forest System land 
in the State of Minnesota that has limited recreational and 
conservation resources and lands owned by the State of 
Minnesota in trust for the public school system that are 
largely scattered in checkerboard fashion within the Boundary 
Waters Canoe Area Wilderness and have important recreational, 
scenic, and conservation resources.

                  BACKGROUND AND NEED FOR LEGISLATION

    The Minnesota Education Investment and Employment Act (H.R. 
5544) would authorize a land exchange between the Superior 
National Forest and the State of Minnesota. Like many 
territories-turned-states, Minnesota retained a number of 
parcels of school trust land upon entering statehood for sale 
and/or development to raise funds for education, many of which 
were sold in the 1880s for agriculture and development. There 
now remains approximately 2.5 million acres of school trust 
land in the State of Minnesota, located primarily in ten 
northern counties. Unfortunately, several thousand acres of 
school trust land were included within the border of the 
Boundary Waters Canoe Area Wilderness (BWCAW) when it was 
established by Congress in 1978.
    Access and development of these school trust lands is 
effectively prohibited by being located within a 
congressionally-designated wilderness area. The Wilderness Act 
of 1964 prohibits road-building and the use of motorized or 
mechanized equipment across federal land that would be 
necessary for the State to make any use of these lands. H.R. 
5544 would provide a solution to this longstanding issue by 
exchanging the acres of school trust land locked away within 
the BWCAW for an in-kind amount of land from the Superior 
National Forest.
    Opponents of a land exchange have advocated for the Forest 
Service to simply purchase the parcels within the BWCAW using 
the Land and Water Conservation Fund. However, given that the 
value of the parcels is estimated to be in excess of $100 
million, an acquisition is not fiscally feasible.
    H.R. 5544 directs the Secretary of Agriculture to enter 
into a land exchange with the State of Minnesota for the trust 
lands located within the BWCAW pursuant to the terms outlined 
by law recently enacted by the State of Minnesota (S.F. 1750), 
that requires equal value for the parcels to be exchanged. In 
addition, the legislation specifies that the State of Minnesota 
is responsible for all survey and administrative costs of the 
exchange, and that lands acquired by the State remain open to 
recreational activities while not in use for revenue 
generation.
    During Full Committee consideration of the bill, the 
Committee adopted an amendment offered by Congressman Rob 
Bishop (R-UT) to make a technical correction and extend the 
deadline for completion of the exchange from one year to 18 
months.

                            COMMITTEE ACTION

    H.R. 5544 was introduced on May 8, 2012, by Congressman 
Chip Cravaack (R-MN). The bill was referred to the House 
Committee on Natural Resources, and within the Committee to the 
Subcommittee on National Parks, Forests and Public Lands. On 
June 8, 2012, the Subcommittee on National Parks, Forests and 
Public Lands held a hearing on the bill. On August 1, 2012, the 
Full Resources Committee met to consider the bill. The 
Subcommittee on National Parks, Forests and Public Lands was 
discharged by unanimous consent. Congressman Rob Bishop (R-UT) 
offered an amendment designated #1 to the bill; the amendment 
was adopted by voice vote. Congressman Raul Grijalva (D-AZ) 
offered an amendment designated .AM2 to the bill; the amendment 
was not adopted by a roll call vote of 19 to 25, as follows:



    The bill, as amended, was then adopted and ordered 
favorably reported to the House of Representatives by a roll 
call vote of 25 to 19, as follows:



            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 Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

                    COMPLIANCE WITH HOUSE RULE XIII

    1. Cost of Legislation. Clause 3(d)(1) 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. However, clause 3(d)(2)(B) 
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 402 of the 
Congressional Budget Act of 1974. 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 
received the following cost estimate for this bill from the 
Director of the Congressional Budget Office:

H.R. 5544--Minnesota Education Investment and Employment Act

    Summary: H.R. 5544 would require the Secretary of 
Agriculture to exchange unspecified national forest lands for 
86,000 acres of land owned by the state of Minnesota, located 
within the federal Boundary Waters Canoe Area Wilderness 
(BWCAW). Based on information provided by the Forest Service, 
CBO estimates that enacting the legislation would increase 
direct spending by $6 million over the 2014-2022 period; 
therefore, pay-as-you-go procedures apply. Enacting H.R. 5544 
would not affect revenues.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
The state of Minnesota would benefit from the land exchange 
authorized in the bill. Any costs to the state would be 
incurred voluntarily.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 5544 is shown in the following table. 
The costs of this legislation fall within budget function 300 
(natural resources and environment).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  By fiscal year, in millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2013    2014    2015    2016    2017    2018    2019    2020    2021    2022   2013-2017  2013-2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING

Estimated Budget Authority........................       0       *       *       1       1       1       1       1       1       1         2          6
Estimated Outlays.................................       0       *       *       1       1       1       1       1       1       1         2          6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Amounts may not sum to totals because of rounding.
      * = less than $500,000.

    Basis of estimate: For this estimate, CBO assumes that the 
legislation will be enacted late in 2012.
    H.R. 5544 would require the Secretary of Agriculture to 
complete a land exchange that would increase the amount of 
federally owned land within the BWCAW. Under the Thye-Blatnick 
Act, the Forest Service makes annual payments to three counties 
in Minnesota that encompass portions of the BWCAW. Those 
payments are calculated as a percentage of the appraised value 
of federally owned lands within the BWCAW. In 2012, the Forest 
Service owned 600,000 acres of land within the BWCAW and paid 
the affected counties $6 million. Based on information provided 
by the Forest Service, CBO expects that, under the bill, the 
amount of federally owned land within the BWCAW would increase 
by 86,000 acres (about 15 percent) over the 2013-2016 period, 
and we estimate that payments to the affected counties would 
increase by a total of $6 million over the 2014-2022 period.
    In addition, CBO expects that the Forest Service would 
convey lands within the Superior National Forest, which are 
located outside the BWCAW, to the state of Minnesota to 
complete the land exchange required under the bill. Because 
those lands could generate offsetting receipts (a credit 
against direct spending) from timber sales or other activities 
over the next 10 years, enacting the bill could reduce 
offsetting receipts. However, CBO estimates that any loss of 
receipts would probably not exceed $500,000 in any year.
    Pay-As-You-Go Considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. CBO estimates that enacting H.R. 5544 would increase 
direct spending by $6 million over the 2014-2022 period. 
Enacting H.R. 5544 would not affect revenues.

          CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 5544 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON NATURAL RESOURCES ON AUGUST 1, 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                             2012    2013    2014    2015    2016    2017    2018    2019    2020    2021    2022   2012-2017  2012-2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET INCREASE IN THE DEFICIT

Statutory Pay-As-You-Go Impact............       0       0       0       0       1       1       1       1       1       1       1         2          6
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 5544 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The state of Minnesota would benefit from the 
land exchange authorized in the bill. Any costs to the state 
would be incurred voluntarily.
    Estimate prepared by: Federal costs: Jeff LaFave; Impact on 
state, local, and tribal governments: Melissa Merrell; Impact 
on the private sector: Amy Petz.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.
    2. Section 308(a) of 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, credit authority, or an increase or decrease in 
revenues or tax expenditures. According to the Congressional 
Budget Office, enactment of the legislation would increase 
direct spending by $6 million over 2014-2022. In addition, CBO 
estimates that the bill could also reduce offsetting receipts 
of not more than $500,000 in any year.
    3. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill, as ordered reported, is to authorize 
and expedite a land exchange involving National Forest System 
land in the Laurentian District of the Superior National Forest 
and certain other National Forest System land in the State of 
Minnesota that has limited recreational and conservation 
resources and lands owned by the State of Minnesota in trust 
for the public school system that are largely scattered in 
checkerboard fashion within the Boundary Waters Canoe Area 
Wilderness and have important recreational, scenic, and 
conservation resources.

                           EARMARK STATEMENT

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                    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.

                            DISSENTING VIEWS

    Proponents of H.R. 5544 argue that state trust lands within 
the Boundary Waters Canoe Area Wilderness (BWCAW) should be 
exchanged for federal lands outside that area so that the state 
can generate more revenue through mining and logging. The 
legislation contains a number of controversial provisions, 
however, and ignores the fact that the relevant Minnesota 
counties are already being compensated for the presence of 
federal land within their boundaries. As a result, H.R. 5544 
should be rejected.
    H.R. 5544 mandates the exchange of land between the State 
of Minnesota and the U.S. Forest Service without identifying 
which federal lands will go into state ownership. Further, the 
legislation uses non-traditional methods to appraise those 
lands, putting taxpayers at risk. Finally, H.R. 5544 waives 
public input and consultation, making the bill controversial 
and potentially setting an unacceptable precedent. These 
defects were raised by the Forest Service in testimony against 
this legislation.
    Counties in Minnesota continue to be compensated by the 
federal government for the designation of the BWCAW. In 
addition to payments that other counties receive through the 
Secure Rural Schools and Payment in Lieu of Taxes (PILT) 
programs, Cook, Lake, and St. Louis counties receive mandatory 
annual payments totaling $6 million to compensate for the loss 
of property tax revenues resulting from federal ownership of 
land within the BWCAW.
    During Committee consideration of this legislation, Ranking 
Member Grijalva offered an amendment to provide public 
participation and taxpayer protections while allowing the 
exchange to proceed. The amendment was defeated by a party-line 
vote.
    There are ways to facilitate land exchanges that bring 
people together to a common solution. This bill is not one of 
them and should be rejected.
                                   Edward J. Markey.
                                   Raul Grijalva.

                                  
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