[House Report 114-833]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-833
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CERTAINTY FOR STATES AND TRIBES ACT
_______
November 22, 2016.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Bishop of Utah, from the Committee on Natural Resources, submitted
the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 5259]
[Including cost estimate of the Congressional Budget Office]
The Committee on Natural Resources, to whom was referred
the bill (H.R. 5259) to direct the Secretary of the Interior to
reestablish the Royalty Policy Committee in order to further a
more consultative process with key Federal, State, tribal,
environmental, and energy stakeholders, and for other purposes,
having considered the same, report favorably thereon with an
amendment and recommend 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 ``Certainty for States and Tribes Act''.
SEC. 2. RECONSTITUTION OF THE ROYALTY POLICY COMMITTEE.
(a) In General.--The Secretary of the Interior shall, by not later
than 90 days after the date of the enactment of this Act, reconstitute
the Royalty Policy Committee as last chartered on March 26, 2010,
except as otherwise provided in this Act.
(b) Corrections and Updates.--In reconstituting the Committee, the
Secretary shall make appropriate technical corrections and updates to
the charter of the Committee, including the following:
(1) Revision of all references to the Minerals Management
Service or Minerals Revenue Management so as to refer to the
Office of Natural Resources Revenue.
(2) Revision of the estimated number and frequency of
meetings of the Committee to not less than once each year.
(3) Revision of the non-Federal members of the Committee to
include--
(A) not fewer than 5 members representing Governors
of States that each receive more than $10,000,000
annually in royalty revenues from Federal leases; and
(B) not more than 5 members representing Indian
tribes that are mineral-producing Indian tribes under--
(i) the Act of May 11, 1938 (commonly known
as the ``Indian Mineral Leasing Act of 1938'')
(25 U.S.C. 396a et seq.);
(ii) title XXVI of the Energy Policy Act of
1992 (25 U.S.C. 3501 et seq.);
(iii) the Indian Mineral Development Act of
1982 (25 U.S.C. 2101 et seq.); or
(iv) any other law relating to mineral
development that is specific to one or more
Indian tribes.
(4) Creation of a subcommittee of the Committee to be known
as the State and Tribal Resources Board, comprised of designees
of States' Governors and tribes participating as non-Federal
members of the reconstituted Committee.
SEC. 3. REVIEW OF REGULATIONS AND POLICIES THE ROYALTY POLICY COMMITTEE
ADVISORY ACTIVITIES SHOULD INCLUDE.
(a) Consultation and Report.--Not later than 180 days after the date
of the issuance by the Department of the Interior of any proposed
regulation or policy related to mineral leasing policy for Federal or
Indian land for exploration, development, or production of oil, gas, or
coal (including valuation methodologies and royalty and lease rates for
oil, gas, or coal), and not later than 180 days after the date of the
enactment of this Act with respect to any proposed regulation of such
Department relating to such policy that is pending as of the date of
the enactment of this Act, the Committee shall--
(1) assess the proposed regulation or policy; and
(2) issue a report that describes the potential impact of the
proposed regulation or policy, including any State and tribal
economic impacts described in subsection (b).
(b) State and Tribal Impact Determination.--
(1) In general.--Before the date on which any proposed
regulation related to mineral leasing policy on Federal or
Indian land (including valuation methodologies and royalty and
lease rates for oil, gas, or coal) may be issued as a final
rule, the State and Tribal Resources Board shall publish a
determination of the impact of the regulation on school
funding, public safety, and other essential State or Indian
tribal government services.
(2) Delay request.--If the State and Tribal Resources Board
determines that a regulation described in paragraph (1) will
have a negative State or tribal budgetary impact, the Secretary
shall, upon request by the Board, grant a delay of 180 days in
the finalization of the regulation for the purposes of
further--
(A) stakeholder consultation;
(B) budgetary review; and
(C) development of a proposal to mitigate the
negative economic impact.
(c) Revision of Proposed Regulation.--
(1) In general.--Before the date on which any proposed
regulation related to mineral leasing policy on Federal or
Indian land (including valuation methodologies and royalty and
lease rates for oil, gas, or coal) is issued as a final rule,
the Secretary shall publish in the Federal Register, in the
same docket as such proposed regulation, a description of the
impacts determined by the Board in the report issued under
subsection (a)(2), the recommendations made by the Board (if
any) for mitigation of negative impacts determined by the Board
under subsection (b)(2), and a clear explanation of why such
recommendations of the Board were or were not incorporated in
the final regulation.
(2) Final rule.--Any final regulation subject to paragraph
(1) must include--
(A) a summary of the report required under subsection
(a)(2); and
(B) a clear explanation of why the recommendations of
that report (including the State and tribal
determination) were or were not taken into account in
the finalization of the regulation.
SEC. 4. SPECIAL REVIEW OF PROGRAMMATIC ENVIRONMENTAL IMPACT STATEMENT.
(a) Participants in Programmatic Review.--
(1) In general.--In carrying out the programmatic review of
coal leasing as described in section 4 of the order of the
Secretary of the Interior entitled ``Discretionary Programmatic
Environmental Impact Statement to Modernize the Federal Coal
Program'', numbered 3338 and dated January 15, 2016, the
Secretary shall confer with, and take into consideration the
views of, representatives appointed to the review board
described in paragraph (2).
(2) Review board.--The Governor of each State in which more
than $10,000,000 in revenue is collected annually by the United
States as bonus bids, royalties, and rentals, and fees for
production of coal under leases of Federal land or Indian land
may each appoint not more than 3 representatives to a review
board for purposes of paragraph (1), at least one of whom shall
be a member of the State and Tribal Resources Board.
(3) Deadline.--
(A) In general.--The Secretary shall complete the
programmatic review referred to in paragraph (1) not
later than January 15, 2019.
(B) Failure to meet deadline.--If the programmatic
review is not completed by the deadline described in
subparagraph (A), the programmatic review shall be
considered to be complete as of that deadline.
(b) Termination of Other Programmatic Review.--No Federal funds may
be used to carry out the programmatic review of coal leasing as
described in subsection (a)(1) after January 15, 2019.
(c) No Implementation Requirement.--Nothing in this section requires
the Secretary to conduct or complete the programmatic review of coal
leasing as described in subsection (a)(1) after January 20, 2017.
(d) Termination of Moratorium.--Effective January 16, 2019--
(1) the pause or moratorium on the issuance of new Federal
coal leases under the Secretarial order referred to in
subsection (a)(1) is terminated; and
(2) that Secretarial order shall have no force or effect.
SEC. 5. GRANDFATHERING OF COAL LEASES ON APPLICATION AND COAL LEASE
MODIFICATIONS.
Nothing in the order of the Secretary of the Interior entitled
``Discretionary Programmatic Environmental Impact Statement to
Modernize the Federal Coal Program'', numbered 3338 and dated January
15, 2016, shall be considered to prohibit or restrict any issuance of a
coal lease on application or coal lease modification, pursuant to
section 3432 of title 43, Code of Federal Regulations, for which the
Bureau of Land Management has begun its review under section 102 of the
National Environmental Policy Act of 1969 (42 U.S.C. 4332) as of
January 15, 2016.
SEC. 6. DEADLINE FOR COAL LEASE SALES AND MODIFICATIONS.
Not later than 1 year after the date on which the Secretary completes
the analysis required under section 102 of the National Environmental
Policy Act of 1969 (42 U.S.C. 4332) for an application for a coal
lease, or an application for a modification to a coal lease pursuant to
subpart 3432 of part 3430 of title 43, Code of Federal Regulations (or
successor regulations), accepted by the Secretary, the Secretary shall
conduct the lease sale and issue the lease, or approve the
modification, unless the applicant indicates in writing that the
applicant no longer seeks the lease or modification to the lease.
PURPOSE OF THE BILL
The purpose of H.R. 5259 is to direct the Secretary of the
Interior to reestablish the Royalty Policy Committee in order
to further a more consultative process with key Federal, State,
tribal, environmental, and energy stakeholders.
BACKGROUND AND NEED FOR LEGISLATION
H.R. 5259, the Certainty for States and Tribes Act, would
reconstitute the Department of the Interior's currently defunct
Royalty Policy Committee, which was established in 1995 to
advise the Secretary on royalty management issues, as well as
other mineral-related policies. As part of this new version of
the Royalty Policy Committee, the bill would create a ``State
and Tribal Resources Board'' to assess the economic impact of
proposed policies and regulatory changes on state and tribal
budgets and governmental services, which are often supported by
revenues from mineral production. The bill is intended to
create an open and transparent process to ensure a fair return
to the American taxpayer and to ensure that states relying on
mineral proceeds from federal land are treated fairly.
The need for this legislation stems from an increased
demand for a cooperative and transparent process when creating
regulations that affect critical funding sources of states and
tribes. States and tribes can provide valuable information and
expertise when it comes to developing rules that affect mineral
production, and the status quo procedures for incorporating
this input are insufficient. States and tribes also merit an
increased role in this decision making process because they are
particularly affected by rules impacting federal land.
Education, infrastructure, and other essential government
services in certain states are funded by revenues from federal
land. The heightened impact of federal regulations to states
with large amounts of federal land requires that those states
be included in the policy discussions that form the basis for
new rules.
The bill would also create a two-year period in which the
Secretary of the Interior must complete the Programmatic
Environmental Impact Statement under the National Environmental
Policy Act of 1969 (42 U.S.C. 4321 et seq.) on the Federal Coal
Program.
COMMITTEE ACTION
H.R. 5259 was introduced on May 17, 2016, by Congressman
Ryan K. Zinke (R-MT). The bill was referred to the Committee on
Natural Resources, and within the Committee to the Subcommittee
on Energy and Mineral Resources and the Subcommittee on Indian,
Insular and Alaska Native Affairs. On June 14, 2016, the
Subcommittee on Energy and Mineral Resources held a hearing on
the bill. On September 7, 2016, the Natural Resources Committee
met to consider the bill. The Subcommittees were discharged by
unanimous consent. Congressman Ryan K. Zinke offered an
amendment designated #1; it was adopted by voice vote.
Congressman Alan S. Lowenthal (D-CA) offered an amendment
designated 001; it was not adopted by a roll call vote of 13
ayes to 22 nays, as follows:
No additional amendments were offered and the bill, as
amended, was ordered favorably reported to the House of
Representatives by a roll call vote of 22 ayes to 13 nays on
September 8, 2016, 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 and the Congressional Budget Act of
1974. With respect to the requirements of clause 3(c)(2) and
(3) of rule XIII of the Rules of the House of Representatives
and sections 308(a) and 402 of the Congressional Budget Act of
1974, the Committee has received the enclosed cost estimate for
the bill from the Director of the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, November 18, 2016.
Hon. Rob Bishop,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5259, the
Certainty for States and Tribes Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Jeff LaFave.
Sincerely,
Keith Hall.
Enclosure.
H.R. 5259--Certainty for States and Tribes Act
Based on information provided by the Department of the
Interior (DOI), CBO estimates that implementing H.R. 5259 would
cost $1 million over the 2017-2021 period; such spending would
be subject to the availability of appropriated funds. Enacting
the bill would not affect direct spending or revenues;
therefore, pay-as-you-go procedures do not apply.
CBO estimates that enacting the legislation would not
increase net direct spending or on-budget deficits in any of
the four consecutive 10-year periods beginning in 2027.
H.R. 5259 would re-establish the Royalty Policy Committee,
a committee composed of federal and nonfederal stakeholders who
advise the Secretary on matters relating to coal leasing on
federal lands. That committee was established in 2010 and
terminated in 2014. Based on information from DOT regarding the
costs associated with providing administrative and logistical
support to the committee, CBO estimates that implementing the
legislation would cost $1 million over the 2017-2021 period.
Under the bill, the Royalty Policy Committee would have the
authority to delay the implementation of future regulations
related to coal leasing by up to 180 days; however, CBO has no
basis for determining what, if any, budgetary effects those
regulations and any subsequent delay would have.
The legislation also contains several provisions related to
the administration of coal leasing on federal lands. In 2016,
the Secretary issued an order to conduct a programmatic
environmental impact statement (PETS) related to coal leasing
on federal lands and to pause certain leasing activities until
that analysis is completed. H.R. 5259 would require the
department to complete the analysis by 2019. Based on
information regarding the time required to complete similar
PEIS analyses, CBO expects that enacting the bill would not
affect when the analysis would be completed.
In addition, H.R. 5259 would allow DOT to approve coal
lease applications submitted by firms prior to the Secretary's
order to pause certain leasing activities. Because the order
does not affect the department's ability to use its discretion
in administering the leasing of coal resources on federal
lands, enacting the provision would not change current law and
would not affect the federal budget.
Finally, the bill would require DOI to issue coal leases
within one year of completing the required environmental
analyses. Based on an analysis of information provided by the
department and firms operating in the coal industry, CBO
expects that establishing that deadline would have no
significant effect on the timing of federal lease sales and
would not affect the federal budget.
H.R. 5259 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.
The CBO staff contact for this estimate is Jeff LaFave. The
estimate was approved by H. Samuel Papenfuss, Deputy Assistant
Director for Budget Analysis.
2. General Performance Goals and Objectives. As required by
clause 3(c)(4) of rule XIII, the general performance goal or
objective of this bill is to direct the Secretary of the
Interior to reestablish the Royalty Policy Committee in order
to further a more consultative process with key Federal, State,
tribal, environmental, and energy stakeholders.
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.
FEDERAL ADVISORY COMMITTEE STATEMENT
The functions of the previously authorized advisory
committee being reconstituted by the bill are not currently
being nor could they be performed by one or more agencies, a
different advisory committee already in existence or by
enlarging the mandate of an existing advisory committee.
COMPLIANCE WITH H. RES. 5
Directed Rule Making. The Chairman does not believe that
this bill directs any executive branch official to conduct any
specific rule-making proceedings.
Duplication of Existing Programs. This bill does not
establish or reauthorize a program of the federal government
known to be duplicative of another program. Such program was
not included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-139
or identified in the most recent Catalog of Federal Domestic
Assistance published pursuant to the Federal Program
Information Act (Public Law 95-220, as amended by Public Law
98-169) as relating to other programs.
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
We oppose H.R. 5259 because of the provisions in the bill
that would handcuff the Department of the Interior (DOI) during
its ongoing review of the federal coal leasing program. Over
the past three years, reports from the Government
Accountability Office, the Department of the Interior's Office
of Inspector General, the White House Council of Economic
Advisors, and independent policy analysts\1\ have concluded
that the federal coal program is broken and in desperate need
of reform, and that taxpayers are not receiving a fair return
from the sale of this public resource.
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\1\For example, ``Reconsidering Coal's Fair Market Value,'' New
York University School of Law Institute for Policy Integrity, October
2015; and ``The Impact of Federal Coal Royalty Reform on Prices,
Production, and State Revenue,'' Headwaters Economics, May 2015.
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In response, in January 2016 the Secretary of the Interior
announced that the Department would place a pause on issuing
new coal leases while conducting a comprehensive federal coal
program review, with the goals of accounting for the
environmental and health impacts of the coal program and
ensuring that American taxpayers receive a fair return. Similar
reviews with associated pauses in leasing were undertaken by
Presidents Nixon and Reagan. And with over 20 years' worth of
federal coal currently under lease and waiting to be mined, it
is clear that new federal leases are not needed in the
immediate future to meet national coal needs.
Unfortunately, H.R. 5259 attempts to preemptively limit the
impact of DOI's coal program review by setting a hard end date
of January 15, 2019, lifting the leasing pause for lease
applications where any environmental work has been started,
setting hard deadlines for the Secretary to approve lease
applications, and requiring a special analysis of the review by
a new State and Tribal Resources Board. While we share an
interest in having the coal program review completed as quickly
as possible, similar previous efforts have taken longer than
three years, and an arbitrary deadline simply increases the
chance that the review will be incomplete or insufficient,
effectively wasting three years of time and funding.
The reconstitution of the Royalty Policy Committee (RPC) is
a welcome component of the bill, since the RPC has in the past
provided valuable advice and recommendations regarding federal
mineral revenue collections, oversight, and enforcement.
However, requiring the RPC to review all regulations and
policies related to mineral leasing and giving it the power to
demand a delay of 180 days before a regulation is finalized is
a step too far, significantly limiting the Secretary's ability
to issue necessary rules and regulations and potentially
creating unnecessary and costly delays. While the sponsor's
amendment in markup removed a constitutional problem present in
the introduced version, we continue to have serious concerns
about the makeup and powers of the RPC under this legislation.
Energy and Mineral Resources Subcommittee Ranking Member
Alan Lowenthal attempted to provide some protection to
taxpayers against the negative revenue implications of this
bill by requiring any coal lease issued because of the bill's
grandfathering provision to pay a royalty rate of 18.75 percent
instead of the 12.5 percent currently paid by federal coal
leases under the Mineral Leasing Act of 1920. The Majority
rejected this amendment along a party-line vote.
For these reasons, we oppose H.R. 5259.
Raul M. Grijalva,
Ranking Member, Committee on
Natural Resources.
Grace F. Napolitano.
Alan Lowenthal.
Niki Tsongas.
Jared Huffman.
Jared Polis.
[all]