[House Report 114-833]
[From the U.S. Government Publishing Office]


114th Congress    }                                   {         Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                   {        114-833

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



 
                  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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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]