[House Report 112-509]
[From the U.S. Government Publishing Office]
112th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 112-509
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TO CLARIFY AUTHORITY GRANTED UNDER THE ACT ENTITLED ``AN ACT TO DEFINE
THE EXTERIOR BOUNDARY OF THE UINTAH AND OURAY INDIAN RESERVATION IN THE
STATE OF UTAH, AND FOR OTHER PURPOSES''
_______
May 31, 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
[To accompany H.R. 4027]
[Including cost estimate of the Congressional Budget Office]
The Committee on Natural Resources, to whom was referred
the bill (H.R. 4027) to clarify authority granted under the Act
entitled ``An Act to define the exterior boundary of the Uintah
and Ouray Indian Reservation in the State of Utah, and for
other purposes'', having considered the same, report favorably
thereon without amendment and recommend that the bill do pass.
Purpose of the Bill
The purpose of H.R. 4027 is to clarify authority granted
under the Act entitled ``An Act to define the exterior boundary
of the Uintah and Ouray Indian Reservation in the State of
Utah, and for other purposes''.
Background and Need for Legislation
The Uintah and Ouray Indian Reservation, located in
northeastern Utah, is the second largest Indian reservation in
the country and the homeland for approximately 20,000 Ute
Indians. Under the Act of March 11, 1948, (62 Stat. 72, the
``Hill Creek Act'') Congress added 510,000 acres of public
domain known as the ``Hill Creek Extension'' to the Reservation
to protect tribal grazing rights. In making this addition to
the Indian Reservation, the United States retained the
subsurface rights to lands held in trust for the Tribe, while
the State of Utah retained 38,000 acres of land it previously
acquired in a checkerboard pattern typical in Western states.
The State lands in the Hill Creek Extension are administered by
SITLA for the benefit of K-12 schools and other State
institutions.
In 1955, Congress authorized the State to relinquish its
lands in the Hill Creek Extension to the United States for the
benefit of the Tribe, in exchange for replacement lands that
are mineral in character. The State subsequently sold much of
the surface estate in the Hill Creek Extension to the Tribe,
while retaining 38,000 of subsurface minerals and the right of
ingress and egress to develop them. The State today wants to
relinquish to the United States (for the benefit of the Tribe)
18,000 acres of subsurface in the remote, southern (Grand
County) portion of the Hill Creek Extension, in exchange for
18,000 acres of subsurface in the northern (Uintah County) area
of the Extension.
In 2006, SITLA filed an application with the BLM to perform
the exchange pursuant to the 1948 Hill Creek Act and the 1955
amendments. The BLM has refused to process the application,
claiming the vague law establishing and amending the Hill Creek
Extension does not permit the State to select minerals in the
northern part of the Extension. Though the State has come to
the opposite legal conclusion, legislation is necessary to
effectuate the exchange. The land exchange authorized by H.R.
4027 will increase energy production and job opportunities,
benefiting the State's public schools, the Tribe, and the
nation. It will also enable the Tribe to consolidate split
estates in ecologically sensitive and tribally sacred areas.
H.R. 4027 amends the 1948 Hill Creek Act to authorize an
acre-for-acre exchange of subsurface mineral lands within the
Hill Creek Extension between the State of Utah and the United
States (on behalf of the Ute Tribe). The State-relinquished
subsurface estate in the sensitive southern area will be held
in trust for the Tribe, while the State-acquired subsurface in
the northern area will be leased for oil and gas development.
To resolve concerns over the relative values of the
exchange, H.R. 4027 reserves to the federal government and the
State of Utah identical overriding financial interests in each
other's exchanged lands. Specifically, the bill reserves to the
federal government 50 percent of bonus bids and rentals from
leasing of the mineral resources obtained by the State under
this bill, a 6.25 percent overriding royalty on the gross
proceeds of oil and gas production, and a 50 percent overriding
royalty on the gross proceeds of production of minerals other
than oil and gas, equal to 50 percent of the royalty rate
established by the Secretary of the Interior by regulation as
of October 1, 2011. The State obtains equal overriding
financial interests in that portion of the mineral estate it
relinquishes to the United States for the benefit of the Tribe.
The overriding interest of each party automatically terminates
after 30 years. Neither the U.S. nor the State is obligated to
lease its lands based on the overriding interests set forth in
this bill.
The lands subject to the exchange authorized by the bill
are considered prospective, mostly for natural gas. The Tribe
is actively engaged in oil and gas leasing on its Reservation.
On March 20, 2012, the Subcommittee on Indian and Alaska
Native Affairs held a hearing on H.R. 4027. Witnesses included
an official with the BLM, the Chairwoman of the Ute Tribe, the
Director of SITLA, and the Director of Wilderness Policy for
the Wilderness Society.
The Tribe, SITLA, and the Wilderness Society testified in
support of H.R. 4027. The BLM testified in support of the goals
of the bill, but in opposition to it as written. The
Administration was concerned with the bill's termination of the
overriding financial interests after 30 years without an
obligation to lease. It also wanted authority to raise the
federal royalty rate for oil and gas produced on the State's
leases. Finally, it pointed out that current federal policy is
for land exchanges with the United States to be of equal value.
The Committee concurs in the Tribe's and SITLA's view that
H.R. 4027 provides an exchange that is fair to all parties,
including the public. The only alternative to address the
legitimate concerns of SITLA and the Tribe is to perform
impractical, dilatory, and costly appraisals that could
frustrate the land exchange, much like such appraisals
frustrated certain goals of the Utah Recreational Land Exchange
Act of 2009 (Public Law 111-53). As explained by the State, the
termination of the overriding federal interest will ``avoid
burdening each party with a perpetual accounting obligation
with respect to lands owned by the other.'' Moreover, allowing
the federal government to unilaterally raise the royalty rate
on proceeds from State-leased oil and gas production would
unfairly reduce the State's benefits.
Committee Action
H.R. 4027 was introduced on February 14, 2012, by
Congressman Jim Matheson (D-UT). The bill was referred to the
Committee on Natural Resources, and within the Committee to the
Subcommittee on Indian and Alaska Native Affairs and the
Subcommittee on Energy and Mineral Resources. On March 20,
2012, the Subcommittee on Indian and Alaska Native Affairs held
a hearing on the bill. On April 25, 2012, the Full Natural
Resources Committee met to consider the bill. The Subcommittee
on Indian and Alaska Native Affairs and the Subcommittee on
Energy and Mineral Resources were discharged by unanimous
consent. No amendments were offered to the bill and the bill
was adopted and ordered favorably reported to the House of
Representatives by unanimous consent.
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. 4027--A bill to clarify authority granted under the act entitled
``An act to define the exterior boundary of the Uintah and
Ouray Reservation in the state of Utah, and for other
purposes''
H.R. 4027 would authorize a conveyance of mineral rights
within the Uintah and Ouray Indian Reservation in Utah among
the state of Utah's School and Institutional Trust Land
Administration (SITLA), the federal government, and the Ute
Indian Tribe. SITLA currently owns the subsurface mineral
rights to approximately 18,000 acres in the Hill Creek
Extension of the reservation; however, the surface rights to
that land are held in trust for the Ute Indian Tribe by the
federal government. The legislation would authorize SITLA to
relinquish to the Ute Indian Tribe its subsurface mineral
rights in exchange for the subsurface rights to about 18,000
acres of other land within the Hill Creek Extension owned by
the federal government.
CBO estimates that the legislation would have no
significant impact on the federal budget over the 2013-2022
period. Enacting H.R. 4027 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
H.R. 4027 would authorize a transfer of federally owned
subsurface mineral rights for an equivalent number of acres of
state land. However, the acres transferred may not have the
same value because mineral deposits are not evenly spread
across all areas. To compensate for such a potential imbalance,
H.R. 4027 would preserve the federal government's existing
financial rights to the value of any subsurface minerals that
are developed on all properties for the next 30 years.
Therefore, CBO estimates that enacting the legislation would
have no impact on direct spending or revenues over the 2013-
2022 period.
H.R. 4027 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
Enacting the bill would benefit the tribe and state.
The CBO staff contact for this estimate is Martin von
Gnechten. The estimate was approved by Theresa Gullo, Deputy
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, spending authority, credit authority, or an increase
or decrease in revenues or tax expenditures. CBO estimates that
the legislation would have no significant impact on the federal
budget over the 2013-2022 period.
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 is to clarify authority granted under
the Act entitled ``An Act to define the exterior boundary of
the Uintah and Ouray Indian Reservation in the State of Utah,
and for other purposes''.
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 Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
ACT OF MARCH 11, 1948
AN ACT To define the exterior boundary of the Uintah and Ouray Indian
Reservation in the State of Utah, and for other purposes.
* * * * * * *
Sec. 5. In order to further clarify authorizations under
this Act, the State of Utah is hereby authorized to relinquish
to the United States, for the benefit of the Ute Indian Tribe
of the Uintah and Ouray Reservation, State school trust or
other State-owned subsurface mineral lands located beneath the
surface estate delineated in Public Law 440 (approved March 11,
1948) and south of the border between Grand County, Utah, and
Uintah County, Utah, and select in lieu of such relinquished
lands, on an acre-for-acre basis, any subsurface mineral lands
of the United States located beneath the surface estate
delineated in Public Law 440 (approved March 11, 1948) and
north of the border between Grand County, Utah, and Uintah
County, Utah, subject to the following conditions:
(1) Reservation by united states.--The Secretary of
the Interior shall reserve an overriding interest in
that portion of the mineral estate comprised of
minerals subject to leasing under the Mineral Leasing
Act (30 U.S.C. 171 et seq) in any mineral lands
conveyed to the State.
(2) Extent of overriding interest.--The overriding
interest reserved by the United States under paragraph
(1) shall consist of--
(A) 50 percent of any bonus bid or other
payment received by the State as consideration
for securing any lease or authorization to
develop such mineral resources;
(B) 50 percent of any rental or other
payments received by the State as consideration
for the lease or authorization to develop such
mineral resources;
(C) a 6.25 percent overriding royalty on the
gross proceeds of oil and gas production under
any lease or authorization to develop such oil
and gas resources; and
(D) an overriding royalty on the gross
proceeds of production of such minerals other
than oil and gas, equal to 50 percent of the
royalty rate established by the Secretary of
the Interior by regulation as of October 1,
2011.
(3) Reservation by state of utah.--The State of Utah
shall reserve, for the benefit of its State school
trust, an overriding interest in that portion of the
mineral estate comprised of minerals subject to leasing
under the Mineral Leasing Act (30 U.S.C. 181 et seq) in
any mineral lands relinquished by the State to the
United States.
(4) Extent of overriding interest.--The overriding
interest reserved by the State under paragraph (3)
shall consist of--
(A) 50 percent of any bonus bid or other
payment received by the United States as
consideration for securing any lease or
authorization to develop such mineral resources
on the relinquished lands;
(B) 50 percent of any rental or other
payments received by the United States as
consideration for the lease or authorization to
develop such mineral resources;
(C) a 6.25 percent overriding royalty on the
gross proceeds of oil and gas production under
any lease or authorization to develop such oil
and gas resources; and
(D) an overriding royalty on the gross
proceeds of production of such minerals other
than oil and gas, equal to 50 percent of the
royalty rate established by the Secretary of
the Interior by regulation as of October 1,
2011.
(5) No obligation to lease.--Neither the United
States nor the State shall be obligated to lease or
otherwise develop oil and gas resources in which the
other party retains an overriding interest under this
section.
(6) Cooperative agreements.--The Secretary of the
Interior is authorized to enter into cooperative
agreements with the State and the Ute Indian Tribe of
the Uintah and Ouray Reservation to facilitate the
relinquishment and selection of lands to be conveyed
under this section, and the administration of the
overriding interests reserved hereunder.
(7) Termination.--The overriding interest reserved by
the Secretary of the Interior under paragraph (1), and
the overriding interest reserved by the State under
paragraph (3), shall automatically terminate 30 years
after the date of enactment of this section.