19–006 

112TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 112–509 

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 adminismstockstill on DSK6TPTVN1PROD with HEARING

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tered 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 acrefor-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 

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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 

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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’’. 

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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 

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(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. 

Æ 

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