I

106TH CONGRESS

1ST SESSION H. R. 2222

To establish fair market value pricing of Federal natural assets, and for

other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 15, 1999

Mr. GEORGE MILLER of California (for himself, Mr. MCGOVERN, Ms. PELOSI,

Mr. HINCHEY, Mrs. TAUSCHER, Mr. MEEHAN, Mr. TIERNEY, Mr. KENNEDY of Rhode Island, Mr. BROWN of Ohio, Ms. DELAURO, Mr. STARK,

Ms. RIVERS, Mr. MOORE, Mr. BONIOR, Mr. LUTHER, Mr. GUTIERREZ,

Ms. SCHAKOWSKY, Mr. VENTO, Ms. SLAUGHTER, and Ms. ESHOO) introduced the following bill; which was referred to the Committee on Resources, and in addition to the Committees on Agriculture, and the Budget, for a period to be subsequently determined by the Speaker, in each

case for consideration of such provisions as fall within the jurisdiction of

the committee concerned

A BILL

To establish fair market value pricing of Federal natural

assets, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Public Resources Debt Reduction Act of 1999’’.

6 (b) TABLE OF CONTENTS.—
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Sec. 1. Short title; table of contents.

TITLE I—GENERAL PROVISIONS

Sec. 101. Fair market value for resource disposal.

Sec. 102. Fees from program beneficiaries.

Sec. 103. Revenues from sale, lease, and transfer of assets.

TITLE II—HARDROCK MINING ROYALTIES

Sec. 201. Royalty.

Sec. 202. Abandoned Minerals Mine Reclamation Fund.

Sec. 203. Limitation on patent issuance.

Sec. 204. Mining claim maintenance requirements.

Sec. 205. Definitions.

TITLE III—USE OR DISPOSAL OF FEDERAL NATURAL

RESOURCES

Sec. 301. Annual domestic livestock grazing fee.

Sec. 302. Elimination of below-cost sales of timber from national forest system

lands.

Sec. 303. Timberland suitability.

Sec. 304. Cost of water used to produce crops on production flexibility contract

acreage.

Sec. 305. Reduction in maximum amount of payments under agricultural assistance programs to reflect receipt of Federal irrigation water.

Sec. 306. Off budget expenditures.

Sec. 307. Deposit of Taylor Grazing Act receipts in Treasury.

Sec. 308. Repeal of livestock feed assistance program.

Sec. 309. Right-of-way permits.

Sec. 310. Oil and gas rentals.

Sec. 311. Improvement of minerals management service royalty collection.

1 TITLE I—GENERAL PROVISIONS

2 SEC. 101. FAIR MARKET VALUE FOR RESOURCE DISPOSAL.

3 (a) IN GENERAL.—Notwithstanding any other provi4 sion of law, no timber, minerals, forage, or other natural

5 resource owned by the United States, no Federally owned

6 water, and no hydroelectric energy generated at a Federal

7 facility may be sold, leased, or otherwise disposed of by

8 any department, agency, or instrumentality of the United

9 States for an amount less than fair market value, as deter10 mined by such department, agency, or instrumentality.

11 (b) EXISTING CONTRACTS, LEASES, ETC.—
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1 (1) EXISTING ARRANGEMENTS.—The provisions

2 of subsection (a) shall not apply to any existing con3 tract, lease, or other binding arrangement entered

4 into before the date of the enactment of this Act un5 less such contract, lease or other arrangement is re6 newed or extended after such date of enactment.

7 (2) ARRANGEMENTS ENTERED INTO IN 5-YEAR

8 PERIOD.—The provisions of subsection (a) shall take

9 effect on the date 5 years after the date of enact10 ment of this Act in the case of any contract, lease,

11 or other binding arrangement entered into or re12 newed or extended after such date but before the

13 date 5 years after such date.

14 (3) ARRANGEMENTS ENTERED INTO AFTER 5

15 YEARS.—The provisions of subsection (a) shall apply

16 immediately to all contracts, leases, or other binding

17 arrangements entered into or renewed or extended

18 after the date 5 years after the enactment of this

19 Act.

20 (c) WAIVER.—The President may waive the require21 ments of subsection (a) whenever the President deter22 mines that such waiver is in the national interest. The

23 President shall submit a notice to Congress containing an

24 explanation of the reasons for any such determination

25 within 60 days after the date of the determination.
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1 SEC. 102. FEES FROM PROGRAM BENEFICIARIES.

2 (a) GENERAL AUTHORITY.—The Secretary of the In3 terior and the Secretary of Agriculture are each author4 ized to establish and collect from persons subject to pro5 grams administered by each such Secretary such user fees

6 as may be necessary to reimburse the United States for

7 the expenses incurred in administering such programs.

8 The aggregate amount of fees that may be assessed and

9 collected under this section by each such Secretary in any

10 fiscal year from persons subject to any such program shall

11 not exceed the aggregate amount of expenses incurred in

12 administering such program in such fiscal year.

13 (b) EFFECTIVE DATE; OIL AND GAS LEASE TRANS14 FERS.—The Secretary of the Interior and the Secretary

15 of Agriculture may, by rule, establish the applicable effec16 tive date of any fee to be imposed under this section, ex17 cept that fees shall be established and collected under this

18 section from each person receiving a transfer of a Federal

19 onshore oil and gas lease after the date of the enactment

20 of this section.

21 SEC. 103. REVENUES FROM SALE, LEASE, AND TRANSFER

22 OF ASSETS.

23 (a) IN GENERAL.—Section 1105(a) of chapter 11 of

24 title 31, United States Code, is amended by adding at the

25 end the following new paragraph:

26 ‘‘(31) a separate statement of—
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1 ‘‘(A) projected revenues during the fiscal

2 year for which the budget is submitted from the

3 anticipated sale, lease, or transfer of any phys4 ical asset; and

5 ‘‘(B) the estimated price at which this

6 asset or a comparable asset would be sold in an

7 arms length transaction in the private sector;

8 asset by asset and aggregated by major functional

9 category.’’.

10 (b) EFFECTIVE DATE.—The amendment made by

11 subsection (a) shall become effective for fiscal year 2000

12 and shall be fully reflected in the fiscal year 2001 budget

13 submitted by the President in February 2000 as required

14 by section 1105(a) of title 31, United States Code.

15 TITLE II—HARDROCK MINING

16 ROYALTIES.

17 SEC. 201. ROYALTY.

18 (a) RESERVATION OF ROYALTY.—Each person pro19 ducing locatable minerals (including associated minerals)

20 from any mining claim located under the general mining

21 laws, or mineral concentrates derived from locatable min22 erals produced from any mining claim located under the

23 general mining laws, as the case may be, shall pay a roy24 alty of 5 percent of the net smelter return from the pro-
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1 duction of such locatable minerals or concentrates, as the

2 case may be.

3 (b) ROYALTY PAYMENTS.—Each person responsible

4 for making royalty payments under this section shall make

5 such payments to the Secretary not later than 30 days

6 after the end of the calendar month in which the mineral

7 or mineral concentrates are produced and first placed in

8 marketable condition, consistent with prevailing practices

9 in the industry.

10 (c) REPORTING REQUIREMENTS.—All persons hold11 ing mining claims located under the general mining laws

12 shall provide to the Secretary such information as deter13 mined necessary by the Secretary to ensure compliance

14 with this section, including, but not limited to, quarterly

15 reports, records, documents, and other data. Such reports

16 may also include, but not be limited to, pertinent technical

17 and financial data relating to the quantity, quality, and

18 amount of all minerals extracted from the mining claim.

19 (d) AUDITS.—The Secretary is authorized to conduct

20 such audits of all persons holding mining claims located

21 under the general mining laws as he deems necessary for

22 the purposes of ensuring compliance with the require23 ments of this section.
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1 (e) DISPOSITION OF RECEIPTS.—All receipts from

2 royalties collected pursuant to this section shall be depos3 ited into the Fund established under section 3.

4 (f) COMPLIANCE.—Any person holding mining claims

5 located under the general mining laws who knowingly or

6 willfully prepares, maintains, or submits false, inaccurate,

7 or misleading information required by this section, or fails

8 or refuses to submit such information, shall be subject to

9 a civil penalty of not more than $10,000 imposed by the

10 Secretary.

11 (g) EFFECTIVE DATE.—This section shall take effect

12 with respect to minerals produced from a mining claim

13 in calendar months beginning after the enactment of this

14 Act.

15 SEC. 202. ABANDONED MINERALS MINE RECLAMATION

16 FUND.

17 (a) ESTABLISHMENT.—(1) There is established on

18 the books of the Treasury of the United States a trust

19 fund to be known as the Abandoned Minerals Mine Rec20 lamation Fund (hereinafter referred to as the Fund). The

21 Fund shall be administered by the Secretary.

22 (2) The Secretary shall notify the Secretary of the

23 Treasury as to what portion of the Fund is not, in his

24 judgment, required to meet current withdrawals. The Sec25 retary of the Treasury shall invest such portion of the
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1 Fund in public debt securities with maturities suitable for

2 the needs of such Fund and bearing interest at rates de3 termined by the Secretary of the Treasury, taking into

4 consideration current market yields on outstanding mar5 ketplace obligations of the United States of comparable

6 maturities. The income on such investments shall be cred7 ited to, and from a part of, the Fund.

8 (b) AMOUNTS.—The following amounts shall be cred9 ited to the Fund for the purposes of this Act:

10 (1) All moneys received from royalties under

11 section 1 of this Act and the mining claim mainte12 nance fee under section 4 of this Act.

13 (2) All donations by persons, corporations, as14 sociations, and foundations for the purposes of this

15 title.

16 (c) USE AND OBJECTIVES OF THE FUND.— The Sec17 retary is, subject to appropriations, authorized to use

18 moneys in the Fund for the reclamation and restoration

19 of land and water resources adversely affected by past

20 mineral (other than coal and fluid minerals) and mineral

21 material mining, including but not limited to, any of the

22 following:

23 (1) Reclamation and restoration of abandoned

24 surface mined areas.
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1 (2) Reclamation and restoration of abandoned

2 milling and processing areas.

3 (3) Sealing, filling, and grading abandoned deep

4 mine entries.

5 (4) Planting of land adversely affected by past

6 mining to prevent erosion and sedimentation.

7 (5) Prevention, abatement, treatment and con8 trol of water pollution created by abandoned mine

9 drainage.

10 (6) Control of surface subsidence due to aban11 doned deep mines.

12 (7) Such expenses as may be necessary to ac13 complish the purposes of this section.

14 (d) ELIGIBLE AREAS.—(1) Land and waters eligible

15 for reclamation expenditures under this section shall be

16 those within the boundaries of States that have lands sub17 ject to the general mining laws—

18 (A) which were mined or processed for minerals

19 and mineral materials or which were affected by

20 such mining or processing, and abandoned or left in

21 an inadequate reclamation status prior to the date

22 of enactment of this Act;

23 (B) for which the Secretary makes a determina24 tion that there is no continuing reclamation respon25 sibility under State or Federal laws; and
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1 (C) for which it can be established that such

2 lands do not contain minerals which could economi3 cally be extracted through the reprocessing or re4 mining of such lands.

5 (2) Notwithstanding paragraph (1), sites and areas

6 designated for remedial action pursuant to the Uranium

7 Mill Tailings Radiation Control Act of 1978 (42 U.S.C.

8 7901 and following) or which have been listed for remedial

9 action pursuant to the Comprehensive Environmental Re10 sponse Compensation and Liability Act of 1980 (42

11 U.S.C. 9601 and following) shall not be eligible for ex12 penditures from the Fund under this section.

13 (e) FUND EXPENDITURES.—Moneys available from

14 the Fund may be expended directly by the Director, Bu15 reau of Land Management. The Director may also make

16 such money available through grants made to the Chief

17 of the United States Forest Service, and the Director of

18 the National Park Service.

19 (f) AUTHORIZATION OF APPROPRIATIONS.—Amounts

20 credited to the Fund are authorized to be appropriated

21 for the purpose of this title without fiscal year limitation.

22 SEC. 203. LIMITATION ON PATENT ISSUANCE.

23 No patent shall be issued by the United States for

24 any mining or mill site claim located under the general

25 mining laws unless the Secretary determines that, for the
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1 claim concerned a patent application was filed with the

2 Secretary on or before September 30, 1994, and all re3 quirements established under sections 2325 and 2326 of

4 the Revised Statutes (30 U.S.C. 29 and 30) for vein or

5 lode claims and sections 2329, 2330, 2331, and 2333 of

6 the Revised Statutes (30 U.S.C. 35, 36 and 37) for placer

7 claims, and section 2337 of the Revised Statutes (30

8 U.S.C. 42) for mill site claims, as the case may be, were

9 fully complied with by the applicant by that date.

10 SEC. 204. MINING CLAIM MAINTENANCE REQUIREMENTS.

11 (a) IN GENERAL.—(1) Effective October 1, 1999, the

12 holder of each mining claim located under the general min13 ing laws prior to the date of enactment shall pay to the

14 Secretary an annual claim maintenance fee of $100 per

15 claim per calendar year.

16 (2) The holder of each mining claim located under

17 the general mining laws subsequent to the date of enact18 ment shall pay to the Secretary an annual claim mainte19 nance fee of $125 per claim per calendar year.

20 (b) PURCHASING POWER ADJUSTMENT.—The Sec21 retary shall adjust the amount of the claim maintenance

22 fee payable pursuant to subsection (a) for changes in the

23 purchasing power of the dollar after the calendar year

24 1993, employing the Consumer Price Index for all urban

25 consumers published by the Department of Labor as the
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1 basis for adjustment, and rounding according to the ad2 justment process of conditions of the Federal Civil Pen3 alties Inflation Adjustment Act of 1990.

4 (c) TIME OF PAYMENT.—Each claim holder shall pay

5 the claim maintenance fee payable under subsection (a)

6 for any year on or before August 31 of each year, except

7 that for the initial calendar year in which the location is

8 made, the initial claim maintenance fee shall be paid at

9 the time the location notice is recorded with the Bureau

10 of Land Management.

11 (d) OIL SHALE CLAIMS SUBJECT TO CLAIM MAINTE12 NANCE FEES UNDER ENERGY POLICY ACT OF 1992.—

13 The section shall not apply to any oil shale claims for

14 which a fee is required to be paid under section 2511(e)(2)

15 of the Energy Policy Act of 1992 (30 U.S.C. 242(e)(2)).

16 (e) CLAIM MAINTENANCE FEES PAYABLE UNDER

17 1993 ACT.—The claim maintenance fees payable under

18 this section for any period with respect to any claim shall

19 be reduced by the amount of the claim maintenance fees

20 paid under section 10101 of the Omnibus Budget Rec21 onciliation Act of 1993 with respect to that claim and with

22 respect to the same period.

23 (f) WAIVER.—(1) The claim maintenance fee re24 quired under this section may be waived for a claim holder

25 who certifies in writing to the Secretary that on the date
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1 the payment was due, the claim holder and all related par2 ties held not more than 10 mining claims on land open

3 to location. Such certification shall be made on or before

4 the date on which payment is due.

5 (2) For purposes of this subsection, with respect to

6 any claim holder, the term ‘‘related party’’ means each

7 of the following:

8 (A) The spouse and dependent children (as de9 fined in section 152 of the Internal Revenue Code of

10 1986), of the claim holder.

11 (B) Any affiliate of the claim holder.

12 (g) CO-OWNERSHIP.—Upon the failure of any one or

13 more of several co-owners to contribute such co-owner or

14 owners portion of the fee under this section, any co-owner

15 who has paid such fee may, after the payment due date,

16 give the delinquent co-owner or owners notice of such fail17 ure in writing (or by publication in the newspaper nearest

18 the claim for at least once a week for at least 90 days).

19 If at the expiration of 90 days after such notice in writing

20 or by publication, any delinquent co-owner fails or refused

21 to contribute his portion, his interest, in the claim shall

22 become the property of the co-owners who have paid the

23 required fee.

24 SEC. 205. DEFINITIONS.

25 As used in this title:
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1 (1) The term ‘‘affiliate’’ means, with respect to

2 any person, each of the following:

3 (A) Any partner of such person.

4 (B) Any person owning at least 10 percent

5 of the voting shares of such person.

6 (C) Any person who controls, is controlled

7 by, or is under common control with such per8 son.

9 (2) The term ‘‘locatable minerals’’ means min10 erals not subject to disposition under any of the fol11 lowing:

12 (A) The Mineral Leasing Act (30 U.S.C.

13 181 and following);

14 (B) The Geothermal Steam Act of 1970

15 (30 U.S.C. 100 and following);

16 (C) The Act of July 31, 1947, commonly

17 known as the Materials Act of 1947 (30 U.S.C.

18 601 and following); or

19 (D) the Mineral Leasing for Acquired

20 Lands Act (30 U.S.C. 351 and following).

21 (3) The term ‘‘net smelter return’’ has the

22 same meaning provided in section 613 of the Inter23 nal Revenue Code of 1986 (26 U.S.C. 613) for

24 ‘‘gross income from mining’’.
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1 (4) The term ‘‘Secretary’’ means the Secretary

2 of the Interior.

3 (5) The term ‘‘general mining laws’’ means

4 those Acts which generally comprise chapters 2,

5 12A, and 16, and sections 161 and 162 of title 30,

6 United States Code.

7 TITLE III—USE OR DISPOSAL OF

8 FEDERAL NATURAL RESOURCES

9 SEC. 301. ANNUAL DOMESTIC LIVESTOCK GRAZING FEE.

10 The Federal Land Policy and Management Act of

11 1976 is amended by inserting after section 401 (43 U.S.C.

12 1751) the following new section:

13 ‘‘SEC. 401A. ESTABLISHMENT OF FAIR MARKET VALUE

14 GRAZING FEES.

15 ‘‘(a) ESTABLISHMENT OF ANNUAL DOMESTIC LIVE16 STOCK GRAZING FEE.—(1) Notwithstanding any other

17 provision of law, the Secretary of Agriculture, with respect

18 to National Forest System lands in the 16 contiguous

19 Western States (except National Grasslands) administered

20 by the Forest Service where domestic livestock grazing is

21 permitted under applicable law, shall establish an annual

22 domestic livestock grazing fee equal to fair market value.

23 ‘‘(2) Notwithstanding any other provision of law, the

24 Secretary of the Interior, with respect to public domain

25 lands administered by the Bureau of Land Management
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1 where domestic livestock grazing is permitted under appli2 cable law, shall establish an annual domestic livestock

3 grazing fee equal to fair market value.

4 ‘‘(b) CALCULATION OF FAIR MARKET VALUE.—(1)

5 For purposes of determining the annual domestic livestock

6 grazing fee under this section, the Secretary concerned

7 shall calculate fair market value using the following for8 mula:

Fair Market Value=

Appraised Base Value×Forage Value Index

100

9 ‘‘(2) For purposes of the formula in paragraph (1):

10 ‘‘(A) The term ‘Forage Value Index’ means the

11 Forage Value Index (FVI) computed annually by the

12 Economic Research Service, United States Depart13 ment of Agriculture, and set with the 1997 FVI

14 equal to 100; and

15 ‘‘(B) The term ‘Appraised Base Value’ means

16 the 1983 Appraisal Value conclusions for mature

17 cattle and horses (expressed in dollars per head or

18 per month), as determined in the 1986 report pre19 pared jointly by the Secretary of Agriculture and the

20 Secretary of the Interior entitled ‘Grazing Fee Re21 view and Evaluation’, dated February 1986, on a

22 west-wide basis using the lowest appraised value of
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1 the pricing areas adjusted for advanced payment

2 and indexed to 1997.

3 ‘‘(c) LIMITATION ON FLUCTUATIONS OF FEES.—

4 Notwithstanding the amount calculated under subsection

5 (b) for a year, the domestic livestock grazing fee charged

6 for any given year shall not increase nor decrease by more

7 than 33.3 percent from the domestic livestock grazing fee

8 for the previous year.

9 ‘‘(d) EFFECT ON EXECUTIVE ORDER.—Executive

10 Order No. 12548, dated February 14, 1986 (51 Fed. Reg.

11 5985), shall not apply to grazing fees established pursuant

12 to this section.

13 ‘‘(e) EFFECT ON GRAZING ADVISORY BOARDS.—The

14 grazing advisory boards established pursuant to Secre15 tarial action, notice of which was published in the Federal

16 Register on May 14, 1986 (51 Fed. Reg. 17874), are abol17 ished, effective as of the date of the enactment of this sec18 tion, and the advisory functions exercised by such boards

19 shall be exercised only by the appropriate councils estab20 lished under section 309 of this Act.

21 ‘‘(f) USE OF FEES AND RANGE IMPROVEMENT

22 FUNDS.—Funds appropriated pursuant to section 5 of the

23 Public Rangelands Improvement Act of 1978 (43 U.S.C.

24 1904) or any other provision of law related to disposition

25 of the Federal share of receipts from fees for grazing on
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1 public domain lands or National Forest lands in the 16

2 contiguous western States shall be used for restoration

3 and enhancement of fish and wildlife habitat, for restora4 tion and improved management of riparian areas, and for

5 implementation and enforcement of applicable land man6 agement plans, allotment plans, and regulations regarding

7 the use of such lands for domestic livestock grazing. Such

8 funds shall be distributed as the Secretary concerned con9 siders advisable after consultation and coordination with

10 the advisory councils established pursuant to section 309

11 of this Act and other interested parties.

12 ‘‘(g) COMMENCEMENT DATE FOR FEES.—The first

13 annual domestic livestock grazing fee required by this sec14 tion shall apply with respect to the grazing season com15 mencing on March 1, 2000.

16 SEC. 302. ELIMINATION OF BELOW-COST SALES OF TIMBER

17 FROM NATIONAL FOREST SYSTEM LANDS.

18 (a) IN GENERAL.—The National Forest Management

19 Act of 1976 is amended by inserting after section 14 (16

20 U.S.C. 472a) the following new section:

21 ‘‘SEC. 14A. ELIMINATION OF BELOW-COST TIMBER SALES

22 FROM NATIONAL FOREST SYSTEM LANDS.

23 ‘‘(a) REQUIREMENT THAT SALE REVENUES EXCEED

24 COSTS.—On and after October 1, 2004, in appraising tim25 ber and setting a minimum bid for trees, portions of trees,
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1 or forest products located on National Forest System

2 lands proposed for sale under section 14 or any other pro3 vision of law, the Secretary of Agriculture shall ensure

4 that the estimated cash returns to the United States

5 Treasury from each sale exceed the estimated costs to be

6 incurred by the Federal Government in the preparation

7 of the sale or as a result of the sale.

8 ‘‘(b) COSTS TO BE CONSIDERED.—For purposes of

9 estimating under this section the costs to be incurred by

10 the Federal Government from each timber sale, the Sec11 retary shall assign to the sale the following costs:

12 ‘‘(1) The actual appropriated expenses for sale

13 preparation and harvest administration incurred or

14 to be incurred by the Federal Government from the

15 sale and the payments to counties to be made as a

16 result of the sale.

17 ‘‘(2) A portion of the annual timber resource

18 planning costs, silvicultural examination costs, other

19 resource support costs, road design and construction

20 costs, road maintenance costs, transportation plan21 ning costs, appropriated reforestation costs, timber

22 stand improvement costs, forest genetics costs, gen23 eral administrative costs (including administrative

24 costs of the national and regional offices of the For25 est Service), and facilities construction costs of the
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1 Federal Government directly or indirectly related to

2 the timber harvest program conducted on National

3 Forest System lands.

4 ‘‘(c) METHOD OF ALLOCATING COSTS.—The Sec5 retary shall allocate the costs referred to in subsection

6 (b)(2) to each unit of the National Forest System, and

7 each proposed timber sale in such unit, on the basis of

8 harvest volume.

9 ‘‘(d) TRANSITIONAL REQUIREMENTS.—To ensure the

10 elimination of all below-cost timber sales by the date speci11 fied in subsection (a), the Secretary shall progressively re12 duce the number and size of below-cost timber sales on

13 National Forest System lands as follows:

14 ‘‘(1) In fiscal years 2000 and 2001, the quan15 tity of timber sold in below-cost timber sales on Na16 tional Forest System lands shall not exceed 75 per17 cent of the quantity of timber sold in such sales in

18 the preceding fiscal year.

19 ‘‘(2) In fiscal year 2002, the quantity of timber

20 sold in below-cost timber sales on National Forest

21 System lands shall not exceed 65 percent of the

22 quantity of timber sold in such sales in fiscal year

23 2000.

24 ‘‘(3) In fiscal year 2003, the quantity of timber

25 sold in below-cost timber sales on National Forest
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1 System lands shall not exceed 50 percent of the

2 quantity of timber sold in such sales in the fiscal

3 year 2002.

4 ‘‘(e) BELOW-COST TIMBER SALE.—For purposes of

5 this section, the term ‘below-cost timber sale’ means a sale

6 of timber in which the costs to be incurred by the Federal

7 Government exceed the cash returns to the United States

8 Treasury.’’.

9 (b) FINDINGS.—Section 2 of the Forest and Range10 land Renewable Resources Planning Act of 1974 (16

11 U.S.C. 1600) is amended—

12 (1) by striking ‘‘and’’ at the end of paragraph

13 (6);

14 (2) by striking the period at the end of para15 graph (7) and inserting ‘‘; and’’; and

16 (3) by adding at the end the following new

17 paragraph:

18 ‘‘(8) the practice of selling timber from Na19 tional Forest System lands for less than the cost to

20 the Federal Government of growing the timber and

21 preparing the timber for sale is not in the best inter22 ests of the United States, and such below-cost sales

23 should be eliminated in an orderly manner to achieve

24 a more economically and environmentally sound tim25 ber program for the National Forest System.’’.
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1 SEC. 303. TIMBERLAND SUITABILITY.

2 Subsection (k) of section 6 of the Forest and Range3 land Renewable Resources Planning Act of 1974 (16

4 U.S.C. 1604) is amended to read as follows:

5 ‘‘(k) DETERMINATION OF SUITABILITY OF LANDS

6 FOR TIMBER PRODUCTION.—

7 ‘‘(1) DETERMINATION REQUIRED.—In revising

8 land management plans developed pursuant to this

9 section, the Secretary shall identify lands within the

10 management area that are not suited for timber pro11 duction based on physical, economic, or other rel12 evant factors. The Secretary shall review the identi13 fications made under this paragraph during each re14 vision of the forest plan.

15 ‘‘(2) EVIDENCE OF ECONOMIC

16 UNSUITABILITY.—The Secretary shall identify lands

17 as economically unsuitable for timber production

18 under paragraph (1) if—

19 ‘‘(A) the expected cash returns to the

20 United States Treasury that would result from

21 the sale of standing timber on the lands do not

22 exceed the expected costs that would be in23 curred by the Federal Government in prepara24 tion or as a result of such sales; or

25 ‘‘(B) the expected cash returns to the

26 United States Treasury that would result from
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1 the sale of subsequent timber stands on the

2 lands do not exceed the expected costs that

3 would be incurred by the Federal Government

4 in preparation or as a result of such sales.

5 ‘‘(3) COSTS TO BE CONSIDERED.—For purposes

6 of estimating under paragraph (2) the costs to be in7 curred by the Federal Government from timber sales

8 conducted on the lands being reviewed, the Secretary

9 shall assign to sales on such lands the following

10 costs:

11 ‘‘(A) The appropriated expenses for sale

12 preparation and harvest administration that

13 would be incurred by the Federal Government

14 from such sales and the payments to counties

15 that would be made as a result of such sales.

16 ‘‘(B) A portion of the annual timber re17 source planning costs, silvicultural examination

18 costs, other resource support costs, road design

19 and construction costs, road maintenance costs,

20 transportation planning costs, appropriated re21 forestation costs, timber stand improvement

22 costs, forest genetics costs, general administra23 tive costs (including administrative costs of the

24 national and regional offices of the Forest Serv25 ice), and facilities construction costs of the Fed-
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1 eral Government directly or indirectly related to

2 the timber harvest program conducted on Na3 tional Forest System lands.

4 ‘‘(4) METHOD OF ALLOCATING COSTS.—The

5 Secretary shall allocate the costs referred to in para6 graph (3)(B) to each unit of the National Forest

7 System on the basis of harvest volume.

8 ‘‘(5) PROHIBITION ON TIMBER HARVESTS ON

9 UNSUITABLE LANDS.—In the case of lands identified

10 under paragraph (1) as unsuitable for timber pro11 duction, no timber harvesting shall occur on such

12 lands for a period of 10 years or the life of the plan,

13 whichever is greater.

14 ‘‘(6) DEFINITIONS.—For purposes of this sub15 section:

16 ‘‘(A) The term ‘standing timber’ means an

17 existing stand of timber that has not been har18 vested.

19 ‘‘(B) The term ‘subsequent timber stand’

20 means a regenerated stand of timber produced

21 on land from which standing timber has been

22 harvested.’’.
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1 SEC. 304. COST OF WATER USED TO PRODUCE CROPS ON

2 PRODUCTION FLEXIBILITY CONTRACT ACRE3 AGE.

4 Section 9 of the Act of August 4, 1939 (commonly

5 known as the Reclamation Project Act of 1939; 43 U.S.C.

6 485h) is amended by inserting at the end thereof the fol7 lowing new subsection:

8 ‘‘(g)(1) Any contract entered into under authority of

9 this section or any other provision of Federal reclamation

10 law shall require that the organization agree by contract

11 with the Secretary to pay full cost for the delivery of water

12 used in the production of any contract commodity on acre13 age subject to a production flexibility contract entered into

14 under section 111 of the Agricultural Market Transition

15 Act (7 U.S.C. 7211).

16 ‘‘(2) The Secretary shall announce the amount of the

17 full cost payment for the succeeding year on or before July

18 1 of each year.

19 ‘‘(3) As used in this subsection:

20 ‘‘(A) The term ‘full cost’ has the meaning given

21 such term in section 202(3) of the Reclamation Re22 form Act of 1982 (43 U.S.C. 390bb(3)).

23 ‘‘(B) The term ‘contract commodity’ has the

24 meaning given such term in section 102(5) of the

25 Agricultural Market Transition Act (7 U.S.C.

26 7202(5)).
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1 ‘‘(4) Paragraph (1) shall apply to any contract en2 tered into or amended after the date of the enactment of

3 this subsection.’’.

4 SEC. 305. REDUCTION IN MAXIMUM AMOUNT OF PAYMENTS

5 UNDER AGRICULTURAL ASSISTANCE PRO6 GRAMS TO REFLECT RECEIPT OF FEDERAL

7 IRRIGATION WATER.

8 (a) PRICE SUPPORT PROGRAMS.—Title X of the

9 Food Security Act of 1985 is amended—

10 (1) by redesignating sections 1001D (7 U.S.C.

11 1308–4) and 1001E (7 U.S.C. 1308–5) as sections

12 1001E and 1001F, respectively; and

13 (2) by inserting after section 1001C (7 U.S.C.

14 1308–3) the following new section:

15 ‘‘SEC. 1001D. REDUCTION OF PAYMENT LIMITATIONS TO

16 REFLECT RECEIPT OF FEDERAL IRRIGATION

17 WATER.

18 ‘‘(a) REDUCTION OF PAYMENT LIMITATIONS RE19 QUIRED.—If a person subject to section 1001 receives

20 Federal irrigation water for agricultural purposes from the

21 operation of a Federal reclamation project, the payment

22 limitations specified in paragraphs (1) and (2) of such sec23 tion and applicable to such person shall be reduced for

24 the year in which such person receives irrigation water.

25 The amount of the reduction shall be equal to the total
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1 value during that year of the subsidy portion of the con2 tract with such person for the delivery of the irrigation

3 water.

4 ‘‘(b) DETERMINATION OF SUBSIDY PORTION OF

5 WATER CONTRACT.—The subsidy portion of an irrigation

6 water delivery contract is equal to the amount by which

7 full cost for the delivery of the irrigation water exceeds

8 the actual contract price for the delivery of the water.

9 ‘‘(c) DEFINITIONS.—For purposes of this section, the

10 terms ‘contract’, ‘full cost’, ‘irrigation water’, and ‘project’

11 have the meanings given such terms in section 202 of the

12 Reclamation Reform Act of 1982 (43 U.S.C. 390bb).’’.

13 (b) NONINSURED CROP DISASTER ASSISTANCE.—

14 Section 196(i) of the Federal Agriculture Improvement

15 and Reform Act of 1996 (7 U.S.C. 7333(i)) is amended—

16 (1) by redesignating paragraph (5) as para17 graph (6); and

18 (2) by inserting after paragraph (4) the fol19 lowing new paragraph:

20 ‘‘(5) EFFECT OF RECEIPT OF IRRIGATION

21 WATER.—

22 ‘‘(A) REDUCTION OF PAYMENT LIMITA23 TION.—If a person who receives payments

24 under this section also receives, during the

25 same year, Federal irrigation water for agricul-
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1 tural purposes from the operation of a Federal

2 reclamation project, the payment limitation

3 specified in paragraph (2) for such person shall

4 be reduced for that year. The amount of the re5 duction shall be equal to the total value during

6 that year of the subsidy portion of the contract

7 with such person for the delivery of the irriga8 tion water.

9 ‘‘(B) DETERMINATION OF SUBSIDY POR10 TION OF WATER CONTRACT.—The subsidy por11 tion of an irrigation water delivery contract is

12 equal to the amount by which full cost for the

13 delivery of the irrigation water exceeds the ac14 tual contract price for the delivery of the water.

15 ‘‘(C) DEFINITIONS.—For purposes of this

16 paragraph, the terms ‘contract’, ‘full cost’, ‘irri17 gation water’, and ‘project’ have the meanings

18 given such terms in section 202 of the Reclama19 tion Reform Act of 1982 (43 U.S.C. 390bb).’’.

20 (c) CONFORMING AMENDMENTS.—Section

21 1001(5)(A) of the Food Security Act of 1985 (7 U.S.C.

22 1308(5)(A)) is amended by striking ‘‘through 1001C’’ and

23 inserting ‘‘through 1001D’’.
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1 SEC. 306. OFF BUDGET EXPENDITURES.

2 (a) KNUTSON-VANDENBERG FUND.—Section 3 of

3 the Act of June 9, 1930 (commonly known as the

4 Knutson-Vandenberg Act; 16 U.S.C. 576b), is amended

5 by striking ‘‘and shall constitute a special fund, which is

6 hereby appropriated and made available until expended,’’

7 in the second sentence and inserting ‘‘and are authorized

8 to be appropriated’’.

9 (b) DEPOSITS FROM BRUSH DISPOSAL.—The para10 graph relating to deposits from brush disposal under the

11 heading ‘‘FOREST SERVICE’’ in the Act of August 11, 1916

12 (39 Stat. 462; 16 U.S.C. 490), is amended by striking

13 ‘‘and constitute a special fund, which is hereby appro14 priated and shall remain available until expended’’ and in15 serting ‘‘and are authorized to be appropriated for the

16 purpose of disposing of such brush and other debris’’.

17 (c) NATIONAL FORESTS ROADS AND TRAILS.—Sec18 tion 7 of Public Law 88–657 (commonly known as the

19 Forest Roads and Trails Act; 16 U.S.C. 538) is amended

20 by striking ‘‘may be placed in a fund to be available’’ and

21 inserting ‘‘are authorized to be appropriated’’.

22 (d) TIMBER SALVAGE SALE FUND.—Section 303(d)

23 of Public Law 96–451 (16 U.S.C. 1606a) is amended by

24 striking ‘‘The Secretary of Agriculture’’ and inserting ‘‘In

25 such amounts as are provided in advance in appropriations

26 Acts, the Secretary of Agriculture’’.
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1 SEC. 307. DEPOSIT OF TAYLOR GRAZING ACT RECEIPTS IN

2 TREASURY.

3 Section 10 of the Act of June 28, 1934 (commonly

4 known as the Taylor Grazing Act; 43 U.S.C. 315i), is

5 amended by striking all after ‘‘miscellaneous receipts’’ and

6 inserting a period.

7 SEC. 308. REPEAL OF LIVESTOCK FEED ASSISTANCE PRO8 GRAM.

9 The Emergency Livestock Feed Assistance Act of

10 1988 (title VI of the Agricultural Act of 1949; 7 U.S.C.

11 1471–1471j) is repealed.

12 SEC. 309. RIGHT-OF-WAY PERMITS.

13 (a) IN GENERAL.—No permit, lease, or authorization

14 for the use of any area of the public lands or National

15 Forests for rights-of-way (including rights-of-way for

16 power lines, oil and gas pipelines, water conveyances, and

17 other utility lines) shall remain in force and effect after

18 October 1, 1999, unless, by such date, and by October

19 1 of each year thereafter, the holder of such permit, lease,

20 or authorization pays to the Secretary of the Interior or

21 the Secretary of Agriculture, as appropriate, an amount

22 equal to the fair market value, as determined by such Sec23 retary, of the right to use and occupy such area for such

24 purposes.

25 (b) DEFINITION.—For the purposes of this section,

26 the term ‘‘public lands’’ shall have the same meaning as
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1 defined in section 103(e) of the Federal Land Policy Man2 agement Act of 1976 (43 U.S.C. 1702(e)).

3 SEC. 310. OIL AND GAS RENTALS.

4 The Mineral Leasing Act (30 U.S.C. 181 et seq.) is

5 amended as follows:

6 (1) In section 14 by striking out ‘‘a rental of

7 $1 per acre’’ and inserting ‘‘a rental established by

8 the Secretary of the Interior’’ and by adding the fol9 lowing at the end thereof: ‘‘The Secretary shall es10 tablish fair market value rental fees under this sec11 tion based upon the rental fees which would be

12 charged in arm’s length transactions for comparable

13 leases of oil and gas resources on non-Federal

14 land.’’.

15 (2) In section 17(d) by striking out ‘‘rental of

16 not less than $1.50 per acre per year for the first

17 through fifth years of the lease and not less than $2

18 per acre per year for each year thereafter’’ and in19 serting ‘‘rental established by the Secretary of the

20 Interior’’ and by adding the following at the end

21 thereof: ‘‘The Secretary shall establish fair market

22 value rental fees under this section based upon the

23 rental fees which would be charged in arms length

24 transactions for comparable leases of oil and gas re25 sources on non-Federal land.’’.
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1 (3) In section 21(a) by striking out ‘‘rental,

2 payable at the beginning of each year, at the rate of

3 50 cents per acre per annum, for the lands included

4 in the lease,’’ and inserting ‘‘rental established by

5 the Secretary of the Interior’’ and by adding the fol6 lowing at the end thereof: ‘‘The Secretary shall es7 tablish fair market value rental fees under this sec8 tion based upon the rental fees which would be

9 charged in arms length transactions for comparable

10 leases on non-Federal land.’’.

11 (4) In section 31(e)(2) by striking ‘‘rate of not

12 less than $10 per acre per year, or the inclusion in

13 a reinstated lease issued pursuant to the provisions

14 of section 17(c) of this Act of a requirement that fu15 ture rentals shall be at a rate not less than $5 per

16 acre per year’’ and inserting ‘‘fair market value rate

17 (but not less than $10 per acre per year)’’.

18 (5) In section 31(f)(3) by striking out ‘‘of not

19 less than $5 per acre per year’’ and inserting ‘‘es20 tablished by the Secretary at fair market value

21 based upon the rental fees which would be charged

22 in arms length transactions for comparable leases on

23 non-Federal land’’.
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1 SEC. 311. IMPROVEMENT OF MINERALS MANAGEMENT

2 SERVICE ROYALTY COLLECTION.

3 The Federal Oil and Gas Royalty Simplification and

4 Fairness Act of 1996 (Public Law No. 104–185; 30

5 U.S.C. 1701 et seq.) is amended by adding the following

6 new subsection after subsection (l):

7 ‘‘(m) ASSESSMENT FOR UNDERREPORTING OF ROY8 ALTY.—(1) If there is any underreporting of royalty owed

9 on production from any lease for any production month,

10 the Secretary may make an assessment of 20 percent of

11 the amount of that underreporting if any of the following

12 circumstances occurs:

13 ‘‘(A) For a Federal lease, the underreporting

14 exceeds 10 percent of the value of production which

15 should have been reported and exceeds $1,500, or

16 the underreporting exceeds 5 percent of the value of

17 production which should have been reported and ex18 ceeds $15,000.

19 ‘‘(B) For an Indian lease, the underreporting

20 exceeds 10 percent of the value of production which

21 should have been reported and exceeds $125.

22 ‘‘(C) For either a Federal or Indian lease, no

23 royalty was paid on production from that lease for

24 the production month immediately preceding the

25 month for which the underreporting was submitted,
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1 regardless of the amount of the underreporting or

2 the amount of royalty owed.

3 ‘‘(2) For purposes of this subsection, the term

4 ‘underreporting’ means the amount by which the royalty

5 on the value of the production which should have been re6 ported exceeds the royalty on the value of the production

7 which was reported.

8 ‘‘(3) The Secretary shall not impose the assessment

9 specified in paragraph (1) if the underreporting is cor10 rected before the date the person against whom the assess11 ment is made receives written notice from the Secretary

12 that an underreporting may have occurred.

13 ‘‘(4) The Secretary shall not impose the assessment

14 specified in paragraph (1) with respect to an under15 reporting which is corrected in the course of performing

16 an order to correct royalty accounting and recompute and

17 pay royalties due. This exception does not apply to the

18 specific instances of underreporting discovered during

19 audit which formed the basis of the order to recompute

20 and pay.

21 ‘‘(5)(A) The Secretary shall waive the portion of an

22 assessment specified in paragraph (1) attributable to that

23 portion of the underreporting for which a person dem24 onstrates that—
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1 ‘‘(i) the person had substantial authority for re2 porting royalty on the value of the production on the

3 basis on which it was reported, or

4 ‘‘(ii) the person meets any other exception

5 which the Secretary may, by rule, establish.

6 ‘‘(B) For purposes of this paragraph, the term ‘sub7 stantial authority’ means any of the following:

8 ‘‘(i) A controlling judicial or administrative de9 cision which has not been reversed, vacated, or over10 ruled, or a controlling regulation.

11 ‘‘(ii) A body of judicial or administrative deci12 sions or regulations which provide a reasoned basis

13 to support the person’s action. Such a reasoned

14 basis must be more than a merely arguable theory

15 which is unlikely to prevail in court upon a complete

16 review of the relevant facts and authorities.

17 ‘‘(iii) A legal question of first impression.

18 ‘‘(6) Interest shall not accrue on the amount of an

19 assessment under this subsection during the pendency of

20 any administrative appeal of the assessment which may

21 be allowed by rule. No hearing on the record in such ap22 peal shall be necessary before an assessment is made. No

23 surety instrument shall be required to secure the amount

24 of the assessment pending administrative appeal.
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1 ‘‘(7) An assessment under this subsection shall apply

2 only to an underreporting occurring after the date of en3 actment of this subsection.

4 ‘‘(8) Notwithstanding any provision of section 206 of

5 this Act, all assessments collected under this subsection

6 shall be deposited to the same accounts in the Treasury

7 or paid to the same recipients in the same manner as the

8 royalty with respect to which such assessment is made.

9 ‘‘(9) For purposes of this subsection, the definitions

10 in section 2 of this Act shall be deemed to also apply to

11 coal, any other mineral, geothermal steam, or associated

12 geothermal resources.’’.

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