HR 2222 IH

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

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

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

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Public Resources Debt Reduction Act of 1999'.

(b) TABLE OF CONTENTS-

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.

TITLE I--GENERAL PROVISIONS

SEC. 101. FAIR MARKET VALUE FOR RESOURCE DISPOSAL.

(a) IN GENERAL- Notwithstanding any other provision of law, no timber, minerals, forage, or other natural resource owned by the United States, no Federally owned water, and no hydroelectric energy generated at a Federal facility may be sold, leased, or otherwise disposed of by any department, agency, or instrumentality of the United States for an amount less than fair market value, as determined by such department, agency, or instrumentality.

(b) EXISTING CONTRACTS, LEASES, ETC-

(1) EXISTING ARRANGEMENTS- The provisions of subsection (a) shall not apply to any existing contract, lease, or other binding arrangement entered into before the date of the enactment of this Act unless such contract, lease or other arrangement is renewed or extended after such date of enactment.

(2) ARRANGEMENTS ENTERED INTO IN 5-YEAR PERIOD- The provisions of subsection (a) shall take effect on the date 5 years after the date of enactment of this Act in the case of any contract, lease, or other binding arrangement entered into or renewed or extended after such date but before the date 5 years after such date.

(3) ARRANGEMENTS ENTERED INTO AFTER 5 YEARS- The provisions of subsection (a) shall apply immediately to all contracts, leases, or other binding arrangements entered into or renewed or extended after the date 5 years after the enactment of this Act.

(c) WAIVER- The President may waive the requirements of subsection (a) whenever the President determines that such waiver is in the national interest. The President shall submit a notice to Congress containing an explanation of the reasons for any such determination within 60 days after the date of the determination.

SEC. 102. FEES FROM PROGRAM BENEFICIARIES.

(a) GENERAL AUTHORITY- The Secretary of the Interior and the Secretary of Agriculture are each authorized to establish and collect from persons subject to programs administered by each such Secretary such user fees as may be necessary to reimburse the United States for the expenses incurred in administering such programs. The aggregate amount of fees that may be assessed and collected under this section by each such Secretary in any fiscal year from persons subject to any such program shall not exceed the aggregate amount of expenses incurred in administering such program in such fiscal year.

(b) EFFECTIVE DATE; OIL AND GAS LEASE TRANSFERS- The Secretary of the Interior and the Secretary of Agriculture may, by rule, establish the applicable effective date of any fee to be imposed under this section, except that fees shall be established and collected under this section from each person receiving a transfer of a Federal onshore oil and gas lease after the date of the enactment of this section.

SEC. 103. REVENUES FROM SALE, LEASE, AND TRANSFER OF ASSETS.

(a) IN GENERAL- Section 1105(a) of chapter 11 of title 31, United States Code, is amended by adding at the end the following new paragraph:

`(31) a separate statement of--

`(A) projected revenues during the fiscal year for which the budget is submitted from the

anticipated sale, lease, or transfer of any physical asset; and

`(B) the estimated price at which this asset or a comparable asset would be sold in an arms length transaction in the private sector;

asset by asset and aggregated by major functional category.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall become effective for fiscal year 2000 and shall be fully reflected in the fiscal year 2001 budget submitted by the President in February 2000 as required by section 1105(a) of title 31, United States Code.

TITLE II--HARDROCK MINING ROYALTIES.

SEC. 201. ROYALTY.

(a) RESERVATION OF ROYALTY- Each person producing locatable minerals (including associated minerals) from any mining claim located under the general mining laws, or mineral concentrates derived from locatable minerals produced from any mining claim located under the general mining laws, as the case may be, shall pay a royalty of 5 percent of the net smelter return from the production of such locatable minerals or concentrates, as the case may be.

(b) ROYALTY PAYMENTS- Each person responsible for making royalty payments under this section shall make such payments to the Secretary not later than 30 days after the end of the calendar month in which the mineral or mineral concentrates are produced and first placed in marketable condition, consistent with prevailing practices in the industry.

(c) REPORTING REQUIREMENTS- All persons holding mining claims located under the general mining laws shall provide to the Secretary such information as determined necessary by the Secretary to ensure compliance with this section, including, but not limited to, quarterly reports, records, documents, and other data. Such reports may also include, but not be limited to, pertinent technical and financial data relating to the quantity, quality, and amount of all minerals extracted from the mining claim.

(d) AUDITS- The Secretary is authorized to conduct such audits of all persons holding mining claims located under the general mining laws as he deems necessary for the purposes of ensuring compliance with the requirements of this section.

(e) DISPOSITION OF RECEIPTS- All receipts from royalties collected pursuant to this section shall be deposited into the Fund established under section 3.

(f) COMPLIANCE- Any person holding mining claims located under the general mining laws who knowingly or willfully prepares, maintains, or submits false, inaccurate, or misleading information required by this section, or fails or refuses to submit such information, shall be subject to a civil penalty of not more than $10,000 imposed by the Secretary.

(g) EFFECTIVE DATE- This section shall take effect with respect to minerals produced from a mining claim in calendar months beginning after the enactment of this Act.

SEC. 202. ABANDONED MINERALS MINE RECLAMATION FUND.

(a) ESTABLISHMENT- (1) There is established on the books of the Treasury of the United States a trust fund to be known as the Abandoned Minerals Mine Reclamation Fund (hereinafter referred to as the Fund). The Fund shall be administered by the Secretary.

(2) The Secretary shall notify the Secretary of the Treasury as to what portion of the Fund is not, in his judgment, required to meet current withdrawals. The Secretary of the Treasury shall invest such portion of the Fund in public debt securities with maturities suitable for the needs of such Fund and bearing interest at rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketplace obligations of the United States of comparable maturities. The income on such investments shall be credited to, and from a part of, the Fund.

(b) AMOUNTS- The following amounts shall be credited to the Fund for the purposes of this Act:

(1) All moneys received from royalties under section 1 of this Act and the mining claim maintenance fee under section 4 of this Act.

(2) All donations by persons, corporations, associations, and foundations for the purposes of this title.

(c) USE AND OBJECTIVES OF THE FUND- The Secretary is, subject to appropriations, authorized to use moneys in the Fund for the reclamation and restoration of land and water resources adversely affected by past mineral (other than coal and fluid minerals) and mineral material mining, including but not limited to, any of the following:

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

(2) Reclamation and restoration of abandoned milling and processing areas.

(3) Sealing, filling, and grading abandoned deep mine entries.

(4) Planting of land adversely affected by past mining to prevent erosion and sedimentation.

(5) Prevention, abatement, treatment and control of water pollution created by abandoned mine drainage.

(6) Control of surface subsidence due to abandoned deep mines.

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

(d) ELIGIBLE AREAS- (1) Land and waters eligible for reclamation expenditures under this section shall be those within the boundaries of States that have lands subject to the general mining laws--

(A) which were mined or processed for minerals and mineral materials or which were affected by such mining or processing, and abandoned or left in an inadequate reclamation status prior to the date of enactment of this Act;

(B) for which the Secretary makes a determination that there is no continuing reclamation responsibility under State or Federal laws; and

(C) for which it can be established that such lands do not contain minerals which could economically be extracted through the reprocessing or remining of such lands.

(2) Notwithstanding paragraph (1), sites and areas designated for remedial action pursuant to the Uranium Mill Tailings Radiation Control Act of 1978 (42 U.S.C. 7901 and following) or which have been listed for remedial action pursuant to the Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. 9601 and following) shall not be eligible for expenditures from the Fund under this section.

(e) FUND EXPENDITURES- Moneys available from the Fund may be expended directly by the Director, Bureau of Land Management. The Director may also make such money available through grants made to the Chief of the United States Forest Service, and the Director of the National Park Service.

(f) AUTHORIZATION OF APPROPRIATIONS- Amounts credited to the Fund are authorized to be appropriated for the purpose of this title without fiscal year limitation.

SEC. 203. LIMITATION ON PATENT ISSUANCE.

No patent shall be issued by the United States for any mining or mill site claim located under the general mining laws unless the Secretary determines that, for the claim concerned a patent application was filed with the Secretary on or before September 30, 1994, and all requirements established under sections 2325 and 2326 of the Revised Statutes (30 U.S.C. 29 and 30) for vein or lode claims and sections 2329, 2330, 2331, and 2333 of the Revised Statutes (30 U.S.C. 35, 36 and 37) for placer claims, and section 2337 of the Revised Statutes (30 U.S.C. 42) for mill site claims, as the case may be, were fully complied with by the applicant by that date.

SEC. 204. MINING CLAIM MAINTENANCE REQUIREMENTS.

(a) IN GENERAL- (1) Effective October 1, 1999, the holder of each mining claim located under the general mining laws prior to the date of enactment shall pay to the Secretary an annual claim maintenance fee of $100 per claim per calendar year.

(2) The holder of each mining claim located under the general mining laws subsequent to the date of enactment shall pay to the Secretary an annual claim maintenance fee of $125 per claim per calendar year.

(b) PURCHASING POWER ADJUSTMENT- The Secretary shall adjust the amount of the claim maintenance fee payable pursuant to subsection (a) for changes in the purchasing power of the dollar after the calendar year 1993, employing the Consumer Price Index for all urban consumers published by the Department of Labor as the basis for adjustment, and rounding according to the adjustment process of conditions of the Federal Civil Penalties Inflation Adjustment Act of 1990.

(c) TIME OF PAYMENT- Each claim holder shall pay the claim maintenance fee payable under subsection (a) for any year on or before August 31 of each year, except that for the initial calendar year in which the location is made, the initial claim maintenance fee shall be paid at the time the location notice is recorded with the Bureau of Land Management.

(d) OIL SHALE CLAIMS SUBJECT TO CLAIM MAINTENANCE FEES UNDER ENERGY POLICY ACT OF 1992- The section shall not apply to any oil shale claims for which a fee is required to be paid under section 2511(e)(2) of the Energy Policy Act of 1992 (30 U.S.C. 242(e)(2)).

(e) CLAIM MAINTENANCE FEES PAYABLE UNDER 1993 ACT- The claim maintenance fees payable under this section for any period with respect to any claim shall be reduced by the amount of the claim maintenance fees paid under section 10101 of the Omnibus Budget Reconciliation Act of 1993 with respect to that claim and with respect to the same period.

(f) WAIVER- (1) The claim maintenance fee required under this section may be waived for a claim holder who certifies in writing to the Secretary that on the date the payment was due, the claim holder and all related parties held not more than 10 mining claims on land open to location. Such certification shall be made on or before the date on which payment is due.

(2) For purposes of this subsection, with respect to any claim holder, the term `related party' means each of the following:

(A) The spouse and dependent children (as defined in section 152 of the Internal Revenue Code of 1986), of the claim holder.

(B) Any affiliate of the claim holder.

(g) CO-OWNERSHIP- Upon the failure of any one or more of several co-owners to contribute such co-owner or owners portion of the fee under this section, any co-owner who has paid such fee may, after the payment due date, give the delinquent co-owner or owners notice of such failure in writing (or by publication in the newspaper nearest the claim for at least once a week for at least 90 days). If at the expiration of 90 days after such notice in writing or by publication, any delinquent co-owner fails or refused to contribute his portion, his interest, in the claim shall become the property of the co-owners who have paid the required fee.

SEC. 205. DEFINITIONS.

As used in this title:

(1) The term `affiliate' means, with respect to any person, each of the following:

(A) Any partner of such person.

(B) Any person owning at least 10 percent of the voting shares of such person.

(C) Any person who controls, is controlled by, or is under common control with such person.

(2) The term `locatable minerals' means minerals not subject to disposition under any of the following:

(A) The Mineral Leasing Act (30 U.S.C. 181 and following);

(B) The Geothermal Steam Act of 1970 (30 U.S.C. 100 and following);

(C) The Act of July 31, 1947, commonly known as the Materials Act of 1947 (30 U.S.C. 601 and following); or

(D) the Mineral Leasing for Acquired Lands Act (30 U.S.C. 351 and following).

(3) The term `net smelter return' has the same meaning provided in section 613 of the Internal Revenue Code of 1986 (26 U.S.C. 613) for `gross income from mining'.

(4) The term `Secretary' means the Secretary of the Interior.

(5) The term `general mining laws' means those Acts which generally comprise chapters 2, 12A, and 16, and sections 161 and 162 of title 30, United States Code.

TITLE III--USE OR DISPOSAL OF FEDERAL NATURAL RESOURCES

SEC. 301. ANNUAL DOMESTIC LIVESTOCK GRAZING FEE.

The Federal Land Policy and Management Act of 1976 is amended by inserting after section 401 (43 U.S.C. 1751) the following new section:

`SEC. 401A. ESTABLISHMENT OF FAIR MARKET VALUE GRAZING FEES.

`(a) ESTABLISHMENT OF ANNUAL DOMESTIC LIVESTOCK GRAZING FEE- (1) Notwithstanding any other provision of law, the Secretary of Agriculture, with respect to National Forest System lands in the 16 contiguous Western States (except National Grasslands) administered by the Forest Service where domestic livestock grazing is permitted under applicable law, shall establish an annual domestic livestock grazing fee equal to fair market value.

`(2) Notwithstanding any other provision of law, the Secretary of the Interior, with respect to public domain lands administered by the Bureau of Land Management where domestic livestock grazing is permitted under applicable law, shall establish an annual domestic livestock grazing fee equal to fair market value.

`(b) CALCULATION OF FAIR MARKET VALUE- (1) For purposes of determining the annual domestic livestock grazing fee under this section, the Secretary concerned shall calculate fair market value using the following formula:

          Fair Market Value=Appraised Base Value x Forage Value Index / (100)

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

`(A) The term `Forage Value Index' means the Forage Value Index (FVI) computed annually by the Economic Research Service, United States Department of Agriculture, and set with the 1997 FVI equal to 100; and

`(B) The term `Appraised Base Value' means the 1983 Appraisal Value conclusions for mature cattle and horses (expressed in dollars per head or per month), as determined in the 1986 report prepared jointly by the Secretary of Agriculture and the Secretary of the Interior entitled `Grazing Fee Review and Evaluation', dated February 1986, on a west-wide basis using the lowest appraised value of the pricing areas adjusted for advanced payment and indexed to 1997.

`(c) LIMITATION ON FLUCTUATIONS OF FEES- Notwithstanding the amount calculated under subsection (b) for a year, the domestic livestock grazing fee charged for any given year shall not increase nor decrease by more than 33.3 percent from the domestic livestock grazing fee for the previous year.

`(d) EFFECT ON EXECUTIVE ORDER- Executive Order No. 12548, dated February 14, 1986 (51 Fed. Reg. 5985), shall not apply to grazing fees established pursuant to this section.

`(e) EFFECT ON GRAZING ADVISORY BOARDS- The grazing advisory boards established pursuant to Secretarial action, notice of which was published in the Federal Register on May 14, 1986 (51 Fed. Reg. 17874), are abolished, effective as of the date of the enactment of this section, and the advisory functions exercised by such boards shall be exercised only by the appropriate councils established under section 309 of this Act.

`(f) USE OF FEES AND RANGE IMPROVEMENT FUNDS- Funds appropriated pursuant to section 5 of the Public Rangelands Improvement Act of 1978 (43 U.S.C. 1904) or any other provision of law related to disposition of the Federal share of receipts from fees for grazing on public domain lands or National Forest lands in the 16 contiguous western States shall be used for restoration

and enhancement of fish and wildlife habitat, for restoration and improved management of riparian areas, and for implementation and enforcement of applicable land management plans, allotment plans, and regulations regarding the use of such lands for domestic livestock grazing. Such funds shall be distributed as the Secretary concerned considers advisable after consultation and coordination with the advisory councils established pursuant to section 309 of this Act and other interested parties.

`(g) COMMENCEMENT DATE FOR FEES- The first annual domestic livestock grazing fee required by this section shall apply with respect to the grazing season commencing on March 1, 2000.

SEC. 302. ELIMINATION OF BELOW-COST SALES OF TIMBER FROM NATIONAL FOREST SYSTEM LANDS.

(a) IN GENERAL- The National Forest Management Act of 1976 is amended by inserting after section 14 (16 U.S.C. 472a) the following new section:

`SEC. 14A. ELIMINATION OF BELOW-COST TIMBER SALES FROM NATIONAL FOREST SYSTEM LANDS.

`(a) REQUIREMENT THAT SALE REVENUES EXCEED COSTS- On and after October 1, 2004, in appraising timber and setting a minimum bid for trees, portions of trees, or forest products located on National Forest System lands proposed for sale under section 14 or any other provision of law, the Secretary of Agriculture shall ensure that the estimated cash returns to the United States Treasury from each sale exceed the estimated costs to be incurred by the Federal Government in the preparation of the sale or as a result of the sale.

`(b) COSTS TO BE CONSIDERED- For purposes of estimating under this section the costs to be incurred by the Federal Government from each timber sale, the Secretary shall assign to the sale the following costs:

`(1) The actual appropriated expenses for sale preparation and harvest administration incurred or to be incurred by the Federal Government from the sale and the payments to counties to be made as a result of the sale.

`(2) A portion of the annual timber resource planning costs, silvicultural examination costs, other resource support costs, road design and construction costs, road maintenance costs, transportation planning costs, appropriated reforestation costs, timber stand improvement costs, forest genetics costs, general administrative costs (including administrative costs of the national and regional offices of the Forest Service), and facilities construction costs of the Federal Government directly or indirectly related to the timber harvest program conducted on National Forest System lands.

`(c) METHOD OF ALLOCATING COSTS- The Secretary shall allocate the costs referred to in subsection (b)(2) to each unit of the National Forest System, and each proposed timber sale in such unit, on the basis of harvest volume.

`(d) TRANSITIONAL REQUIREMENTS- To ensure the elimination of all below-cost timber sales by the date specified in subsection (a), the Secretary shall progressively reduce the number and size of below-cost timber sales on National Forest System lands as follows:

`(1) In fiscal years 2000 and 2001, the quantity of timber sold in below-cost timber sales on National Forest System lands shall not exceed 75 percent of the quantity of timber sold in such sales in the preceding fiscal year.

`(2) In fiscal year 2002, the quantity of timber sold in below-cost timber sales on National Forest System lands shall not exceed 65 percent of the quantity of timber sold in such sales in fiscal year 2000.

`(3) In fiscal year 2003, the quantity of timber sold in below-cost timber sales on National Forest System lands shall not exceed 50 percent of the quantity of timber sold in such sales in the fiscal year 2002.

`(e) BELOW-COST TIMBER SALE- For purposes of this section, the term `below-cost timber sale' means a sale of timber in which the costs to be incurred by the Federal Government exceed the cash returns to the United States Treasury.'.

(b) FINDINGS- Section 2 of the Forest and Rangeland Renewable Resources Planning Act of 1974 (16 U.S.C. 1600) is amended--

(1) by striking `and' at the end of paragraph (6);

(2) by striking the period at the end of paragraph (7) and inserting `; and'; and

(3) by adding at the end the following new paragraph:

`(8) the practice of selling timber from National Forest System lands for less than the cost to the Federal Government of growing the timber and preparing the timber for sale is not in the best interests of the United States, and such below-cost sales should be eliminated in an orderly manner to achieve a more economically and environmentally sound timber program for the National Forest System.'.

SEC. 303. TIMBERLAND SUITABILITY.

Subsection (k) of section 6 of the Forest and Rangeland Renewable Resources Planning Act of 1974 (16 U.S.C. 1604) is amended to read as follows:

`(k) DETERMINATION OF SUITABILITY OF LANDS FOR TIMBER PRODUCTION-

`(1) DETERMINATION REQUIRED- In revising land management plans developed pursuant to this section, the Secretary shall identify lands within the management area that are not suited for timber production based on physical, economic, or other relevant factors. The Secretary shall review the identifications made under this paragraph during each revision of the forest plan.

`(2) EVIDENCE OF ECONOMIC UNSUITABILITY- The Secretary shall identify lands as economically unsuitable for timber production under paragraph (1) if--

`(A) the expected cash returns to the United States Treasury that would result from the sale of standing timber on the lands do not exceed the expected costs that would be incurred by the Federal Government in preparation or as a result of such sales; or

`(B) the expected cash returns to the United States Treasury that would result from the sale of subsequent timber stands on the lands do not exceed the expected costs that would be incurred by the Federal Government in preparation or as a result of such sales.

`(3) COSTS TO BE CONSIDERED- For purposes of estimating under paragraph (2) the costs to be incurred by the Federal Government from timber sales conducted on the lands being reviewed, the Secretary shall assign to sales on such lands the following costs:

`(A) The appropriated expenses for sale preparation and harvest administration that would be incurred by the Federal Government from such sales and the payments to counties that would be made as a result of such sales.

`(B) A portion of the annual timber resource planning costs, silvicultural examination costs, other resource support costs, road design and construction costs, road maintenance costs, transportation planning costs, appropriated reforestation costs, timber stand improvement costs, forest genetics costs, general administrative costs (including administrative costs of the national and regional offices of the Forest Service), and facilities construction costs of the Federal Government directly or indirectly related to the timber harvest program conducted on National Forest System lands.

`(4) METHOD OF ALLOCATING COSTS- The Secretary shall allocate the costs referred to in paragraph (3)(B) to each unit of the National Forest System on the basis of harvest volume.

`(5) PROHIBITION ON TIMBER HARVESTS ON UNSUITABLE LANDS- In the case of lands identified under paragraph (1) as unsuitable for timber production, no timber harvesting shall occur on such lands for a period of 10 years or the life of the plan, whichever is greater.

`(6) DEFINITIONS- For purposes of this subsection:

`(A) The term `standing timber' means an existing stand of timber that has not been harvested.

`(B) The term `subsequent timber stand' means a regenerated stand of timber produced on land from which standing timber has been harvested.'.

SEC. 304. COST OF WATER USED TO PRODUCE CROPS ON PRODUCTION FLEXIBILITY CONTRACT ACREAGE.

Section 9 of the Act of August 4, 1939 (commonly known as the Reclamation Project Act of 1939; 43 U.S.C. 485h) is amended by inserting at the end thereof the following new subsection:

`(g)(1) Any contract entered into under authority of this section or any other provision of Federal reclamation law shall require that the organization agree by contract with the Secretary to pay full cost for the delivery of water used in the production of any contract commodity on acreage subject to a production flexibility contract entered into under section 111 of the Agricultural Market Transition Act (7 U.S.C. 7211).

`(2) The Secretary shall announce the amount of the full cost payment for the succeeding year on or before July 1 of each year.

`(3) As used in this subsection:

`(A) The term `full cost' has the meaning given such term in section 202(3) of the Reclamation Reform Act of 1982 (43 U.S.C. 390bb(3)).

`(B) The term `contract commodity' has the meaning given such term in section 102(5) of the Agricultural Market Transition Act (7 U.S.C. 7202(5)).

`(4) Paragraph (1) shall apply to any contract entered into or amended after the date of the enactment of this subsection.'.

SEC. 305. REDUCTION IN MAXIMUM AMOUNT OF PAYMENTS UNDER AGRICULTURAL ASSISTANCE PROGRAMS TO REFLECT RECEIPT OF FEDERAL IRRIGATION WATER.

(a) PRICE SUPPORT PROGRAMS- Title X of the Food Security Act of 1985 is amended--

(1) by redesignating sections 1001D (7 U.S.C. 1308-4) and 1001E (7 U.S.C. 1308-5) as sections 1001E and 1001F, respectively; and

(2) by inserting after section 1001C (7 U.S.C. 1308-3) the following new section:

`SEC. 1001D. REDUCTION OF PAYMENT LIMITATIONS TO REFLECT RECEIPT OF FEDERAL IRRIGATION WATER.

`(a) REDUCTION OF PAYMENT LIMITATIONS REQUIRED- If a person subject to section 1001 receives Federal irrigation water for agricultural purposes from the operation of a Federal reclamation project, the payment limitations specified in paragraphs (1) and (2) of such section and applicable to such person shall be reduced for the year in which such person receives irrigation water. The amount of the reduction shall be equal to the total

value during that year of the subsidy portion of the contract with such person for the delivery of the irrigation water.

`(b) DETERMINATION OF SUBSIDY PORTION OF WATER CONTRACT- The subsidy portion of an irrigation water delivery contract is equal to the amount by which full cost for the delivery of the irrigation water exceeds the actual contract price for the delivery of the water.

`(c) DEFINITIONS- For purposes of this section, the terms `contract', `full cost', `irrigation water', and `project' have the meanings given such terms in section 202 of the Reclamation Reform Act of 1982 (43 U.S.C. 390bb).'.

(b) NONINSURED CROP DISASTER ASSISTANCE- Section 196(i) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333(i)) is amended--

(1) by redesignating paragraph (5) as paragraph (6); and

(2) by inserting after paragraph (4) the following new paragraph:

`(5) EFFECT OF RECEIPT OF IRRIGATION WATER-

`(A) REDUCTION OF PAYMENT LIMITATION- If a person who receives payments under this section also receives, during the same year, Federal irrigation water for agricultural purposes from the operation of a Federal reclamation project, the payment limitation specified in paragraph (2) for such person shall be reduced for that year. The amount of the reduction shall be equal to the total value during that year of the subsidy portion of the contract with such person for the delivery of the irrigation water.

`(B) DETERMINATION OF SUBSIDY PORTION OF WATER CONTRACT- The subsidy portion of an irrigation water delivery contract is equal to the amount by which full cost for the delivery of the irrigation water exceeds the actual contract price for the delivery of the water.

`(C) DEFINITIONS- For purposes of this paragraph, the terms `contract', `full cost', `irrigation water', and `project' have the meanings given such terms in section 202 of the Reclamation Reform Act of 1982 (43 U.S.C. 390bb).'.

(c) CONFORMING AMENDMENTS- Section 1001(5)(A) of the Food Security Act of 1985 (7 U.S.C. 1308(5)(A)) is amended by striking `through 1001C' and inserting `through 1001D'.

SEC. 306. OFF BUDGET EXPENDITURES.

(a) KNUTSON-VANDENBERG FUND- Section 3 of the Act of June 9, 1930 (commonly known as the Knutson-Vandenberg Act; 16 U.S.C. 576b), is amended by striking `and shall constitute a special fund, which is hereby appropriated and made available until expended,' in the second sentence and inserting `and are authorized to be appropriated'.

(b) DEPOSITS FROM BRUSH DISPOSAL- The paragraph relating to deposits from brush disposal under the heading `FOREST SERVICE' in the Act of August 11, 1916 (39 Stat. 462; 16 U.S.C. 490), is amended by striking `and constitute a special fund, which is hereby appropriated and shall remain available until expended' and inserting `and are authorized to be appropriated for the purpose of disposing of such brush and other debris'.

(c) NATIONAL FORESTS ROADS AND TRAILS- Section 7 of Public Law 88-657 (commonly known as the Forest Roads and Trails Act; 16 U.S.C. 538) is amended by striking `may be placed in a fund to be available' and inserting `are authorized to be appropriated'.

(d) TIMBER SALVAGE SALE FUND- Section 303(d) of Public Law 96-451 (16 U.S.C. 1606a) is amended by striking `The Secretary of Agriculture' and inserting `In such amounts as are provided in advance in appropriations Acts, the Secretary of Agriculture'.

SEC. 307. DEPOSIT OF TAYLOR GRAZING ACT RECEIPTS IN TREASURY.

Section 10 of the Act of June 28, 1934 (commonly known as the Taylor Grazing Act; 43 U.S.C. 315i), is amended by striking all after `miscellaneous receipts' and inserting a period.

SEC. 308. REPEAL OF LIVESTOCK FEED ASSISTANCE PROGRAM.

The Emergency Livestock Feed Assistance Act of 1988 (title VI of the Agricultural Act of 1949; 7 U.S.C. 1471-1471j) is repealed.

SEC. 309. RIGHT-OF-WAY PERMITS.

(a) IN GENERAL- No permit, lease, or authorization for the use of any area of the public lands or National Forests for rights-of-way (including rights-of-way for power lines, oil and gas pipelines, water conveyances, and other utility lines) shall remain in force and effect after October 1, 1999, unless, by such date, and by October 1 of each year thereafter, the holder of such permit, lease, or authorization pays to the Secretary of the Interior or the Secretary of Agriculture, as appropriate, an amount equal to the fair market value, as determined by such Secretary, of the right to use and occupy such area for such purposes.

(b) DEFINITION- For the purposes of this section, the term `public lands' shall have the same meaning as defined in section 103(e) of the Federal Land Policy Management Act of 1976 (43 U.S.C. 1702(e)).

SEC. 310. OIL AND GAS RENTALS.

The Mineral Leasing Act (30 U.S.C. 181 et seq.) is amended as follows:

(1) In section 14 by striking out `a rental of $1 per acre' and inserting `a rental established by the Secretary of the Interior' and by adding the following at the end thereof: `The Secretary shall establish fair market value rental fees under this section based upon the rental fees which would be charged in arm's length transactions for comparable leases of oil and gas resources on non-Federal land.'.

(2) In section 17(d) by striking out `rental of not less than $1.50 per acre per year for the first through fifth years of the lease and not less than $2 per acre per year for each year thereafter' and inserting `rental established by the Secretary of the Interior' and by adding the following at the end thereof: `The Secretary shall establish fair market value rental fees under this section based upon the rental fees which would be charged in arms length transactions for comparable leases of oil and gas resources on non-Federal land.'.

(3) In section 21(a) by striking out `rental, payable at the beginning of each year, at the rate of 50 cents per acre per annum, for the lands included in the lease,' and inserting `rental established by the Secretary of the Interior' and by adding the following at the end thereof: `The Secretary shall establish fair market value rental fees under this section based upon the rental fees which would be charged in arms length transactions for comparable leases on non-Federal land.'.

(4) In section 31(e)(2) by striking `rate of not less than $10 per acre per year, or the inclusion in a reinstated lease issued pursuant to the provisions of section 17(c) of this Act of a requirement that future rentals shall be at a rate not less than $5 per acre per year' and inserting `fair market value rate (but not less than $10 per acre per year)'.

(5) In section 31(f)(3) by striking out `of not less than $5 per acre per year' and inserting `established by the Secretary at fair market value based upon the rental fees which would be charged in arms length transactions for comparable leases on non-Federal land'.

SEC. 311. IMPROVEMENT OF MINERALS MANAGEMENT SERVICE ROYALTY COLLECTION.

The Federal Oil and Gas Royalty Simplification and Fairness Act of 1996 (Public Law No. 104-185; 30 U.S.C. 1701 et seq.) is amended by adding the following new subsection after subsection (l):

`(m) ASSESSMENT FOR UNDERREPORTING OF ROYALTY- (1) If there is any underreporting of royalty owed on production from any lease for any production month, the Secretary may make an assessment of 20 percent of the amount of that underreporting if any of the following circumstances occurs:

`(A) For a Federal lease, the underreporting exceeds 10 percent of the value of production which should have been reported and exceeds $1,500, or the underreporting exceeds 5 percent of the value of production which should have been reported and exceeds $15,000.

`(B) For an Indian lease, the underreporting exceeds 10 percent of the value of production which should have been reported and exceeds $125.

`(C) For either a Federal or Indian lease, no royalty was paid on production from that lease for the production month immediately preceding the month for which the underreporting was submitted, regardless of the amount of the underreporting or the amount of royalty owed.

`(2) For purposes of this subsection, the term `underreporting' means the amount by which the royalty on the value of the production which should have been reported exceeds the royalty on the value of the production which was reported.

`(3) The Secretary shall not impose the assessment specified in paragraph (1) if the underreporting is corrected before the date the person against whom the assessment is made receives written notice from the Secretary that an underreporting may have occurred.

`(4) The Secretary shall not impose the assessment specified in paragraph (1) with respect to an underreporting which is corrected in the course of performing an order to correct royalty accounting and recompute and pay royalties due. This exception does not apply to the specific instances of underreporting discovered during audit which formed the basis of the order to recompute and pay.

`(5)(A) The Secretary shall waive the portion of an assessment specified in paragraph (1) attributable to that portion of the underreporting for which a person demonstrates that--

`(i) the person had substantial authority for reporting royalty on the value of the production on the basis on which it was reported, or

`(ii) the person meets any other exception which the Secretary may, by rule, establish.

`(B) For purposes of this paragraph, the term `substantial authority' means any of the following:

`(i) A controlling judicial or administrative decision which has not been reversed, vacated, or overruled, or a controlling regulation.

`(ii) A body of judicial or administrative decisions or regulations which provide a reasoned basis to support the person's action. Such a reasoned basis must be more than a merely arguable theory which is unlikely to prevail in court upon a complete review of the relevant facts and authorities.

`(iii) A legal question of first impression.

`(6) Interest shall not accrue on the amount of an assessment under this subsection during the pendency of any administrative appeal of the assessment which may be allowed by rule. No hearing on the record in such appeal shall be necessary before an assessment is made. No surety instrument shall be required to secure the amount of the assessment pending administrative appeal.

`(7) An assessment under this subsection shall apply only to an underreporting occurring after the date of enactment of this subsection.

`(8) Notwithstanding any provision of section 206 of this Act, all assessments collected under this subsection shall be deposited to the same accounts in the Treasury or paid to the same recipients in the same manner as the royalty with respect to which such assessment is made.

`(9) For purposes of this subsection, the definitions in section 2 of this Act shall be deemed to also apply to coal, any other mineral, geothermal steam, or associated geothermal resources.'.

END