H. Rept. 113-169 - 113th Congress (2013-2014)
July 22, 2013, As Reported by the Natural Resources Committee

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House Report 113-169 - AMERICAN SODA ASH COMPETITIVENESS ACT




[House Report 113-169]
[From the U.S. Government Printing Office]


113th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    113-169
======================================================================
 
                 AMERICAN SODA ASH COMPETITIVENESS ACT

                                _______
                                

 July 22, 2013.--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. 957]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 957) to reduce temporarily the royalty required 
to be paid for sodium produced on Federal lands, 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. 957 is to reduce temporarily the 
royalty required to be paid for sodium produced on Federal 
lands.

                  BACKGROUND AND NEED FOR LEGISLATION

    The Soda Ash Royalty Reduction Act of 2006 was included in 
the National Heritage Areas Act of 2006 (Public Law 109-338). 
This law reduced the royalty on soda ash to 2 percent, the 
minimum required in the Mineral Leasing Act of 1921.
    Uses for soda ash include glass-making which consumes about 
half of soda ash output. This is followed by the chemical 
industry, which uses about a quarter of the output. Other uses 
include soap, paper manufacturing, and water treatment.
    Prior to the royalty relief legislation being enacted, the 
U.S. soda ash (sodium carbonate) industry was experiencing 
increased pressure from state owned Chinese companies operating 
under lax environmental standards, coupled with high U.S. 
royalty rates that ranged between 5 and 8 percent. Between 1997 
(the year after the Bureau of Land Management raised the 
royalty rates) and 2000, China overtook the United States as 
the world's largest exporter of soda ash. By 2003, the growth 
in domestic exports had grown by only a few percentage points, 
and approximately 1000 jobs in the domestic soda ash mining 
industry had been lost.
    Between October 2006 and September 2011, when the 2 percent 
royalty rate was in place, the soda ash industry was able to 
reverse the downward trend in exports, and was able to add jobs 
during the recession. By being able to keep more of the money 
they made, the soda ash companies were able to reinvest in 
their operations to increase production and efficiencies, 
allowing the industry to increase exports by more than 1 
million tons.
    In October 2011, the Bureau of Land Management reinstated 
the 6 percent royalty. This was a discretionary decision. This 
has already had an impact on U.S. exports: those for the first 
two months of 2012 have fallen below the average exports for 
2011.
    H.R. 957, the ``American Soda Ash Competitiveness Act,'' 
would restore the royalty rate for soda ash at 2 percent for a 
five year period.

                            COMMITTEE ACTION

    H.R. 957 was introduced on March 5, 2013, by Congresswoman 
Cynthia Lummis (R-WY). The bill was referred to the Committee 
on Natural Resources, and within the Committee to the 
Subcommittee on Energy and Mineral Resources. On March 21, 
2013, the Subcommittee on Energy and Mineral Resources held a 
hearing on the bill. On May 15, 2013, the Full Natural 
Resources Committee met to consider the bill. The Subcommittee 
on Energy and Mineral Resources was discharged by unanimous 
consent. Congresswoman Carol Shea-Porter (D-NH) offered an 
amendment designated .001 to the bill; the amendment was not 
adopted by a bipartisan roll call vote of 16 to 26, as follows:
    Congressman Alan Lowenthal (D-CA) offered an amendment 
designated .002 to the bill; the amendment was not adopted by a 
bipartisan roll call vote of 17 to 25, as follows:
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

    Congressman Alan Lowenthal (D-CA) offered an amendment 
designated .002 to the bill; the amendment was not adopted by a 
bipartisan roll call vote of 17 to 25, as follows:
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

    No further amendments were offered and the bill was then 
adopted and ordered favorably reported to the House of 
Representatives by a bipartisan roll call vote of 28 to 13, as 
follows:
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

                    COMPLIANCE WITH HOUSE RULE XIII

    1. Cost of Legislation. Clause 3(d)(1) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(2)(B) 
of that Rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974. Under clause 3(c)(3) of rule 
XIII of the Rules of the House of Representatives and section 
403 of the Congressional Budget Act of 1974, the Committee has 
received the following cost estimate for this bill from the 
Director of the Congressional Budget Office:

H.R. 957--American Soda Ash Competitiveness Act

    Summary: H.R. 957 would require the Department of the 
Interior (DOI) to charge a 2 percent royalty on the value of 
soda ash and certain related minerals produced on federal lands 
for a five-year period following enactment of the bill. That 
rate would be lower than the average rate expected under 
current law, which is about 6 percent over that period. As a 
result, CBO estimates that implementing H.R. 957 would reduce 
net federal offsetting receipts from soda ash royalties by $80 
million over the 2014-2018 period; therefore, pay-as-you-go 
procedures apply. Enacting H.R. 957 would not affect revenues.
    H.R. 957 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated Cost to the Federal Government: The estimated 
budgetary impact of H.R. 957 is shown in the following table. 
The costs of this legislation fall within budget function 300 
(natural resources and environment).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2014   2015   2016   2017   2018   2019   2020   2021   2022   2023  2014-2018  2014-2023
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING

Estimated Budget Authority..................................     16     16     16     16     16      0      0      0      0      0       80         80
Estimated Outlays...........................................     16     16     16     16     16      0      0      0      0      0       80         80
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Basis of Estimate: For this estimate, CBO assumes that the 
legislation will be enacted near the end of 2013.
    H.R. 957 would reduce the royalty rate on the value of soda 
ash and certain related minerals produced on federal lands from 
about 6 percent to 2 percent for a five-year period following 
enactment of the bill. Because CBO expects that royalty rates 
charged for the production of such minerals on state and 
private lands will be higher than 2 percent, we also expect 
that, under the bill, the amount of soda ash and other affected 
minerals produced on federal lands would be greater over the 
next five years than it would be under current law. However, 
CBO expects that any increase in production would only 
partially offset the loss of receipts from lowering the royalty 
rate through 2018.
    In 2011, the last year in which the royalty rate was set at 
2 percent, firms produced about 9 million tons of soda ash and 
related products on federal lands and paid net royalties 
totaling $11 million. (Half of all federal royalties collected 
on the affected minerals are paid to states where those 
minerals are produced.) The Bureau of Land Management increased 
the average royalty rate to about 6 percent in 2012. Production 
of soda ash and related products decreased to about 7 million 
tons in that year; however, net royalty collections increased 
to about $25 million. Based on monthly data on royalty 
collections from the Office of Natural Resources Revenue, CBO 
expects that, under current law, net royalty collections will 
total between $25 million and $30 million in 2013 and will 
remain in that range over the next five years. Under the bill, 
we estimate that collections would total about $11 million to 
$12 million annually over that period. On balance, CBO 
estimates that enacting H.R. 957 would reduce net offsetting 
receipts from soda ash royalties by $16 million a year over the 
2014-2018 period.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table.

           CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 957 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON NATURAL RESOURCES ON MAY 15, 2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2013   2014   2015   2016   2017   2018   2019   2020   2021   2022   2023  2013-2018  2013-2023
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET INCREASE IN THE DEFICIT

Statutory Pay-As-You-Go Impact.......................      0     16     16     16     16     16      0      0      0      0      0       80         80
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 957 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The royalty reduction required by the bill 
would reduce federal payments to Arizona, California, Colorado, 
New Mexico, Utah, and Wyoming by about $80 million over the 
2014-2018 period.
    Estimate prepared by: Federal Costs: Jeff LaFave; Impact on 
State, Local, and Tribal Governments: Melissa Merrell; Impact 
on the Private Sector: Amy Petz.
    Estimate 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 
implementing H.R. 957 would reduce net federal offsetting 
receipts from soda ash royalties by $80 million over the 2014-
2018 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 reduce temporarily the royalty 
required to be paid for sodium produced on Federal lands.

                           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.

                       COMPLIANCE WITH H. RES. 5

    Directed Rule Making. The Chairman does not believe that 
this bill directs any executive branch official to conduct any 
specific rule-making proceedings.
    Duplication of Existing Programs. This bill does not 
establish or reauthorize a program of the federal government 
known to be duplicative of another program. Such program was 
not included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-139 
or identified in the most recent Catalog of Federal Domestic 
Assistance published pursuant to the Federal Program 
Information Act (Public Law 95-220, as amended by Public Law 
98-169) as relating to other programs.

                PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

    This bill is not intended to preempt any State, local or 
tribal law.

                        CHANGES IN EXISTING LAW

    If enacted, this bill would make no changes in existing 
law.