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[From the U.S. Government Publishing Office]
113th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 113-169
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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:
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:
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:
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).
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By fiscal year, in millions of dollars--
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2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014-2018 2014-2023
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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
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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
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By fiscal year, in millions of dollars--
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2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013-2018 2013-2023
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NET INCREASE IN THE DEFICIT
Statutory Pay-As-You-Go Impact....................... 0 16 16 16 16 16 0 0 0 0 0 80 80
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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.