Report text available as:

  • TXT
  • PDF   (PDF provides a complete and accurate display of this text.) Tip ?

115th Congress    }                                {   Rept. 115-1067
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                {           Part 1

======================================================================



 
                    EDUCATION AND ENERGY ACT OF 2018

                                _______
                                

                December 6, 2018.--Ordered to be printed

                                _______
                                

Mr. Bishop of Utah, from the Committee on Natural Resources, submitted 
                             the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 5859]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 5859) to amend the Mineral Leasing Act to 
require that a portion of revenues from new Federal mineral and 
geothermal leases be paid to States for use to supplement the 
education of students in kindergarten through grade 12 and 
public support of institutions of higher education, and for 
other purposes, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Education and Energy Act of 2018''.

SEC. 2. USE OF REVENUES FROM NEW FEDERAL MINERAL AND GEOTHERMAL LEASES 
                    FOR PAYMENTS TO STATE FOR EDUCATION.

  Section 35(a) of the Mineral Leasing Act (30 U.S.C. 191) is amended 
by inserting ``(1)'' before the first sentence, and by adding at the 
end the following new paragraph:
  ``(2)(A) Of amounts otherwise required under paragraph (1) to be 
deposited into the general fund of the Treasury each fiscal year that 
are derived from leases for tracts located in a State, the Secretary 
shall pay to the county from which the mineral or geothermal royalties 
were generated 33 percent for use to supplement the education of 
students in kindergarten through grade 12 and to supplement public 
support of institutions of higher education.
  ``(B) Of the amounts otherwise required under paragraph (1) to be 
deposited into the general fund of the Treasury each fiscal year that 
are not required to be used for payments under subparagraph (A) of this 
paragraph, the Secretary shall pay to States, in equal amounts, 17 
percent for use to supplement the education of students in kindergarten 
through grade 12 and to supplement public support of institutions of 
higher education.
  ``(C) Subparagraphs (A) and (B) shall apply only with respect to 
amounts that--
          ``(i) are received by the United States under leases entered 
        into under this Act or the Geothermal Steam Act of 1970 after 
        the date of enactment of the Education and Energy Act of 2018; 
        and
          ``(ii) exceed the amount of revenues that the Congressional 
        Budget Office previously estimated would be received under such 
        leases in the fiscal year.
  ``(D) Subparagraphs (A) and (B) shall not apply with respect to 
amounts required by paragraph (1) to be paid into, reserved, or 
appropriated as part of the reclamation fund.
  ``(E) Any amounts received by a county under subparagraph (A) shall 
not be considered when calculating payments to that county under the 
Secure Rural Schools and Community Self-Determination Act of 2000 (16 
U.S.C. 7101 et seq.) or chapter 69 of title 31, United States Code.''.

                          Purpose of the Bill

    The purpose of H.R. 5859 is to amend the Mineral Leasing 
Act to require that a portion of revenues from new federal 
mineral and geothermal leases be paid to States for use to 
supplement the education of students in kindergarten through 
grade 12 and public support of institutions of higher 
education.

                  Background and Need for Legislation

    The public school system is one of the most important, and 
most unevenly funded, national services in the United States. 
The struggle for more resources has been highlighted by recent 
teacher strikes in West Virginia, Kentucky, Oklahoma, Arizona 
and Colorado.\1\ Among other factors, the State where a school 
is located is a major indicator of the amount of resources each 
student may receive. According to a Department of Education 
report released in January 2018, expenditures per pupil range 
from $6,751 in Utah to $20,744 in New York.\2\
---------------------------------------------------------------------------
    \1\Frederick Hess, The Facts Behind the Teacher Strikes. Forbes. 
April 30, 2018. https://www.forbes.com/sites/frederickhess/2018/04/30/
the-facts-behind-the-teacher-strikes/#7e5475a27639.
    \2\U.S. Department of Education, National Center for Education 
Statistics. Revenues and Expenditures forPublic Elementary and 
Secondary Education: School Year 2014-15 (Fiscal Year 2015) (2018). 
https://nces.ed.gov/pubs2018/2018301.pdf.
---------------------------------------------------------------------------
    Although this disparity in available resources is 
attributable to multiple causes, one is the difference in the 
amount of taxable land per State.\3\ In the 2014-15 school 
year, out of $664 billion\4\ in revenues collected for 
elementary and secondary public school, only 8 percent came 
from federal sources, while 47 percent came from State sources 
and 45 percent from local sources.\5\ For States like Nevada 
and Utah, with approximately 80 percent and 63 percent of non-
taxable federal land respectively, this can have a critical 
impact on available revenue for use in State services, schools 
included.\6\
---------------------------------------------------------------------------
    \3\U.S. Department of Education, Office of Elementary and Secondary 
Education. About Impact Aid (updated March 21, 2017). https://
www2.ed.gov/about/offices/list/oese/impactaid/whatisia.html?exp=7#a.
    \4\In constant 2016-17 dollars.
    \5\U.S. Department of Education, National Center for Education 
Statistics. Public School Revenue Sources (updated April 2018). https:/
/nces.ed.gov/programs/coe/indicator_cma.asp#f1.
    \6\Carol Hardy Vincent et al, Federal Land Ownership: Overview and 
Data (2017). http://www.crs.gov/reports/pdf/R42346.
---------------------------------------------------------------------------
    H.R. 5859, the Education and Energy Act of 2018, will help 
enable States support K-12 schools and higher education through 
responsible energy development. The bill reallocates a greater 
share of federal mineral and geothermal revenues back to the 
State and county in which they were generated, specifically to 
support public education.

Background of Mineral Leasing Act revenue sharing

    Revenue sharing between onshore energy-producing States and 
the federal government is governed by the Mineral Leasing Act 
(MLA, 30 U.S.C. 181 et seq.). Revenues are generated by the 
rentals, bonuses, and royalties on onshore mineral resource 
production on federal public lands.\7\ The MLA specifically 
applies to oil, gas, and coal leasing, as well as certain 
minerals including phosphates, sodium, sulfur, and potash.\8\
---------------------------------------------------------------------------
    \7\Marc Humphries, Energy and Mineral Development on Federal Land 
(2015). http://www.crs.gov/Reports/
IF10127?source=search&guid=ab1ee1f40564437797071c178c8fa2ad&index=.
    \8\Briefing by Marc Humphries, Specialist in Energy Policy, 
Congressional Research Service received by Energy and Mineral Resources 
Subcommittee Majority Staff on August 20, 2017.
---------------------------------------------------------------------------
    States historically received 50 percent of the revenues 
generated by leasing and production of onshore energy resources 
on federal land within their borders, except Alaska, which 
received 90 percent. However, a 2014 amendment to the MLA 
authorized the Secretary of the Interior to charge a 2 percent 
fee on the collection of these revenues, reducing the States' 
share.\9\
---------------------------------------------------------------------------
    \9\30 U.S.C. 191.
---------------------------------------------------------------------------
    Aside from the States' share, another 40 percent of onshore 
mineral revenues (except Alaska) is reserved for payment into 
the Reclamation Fund. Established by the Reclamation Act of 
1902 (Public Law 57-161) and administered by the Bureau of 
Reclamation under the Department of the Interior, the 
Reclamation Fund was created to fund irrigation projects in 
arid regions of the West.\10\ Remaining revenues not paid to 
the States or the Reclamation Fund are directed into the U.S. 
Treasury.\11\
---------------------------------------------------------------------------
    \10\Charles V. Stern, The Reclamation Fund (2015). Congressional 
Research Service.
    \11\30 U.S.C. 191.
---------------------------------------------------------------------------
    The Education and Energy Act of 2018 would leave the 
established State and Reclamation Fund allocation percentages 
the same. It applies specifically to mineral resource revenues 
otherwise slated for the Treasury, and only in years when 
actual revenues generated exceed the Congressional Budget 
office (CBO) estimates.

Onshore state usage of mineral revenues

    Almost half of the land in the West is owned by the federal 
government.\12\ The vast amount of tax-exempt federal land in 
this region makes much of the western United States reliant on 
alternative sources of State income to offset losses in private 
tax revenue.\13\ Some relief comes in the form of revenues from 
energy production. These revenues go toward the maintenance and 
improvement of local communities and critical public services. 
In energy-producing States, a portion of the revenues are 
utilized to mitigate the risks of energy development, as well 
as funding for roads and infrastructure,\14\ public safety, 
housing, transportation, public school systems and community 
colleges.\15\
---------------------------------------------------------------------------
    \12\Carol Hardy Vincent, Federal Land Ownership: Overview and Data 
(CRS Report R42346)(Washington, D.C.: Congressional Research Service, 
2014), p.1.
    \13\Marc Humphries, Mineral Royalties on Federal Lands: Issues for 
Congress (2015). http://www.crs.gov/reports/pdf/R43891.
    \14\Marc Humphries, Mineral Royalties on Federal Lands: Issues for 
Congress (2015). http://www.crs.gov/reports/pdf/R43891.
    \15\The United States Extractive Industries Transparency 
Initiative. Explore Data, Wyoming. https://useiti.doi.gov/explore/WY/
#disbursements (Accessed August 29, 2017).
---------------------------------------------------------------------------
    Many States that depend on these revenues to support 
necessary services also maintain mineral trust funds dedicated 
for future uses. For instance, Colorado allocates a share of 
its mineral revenues to its Local Government Permanent Fund, 
School Trust Permanent Fund, and Higher Education Maintenance 
and Reserve Fund.\16\
---------------------------------------------------------------------------
    \16\U.S. Department of Interior. Office of Natural Resources 
Revenue. Natural Resources Revenue Data. Colorado. https://
revenuedata.doi.gov/explore/CO/.
---------------------------------------------------------------------------
    The difference in funds available for some States' public 
services, specifically schools, is striking. Given that the 
average State receives approximately 90 percent of its school 
funding from State and local sources,\17\ States with large 
amounts of nontaxable federal land are at a decided 
disadvantage when finding resources for in-State education.
---------------------------------------------------------------------------
    \17\Uhttps://nces.ed.gov/programs/coe/indicator_cma.asp#f1.
---------------------------------------------------------------------------
    H.R. 5859 would amend the MLA to require a portion of new 
federal mineral and geothermal revenues be paid back to States 
and counties to support public K-12 and higher education 
institutions. This would only apply to revenues slated for the 
Treasury, and not already obligated to the States' revenue 
sharing formulas or the Reclamation Fund. Further, of this 
amount (approximately 10 percent of the total revenues 
produced), this bill will only apply to revenues exceeding the 
CBO estimated revenue for the leases in the previous fiscal 
year. Specifically, as ordered reported, H.R. 5859 requires 
that 33 percent of revenues above the CBO estimate be sent back 
to the county where the energy was generated. An additional 17 
percent would be split evenly among the 50 States. None of this 
new revenue would be considered when determining State payments 
under the Secure Rural Schools and Community Self-Determination 
Act of 2000 (Public Law 106-393) or chapter 69 of title 31, 
United States Code (the Payment in Lieu of Taxes program).
    By returning a portion of revenues from energy production 
to specifically support public education, H.R. 5859 would 
bolster State education using State-created value. While 
energy-producing States understandably have a larger percentage 
returned than non-producing States, this bill would also assist 
public school funding in the country at large.
    Revenues from energy production are made by hardworking 
Americans in a minority of States for the benefit of the entire 
nation. H.R. 5859 helps ensure members of energy-producing 
States have fair returns for State services, specifically to 
support K-12 and higher education opportunities for their 
students.

                            Committee Action

    H.R. 5859 was introduced on May 17, 2018, by Congressman 
Scott R. Tipton (R-CO). The bill was referred primarily to the 
Committee on Natural Resources and within the Committee to the 
Subcommittee on Energy and Mineral Resources. The bill was 
additionally referred to the Committee on Education and the 
Workforce. The Subcommittee on Energy and Mineral Resources 
held a hearing on the bill on June 21, 2018. On June 27, 2018, 
the Natural Resources Committee met to consider the bill. The 
Subcommittee was discharged by unanimous consent. Congressman 
Tipton offered an amendment designated #1; it was adopted by 
voice vote. No additional amendments were offered, and the 
bill, as amended, was ordered favorably reported to the House 
of Representatives by a roll call vote of 16 ayes and 11 nays, 
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 and Congressional Budget Act

    1. Cost of Legislation and the Congressional Budget Act. 
With respect to the requirements of clause 3(c)(2) and (3) of 
rule XIII of the Rules of the House of Representatives and 
sections 308(a) and 402 of the Congressional Budget Act of 
1974, the Committee has received the following estimate for the 
bill from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 31, 2018.
Hon. Rob Bishop,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5859, the 
Education and Energy Act of 2018.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kim Cawley.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 5859--Education and Energy Act of 2018

    Summary: H.R. 5859 would require the Department of the 
Interior (DOI) to make payments to states and counties from 
certain mineral receipts that otherwise would be deposited in 
the Treasury. Using information provided by DOI, CBO estimates 
that enacting the bill would increase direct spending by $200 
million over the 2019-2028 period; therefore, pay-as-you-go 
procedures apply. Enacting the bill would not affect revenues.
    CBO estimates that enacting H.R. 5859 would not increase 
net direct spending or on-budget deficits by more than $5 
billion in any of the four consecutive 10-year periods 
beginning in 2029.
    H.R. 5859 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would benefit states by increasing the royalties they 
receive from resource production on federal lands.
    Estimated cost to the Federal Government: The estimated 
budgetary effect of H.R. 5859 is shown in the following table. 
The costs of the legislation fall within budget function 300 
(natural resources and environment).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2019   2020   2021   2022   2023   024    2025   2026   2027   2028  2019-2023  2019-2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              INCREASES IN DIRECT SPENDING
 
Estimated Budget Authority..................................     15     20     20     20     20     20     20     20     20     25        95        200
Estimated Outlays...........................................     15     20     20     20     20     20     20     20     20     25        95        200
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that the 
legislation will be enacted near the end of 2018.
    The cost of enacting H.R. 5859 would stem from additional 
payments to states and counties that would be required under 
the bill if annual proceeds from certain mineral development 
activities on federal lands exceeded CBO's estimates of such 
proceeds in any year.

Background

    Under current law, proceeds from activities carried out 
under the Mineral Leasing Act (MLA) and the Geothermal Steam 
Act (GSA) are used for various purposes. Under the MLA, states 
receive 49 percent of all proceeds (royalties, rents, and bonus 
bids, which are amounts that companies pay to the federal 
government to acquire leases).\1\ Forty percent of all proceeds 
are deposited into the Reclamation Fund, which is used for 
projects of the Bureau of Reclamation to the extent those funds 
are appropriated. Under the GSA, half of all proceeds from 
royalties, rents, and bonus bids is paid to states and 25 
percent is paid to counties. Under both acts, any remaining 
funds (generally 11 percent of gross proceeds under the MLA and 
25 percent of gross proceeds under the GSA) are deposited in 
the general fund of the Treasury.
---------------------------------------------------------------------------
    \1\Alaska is an exception to this provision of the MLA. It receives 
90 percent of royalties, rents, and bonus bids from federal leases 
outside of the National Petroleum Reserve in Alaska. The remaining 
proceeds are deposited in the Treasury.
---------------------------------------------------------------------------

Direct spending

    Under H.R. 5859, DOI would make additional payments to 
states and counties in any year in which gross proceeds from 
activities under the MLA and the GSA exceeded the amounts CBO 
projected would be received in that year. Those payments would 
be made only from proceeds that exceed CBO's projections and 
would be equal to 50 percent of the portion of those amounts 
that otherwise would have been deposited in the general fund. 
States and counties would be required to use those funds to 
support public schools and universities. CBO anticipates that 
DOI would use the most recent CBO baseline to determine whether 
actual receipts in a fiscal year were above or below projected 
receipts for that year.
    CBO's baseline projections represent the expected value of 
proceeds within a range of possible outcomes. In developing its 
estimate of the budgetary effects of H.R. 5859, CBO identified 
the probability that proceeds would exceed expected projections 
because of higher mineral prices, increased mineral production, 
or both were higher than CBO projections. Then, to arrive at 
its estimate of total proceeds, CBO estimated average prices 
and production for the 2019-2028 period.
    Over the period, CBO anticipates, the expected amount of 
excess proceeds (after accounting for the probability that 
receipts could be equal to or below CBO's projections for those 
years) could range from $250 million to $500 million (or 8 
percent to 12 percent more than CBO's baseline projections for 
the period). Of those amounts, between $30 million and $50 
million would be deposited into the general fund each year 
under current law. Under H.R. 5859, half would be paid to 
states and counties instead. Thus, CBO estimates that enacting 
the bill would increase direct spending by $20 million a year, 
on average, over the 2019-2028 period.

Uncertainty

    CBO aims to produce estimates that generally reflect the 
middle of a range of the most likely budgetary outcomes that 
would result if the legislation was enacted. In estimating the 
effects of H.R. 5859, CBO had to account for many sources of 
uncertainty inherent in projecting the prices and quantities of 
minerals produced on federal lands. In addition, because the 
bill's language provides significant room for interpretation, 
CBO made two key assumptions about DOI's implementation. If the 
agency chose some other approach, the estimated budgetary 
effects could differ significantly.
    The text of H.R. 5859 would require additional payments to 
states and counties to be made only in years when proceeds 
under the MLA and GSA ``exceed the amount of revenues that the 
Congressional Budget Office previously estimated would be 
received.'' For this estimate, CBO assumes that DOI would 
interpret revenues to mean offsetting receipts, which is how 
proceeds under the MLA and GSA are classified in the federal 
budget. That assumption is key because CBO does not project 
that any budgetary revenues would be collected as proceeds 
under those acts. If DOI implemented the bill using a strict 
interpretation of the language, it would determine that CBO's 
previous estimates of revenues from those activities were zero 
for each year, thus effectively eliminating the threshold that 
would determine when additional payments to states and counties 
could be made. If DOI were to implement H.R. 5859 using zero as 
the threshold for the level of mineral revenues in CBO's 
baseline estimate (which CBO expects is unlikely), the bill's 
cost would be about 10 times higher than CBO has presented in 
the estimate.
    In preparing this estimate, CBO also assumed that DOI would 
use the most recent baseline produced in each fiscal year to 
determine whether actual proceeds received in that year 
exceeded the projected amounts. The text of the bill would 
require DOI to make additional payments only when actual 
proceeds under the MLA and GSA exceed amounts ``previously 
estimated'' by CBO. Because CBO's baseline projections cover a 
10-year period and because CBO generally releases more than one 
baseline each year, the agency would probably have anywhere 
from 20 to 30 previous CBO estimates to choose from for each 
fiscal year. Because CBO's projections change over time, we 
cannot determine how using projections that are different from 
those assumed for the purpose of this estimate would affect the 
amount of payments to states and counties under the bill. DOI 
could use previous CBO baseline estimates that would either 
maximize or minimize payments to states and counties in each 
year. Thus, the estimated budgetary effects of enacting H.R. 
5859 could be larger or smaller than those in this estimate.
    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. 5859, THE EDUCATION AND ENERGY ACT OF 2018, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON NATURAL
                                                               RESOURCES ON June 27, 2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2019   2020   2021   2022   2023   2024   2025   2026   2027   2028  2019-2023  2019-2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET INCREASE IN THE DEFICIT
 
Statutory Pay-As-You-Go Effect..............................     15     20     20     20     20     20     20     20     20     25        95        200
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long-term direct spending and deficits: CBO 
estimates that enacting H.R. 5859 would not increase net direct 
spending or on-budget deficits by more than $5 billion in any 
of the four consecutive 10-year periods beginning in 2029.
    Mandates: H.R. 5859 contains no intergovernmental or 
private-sector mandates as defined in UMRA and would benefit 
states by increasing the royalties they receive from resource 
production on federal lands.
    Estimate prepared by: Federal costs: Kim P. Cawley; 
Mandates: Jon Sperl.
    Estimate reviewed by: H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis; Theresa Gullo, Assistant Director 
for Budget Analysis.
    2. 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 amend the Mineral Leasing Act to 
require that a portion of revenues from new federal mineral and 
geothermal leases be paid to States for use to supplement the 
education of students in kindergarten through grade 12 and 
public support of institutions of higher education.

                           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. This bill does not contain any 
directed rule makings.
    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


         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                          MINERAL LEASING ACT




           *       *       *       *       *       *       *
  Sec. 35. (a)(1) All money received from sales, bonuses, 
royalties including interest charges collected under the 
Federal Oil and Gas Royalty Management Act of 1982, and rentals 
of the public lands under the provisions of this Act and the 
Geothermal Steam Act of 1970, shall be paid into the Treasury 
of the United States; 50 per centum thereof shall be paid by 
the Secretary of the Treasury to the State other than Alaska 
within the boundaries of which the leased lands or deposits are 
or were located; said moneys paid to any of such States on or 
after January 1, 1976, to be used by such State and its 
subdivisions, as the legislature of the State may direct giving 
priority to those subdivisions of the State socially or 
economically impacted by development of minerals leased under 
this Act, for (i) planning, (ii) construction and maintenance 
of public facilities, and (iii) provision of public service; 
and excepting those from Alaska, 40 per centum thereof shall be 
paid into, reserved, appropriated, as part of the reclamation 
fund created by the Act of Congress known as the Reclamation 
Act, approved June 17, 1902, and of those from Alaska as soon 
as practicable after March 31 and September 30 of each year, 90 
per centum thereof shall be paid to the State of Alaska for 
disposition by the legislature thereof: Provided, That all 
moneys which may accrue to the United States under the 
provisions of this Act and the Geothermal Steam Act of 1970 
from lands within the naval petroleum reserves shall be 
deposited in the Treasury as ``miscellaneous receipts'', as 
provided by the Act of June 4, 1920 (41 Stat. 813), as amended 
June 30, 1938 (52 Stat. 1252). All moneys received under the 
provisions of this Act and the Geothermal Steam Act of 1970 not 
otherwise disposed of by this section shall be credited to 
miscellaneous receipts. Payments to States under this section 
with respect to any moneys received by the United States, shall 
be made not later than the last business day of the month in 
which such moneys are warranted by the United States Treasury 
to the Secretary as having been received, except for any 
portion of such moneys which is under challenge and placed in a 
suspense account pending resolution of a dispute. Such warrants 
shall be issued by the United States Treasury not later than 10 
days after receipt of such moneys by the Treasury. Moneys 
placed in a suspense account which are determined to be payable 
to a State shall be made not later than the last business day 
of the month in which such dispute is resolved. Any such amount 
placed in a suspense account pending resolution shall bear 
interest until the dispute is resolved.
  (2)(A) Of amounts otherwise required under paragraph (1) to 
be deposited into the general fund of the Treasury each fiscal 
year that are derived from leases for tracts located in a 
State, the Secretary shall pay to the county from which the 
mineral or geothermal royalties were generated 33 percent for 
use to supplement the education of students in kindergarten 
through grade 12 and to supplement public support of 
institutions of higher education.
  (B) Of the amounts otherwise required under paragraph (1) to 
be deposited into the general fund of the Treasury each fiscal 
year that are not required to be used for payments under 
subparagraph (A) of this paragraph, the Secretary shall pay to 
States, in equal amounts, 17 percent for use to supplement the 
education of students in kindergarten through grade 12 and to 
supplement public support of institutions of higher education.
  (C) Subparagraphs (A) and (B) shall apply only with respect 
to amounts that--
          (i) are received by the United States under leases 
        entered into under this Act or the Geothermal Steam Act 
        of 1970 after the date of enactment of the Education 
        and Energy Act of 2018; and
          (ii) exceed the amount of revenues that the 
        Congressional Budget Office previously estimated would 
        be received under such leases in the fiscal year.
  (D) Subparagraphs (A) and (B) shall not apply with respect to 
amounts required by paragraph (1) to be paid into, reserved, or 
appropriated as part of the reclamation fund.
  (E) Any amounts received by a county under subparagraph (A) 
shall not be considered when calculating payments to that 
county under the Secure Rural Schools and Community Self-
Determination Act of 2000 (16 U.S.C. 7101 et seq.) or chapter 
69 of title 31, United States Code.
  (b) Deduction for Administrative Costs.--In determining the 
amount of payments to the States under this section, beginning 
in fiscal year 2014 and for each year thereafter, the amount of 
such payments shall be reduced by 2 percent for any 
administrative or other costs incurred by the United States in 
carrying out the program authorized by this Act, and the amount 
of such reduction shall be deposited to miscellaneous receipts 
of the Treasury.
  (c)(1) Notwithstanding the first sentence of subsection (a), 
any rentals received from leases in any State (other than the 
State of Alaska) on or after the date of enactment of this 
subsection shall be deposited in the Treasury, to be allocated 
in accordance with paragraph (2).
  (2) Of the amounts deposited in the Treasury under paragraph 
(1)--
          (A) 50 percent shall be paid by the Secretary of the 
        Treasury to the State within the boundaries of which 
        the leased land is located or the deposits were 
        derived; and
          (B) 50 percent shall be deposited in a special fund 
        in the Treasury, to be known as the ``BLM Permit 
        Processing Improvement Fund'' (referred to in this 
        subsection as the ``Fund'').
          (3) Use of fund.--
                  (A) In general.--The Fund shall be available 
                to the Secretary of the Interior for 
                expenditure, without further appropriation and 
                without fiscal year limitation, for the 
                coordination and processing of oil and gas use 
                authorizations on onshore Federal and Indian 
                trust mineral estate land.
                  (B) Accounts.--The Secretary shall divide the 
                Fund into--
                          (i) a Rental Account (referred to in 
                        this subsection as the ``Rental 
                        Account'') comprised of rental receipts 
                        collected under this section; and
                          (ii) a Fee Account (referred to in 
                        this subsection as the ``Fee Account'') 
                        comprised of fees collected under 
                        subsection (d).
          (4) Rental account.--
                  (A) In general.--The Secretary shall use the 
                Rental Account for--
                          (i) the coordination and processing 
                        of oil and gas use authorizations on 
                        onshore Federal and Indian trust 
                        mineral estate land under the 
                        jurisdiction of the Project offices 
                        identified under section 365(d) of the 
                        Energy Policy Act of 2005 (42 U.S.C. 
                        15924(d)); and
                          (ii) training programs for 
                        development of expertise related to 
                        coordinating and processing oil and gas 
                        use authorizations.
                  (B) Allocation.--In determining the 
                allocation of the Rental Account among Project 
                offices for a fiscal year, the Secretary shall 
                consider--
                          (i) the number of applications for 
                        permit to drill received in a Project 
                        office during the previous fiscal year;
                          (ii) the backlog of applications 
                        described in clause (i) in a Project 
                        office;
                          (iii) publicly available industry 
                        forecasts for development of oil and 
                        gas resources under the jurisdiction of 
                        a Project office; and
                          (iv) any opportunities for 
                        partnership with local industry 
                        organizations and educational 
                        institutions in developing training 
                        programs to facilitate the coordination 
                        and processing of oil and gas use 
                        authorizations.
          (5) Fee account.--
                  (A) In general.--The Secretary shall use the 
                Fee Account for the coordination and processing 
                of oil and gas use authorizations on onshore 
                Federal and Indian trust mineral estate land.
                  (B) Allocation.--The Secretary shall transfer 
                not less than 75 percent of the revenues 
                collected by an office for the processing of 
                applications for permits to the State office of 
                the State in which the fees were collected.
  (d), BLM Oil and Gas Permit Processing Fee.--
          (1) In general.--Notwithstanding any other provision 
        of law, for each of fiscal years 2016 through 2026, the 
        Secretary, acting through the Director of the Bureau of 
        Land Management, shall collect a fee for each new 
        application for a permit to drill that is submitted to 
        the Secretary.
          (2) Amount.--The amount of the fee shall be $9,500 
        for each new application, as indexed for United States 
        dollar inflation from October 1, 2015 (as measured by 
        the Consumer Price Index).
          (3) Use.--Of the fees collected under this subsection 
        for a fiscal year, the Secretary shall transfer--
                  (A) for each of fiscal years 2016 through 
                2019--
                          (i) 15 percent to the field offices 
                        that collected the fees and used to 
                        process protests, leases, and permits 
                        under this Act, subject to 
                        appropriation; and
                          (ii) 85 percent to the BLM Permit 
                        Processing Improvement Fund established 
                        under subsection (c)(2)(B) (referred to 
                        in this subsection as the ``Fund''); 
                        and
                  (B) for each of fiscal years 2020 through 
                2026, all of the fees to the Fund.
          (4) Additional costs.--During each of fiscal years of 
        2016 through 2026, the Secretary shall not implement a 
        rulemaking that would enable an increase in fees to 
        recover additional costs related to processing 
        applications for permits to drill.

           *       *       *       *       *       *       *


                            DISSENTING VIEWS

    H.R. 5859 would take a small fraction of the mineral 
revenues that are in excess from the Congressional Budget 
Office (CBO) projections for a given year, and are generated 
from leases issued after the date of enactment of the bill, and 
divert those to states and counties for K-12 and higher 
education. While we support additional funding for education, 
and welcome Republican efforts to do so in the face of sharp 
cuts to the Department of Education proposed by the Trump 
administration, we oppose this legislation because we do not 
believe that incentivizing additional drilling on public lands 
is the appropriate way to do it.
    The use of revenues above the CBO baseline to fund certain 
priorities, as this bill does, is very different from 
dedicating a portion of mineral revenues to fund those 
priorities, such as with the Land and Water Conservation Fund 
(LWCF), a program we very much support. The LWCF is credited 
with the first $900 million in offshore revenues received by 
the federal government. Once $900 million has been collected, 
which has been the case every year for decades, there is no 
benefit to the LWCF from additional drilling. When only 
revenues over the baseline are diverted, however, the amount of 
funding depends on oil and gas prices and the amount of oil and 
gas activity. Since oil and gas prices can't be directly 
controlled, additional education funding would require 
additional leasing and drilling.
    One particular problem in linking education funding with 
increased oil and gas activity is that children are 
particularly susceptible to pollution generated from drilling 
and production, especially high concentrations of ground-level 
ozone. With the administration moving away from regulating oil 
and gas industry methane emissions, air quality will get worse 
around production sites; since 1990, methane emissions from 
natural gas production sites are up 58 percent, while 
production of natural gas has only increased 52 percent in that 
same time.
    Democrats want to protect children at school and at home by 
enacting mandatory setbacks for drilling on public land, and 
enforcing strong methane regulations to reduce waste and 
improve air quality. Encouraging more drilling only puts our 
children at greater risk, and that is not worth the extremely 
small amount of education funding this bill would provide.

                                   Raul M. Grijalva,
                                           Ranking Member, Committee on 
                                               Natural Resources.
                                   Jared Huffman.
                                   Nydia M. Velazquez.

                                  [all]