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                                                       Calendar No. 644
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-393
_______________________________________________________________________


 
                          IDAHO ADMISSION ACT

                                _______
                                

  October 9 (legislative day, October 2), 1998.--Ordered to be printed

_______________________________________________________________________


  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 4166]

    The Committee on Energy and Natural Resources, to which was 
referred the Act (H.R. 4166) to amend the Idaho Admission Act 
regarding the sale or lease of school land, having considered 
the same, reports favorably thereon without amendment and 
recommends that the Act do pass.

                         Purpose of the Measure

    H.R. 4166, as ordered reported, amends the Idaho Admission 
Act to provide for: (1) establishment of an Earnings Reserve 
Fund; (2) authorization of a land bank fund for additional land 
purchases; (3) elimination of the current ten year term for 
leases on school endowment lands; and (4) the removal of the 
current requirement that the State issue leases for school 
endowment lands at public auction.

                          Background and Need

    In writing the 1890 law that made Idaho the 43rd State, 
Congress set aside 3.5 million acres of land as a permanent 
endowment to help finance the education of Idaho children in 
the 20th century. These lands are spread throughout the State, 
and are managed for the financial benefit of Idaho. The Idaho 
Admission Act is very specific about how these lands are to be 
administered. While these restrictions worked well in 1890, 
some of them have now become outdated.
    Section 5 of the Idaho Admission Act of 1890 created the 
endowment fund, and contains rules governing the sale and lease 
of endowment lands. H.R. 4166 would employ modern financial 
tools to benefit Idaho's children. H.R. 4166 will replace 
section 5 with a new section that gives land and investment 
managers greater flexibility in managing both the endowment 
lands and endowment funds.
    H.R. 4166 would give the State the authority to establish a 
new land bank fund which can be used to purchase additional 
land. For example, this land bank would allow the State to sell 
land that is difficult to mange in order to purchase land of 
higher functionality and greater investment return. This 
legislation also establishes an Earnings Reserve Fund. The 
Earnings Reserve Fund would give investment managers greater 
flexibility to make investments that have higher returns and 
facilitate a steadier and higher stream of distributions. 
Lastly, the legislation repeals the 10-year limit on leases on 
endowment lands, and allows the State Land Board to establish 
agreements that will maximize the long-term financial return on 
any lease that is made.

                          Legislative History

    H.R. 4166 was introduced by Congressman Crapo on June 25, 
1998. The House Committee on Resources ordered H.R. 4166 
reported by voice vote on August 5, 1998. On September 15, 1998 
the bill passed House by voice vote.
    The Senate companion bill, S. 2226, sponsored by Senators 
Craig and Kempthorne, received a hearing on July 22, 1998, 
before the Subcommittee on Forests and Public Land Management. 
At an open business meeting held on September 23, 1998, the 
Committee on Energy and Natural Resources ordered H.R. 4166 to 
be favorably reported, without amendment.

            Committee Recommendation and Tabulation of Votes

    The Committee on Energy and Natural Resources, in open 
business session on September 23, 1998, by unanimous voice vote 
of a quorum present recommends that the Senate pass H.R. 4166.

                      Section-by-Section Analysis

    Section 1 replaces section 5 of the Idaho Admissions Act 
(26 Stat. 215, chapter 656) with new language.
    Subsection (a) states that, except as provided in 
subsection (c), all land granted under this Act for educational 
purposes shall be sold only at public sale. It further requires 
that proceeds of the sale of school land be deposited in the 
public school permanent endowment fund and expended only for 
the support of public schools, unless the proceeds are 
deposited in a land bank fund to be used to acquire other land 
in the State for the benefit of the public school permanent 
endowment fund. In addition, this subsection states that, if 
the proceeds are not used to acquire other land in the State 
within a period specified by State law, the proceeds shall be 
transferred to the public school permanent endowment fund. 
Finally, this subsection requires that any earnings on amounts 
in the public school permanent endowment fund be deposited in 
an earnings reserve fund to be used for the support of public 
schools.
    Subsection (b) provides that any land granted under this 
Act for educational purposes may be leased in accordance with 
State law.
    Subsection (c) states that the land granted for educational 
purposes under this Act may be exchanged for other public or 
private land and requires that the values of exchanged lands 
shall be approximately equal. This subsection authorizes values 
to be equalized by the payment of funds by the appropriate 
party if values are not approximate equal. Additionally, this 
subsection states that a land exchange with the United States 
shall be limited to Federal land within the State that is 
subject to exchange under the law governing the administration 
of the Federal land. This subsection also states that all 
exchanges made with the United States before the date of 
enactment of this paragraph are approved.
    Subsection (d) provides that the land granted for 
educational purposes, whether surveyed or unsurveyed, shall not 
be subject to preemption or entry, and shall be reserved for 
school purposes only.

                    Cost and Budgetary Consideration

    The following estimate of this measure has been provided by 
the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 28, 1998.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4166, an act to 
amend the Idaho Admission Act regarding the sale or lease of 
school land.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Marjorie 
Miller.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

               congressional budget office cost estimate

H.R. 4166--An act to amend the Idaho Admission Act regarding the sale 
        or lease of school land

    H.R. 4166 would amend the Idaho Admission Act to provide 
the state with greater flexibility in managing lands given to 
it by the federal government in 1890 and placed in an endowment 
to benefit public education. These changes would conform 
federal statute to recent amendments to the state constitution 
enacted by the Idaho State Legislature.
    CBO estimates that enacting this legislation would have no 
impact on the federal budget. Because H.R. 4166 would not 
affect direct spending or receipts, pay-as-you-go procedures 
would not apply. H.R. 4166 would not affect direct spending or 
receipts, pay-as-you-go procedures would not apply. H.R. 4166 
contains no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act and would impose no 
costs on state, local, or tribal governments.
    On August 12, 1998, CBO submitted a cost estimate for H.R. 
4166, as ordered reported by the House Committee on Resources. 
The two versions are identical, as are the cost estimates.
    The CBO staff contact for this estimate is Marjorie Miller. 
This estimate was approved by Robert A. Sunshine, Deputy 
Assistant Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the
    Committee makes the following evaluation of the regulatory 
impact which would be incurred in carrying out H.R. 4166.
    The bill is not a regulatory measure in the sense of 
imposing Government established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little if any additional paperwork would result from the 
enactment of H.R. 4166.

                        Executive Communications

    The testimony provided by the Forest Service at the 
Subcommittee hearing follows:

 Statement of Gloria Manning, Associate Deputy Chief, National Forest 
           Systems, Forest Service, Department of Agriculture

    Mister Chairman and Members of the Subcommittee: I am 
Gloria Manning, Associate Deputy Chief for National Forest 
Systems. I am pleased to be here to share the Administration's 
view on S. 2226, which would amend the Idaho Admission Act with 
regard to the sale or lease of school land.


                  s. 2226 idaho school land amendment


    S. 2226 would amend the Idaho Admission Act with regard to 
the sale or lease of school land. The Administration takes no 
position on this bill because it reflects the will of the State 
of Idaho in regards to the disposition of Idaho state lands.
    The Idaho State Legislature passed amendments to the Idaho 
State Constitution which removes the 10 year limit for the 
lease of public state lands and prohibits the use of public 
auction for awarding leases. In general, the Administration 
supports term limits for public land leases to ensure 
implementation of appropriate conservation and land management 
objectives that reflect current science. Term limits also 
provide a natural enforcement mechanism to protect the public 
interests in land use. The elimination of competitive bidding 
for public land leases undermines the public's ability to 
collect full value for the use of public land and sometimes 
prohibits viable panners from having the privilege of using 
public lands. The Administration does not oppose the 
legislation that affects land entirely under the jurisdiction 
of the State of Idaho, but does not condone the land management 
principles inherent in the legislation before the Committee.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate changes in existing law made by 
the bill H.R. 4166, as ordered reported, are shown as follows:

                          IDAHO ADMISSION BILL

                      [26 Stat. L. 215, ch. 656.]

          * * * * * * *
    [Sec. 5. Sale or lease of school lands.--(a) Except as 
provided in subsection (b) all lands herein granted for 
educational purposes shall be disposed of only at public sale, 
the proceeds to constitute a permanent school fund, the 
interest of which only shall be expended in the support of said 
schools. Such lands may, under such regulations as the 
legislature shall prescribe, be leased for periods of not more 
than ten years, and in the case of an oil, gas, or other 
hydrocarbon lease or a geothermal resource and associated 
byproducts lease, for as long thereafter as such product is 
produced in paying quantities or the lessee in good faith is 
conducting well drilling or construction operations, and such 
lands shall not be subject to preemption, homestead entry, or 
any other entry under the land laws of the United States, 
whether surveyed or unsurveyed, but shall be reserved for 
school purposes only.
    (b) Such lands may be exchanged for other lands, public or 
private. The values of such lands so exchanged shall be 
approximately equal or, if they are not approximately equal, 
they shall be equalized by the payment of money by the 
appropriate party. If any such lands are exchanged with the 
United States, such exchange shall be limited to Federal lands 
within the State that are subject to exchange under the laws 
governing the administration of such lands. All such exchanges 
heretofore made with the United States are hereby approved. [As 
amended 56 Stat. L. 48, ch. 36, approved February 6, 1942; 63 
Stat. L. 714, ch. 622, approved October 6, 1949; 88 Stat. 1821, 
Pub. L. 93-562, approved December 30, 1974.]]

SEC. 5. SALE, LEASE, OR EXCHANGE OF SCHOOL LAND

    (a) Sale.--
          (1) In general.--Except as provided in subsection (c) 
        all land granted under this Act for educational 
        purposes shall be sold only at public sale.
          (2) Use of proceeds.--
                  (A) In general.--Proceeds of the sale of 
                school land--
                          (i) except as provided in clause 
                        (ii), shall be deposited in the public 
                        school permanent endowment fund and 
                        expended only for the support of public 
                        schools; and
                          (ii)(I) may be deposited in a land 
                        bank fund to be used to acquire, in 
                        accordance with State law, other land 
                        in the State for the benefit of the 
                        beneficiaries of the public school 
                        permanent endowment fund; or
                          (II) if the proceeds are not used to 
                        acquire other land in the State within 
                        a period specified by State law, shall 
                        be transferred to the public school 
                        permanent endowment fund.
                  (B) Earnings reserve fund.--Earnings on 
                amounts in the public school permanent 
                endowment fund shall be deposited in an 
                earnings reserve fund to be used for the 
                support of public schools of the State in 
                accordance with State law.
    (b) Lease.--Land granted under this Act for educational 
purposes may be leased in accordance with State law.
    (c) Exchange.--
          (1) In general.--Land granted for educational 
        purposes under this Act may be exchange for other 
        public or private land.
          (2) Valuation.--The values of exchanged lands shall 
        be approximately equal, or, if the values are not 
        approximately equal, the values shall be equalized by 
        the payment of funds by the appropriate party.
          (3) Exchanges with the united states.--
                  (A) In general.--A land exchange with the 
                United States shall be limited to Federal land 
                within the State that is subject to exchange 
                under the law governing the administration of 
                the Federal land.
                  (B) Previous exchanges.--All land exchanges 
                made with the United States before the date of 
                enactment of this paragraph are approved.
    (d) Reservation for School Purposes.--Land granted for 
educational purposes, whether surveyed or unsurveyed, shall not 
be subject to preemption, homestead entry, or any other form of 
entry under the land laws of the United States, but shall be 
reserved for school purposes only.