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Wednesday, April 20, 2011

Leasing and Selling Federal Lands and Resources: Receipts and Their Disposition

Ross W. Gorte, Coordinator
Specialist in Natural Resources Policy

Carol Hardy Vincent
Specialist in Natural Resources Policy

Marc Humphries
Analyst in Energy Policy

Many laws have been enacted over the past century authorizing the sale or lease of lands or resources by the federal land management agencies—the Bureau of Land Management, National Park Service (NPS), and Fish and Wildlife Service (FWS) in the U.S. Department of the Interior (DOI) and the Forest Service (USFS) in the U.S. Department of Agriculture (USDA). The receipts from these leases and sales have been used for many purposes, including for local economic development, to recover some or all of the operating and capital costs, or to fund land management activities. In its legislative debates, Congress may consider how prices or fees should be set for the sale or use of federal lands and resources and whether and how the receipts from such sales or leases should be used to fund desired activities.

The various resources sold or leased generate substantial federal revenues—nearly $16 billion annually for FY2007-FY2009. Leases for oil and gas and other minerals have generated the vast majority of these receipts, averaging $10.3 billion from offshore leasing and $4.4 billion from onshore leasing, although the amounts fluctuate widely from year to year. Recreation ($253 million) and timber sales ($223 million) also generate significant receipts annually. Other resource sales and leases generate lesser amounts—hardrock mining ($60 million), BLM land sales ($35 million), geothermal leasing ($30 million), and grazing ($17 million). Various other programs (e.g., special use fees) generated nearly $500 million in FY2009.

The pricing mechanisms for the various land and resource sales and leases vary widely. For many leases and sales, the fees are determined administratively. This can be (a) to recover agency administrative costs, such as for hardrock mining and for mineral leasing permit fees; (b) to approximate a fair market value, such as for BLM land sales; or (c) to account for other factors established in law, such as for grazing and recreation. For some resource leases and sales, competitive bidding is used to establish prices for some resources, such as for timber and mineral leasing bonuses. In a few situations, prices are set in the legislative authorization for the lease or sale program. For mineral resources, multiple pricing mechanisms are used, often with a combination of administrative fees and competitive bids.

Many of the receipts can be spent without further appropriation by Congress; these accounts have mandatory spending authority. Other receipts are deposited in designated accounts or the General Treasury, and cannot be spent without an annual appropriation.

Many of the receipts are granted to state or local governments, generally as compensation for the tax-exempt status of federal lands and resources. The portion of receipts granted to state and local governments varies widely by the type of resource leased or sold and by the history of the lands, and range from 0% (for recreation) to 90% (for mineral leasing in Alaska). Other receipts are commonly deposited into designated accounts for particular agency activities, to recover the cost of administering the lease or sale program or to restore or enhance the affected lands and resources, with remaining receipts deposited in the General Treasury. For some sales or leases, the portion deposited in the General Treasury is fixed—for example, 10% of onshore lease receipts, 37.5% of grazing receipts from certain lands, and 0% for recreation. For others, however, the deposits to many of the accounts vary, often being determined on each lease or sale, and thus the remaining portion deposited in the General Treasury, if any, fluctuates.

Date of Report: April 14, 2011
Number of Pages: 23
Order Number: R41770
Price: $29.95

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