Department of the Interior, Environment, and Related Agencies Appropriations Act, 2007

DEPARTMENT OF THE INTERIOR, ENVIRONMENT, AND RELATED AGENCIES APPROPRIATIONS ACT, 2007 -- (House of Representatives - May 18, 2006)

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Mr. SIMPSON. I thank the gentlemen for yielding.

Mr. Chairman, I do not disagree with what the gentleman from Colorado is saying. There has been devestation in our forests. We do need the funding for firefighting and so forth. But I will tell you that taking it out of the NEA is the wrong place in the bill.

Mr. Chairman, they have done a tremendous job under the chairmanship of Gioia. They have brought the NEA back to what we originally intended it to be, and that is a means of getting the arts out to the rest of America, to rural America, particularly.

And if you will look at some of the programs that they have, their masters program and the Shakespeare program and others, they have done a great job of getting the rest of rural America exposed to those types of things. That is what the NEA is all about.

And yes, there is private organizations that fund a lot of these. But oftentimes it is in conjunction with private and public financing. Sometimes they just finance a very small portion of it. So I think that while I agree with the gentlemen's intent in terms of fire protection, taking the money out of the NEA, which is substantially below what it was in its high peak as was mentioned, I think is the wrong direction to go and would set this program back, when it is moving in the direction that we all hope it will go.

Mr. Chairman, I appreciate the gentleman's amendment, but I will be voting against it.

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Mr. SIMPSON. Mr. Chairman, I stand to oppose this amendment offered by the gentleman from New York. In committee, the gentleman from New York offered an amendment that conditioned eligibility for future leases on renegotiation of price thresholds in old leases. Today's amendment seeks to obtain the same coercive result by indirection.

I share the gentleman's concern about the lack of price thresholds in leases negotiated by the Clinton/Gore administration in 1998 and 1999. The Department of the Interior's Inspector General has appropriately launched an investigation into this, as has the Resources Committee. However, these leases were valid legal contracts signed between the government and these companies in good faith. They paid hundreds of millions of dollars in bonus bids for these leases, bidding on the basis of the royalty relief that they were being offered.

If the lessees seek to maintain their valid legal rights under these contracts, the amendment would penalize them for doing so, in violation of their due process rights under the Constitution. At best, the amendment is an invitation to litigation, which the government will likely lose at a high cost to the taxpayer. A more dire impact will be the lack of development of energy resources that America badly needs.

The amendment would disqualify many companies from bidding on new leases. Remember, these leases were valid leases signed by the government, legally binding. They are contracts. So what we are going to do is penalize these companies because they are abiding by their legal contracts.

Sure, we want them to negotiate. We want them to renegotiate. We would like them to pay the royalties. But the Clinton/Gore administration at that time put these contracts in place. They were signed by the companies. They were signed by the government. And now we are going to go in and say if you don't renegotiate, then you are not going to be eligible for any of these contracts. If you don't pay royalties on these contracts, wherein you are doing exactly what you are required to do by law, if you don't pay royalties voluntarily, then you are not going to be eligible for any of the new leases that are out there.

To me, that is discrimination against those companies. Sure, we would like them to pay the royalties. We think they should. We think they should renegotiate, but I don't think you can go in and break the contract that the government signed with these companies by pressuring them with the threat of not being eligible for future leases.

Mr. Chairman, this is a bad amendment and we should reject it.

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Mr. SIMPSON. Thank you, Mr. Chairman. I appreciate what the gentleman from California was saying, but he was wrong. Just dead wrong.

These leases were signed by the government. They were legal leases. They were valid leases. All we are saying is that the government ought to keep its word. When they sign a contract, they ought to honor the contract. The gentleman is absolutely wrong. Congress and the government should keep their word when they sign a contract. That is all we are saying.

Do we want them to pay royalty on this? Certainly we should, and I do not know why in the world the Clinton/Gore administration, the Clinton/Gore administration, let these leases go without any royalty. I do not know why they did that, but the reality is that they were signed contracts. And all we are suggesting is that you should not penalize those companies that actually signed these contracts in good faith. You should not penalize them for future leases. Why should we penalize them? There is absolutely no reason why we should penalize them. We should honor our word and our contracts, and then we should go forward.

We hope, we hope that they will renegotiate for leases, but this is not giving a break to those companies. That is not what we are intending. We hope they renegotiate. That is the reality.

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Mr. SIMPSON. I am sorry the gentleman from California left the floor. We do renegotiate all the time, but it is up to me to decide whether I want to renegotiate or not.

What we are doing is imposing a penalty on these companies if they choose not to renegotiate. And I really don't care what CRS says. I don't think they are a bunch of attorneys down there. All I know is that in Idaho, we believe that when you write a contract you abide by the contract. We have written a contract. We ought to abide by it.

We are the Government of the United States. If you can't trust us to abide by the contracts we sign, why should we trust anybody else to?

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