Mr. Speaker, today I am again introducing legislation designed to help promote the cleanup of abandoned and inactive hardrock mines that are a menace to the environment and public health throughout the country, but especially in the west.…
Mr. Speaker, today I am again introducing legislation designed to help promote the cleanup of abandoned and inactive hardrock mines that are a menace to the environment and public health throughout the country, but especially in the west. I introduced a bill aimed at that result in the 107th Congress, and in the 108th introduced a revised version that incorporated a number of changes developed in consultation with interested parties, including representatives of the Western Governors' Association, the hardrock mining industry, and environmental groups.
Today, I am introducing two separate but complementary bills that together include the provisions of the bill I introduced in the 108th Congress. This two-bill approach reflects the fact that while the Resources Committee has jurisdiction over the proposed funding legislation, the provisions dealing with liability fall within the responsibility of the Transportation and Infrastructure Committee. In other words, while the one-bill approach had the virtue of being comprehensive, the two-bill approach may facilitate Congressional action. But it remains the fact that both bills are equally necessary for a complete response to the problem.
The background: For over one hundred years, miners and prospectors have searched for and developed valuable ``hardrock'' minerals--gold, silver, copper, molybdenum, and others. Hardrock mining has played a key role in the history of Colorado and other states, and the resulting mineral wealth has been an important aspect of our economy and the development of essential products. However, as all westerners know, this history has too often been marked by a series of ``boom'' times followed by a ``bust'' when mines were no longer profitable. When these busts came, too often the miners would abandon their workings and move on, seeking riches over the next mountain. The resulting legacy of unsafe open mine shafts and acid mine drainages can be seen throughout the country and especially on the western public lands where mineral development was encouraged to help settle our region.
The problems: The problems caused by abandoned and inactive mines are very real and very large--including acidic water draining from old tunnels, heavy metals leaching into streams killing fish and tainting water supplies, open vertical mine shafts, dangerous highwalls, large open pits, waste rock piles that are unsightly and dangerous, and hazardous dilapidated structures.
And, unfortunately, many of our current environmental laws, designed to mitigate the impact from operating hardrock mines, are of limited effectiveness when applied to abandoned and inactive mines. As a result, many of these old mines go on polluting streams and rivers and potentially risking the health of people who live nearby or downstream.
Obstacles to cleanups: Right now there are two serious obstacles to progress. One is a serious lack of funds for cleaning up sites for which no private person or entity can be held liable. The other obstacle is legal. While the Clean Water Act is one of the most effective and important of our environmental laws, as applied it can mean that someone undertaking to clean up an abandoned or inactive mine will be exposed to the same liability that would apply to a party responsible for creating the site's problems in the first place. As a result, would-be ``good Samaritans'' understandably have been unwilling to volunteer their services to clean up abandoned and inactive mines.
Unless these fiscal and legal obstacles are overcome, often the only route to clean up abandoned mines will be to place them on the nation's Superfund list. Colorado has experience with that approach, so Coloradans know that while it can be effective it also has shortcomings. For one thing, just being placed on the Superfund list does not guarantee prompt cleanup. The site will have to get in line behind other listed sites and await the availability of financial resources. In addition, as many communities within or near Superfund sites know, listing an area on the Superfund list can create concerns about stigmatizing an area and potentially harming nearby property values.
We need to develop an alternative approach that will mean we are not left only with the options of doing nothing or creating additional Superfund sites--because while in some cases the Superfund approach may make the most sense, in many others there could be a more direct and effective way to remedy the problem.
Western Governors want action: The Governors of our western States have recognized the need for action to address this serious problem. The Western Governors' Association has several times adopted resolutions on the subject, such as the one of June, 2004 entitled ``Cleaning Up Abandoned Mines'' sponsored by Governor Bill Owens of Colorado along with Governor Bill Richardson of New Mexico and Governor Kenny Guinn of Nevada.
Outline of the two bills: My two bills are based directly on those recommendations by the Western Governors. One addresses the lack of resources, while the other deals with the liability risks to those doing cleanups.
Bill to provide funds for cleanups: To help fund cleanup projects, one bill--entitled the ``Abandoned Hardrock Mines Reclamation Funding Act''--would create a reclamation fund paid for by a modest fee applied to existing hardrock mining operations. The fund would be used by the Secretary of the Interior to assist projects to reclaim and restore lands and waters adversely affected by abandoned or inactive hardrock mines.
A similar method already exists to fund cleanup of abandoned coal mines. The Surface Mining Control and Reclamation Act of 1977 (SMCRA) provides for fees on coal production. Those fees are deposited into the Abandoned Mine Reclamation Fund and used to fund reclamation of sites that had been mined for coal and then abandoned before enactment of SMCRA. Similarly, my bill provides for fees on mineral production from producing hardrock mines.
In developing this bill, I have followed the lead of a 1999 resolution of the Western Governors Association. That resolution notes that ``While society has benefited broadly from the metal mining industry, problems created by some abandoned mine lands [are] a significant national concern. . . [and] industry can play an important role in the resolution of these problems through funding mechanisms'' as well as in other ways.
In accord with that suggestion, the bill provides for fees on producing hardrock mines on federal lands or lands that were federal before issuance of a mining-law patent. Fees would be paid to the Secretary of the Interior and would be deposited in a new Abandoned Minerals Mine Reclamation Fund in the U.S. Treasury. Money in that fund would earn interest and would be available for reclamation of abandoned hardrock mines and associated sites.
In developing the bill, I decided that a one-fee-fits-all approach would not be fair. Instead, the bill provides for only modest fees and a sliding scale based on the ability of mines to pay.
Mines Exempt From Fees--To begin with, the bill would entirely exempt mines with gross proceeds of less than $500,000 per year. That means many--probably most--small operations, such as Alaskan prospectors working individual placer claims, will not be liable for any fees.
Calculation of Fees--For more lucrative mines, fees would be based on the ratio of net proceeds to gross proceeds. If a mine's net proceeds were under 10% of gross proceeds, the fee would be 2 percent of the net proceeds. For mines with net proceeds of at least 10 percent but less than 18 percent of gross proceeds, the fee would be 2.5 percent of net proceeds. Mines where the net proceeds were at least 18 percent but less than 26 percent of gross proceeds would pay a fee of 3 percent of net proceeds. If the net proceeds were at least 26 percent but less than 34 percent of gross proceeds, the fee would be 3.5 percent of net proceeds. Where the net proceeds were at least 34 percent but less than 42 percent of gross proceeds the fee would be 4 percent of net proceeds. Mines with net proceeds equal to at least 42 percent but less than 50 percent of gross proceeds would pay a fee of 4.5 percent of net proceeds. And mines whose net proceeds were 50 percent or more of the gross proceeds would pay a fee of 5 percent of the net proceeds.
For the purpose of calculating these fees, the bill defines gross proceeds as the value of any extracted hardrock minerals that are sold, exchanged for good or services, exported ready for use or sale, or initially used in manufacture or service. Net proceeds are defined as how much of the gross proceeds remain after deducting the costs of mine development; mineral extraction; transporting minerals for smelting or similar processing; mineral processing; marketing and delivery to customers; maintenance and repairs of machinery and facilities; depreciation; insurance on mine facilities and equipment; insurance for employees; and royalties and taxes.
Based on Nevada Model--This way of calculating fees resembles one used by Nevada, which collects similar production-based fees from mines in that state. However, the fees in my bill are more moderate than those set by the Nevada law in one important respect--Nevada imposes its maximum fee rate on all mines with net proceeds of $5 million or more, regardless of the ratio between those net proceeds and the gross proceeds. My bill does not do that--instead, all of its fees are based on the ratio. In other words, under my bill a mine with earnings (i.e., net proceeds) of more than $5 million per year still might pay the minimum fee if those earnings were less than 10 percent of the gross proceeds.
Offset Provision--Under current law, the United States does not receive royalties from production of hardrock minerals from federal lands. Over the years, there have been frequent proposals to establish royalties for hardrock production, in order to provide a greater return to the American people. I think there are strong arguments in favor of such an approach. Accordingly, this bill would require the Secretary of the Interior to reduce payments under this title so as to offset any royalties hardrock producers may pay in the future pursuant to changes in current law. This is intended to avoid the chance that implementation of a royalty would result in inequitable treatment of a producer covered by both the royalty and Title I of this bill.
Estimated Proceeds From Fees and Use of Fund--There are not sufficient data available to say exactly how much money the fees would bring into the new reclamation fund each year. However, the United States Geological Survey does have information about the number of operating copper and gold mines and the State of Nevada has data about the money raised by their similar fee system. By extrapolating from those data, it is possible to estimate that the fees provided for in my bill would generate about $40 million annually for the Abandoned Minerals Mine Reclamation Fund.
Funds in the new reclamation fund would be available for appropriation for grants to States to complete inventories of abandoned hardrock mine sites, as mentioned above. A state with sites covered by the bill could receive a grant of up to $2 million annually for this purpose. In addition, money from the fund would be available for cleanup work at eligible sites.
To be eligible, a site would have to be within a state subject to operation of the general mining laws that has completed its statewide inventory. Within those states, eligible sites would be those--(1) where former hardrock-mining activities had permanently ceased as of the date of the bill's enactment; (2) that are not on the National Priorities List under the Superfund law; (3) for which there are no identifiable owners or operators; and (4) that lack sufficient minerals to make further mining, remining, or reprocessing of minerals economically feasible. Sites designated for remedial action under the Uranium Mill Tailings Radiation Control Act of 1978 or subject to planned or ongoing response or natural resource damage action under the Superfund law would not be eligible for cleanup funding from the new reclamation fund.
The Interior Department could use money from the fund to do cleanup work itself or could authorize use of the money for cleanup work by a holder of one of the new ``good Samaritan'' permits provided for in the other bill I am introducing today. Among eligible sites, priorities for funding would be based on the presence and severity of threats to public health, safety, general welfare, or property from the effects of past mining and the improvement that cleanup work could make in
restoration of degraded water and other resources. The first priority would be for sites where effects of past mining pose an extreme danger. After that, priorities would be sites where past mining has resulted in adverse effects (but not extreme danger) and then those where past mining has not led to equally serious consequences but where cleanup work would have a beneficial effect.
Further, the bill recognizes that in Colorado and other states there are often concentrations of abandoned mining sites that vary in the severity of their threat to the public health and the environment but that can and should be dealt with in a comprehensive manner. Therefore, it provides that sites of varying priority should be dealt with at the same time when feasible and appropriate.
Bill to provide protection for ``Good Samaritans'': To help encourage the efforts of ``good Samaritans,'' the second bill--entitled the ``Abandoned Hardrock Mines Reclamation Facilitation Act''--would create a new program under the Clean Water Act under which qualifying individuals and entities could obtain permits to conduct cleanups of abandoned or inactive hardrock mines.
These permits would give some liability protection to those volunteering to clean up these sites, while also requiring the permit holders to meet certain requirements.
The bill specifies who can secure these permits, what would be required by way of a cleanup plan, and the extent of liability exposure. Notably, unlike regular Clean Water Act point-source (``NPDES'') permits, these new permits would not require meeting specific standards for specific pollutants and would not impose liabilities for monitoring or long-term maintenance and operations. These permits would terminate upon completion of cleanup, if a regular Clean Water Act permit is issued for the same site, or if a permit holder encounters unforeseen conditions beyond the holder's control. I think this would encourage efforts to fix problems like those at the Pennsylvania Mine.
Together, these two bills can help address problems that have frustrated federal and state agencies throughout the country. As population growth continues near these old mines, more and more risks to public health and safety are likely to occur. We simply must begin to address this issue--not only to improve the environment, but also to ensure that our water supplies are safe and usable.