[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5887 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 5887

To provide to the Secretary of Interior a mechanism to cancel contracts 
    for the sale of materials CA-20139 and CA-22901, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 24, 2008

  Mr. McKeon introduced the following bill; which was referred to the 
  Committee on Natural Resources, and in addition to the Committee on 
   Ways and Means, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To provide to the Secretary of Interior a mechanism to cancel contracts 
    for the sale of materials CA-20139 and CA-22901, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Soledad Canyon Mine Act''.

SEC. 2. FINDING AND PURPOSES.

    (a) Findings.--The Congress finds the following:
            (1) Transit Mix Concrete Corporation holds two valid 
        Federal contracts, numbered CA-20139 and CA-22901, issued under 
        the Materials Act of 1947, for the extraction of approximately 
        56,000,000 tons of sand and gravel from the Federal mineral 
        estate in lands located in Soledad Canyon adjacent to the city 
        of Santa Clarita, California.
            (2) It is in the best interest of the citizens of 
        California and the Federal Government to cancel the Contracts 
        and prohibit future mining in the Soledad Canyon area of 
        California.
            (3) TMC should receive as just compensation for such 
        cancellation the fair market value of the Contracts and all 
        costs, fees, and covered liabilities incurred by TMC in good 
        faith in its efforts to develop the Contracts.
            (4) A site-specific solution that is fair to TMC and that 
        seeks to protect the environment and minimize impacts on local 
        transportation systems is in the best interest of the Nation.
            (5) Considerable sums of money have been expended by TMC 
        and the city of Santa Clarita on legal and other services in 
        trying to ensure their interests are protected with respect to 
        Contracts CA-20139 and CA-22901.
    (b) Purposes.--The purposes of this Act are the following:
            (1) To provide to the Bureau of Land Management the 
        authority to cancel contracts CA-20139 and CA-22901 and 
        prohibit future mining in the Soledad Canyon.
            (2) To provide a means for TMC to recover as just 
        compensation for the cancellation of the Contracts the fair 
        market value of, and TMC's expenditures and covered liabilities 
        pursuing the development of, the Contracts.
            (3) To provide the Bureau of Land Management tools to 
        verify expenses incurred by TMC and provide relief.
            (4) To provide timelines for the verification of costs 
        incurred by TMC and the determination of just compensation, and 
        to provide a dispute resolution process.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Contracts.--The term ``Contracts'' means Bureau of Land 
        Management mineral contracts numbered CA-20139 and CA-22901.
            (2) Covered liabilities.--The term ``covered liabilities'' 
        includes any court-ordered or court-approved payment, 
        settlement, or other liability on the part of TMC for damages, 
        costs, compensation, or reimbursement to any third party for 
        agreements entered into by TMC in good faith prior to January 
        1, 2008, in order to exercise rights under the Contracts.
            (3) Materials act of 1947.--The term ``Materials Act of 
        1947'' means the Act of July 31, 1947, (chapter 406; 61 Stat. 
        681; 30 U.S.C. 601-604).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.
            (5) TMC.--The term ``TMC'' means the Transit Mixed Concrete 
        Corporation and its successors in interest, including CEMEX 
        USA.

SEC. 4. CANCELLATION OF THE CONTRACTS.

    (a) Contract Cancellations.--The Secretary shall cancel Bureau of 
Land Management mineral contracts CA-20139 and CA-22901 and withdraw 
those areas that were subject to the Contracts from further mineral 
entry under all mineral leasing and sales authorities available to the 
Secretary, effective on the date of the enactment of this Act.
    (b) Compensation.--
            (1) In general.--As compensation for the cancellation of 
        the Contracts, TMC shall receive fair market value of the 
        Contracts and TMC's expenditures and covered liabilities in 
        trying to bring the Contracts into commercial production. As 
        such compensation, the Secretary shall provide to TMC surface 
        and mineral interests and additional value in accordance with 
        subsection (d) having a total value equal to the amount 
        described in paragraph (3). All such expenditures must have 
        been incurred by TMC in good faith in connection with its 
        efforts to bring the Contracts into commercial production: 
        Provided, however, that compensation for covered liabilities 
        may be paid to TMC under this section for up to 15 years 
        following the effective date of this Act.
            (2) Increase in adjusted basis of contract upon 
        cancellation.--For purposes of the Internal Revenue Code of 
        1986, the adjusted basis of any contract to which section 4(a) 
        applies shall be increased (immediately before the cancellation 
        of such contract under such section) by the excess (if any) 
        of--
                    (A) the fair market value of such contract 
                (determined immediately before such cancellation), over
                    (B) the adjusted basis of such contract (as 
                determined immediately before the application of this 
                section).
            (3) Value described.--The compensation provided for in 
        paragraph (1) is equal to the sum of the following:
                    (A) All amounts paid to the United States by TMC 
                with respect to the Contracts as bonus bids or other 
                prepayments.
                    (B) Interest on amounts referred to in subparagraph 
                (A), from the date of payment of such amounts to the 
                United States, at a rate determined by the Secretary.
                    (C) Amounts expended by TMC in securing the 
                contracts and trying to bring them into production, 
                including--
                            (i) all actual costs, including fees, 
                        associated with the engineering and 
                        environmental studies, and permitting 
                        proceedings, that were incurred in good faith 
                        in TMC's efforts to exercise the rights granted 
                        under the Contract terms; and
                            (ii) all actual legal costs, including fees 
                        and covered liabilities, incurred in good faith 
                        in TMC's efforts to exercise the rights granted 
                        in the Contracts, including all fees and costs 
                        associated with securing permits and 
                        entitlements, litigation to compel, secure, or 
                        defend permits or entitlements, and litigation 
                        in connection with disputes relating to mineral 
                        and surface estate rights to the property that 
                        is the subject of the Contracts.
                    (D) The fair market value of the Contracts.
            (4) Determination of fair market value.--The Secretary 
        shall, within six months after the date of enactment of this 
        Act, determine by mineral appraisal the fair market value of 
        the contracts at the time of such determination for purposes of 
        paragraph (3)(D), determine by mineral appraisal or other 
        generally accepted applicable appraisal techniques the fair 
        market value of the surface and mineral estate identified in 
        the map referred to in subsection (d), and notify TMC of those 
        determinations. In determining the fair market value of the 
        Contracts, the Secretary shall assume that--
                    (A) TMC has obtained all permits and entitlements 
                necessary to mine, produce, process, and sell sand and 
                gravel from the Contracts;
                    (B) mining operations under the Contracts have 
                commenced at the time of the determination, with 
                maximum annual production volumes that--
                            (i) are based on the projected supply and 
                        demand outlook at the time of determination; 
                        and
                            (ii) reflect depletion of the reserves of 
                        the Contracts within the effective periods of 
                        the Contract;
                    (C) the fair market value of the Contracts includes 
                the present value of expected future net cash flows to 
                be derived from the mining, producing, processing, and 
                sale of the sand and gravel contained in the Contracts 
                over the minimum time necessary to mine, produce, 
                process, and sell such sand and gravel, taking into 
                consideration--
                            (i) the material deposit contained in the 
                        contract sites and its quality, volume, 
                        minability, and reclamation requirements;
                            (ii) the proximity of the contract sites to 
                        markets;
                            (iii) the type of market that could be 
                        served from the contract sites, including 
                        future supply, demand, and probable price 
                        increases based upon construction material data 
                        developed by the State of California;
                            (iv) the cost of mining, producing, 
                        processing, and selling the material reserved 
                        in the contract sites;
                            (v) the types and costs of transportation 
                        for such production from the contract sites to 
                        markets;
                            (vi) royalties, taxes, and fees to mine and 
                        sell the production from the contract sites;
                            (vii) similar market sales of materials the 
                        area or region of the contract sites; and
                            (viii) the net present values of expected 
                        future cash flows from proposed mining 
                        operations of the Contract sites taking into 
                        consideration, at a minimum, the matters 
                        referred to in clauses (i) through (viii).
    (c) Submission of Expenses Incurred.--
            (1) In general.--To assist in the verification of the 
        amounts expended referred to in subsection (b)(3)(C), TMC shall 
        submit to the Secretary within 60 days after the date of 
        enactment of this Act an itemized list of such amounts, with 
        enough detail and supporting documentation so the Secretary can 
        determine that the expenses are associated with the Contracts.
            (2) Arbitration.--The Secretary shall issue the 
        determination of the amounts expended referred to in subsection 
        (b)(3)(C) within 60 days after receipt of the itemized list 
        required under paragraph (1). If the Secretary disapproves such 
        list, the Secretary shall, upon request of TMC, determine the 
        economic value invested for purposes of subsection (b)(3) 
        through arbitration in accordance with subchapter IV of chapter 
        5 of title 5, United States Code.
    (d) Return of Value Opportunities for TMC.--
            (1) In general.--Within six months after the completion of 
        the requirements of subsections (b) and (c), the Secretary 
        shall provide to TMC the following:
                    (A) Surface and mineral estate interests and 
                additional value under subsection (b)(1) using the 
                surface and mineral estate as described and delineated 
                as Area A on the map entitled ``Cemex USA and City of 
                Victorville, California Land Disposal and Acquisition 
                Agreement'' and on file with the Secretary, consisting 
                of approximately 5,000 acres.
                    (B) If the fair market value of the surface and 
                mineral estate used under subparagraph (A) is less than 
                the sum described in subsection (b)(3), additional 
                mineral or surface estate under subsection (b)(1) using 
                the surface and mineral estate as described and 
                delineated as Area B on the map entitled ``Cemex USA 
                and City of Victorville, California Land Disposal and 
                Acquisition Agreement'' and on file with the Secretary, 
                consisting of approximately 3,000 acres as is necessary 
                so that the sum of the values provided under 
                subparagraph (A) and this subparagraph does not exceed 
                the sum described in subsection (b)(3).
                    (C) If the sum of the fair market values of the 
                surface and mineral estates and additional value 
                provided under subparagraphs (A) and (B) is less that 
                the sum described in subsection (b)(3), additional 
                value as is necessary so that the sum of the values 
                provided under subparagraphs (A) and (B) and this 
                subparagraph does not exceed the sum described in 
                subsection (b)(3), in the form of one or more of the 
                following that are mutually agreed to by the Secretary 
                and TMC:
                            (i) Credits that may be applied against 
                        future royalties, bonus bids, or rental fees 
                        for Federal lands administered by the Secretary 
                        and located within the State of California, 
                        including leases for all submerged lands of the 
                        outer Continental Shelf.
                            (ii) Interest in the mineral estate in 
                        Federal lands in the State of California that 
                        are available for sale under the Mineral 
                        Leasing Act (30 U.S.C. 181 et seq.) or other 
                        law administered by the Secretary.
                            (iii) Interests in the surface estate in 
                        Federal lands in the State of California that 
                        are under the administrative jurisdiction of 
                        the Secretary and that are available for 
                        disposal.
    (e) Treatment of Credits.--
            (1) Term.--Credits provided under subsection (d) shall 
        expire at the end of the 10-year period beginning on the date 
        the credits are issued by the Secretary.
            (2) Assignment.--TMC may assign credits provided to TMC 
        under subsection (d) to any person who satisfies the same 
        requirements to hold the Contracts as those that applied to TMC 
        under the Materials Act of 1947.
    (f) Referral to Court of Claims.--
            (1) Referral.--If within 12 months after the date of 
        enactment of this Act, the Secretary and TMC do not reach 
        agreement under subsections (b), (c), and (d) regarding the 
        financial and mineral production opportunities to be provided 
        by the Secretary to TMC under subsection (b)(1), or, if within 
        3 months after TMC receives notice in accordance with 
        subsection (b)(4) of the fair market value determined by the 
        Secretary of the surface and mineral estate identified in the 
        maps referred to in subsection (d) TMC or the city of 
        Victorville, California, notifies the Secretary that it 
        disagrees with the Secretary's determination, the Secretary 
        shall refer the issues upon which TMC, or the city of 
        Victorville, California, and the Secretary are not in agreement 
        with respect to such an agreement or fair market value to the 
        United States Court of Federal Claims for resolution
            (2) Resolution by court.--In any referral under this 
        subsection, the court shall--
                    (A) determine de novo the values described in 
                subsection (b) and (d), including the fair market 
                values of the surface and mineral estates as described 
                and delineated on the maps referred to in subsection 
                (d)(1); and
                    (B) determine and order the Secretary to provide 
                financial and mineral production opportunities 
                consistent with subparagraph (A), for purposes of 
                subsections (b)(1) and (d).

SEC. 5. LIMITATIONS ON FUTURE LEASING FOR LAND OR MINERAL ESTATE IN THE 
              VICTOR VALLEY AREA OF CALIFORNIA.

    Notwithstanding anything in this Act to the contrary, prior to any 
lease, transfer, or other disposition of land or any mineral or surface 
estate for any area that is located in the city of Victorville, 
California, the city of Victorville's sphere of influence, or the city 
of Victorville's proposed sphere of influence, all as delineated on the 
map entitled ``Cemex USA and City of Victorville, California Land 
Disposal and Acquisition Agreement'' and on file with the Secretary, 
the Secretary shall--
            (1) consult with the city of Victorville, California, and 
        surface owners in that area; and
            (2) prohibit mining in that area.
                                 <all>