110 HR 5887 IH: Soledad Canyon Mine U.S. House of Representatives 2008-04-24 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 110th CONGRESS 2d Session H. R. 5887 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.

1.

Short title

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

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.

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.

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).

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.