    [House Hearing, 110 Congress]
    [From the U.S. Government Publishing Office]

                            H.R. 2262, THE HARDROCK

                            MINING AND RECLAMATION

                             ACT OF 2007 -- PART 1

    =======================================================================

                              LEGISLATIVE HEARING

                                   before the

                           SUBCOMMITTEE ON ENERGY AND
                               MINERAL RESOURCES

                                     of the

                         COMMITTEE ON NATURAL RESOURCES
                         U.S. HOUSE OF REPRESENTATIVES

                           ONE HUNDRED TENTH CONGRESS

                                 FIRST SESSION

                                   __________

                            Thursday, July 26, 2007

                                   __________

                               Serial No. 110-37

                                   __________

           Printed for the use of the Committee on Natural Resources

      Available via the World Wide Web: http://www.gpoaccess.gov/congress/
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                         COMMITTEE ON NATURAL RESOURCES

                   NICK J. RAHALL II, West Virginia, Chairman
                  DON YOUNG, Alaska, Ranking Republican Member

    Dale E. Kildee, Michigan             Jim Saxton, New Jersey
    Eni F.H. Faleomavaega, American      Elton Gallegly, California
        Samoa                            John J. Duncan, Jr., Tennessee
    Neil Abercrombie, Hawaii             Wayne T. Gilchrest, Maryland
    Solomon P. Ortiz, Texas              Chris Cannon, Utah
    Frank Pallone, Jr., New Jersey       Thomas G. Tancredo, Colorado
    Donna M. Christensen, Virgin         Jeff Flake, Arizona
        Islands                          Stevan Pearce, New Mexico
    Grace F. Napolitano, California      Henry E. Brown, Jr., South
    Rush D. Holt, New Jersey                 Carolina
    Raul M. Grijalva, Arizona            Luis G. Fortuno, Puerto Rico
    Madeleine Z. Bordallo, Guam          Cathy McMorris Rodgers, Washington
    Jim Costa, California                Bobby Jindal, Louisiana
    Dan Boren, Oklahoma                  Louie Gohmert, Texas
    John P. Sarbanes, Maryland           Tom Cole, Oklahoma
    George Miller, California            Rob Bishop, Utah
    Edward J. Markey, Massachusetts      Bill Shuster, Pennsylvania
    Peter A. DeFazio, Oregon             Dean Heller, Nevada
    Maurice D. Hinchey, New York         Bill Sali, Idaho
    Patrick J. Kennedy, Rhode Island     Doug Lamborn, Colorado
    Ron Kind, Wisconsin                  Mary Fallin, Oklahoma
    Lois Capps, California               Kevin McCarthy, California
    Jay Inslee, Washington
    Mark Udall, Colorado
    Joe Baca, California
    Hilda L. Solis, California
    Stephanie Herseth Sandlin, South
        Dakota
    Heath Shuler, North Carolina

                         James H. Zoia, Chief of Staff
                       Jeffrey P. Petrich, Chief Counsel
                     Lloyd Jones, Republican Staff Director
                     Lisa Pittman, Republican Chief Counsel
                                     ------

                  SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

                        JIM COSTA, California, Chairman
              STEVAN PEARCE, New Mexico, Ranking Republican Member

    Eni F.H. Faleomavaega, American      Bobby Jindal, Louisiana
        Samoa                            Louie Gohmert, Texas
    Solomon P. Ortiz, Texas              Bill Shuster, Pennsylvania
    Rush D. Holt, New Jersey             Dean Heller, Nevada
    Dan Boren, Oklahoma                  Bill Sali, Idaho
    Maurice D. Hinchey, New York         Don Young, Alaska ex officio
    Patrick J. Kennedy, Rhode Island
    Hilda L. Solis, California
    Nick J. Rahall II, West Virginia,
        ex officio
                                     ------
                                    CONTENTS

                                  ----------
                                                                       Page

    Hearing held on Thursday, July 26, 2007..........................     1

    Statement of Members:
        Costa, Hon. Jim, a Representative in Congress from the State
          of California..............................................     1
        Heller, Hon. Dean, a Representative in Congress from the
          State of Nevada............................................     4
        McMorris Rodgers, Hon. Cathy, a Representative in Congress
          from the State of Washington, Statement submitted for the
          record.....................................................    97
        Pearce, Hon. Stevan, a Representative in Congress from the
          State of New Mexico........................................    37
        Rahall, Hon. Nick J., II, a Representative in Congress from
          the State of West Virginia.................................     3
        Sali, Hon. Bill, a Representative in Congress from the State
          of Idaho...................................................     5

    Statement of Witnesses:
        Bisson, Henri, Deputy Director, Bureau of Land Management,
          U.S. Department of the Interior............................    13
            Prepared statement of....................................    14
        Champion, William, President and CEO, Kennecott Utah Copper
          Corporation................................................    80
            Prepared statement of....................................    82
        Craig, Hon. Larry E., a U.S. Senator from the State of Idaho.     7
            Prepared statement of....................................    10
        Dean, Tony, Sportsman, and Producer and Host of ``Tony Dean
          Outdoors''.................................................    65
            Prepared statement of....................................    67
        Ellis, Steve, Vice President, Taxpayers for Common Sense.....    51
            Prepared statement of....................................    53
        Horwitt, Dusty, Public Lands Analyst, Environmental Working
          Group......................................................    55
            Prepared statement of....................................    57
        Leshy, Hon. John D., Former Solicitor General, U.S.
          Department of the Interior.................................    17
            Prepared statement of....................................    19
             Response to questions submitted for the record..........    22
        Marchand, Hon. Michael E., Chairman, Confederated Tribes of
          the Colville Reservation, Washington State.................    71
            Prepared statement of....................................    72
            Response to questions submitted for the record...........    75
            Proposed Modifications to H.R. 2262......................    77
            Additional Proposed Modifications to H.R. 2262...........    79
        Martin, Jennifer L., Commissioner, Arizona Game and Fish
          Commission.................................................    28
            Prepared statement of....................................    29
        Tangen, J.P., Former Regional Solicitor, Alaska, on behalf of
          the Alaska Miners Association..............................    30
            Prepared statement of....................................    33
        Wilton, Ted, Executive Vice President, Neutron Energy Company    85
            Prepared statement of....................................    86

    Additional materials supplied:
        Cibola County, New Mexico, Resolution submitted for the
          record.....................................................   104
        Uranium Producers of America, Statement submitted for the
          record.....................................................    98
        Washington Times article ``China powering world economy''
          dated July 26, 2007, submitted for the record..............   102

    LEGISLATIVE HEARING ON H.R. 2262, TO MODIFY THE REQUIREMENTS APPLICABLE
       TO LOCATABLE MINERALS ON PUBLIC DOMAIN LANDS, CONSISTENT WITH THE
    PRINCIPLES OF SELF-INITIATION OF MINING CLAIMS, AND FOR OTHER PURPOSES.
              ``THE HARDROCK MINING AND RECLAMATION ACT OF 2007''

                                  ----------

                            Thursday, July 26, 2007

                         U.S. House of Representatives

                  Subcommittee on Energy and Mineral Resources

                         Committee on Natural Resources

                                Washington, D.C.

                                  ----------

        The Subcommittee met, pursuant to call, at 10:05 a.m. in
    Room 1324, Longworth House Office Building, Hon. Jim Costa
    [Chairman of the Subcommittee] presiding.
        Present: Representatives Costa, Pearce, Rahall, Grijalva,
    Gohmert, Heller, and Sali.

     STATEMENT OF THE HON. JIM COSTA, A REPRESENTATIVE IN CONGRESS
                      FROM THE STATE OF CALIFORNIA

        Mr. Costa. The Subcommittee on Energy and Mineral Resources
    hearing this morning on H.R. 2262 will now come to order. This
    legislation is an important bill that has been introduced by
    the Chair of the Natural Resources Committee, our good friend,
    a gentleman from West Virginia, Congressman Mr. Rahall, an area
    that he has worked on long and hard.
        But before we get to the substance of this matter, I have a
    few preliminary items I need to address. Under Rule 4[g], the
    Chairman and Ranking Members may make opening statements. If
    any members have any other statements, they will be included in
    the record under unanimous consent.
        Additionally, under Committee Rule 4[h], additional
    material for the record should be submitted by members and
    witnesses within 10 days of the hearing. I have asked in
    previous hearings that those witnesses please try to expedite
    their efforts and assist because it is helpful. The cooperation
    makes a difference, in responding to any questions that have
    been submitted to the witnesses.
        Now let me make a couple of other comments. Mr. Heller is
    our Ranking Member de jour, and Mr. Pearce will be here I
    suspect later this morning. He is in another committee with
    markup, and so we understand sometimes we have overlapping
    responsibilities. Nonetheless, we have an ambitious hearing
    this morning with I believe 11 witnesses, and we must be
    mindful of other people's time so we will begin. I know Mr.
    Heller will fill in well on behalf of Mr. Pearce.
        It is an important issue that we have here today. This
    kicks off an effort to reform the 1872 Mining Law. There
    probably are not a lot of other cases in American law where a
    Congress enacts a piece of legislation, a President signs it--
    in this case President Ulysses Grant--and then for a period of
    over 100 years, if you do the math over 130 years, the law is
    not changed, and certainly we all have different perspectives
    on law but we know a lot has changed in our country, and as it
    relates to the subject matter, and in fact I think many of us
    do believe it is time that we take into account the changes and
    look at modifying the 1872 law, and that is what Mr. Rahall's
    measure does.
        Even by international standards, when we look at 110
    different nations throughout the world, over the last 20 years
    there have been numerous changes in mining laws, and analysis
    according to the World Bank and others reflect that. Many
    committee members and many of those testifying today have much
    of the history with mining law. I am very pleased that two of
    those individuals, Chairman Rahall, as well as Congressman
    Miller, for two decades have sought reform.
        Senator Craig, who will be testifying momentarily, used to
    be a member of this committee, used to be a member of the
    Subcommittee with Chairman Rahall. So, this is a bit of a
    reunion of sorts, and certainly their combined in-depth
    knowledge of mining issues reflects--if you look at Idaho as an
    important mining state in the country--over 140 years of legacy
    of hardrock mining. In the Senate version of the mining law,
    this is an area that Senator Craig has obviously had a great
    interest in as well.
        Since the late 1980s, as we look at the legislation before
    us, there have been over 30 oversight and legislative hearings
    on this subject, yet no changes. Some of the newer hardrock
    mining issues I think are important that this committee take
    the opportunity to learn. The Subcommittee will be holding a
    hearing, a field hearing in Nevada in August with Senator Harry
    Reid. I believe the date is August 21 in Elko, Nevada, for
    those of you who want to come to Nevada.
        The economic issues, of course, in hardrock mining
    companies among many that we will be discussing is the issue of
    royalties and royalty payments. How to bring a fair return to
    taxpayers while also looking at ensuring the sustainability of
    the mining industry. We also have other environmental issues
    that include water, wildlife and recreation impacts.
        I believe there is a need to be transparent but have
    workable criteria on how we proceed with the continued
    important resource of mining, the economic benefits and yet at
    the same time that balancing act that I always talk about, and
    that is to ensure--as this Subcommittee attempts to do--the
    environmental issues because we must be good stewards of the
    environment.
        When you talk about the environment, it is a sad note but
    the fact is that there is estimated to be over $32 billion
    backlogged in abandoned cleanup for mines. That is a large
    number. There are thousands of sites throughout the country. We
    have many of them in California. The adequacy of the law and
    the regulations in light of the current efforts to develop new
    mining claims throughout the West I think makes it more urgent
    than ever that we do this work.
        For example, in my state alone, in California, there are
    new claims in the following areas: 29 Palms, the Joshua Tree
    National Park, and Big Bear Lake in the San Bernardino
    Mountains not far from the City of Portola. Clearly those
    examples can be I think illuminated in other parts of the West.
        So, I think what is important is that this subcommittee do
    its work. That we get the information, the very best
    information we possibly can. People say that the West has
    changed, and in my view I think it is time to change the 1872
    Mining Law. So, for all of those reasons, we want to take
    everybody's input and expertise and do our due diligence to try
    to do the best work product we possibly can.
        With that, I note that we have some additional opening
    statements of Mr. Heller, and then we will defer to the
    Chairman of the Committee, and you are going to submit your
    statement, Mr. Chairman?
        Mr. Rahall. No. Just very quickly--
        Mr. Costa. Very quickly. Let us have the Chairman speak
    first.

     STATEMENT OF THE HON. NICK J. RAHALL, II, A REPRESENTATIVE IN
                CONGRESS FROM THE STATE OF WEST VIRGINIA

        Mr. Rahall. Thank you, Mr. Chairman. I certainly want to
    commend you and the Ranking Member, Mr. Heller, for conducting
    these hearings today on H.R. 2262, legislation reform of the
    Mining Law of 1872. It is a particular honor and delight to
    welcome back former Ranking Member of your subcommittee
    actually, Mr. Chairman, our colleague from the other body,
    Larry Craig of Idaho, a dear friend. I have been in his
    district and been in his state on this issue and other issues
    before our committee when he so ably served here but he saw fit
    to go over to that other body, but that is his problem.
        I have been at this for so long that I guess I am almost at
    a loss of words, and therefore I am going to be brief because
    frankly I have said everything that I need to say about the
    need to reform the Mining Law of 1872 over the past 20 years or
    more. As the first Chairman of this Committee, under the first
    Chairman under whom I served, Mo Udall, used to say, everything
    that needs to be said has been said but not everybody has said
    it.
        So without further ado, let me note that I certainly
    recognize it is a changed landscape out there in terms of what
    constitutes a hardrock mining industry in this country, in
    terms of how that mining is done, and in terms of the
    expectations of the people that reside in the area. A lot has
    indeed changed not only since 1872 but since we last visited
    this legislation in the Congress.
        I also recognize that the principles behind this
    legislation and I am certainly not locked in stone with every
    word and provision, but the principles remain valid. The people
    of the United States, the true holders of these lands, deserve
    to receive a payment in return for the disposition of the
    resources we all own. Nobody in their right mind would allow
    timber, oil, gas, coal or copper to be cut, drilled for or
    mined on lands they own without some reimbursement and neither
    should the United States.
        In all cases we do require payment except in the case of
    hardrock minerals such as copper, silver and gold. People of
    the U.S. also deserve to see that the lands they own are
    properly managed, whether it be forest lands in the east or
    public lands in the West. Certainly the states have stepped up
    to the plate in terms of hardrock mining on Federal lands and
    the regulations thereof but they are, when all is said and
    done, Federal lands owned by all of the people of the United
    States, and it seems to me that it is appropriate to have
    Federal guidelines on hardrock mining and reclamation
    operations.
        Certainty is what we strive for here to remove the cloud of
    uncertainty that currently exists over the industry so that
    indeed financial decisions can be made for the future. The
    pending legislation is a proposition to accomplish these goals
    despite the fact that it is premised on decades of similar
    bills including those which twice passed the House of
    Representatives in a bipartisan fashion. It is still, to coin
    the title of a book authored by John Leshy, a study in
    perpetual motion.
        So again, I welcome Senator Craig to our committee today as
    well as the other witnesses, many of whom have traveled long
    distances to be with us, to share with us their expertise on
    this issue, and again I thank you, Subcommittee Chair Costa,
    for holding this hearing today. Thank you.
        Mr. Costa. Thank you, Mr. Chairman, and hopefully we will
    transition this from a study in perpetual motion to a work in
    progress as we move along. The Ranking Member this morning is
    the gentleman from Nevada, Mr. Heller. I recognize him for an
    opening statement.

    STATEMENT OF THE HON. DEAN HELLER, A REPRESENTATIVE IN CONGRESS
                        FROM THE STATE OF NEVADA

        Mr. Heller. Thank you, Mr. Chairman, and thank you for your
    time in bringing this particular piece of legislation. I want
    to thank Chairman Rahall also for his dedicated time and energy
    over the 20 years of bringing this bill forward, and I know
    this goes back and forth quite a bit, and there is a lot of
    energy expended on this particular bill, and I am certain that
    that will change during this cycle also.
        I want to thank Senator Craig for being with us here today.
    I also want to thank the other 10 members that will be on this
    panel for your time and energy and efforts to be here. I would
    like to point out Ted Wilton specifically since he is from my
    district, from Spring Creek, just outside of Elko and welcome
    him here today.
        I do not think there is any state that is affected more by
    this piece of legislation than the State of Nevada.
    Approximately 85 percent of the lands in Nevada are controlled
    by the Federal government. Hardrock mining on public lands in
    Nevada provides high wage jobs that benefit many of the rural
    communities in my district. Mining employees pay income taxes.
    They shop at local stores. They eat at local restaurants.
        These wages are critical to many local economies in Nevada.
    However, under the Hardrock Mining and Reclamation Act of 2007,
    thousands of jobs will be threatened in my district if this
    piece of legislation becomes law. This bill seeks to establish
    a royalty structure that will make mining operations less
    economical. The jobs in mineral production could be exported to
    other countries. It could force operators to relocate their
    operations offshore causing domestic production of needed
    commodities to be eliminated or reduced.
        It creates a bypass of Congressional authority for approval
    of land withdrawals and creates the potential of expanding
    administrative authority to close vast amounts of public lands
    and access not only to mining operations but access to the
    general public. It establishes unattainable environmental
    regulations that could mire any mining claim in litigation,
    should it be able to move forward despite the excess of cost
    and bureaucratic red tape.
        My district encompasses over 110,000 square miles. Of that,
    mining operations are less than 6,000 square miles. There is
    still over 100,000 square miles for other land uses. Mining has
    been a good steward of the public lands, and has benefitted
    many of the communities in my district. I urge the Chairman to
    take a more measured approach to any reforms having to do with
    the Mining Law of 1872. Thank you, Mr. Chairman. I yield back.
        Mr. Costa. Thank you, gentleman from Nevada. I will now
    recognize----
        Mr. Sali. Mr. Chairman?
        Mr. Costa. Yes.
        Mr. Sali. Can I make a brief statement?
        Mr. Costa. Yes, when I recognize you. We have the gentleman
    from Arizona who is the Chairperson of the National Parks,
    Forests and Public Lands who I was going to recognize at this
    time.
        Mr. Grijalva. Thank you, Mr. Chairman, and let me just
    thank you for your indulgence in allowing me to sit in on this
    meeting. I appreciate that very much. My statement I will
    submit for the record, and the overlap on the public lands and
    the very important piece of legislation that our committee
    Chairman has brought forth, 2262, is a vital piece of
    legislation. It affects the public lands in this country in a
    very direct way, and the taxpayers in a very direct way, and I
    am grateful to you and the Ranking Member for holding this
    hearing. Thank you.
        Mr. Costa. Thank you, the gentleman from Arizona and my
    friend and colleague. I will now recognize Mr. Soto for a brief
    statement.

     STATEMENT OF THE HON. BILL SALI, A REPRESENTATIVE IN CONGRESS
                        FROM THE STATE OF IDAHO

        Mr. Sali. That actually will be Mr. Sali.
        Mr. Costa. I am sorry.
        Mr. Sali. Well, Mr. Chairman, as with most things in life,
    it really boils down to your perspective, and while I
    appreciate the fact that the good Chairman has been to Idaho, I
    think it makes a difference when you actually live in the West,
    and with due respect, West Virginia is not the West.
        It makes a difference when you have actually been engaged
    in mining. I have. It makes a difference when you have been
    involved in mining trying to turn a profit. That gives you a
    special perspective. I have. Mr. Chairman, there are some
    issues that I think are problematic with the bill draft that
    has been introduced by the Chairman.
        Number one, there is really going to be a discouragement of
    mining with the provisions that have been added here, as the
    Ranking Member points out. The fees and royalties that will be
    charged are going to be a discouragement to mining for those
    who are trying to actually make a mine work and earn a profit
    from it. There are no incentives that are set in place to
    offset those things that will discourage mining.
        It will only serve to further regulate one of the most
    regulated industries in the land, and as a result of all that,
    I think it will have two results. The first is it will increase
    our dependence on minerals from foreign sources, and I think
    the thing that we ought to compare that to is, for example, our
    importation of oil and gas in this country. When we import 60
    percent of our oil from foreign countries and then we gripe
    about the fact that OPEC is actually the one that is setting
    our prices that we pay at the pump, we need to consider very
    strongly setting a similar policy for mining in this country.
        Finally, the end result will be if we discourage mining in
    this country we will not only end up with that shortage of
    domestic mining--which will be a national security issue--we
    will at the end of the game export a number of jobs. Many of
    those are high paying union jobs which will go away in this
    country. I think we have to keep all of those perspectives in
    mind as we proceed with the hearing of this bill. Thank you,
    Mr. Chairman.
        Mr. Costa. Thank you, Mr. Sali, and certainly the gentleman
    from Idaho is entitled to his opinion. I am not going to get
    into a debate at this time. I would hope that your concerns
    with regards to the legislation does not at all attempt to
    impugn or question the author's sincere desire to make changes
    and reform. We can agree to disagree. We have an industry that
    has had record profits, and I would submit to you that our
    importation--which we all I think lament of energy--is not
    because we do not encourage energy development in the United
    States or limit it. We consume more energy than we have in the
    United States is part of our problem, at least the energy we
    like to use which is cleaner burning energy.
        But again I am not going to get into a debate because we
    want to hear our witnesses. Senator Craig, who called last week
    and talked about his desire to testify before the Committee,
    his long history as the distinguished Senator from the great
    State of Idaho, who has long worked in this issue as well as
    many other issues that he and I have worked on together,
    indicated that he would very much like to be here and to see
    his old friend, Mr. Rahall, and to give us the benefit of his
    insights on how we might deal with this issue.
        So, we are very much looking forward to his testimony, and
    the Chair will now recognize the Senator from the great State
    of Idaho for five minutes.

              STATEMENT OF THE HONORABLE LARRY E. CRAIG,
                 A U.S. SENATOR FROM THE STATE OF IDAHO

        Senator Craig. Well, thank you very much, Mr. Chairman.
    Should I say Chairmans all?
        Mr. Costa. We have a few here.
        Senator Craig. Yes, you do, and I appreciate that. It is a
    great opportunity for me, and I thank you for allowing me this
    opportunity. Mr. Chairman, you are correct. We have worked on a
    variety of issues together and continue to do so. Chairman
    Rahall has spoke a bit of our history together as we have
    worked on this issue, and I would agree between he and I
    together we collectively probably have as much or more
    knowledge on 1872 Mining Law, other than Jim Zoia sitting in
    the back of the room over there, and I have always blamed the
    Chairman's ill-gotten direction on this issue to Zoia, not to
    him. So it is understandable.
        But having said that, let me also recognize my Congressman
    Bill Sali for being here this morning. He resides over a
    district that at one time was one of the largest mining
    Congressional districts in the nation, and I was its
    Congressman, and it was the second largest economy of that
    Congressional district when I was its Congressman in 1980.
    Mining is probably now fourth, possibly fifth.
        As a result of international markets and access to public
    land mining base resource, our world changed dramatically. Last
    I checked in Idaho, a few moments ago, the average wage was
    nearly $30,000 but the mining wage was $44,000 a year. So the
    point made is an important point as it relates to bits and
    pieces of the economy, Mr. Chairman, but let me talk this
    morning in a broader sense and specifically in general to what
    you are attempting to do here because I am one of those who
    believes that great nations rely first upon themselves and
    second upon the nations around them.
        I am concerned because I do think we have an energy crisis
    in this country that we have grown increasingly reliant on
    foreign sources and less on our own. I am increasingly
    concerned that that might happen in our food supply, and you
    and I have engaged in that as we cannot get a policy together
    that allows our large specialty crop producers, primarily, to
    have access to a labor force that allows them to farm and
    supply for the retail markets of our country, i.e., our
    consumers. You have a migration going on in your district
    today, and it has not happened in Idaho yet because of our type
    of cropping but that migration is to take American capital,
    American know-how and move it offshore because we cannot do it
    here.
        I believe--and let me put it in this vernacular because I
    think that Chairman Rahall understands it--I believe that
    mining is not the canary in the coal mine but it is the canary
    of an economy. It is an indicator of whether a nation can
    sustain its economies. Now for example, we are interested in
    energy. Copper today is a major component in hybrids, in
    automobiles. It will continue to be, if we move our country
    toward electric transportation, ever increasingly valuable, and
    as a result of that I think it is tremendously important that
    we recognize the value of that mineral once again.
        Silver connectivity. When Chairman Rahall and I were
    debating silver 20-plus years ago, it was a value added. It was
    a numismatic metal. Today it is an industrial metal. It
    connects our fingertips to the digital world. Increasingly
    valuable.
        Gold still is little industrial, largely numismatic, but
    extremely valuable to the economy and the base resources of our
    state, and as Congressman Heller has said it, a big piece of
    his economy in his state. So, for just a moment, let me look at
    the bill that is before you. I am very familiar with some of
    its provisions. Let me lay out a couple of thoughts.
        First, in order for a domestic industry to succeed it must
    be allowed a profit, and I think it is tremendously important
    that we recognize profitability, and I have supported a royalty
    on hardrock metals. We did in the last dust up that we tried to
    get to some years ago but how we formulate a royalty, how we
    calculate it in relation to investment and return on investment
    and capital realized is going to be very, very critical or we
    will blight the ability of our industries to perform.
        That coupled with the reality of the cost of doing business
    today, a world of difference from the cost of doing business
    even 20 years ago when we first started debating this issue in
    this room and in this subcommittee, that world and those costs
    have changed dramatically, and I think we have to be
    increasingly aware of that reality. Discovery. Very important.
    The allowance of discovery.
        I always really laughed a little bit kind of down inside
    when the environmental community would say, ``Well, we will
    block this land off over here and you can go mine there.'' They
    had forgotten the age old adage that the gold is where you find
    it and, once found, the principle of the 1872 Mining Law was
    once discovered development and the right to do so under a
    patenting process.
        The right of discovery remains important today but more
    important than all of that, once discovered, is tenure. How do
    we secure tenure for a company to make the kind of long-term
    investment it takes to sustain an operation and to continue to
    produce through the life of the resource itself? So, I am going
    to look a little less at patenting and a lot more at tenure and
    the stability of tenure than I maybe once did because I am
    willing to adjust to the economies and realities of the
    industry.
        At the same time, I understand the importance of what we
    are about. Now, having said that, I brought an organization to
    Idaho some years ago called the Center for the New West. So you
    see, Mr. Chairman, I believe there is a new West out there, a
    much different appreciation for our lands and all of their
    resources than there was in 1872, than there was in 1982 and
    1984 and 1986 when I was here in this committee.
        At the same time, there is a reality of balance. If we look
    at the old 1872 Mining Law itself and say, ``Here it is. Here
    are the books,'' then let us also put all of the case law with
    it that would fill this table, and then--and you are going to
    be hearing from the BLM that is the primary land steward of the
    subsurface right. They are the ones that sit down with the
    mining company and develop a mining plan and put it together
    and link it to bonding and link it to how they will practice
    upon the land as it fits with all the resources around in an
    environmentally sound way.
        So dovetailed into the 1872 law is the Clean Air Act and
    the Clean Water Act and the Endangered Species Act and on and
    on and on. The 1872 Mining Law as Grant signed it is a very
    different law today. Its primary premises remain but it has
    grown to be a very different law in a very different world in a
    very different public land environment, and that is something
    that is extremely important.
        And so in recognizing all of that I think it is important
    that we write something that is clear, that is practical, that
    is reasonable and understandable, that returns to the owners of
    that public land, the American citizenry some value for the
    resource that they have allowed development of. I have no
    difficulty with that. But I am going to make sure that the
    bird, that canary when it breathes deeply does not fall over on
    its side and die because I do believe that mining must remain a
    basic part of the fundamental reality of what we do.
        Good Samaritan liability coverage. OK. Let us see what we
    can do to handle that. Reclamation. Absolutely. Abandoned mine
    lines, a legacy of the past. How can we deal with it in a way
    that lessens the human liability and in some instances
    environmental liability from mine seepage and all of the kinds
    of things that can and do happen in certain mining settings?
        Let me close with this thought. Senator Reid and I are very
    close on this issue and have worked closely on this issue for
    some time, and I visited with Senator Reid prior to coming over
    because I want to make myself very clear. It is suggested by
    Chairman Rahall that while the House has passed on several
    occasions mining law reform that maybe we have been the enemy
    of the good. Over on the Senate side I would like to suggest
    that maybe we are the caretakers of the future. The viability
    of the economy of a mining industry.
        But having said that, both Senator Reid and I agree that if
    change can be made we ought to make it, but I would hope we
    would work together to do so because a bill that does not
    represent the reality of where we are but has a message more
    than a practicality probably does not get as well received in
    the Senate as it might ought to. I am Ranking on the Public
    Lands Subcommittee. We will give it due diligence.
        At the same time, I think both Senator Reid and I are
    extremely concerned that the Carlin trend remains viable. That
    the economies of my state, the economies of Nevada, are in
    large part fed by the resources of those joint areas of natural
    phenomena, basically known as microscopic gold, and I do not
    want to blight that, and we will not blight that in any way.
        Last, thank you again for your diligence, your tolerance,
    the time you have offered. Both Senator Reid and I were at a
    press conference yesterday, and we were looking at a fire
    burning in Idaho and in northern Nevada called the Murphy
    Complex. As of yesterday it burned 628,000 acres. It may have
    gotten to 700,000 acres last night, a very large fire burning
    across the borders of Nevada and Idaho.
        We had it up on a wall on a map, and we were talking with
    the Secretary of Interior and the acting Director of the BLM,
    and it was just a spot on a map in a very big area but to bring
    it into context at 620,000 acres it was 80 percent the size of
    Rhode Island, and it was hardly a spot on a map in the State of
    Idaho and Nevada. I think that the Congressman from Idaho and
    what the Congressman from Nevada are saying is let us not lose
    our perspective as to the reality of what we deal with, and in
    doing that, we will work together to see if we cannot modernize
    a very valuable law to our country. Thank you.
        [The prepared statement of Senator Craig follows:]

                  Statement of The Honorable Larry E. Craig,
                     a U.S. Senator from the State of Idaho

        Chairman Costa and Ranking Member Pearce and members of the
    subcommittee, I appreciate you allowing me to testify on a subject that
    I have not only been a proponent of, but also involved in since I was a
    member of this subcommittee.
        I believe it is appropriate that I begin this discussion by
    pointing out our increasing reliance on foreign mineral sources. Not
    unlike energy, Americans depend heavily on a variety of mineral sources
    for everything from the cars we drive, to the pharmaceutical drugs we
    take.
        This country must wake up and realize that energy and minerals are
    a key component of national security. Transportation, national defense,
    and growing economies are all subject to domestic energy and mineral
    resources. In fact, some have used hybrids as a piece of the energy
    savings pie, but hybrids require significantly more copper than our
    traditional cars. As legislators, we must recognize our vulnerability
    and ensure that we do not make it worse.
        According the USGS, the U.S. reliance on mineral imports has nearly
    doubled over the past decade, and with the rising economies like China,
    it will only get worse. Looking into the 21st Century and the
    continuing development of the U.S., China, and other countries, our
    needs and dependence will not diminish--they will intensify. That is
    why America and its economy can't survive without mining policy that
    promotes domestic mining in a way that is environmentally responsible.
        In 2006, U.S. metal mines produced $23.5 billion worth of metal
    ores and generated some 170,000 jobs. In Idaho, mining often provides
    some of the highest paying jobs to our communities and is generally the
    sole driver to those rural economies.
        As you know, Mr. Chairman, most of our country's hardrock minerals
    are located on federally owned lands, which hold the highest
    environmental standards. Many opponents of mining point to the years
    before most of our time and the mining practices that have occurred
    then, and not the practices that are in place now.
        We often talk about the 1872 Mining Law as a legacy, but outdated
    law. However, since Eisenhower signed what has become a valuable piece
    of legislation, many other presidents have signed laws that many would
    argue have strengthened environmental law including the 1872 act. The
    Clean Water Act, Clean Air Act, NEPA, FLPMA, RCRA, not to mention
    agency directives and the mounting litigation are all part of the
    myriad policies that direct what does and does not happen on our public
    lands.
        I know this is a legislative hearing on Chairman Rahall's bill, and
    I would like to take this opportunity to provide some thoughts on a few
    concepts raised in this legislation, in no particular order.
        First, in order for a domestic industry to succeed, it must be
    allowed to profit. Having said that, we are at a time where public land
    royalties are a necessary for mining law reform to pass. Whether you
    are cutting timber, grazing cattle, or drilling for oil, you pay a
    royalty, and mining shouldn't be any different.
        However, the royalty must be carefully set and be reasonable to
    avoid choking out our domestic industry. An eight percent net smelter
    return royalty doesn't mean anything if there isn't an industry to
    apply it to. Additionally, it should not be the intent of this Congress
    to apply this royalty to already-discovered minerals and change the
    rules in the middle of the game.
        Second, while patenting may be the practice of the past, the
    investment longevity isn't. In order for this industry to continue
    developing its resources, investments will have to be stable and long
    lasting. I am sensitive to my state, which generally promotes access
    for recreation, hunting, and grazing. However, we must look for ways to
    secure tenure to the companies that continue to provide the needed
    minerals our economy depends on.
        Third, Congress must be very careful not to bottle neck the lands
    open to location. Again, limiting our domestic ability to locate and
    mine essential minerals will only increase our reliance on foreign
    sources.
        Fourth, the American people insist on financial assurance and the
    ability of industry to reclaim lands. Recent changes to the financial
    assurance regulations for mining on federal lands have made a
    difference. I believe the mining industry today has captured the
    confidence of the people who have taken the time to visit and research
    current mining practices and reclaiming techniques.
        And lastly, we must improve our ability to reclaim and restore our
    land and water resources by improving the way abandoned mine land funds
    are distributed and creating comprehensive Good Samaritan liability
    coverage. In order to address old practices, we must provide resources
    to return portions of our public lands back their historic beauty.
        I believe many of the concepts addressed in this legislation are
    important and must be debated. However, I am very concerned that this
    legislation could kill a very important domestic industry.
        I have watched over the years as robust logging, ranching, and
    mining industries suffer over what I believe have been unintended
    consequences by the interpretation of federal laws by activist judges.
    We must be cognizant of our past mistakes and ensure we do not repeat
    those same mistakes. We can avoid that by clearly laying out the intent
    of this Congress.
        I am the Ranking Member on the Public Lands and Forestry
    Subcommittee in the Senate, and I hope to address many of the issues I
    have raised here. Senator Reid and I have worked together on mining
    reform for many years, and we continue to work to ensure that Congress
    moves legislation that can work for industry while balancing
    environmental concerns.
        We hope to work in a bicameral fashion and pass overdue mining
    reform this Congress. Again, I appreciate the opportunity to
    participate here today, and I look forward to working with you on this
    important issue. With that Mr. Chairman, I conclude my testimony.
                                     ______

        Mr. Costa. Thank you very much, Senator Craig, for your
    very comprehensive statement, and we will look forward to
    working with you. I know the author of this legislation, as I
    am, is very mindful of the fact that I have never seen a one-
    house bill be successfully signed into law. Consequently, we
    are going to have to work together, and you bring a great deal
    of knowledge to the table, and we will look forward to working
    with you and Senator Reid. It is one of the reasons that I
    decided to hold the Subcommittee field hearing in Nevada
    because of our recognition of the importance to the issue of
    not only Nevada but other western states. So, we will look
    forward to continuing to work with you.
        Senator Craig. Well, thank you. I know Senator Reid has
    said he will be at the hearing, and I am going to try and make
    it down for it. So, we will hope to see you. Where is that
    going to be?
        Mr. Costa. Elko, Nevada.
        Senator Craig. Elko.
        Mr. Costa. Not far from Idaho.
        Senator Craig. You will love Elko.
        Mr. Costa. I know. I have been there before.
        Senator Craig. All right.
        Mr. Costa. They have great cowboy poetry there in the
    wintertime.
        Senator Craig. That they have.
        Mr. Costa. Yes. All right.
        Senator Craig. Thank you.
        Mr. Costa. If members have some questions that they would
    like to opine of you, I am sure you will respond. The issue of
    royalties I would like to get more thoughts from you as we deal
    with oil and gas, what comparatively would be a level of
    fairness in hardrock and the other issues on cleanup I am
    interested in your thoughts as well. All right. OK. We will
    move on.
        Mr. Rahall. Mr. Chairman?
        Mr. Costa. Yes.
        Mr. Rahall. Mr. Chairman, may I just say in response to the
    Senator that I appreciate his testimony this morning and the
    manner in which he expressed a willingness to work together. I
    also have visited with Majority Leader Reid on this issue
    alone, and he has expressed a willingness to work together. In
    the testimony he gave, there is not much I could disagree with.
        Certainly we all want to see industry make profits. I
    represent the coal industry. As you know, Larry, we have
    traveled throughout the West when I was Chairman of this
    subcommittee, visited about every mine I can think of whether
    it be silver, copper, uranium, regardless. We had an extensive
    set of hearings on this legislation.
        We are going to have some more hearings under Chairman
    Costa, and I think in response to the gentleman from Nevada,
    just because I am from West Virginia I know a little bit about
    mining in the West too, having been in those mines, and we have
    a mining industry in my state too, which we did not devastate
    by any Federal surface mining law 30 years ago almost this very
    day. So we can have Federal legislation and not put the
    industry out of business. Thank you.
        Mr. Costa. Thank you, Senator, and thank you Chairman
    Rahall. In conversation with the gentleman from Nevada, I know
    he knows that you know about mining. It was the gentleman from
    Idaho who was not certain of your acumen in over 30-plus years
    of mining in West Virginia, but I know sometimes those guys out
    in the West all look alike. I want to get on with our testimony
    here.
        We have our first panel, and that involves the witnesses
    Mr. Henri Bisson, Deputy Director of the Bureau of Land
    Management; Mr. John Leshy, former Solicitor General of the
    Department of Interior; Ms. Jennifer Martin, Commissioner of
    the Arizona Game and Fish Commission; Mr. J. P. Tangen, former
    Regional Solicitor of the Department of Interior for Alaska. I
    think we have everybody who we have asked to testify in this
    first panel.
        You have all come forward as you have, and as I look at the
    table I know that there is a lot of expertise that we will
    benefit from and also experience in testifying before
    Congressional committees. With that said, we have those lights
    that are in front of you, and they are there for a reason,
    notwithstanding sometimes our unwillingness to comply with
    them. But we would appreciate the witnesses keeping their
    statements within five minutes.
        Certainly that is why we provide the opportunity for longer
    written statements to be submitted for the record and for us to
    benefit in more in-depth information that you may have and want
    to provide the Committee and, of course, we will ask questions
    beyond the time that is allowed for this first panel, and we
    will submit those in writing to you for any follow up. With
    that said, the Chair now recognizes Mr. Bisson, who will now
    testify for five minutes.

              STATEMENT OF HENRI BISSON, DEPUTY DIRECTOR,
                       BUREAU OF LAND MANAGEMENT

        Mr. Bisson. Thank you, Mr. Chairman and Chairman Grijalva
    and members of the Subcommittee. My name is Henri Bisson. I am
    the Deputy Director of the Bureau of Land Management. I thank
    you for the opportunity to present the views of the Department
    of the Interior on H.R. 2262, the Hardrock Mining and
    Reclamation Act of 2007. On October 25, 2001, the Department of
    the Interior urged Congress to resolve contentious issues
    surrounding the mining law that had been raised by the states,
    industry and the environmental community in a way that provides
    stability to the industry and improves our environment.
        While H.R. 2262 provides comprehensive revisions to the
    General Mining Act of May 10, 1872, as amended, we do not
    believe it accomplishes these goals. Instead, this bill could
    harm the domestic production of mineral resources. These types
    of mineral resources are essential to economic growth, advanced
    industry and technology and improve the quality of everyday
    life for Americans. We therefore cannot support the bill as
    drafted.
        We often take for granted the availability of computers,
    telephones, clothing, toothpaste, cosmetics, medicines, cars,
    sports and recreation equipment, appliances and sundry other
    items that make our homes safe, convenient and comfortable.
    None of these would exist without the types of minerals
    produced under the 1872 Mining Law. The phenomenal advance of
    culture, science and technology remains dependent on mineral
    resources.
        Any legislation that increases the cost of domestic metal
    production could affect the availability of these materials
    domestically with potential adverse security and economic costs
    to our citizens. In contrast, some of the benefits from the
    production of these minerals can be very local, providing jobs
    in small communities throughout the West where employment
    opportunities are limited. For every direct job in mining,
    three supporting jobs are created.
        BLM has the responsibility to ensure that minerals
    production is conducted in a responsible manner that serves the
    social and economic needs of the Nation and protects the
    environment. BLM has accomplished this through the principles
    of sustainable development, the promulgation of surface
    management regulations and the issuance of policy guidance.
        Despite the BLM's efforts to administratively improve
    mining operations, certain issues cannot be resolved without
    additional statutory authority. Unfortunately, H.R. 2262 does
    not adequately resolve these issues. Four examples are: H.R.
    2262 proposes to prohibit the Secretary from issuing patents
    except for those grandfathered under a moratorium. The
    Department believes this issue warrants additional
    consideration and would like to work with the Committee toward
    resolution.
        The Department believes the perspective application of a
    royalty or production payment merits further discussion. We are
    concerned that imposing a royalty on existing mining claims
    could raise constitutional concerns. We believe the legislative
    restatement and expansion of existing environmental laws and
    standards and codification of the BLM's permitting requirements
    in H.R. 2262 is both unnecessary and redundant. This would only
    complicate BLM administration of its program and operator
    compliance.
        We support full and transparent public participation at
    appropriate stages. Under NEPA and FLPMA, Congress established
    a public process that did not give an individual the ability to
    block Federal actions unnecessarily. Certain provisions of H.R.
    2262 appear to do just that. The Department remains committed
    to continuing to find administrative solutions to emerging
    issues as well as working with the Congress and other
    interested parties to find legislative solutions to those
    problems that cannot be resolved administratively including the
    future role of mineral patenting and requiring some form of
    prospective royalty or production payment.
        Because H.R. 2262, in our view, does not present workable
    solutions on these issues, we look forward to working with the
    Congress to consider other options. I would be happy to answer
    any questions. Thank you.
        [The prepared statement of Mr. Bisson follows:]

    Statement of Henri Bisson, Deputy Director, Bureau of Land Management,
                        U.S. Department of the Interior

        Thank you for the opportunity to present the views of the
    Department of the Interior on H.R. 2262, the Hardrock Mining and
    Reclamation Act of 2007.
        On October 25, 2001, the Department of the Interior urged Congress
    to resolve contentious issues surrounding the Mining Law that have been
    raised by the States, industry, and the environmental community in a
    way that provides stability to the industry and improves our
    environment.
        While H.R. 2262 provides comprehensive revisions to the General
    Mining Law of May 10, 1872, as amended, we do not believe that H.R.
    2262 accomplishes these goals. Instead, this bill could harm the
    domestic production of mineral resources; these types of minerals are
    essential to economic growth, advance industry and technology, and
    improve the quality of every day life for Americans. We, therefore,
    cannot support the bill as drafted. We do remain committed to
    continuing to find administrative solutions to emerging issues as well
    as working with the Congress and other interested parties to find
    legislative solutions to those problems that cannot be resolved
    administratively. We look forward to working with you toward that end.
    Background
        For over 135 years, the 1872 Mining Law has served to assure a
    reliable and affordable domestic supply of the minerals--gold, silver,
    copper, lead, zinc, and uranium--critical to our economy and national
    security. The 1872 Mining Law also promoted the settlement of the
    western United States by providing an opportunity for any citizen of
    the United States to explore the available public domain lands for
    valuable mineral deposits, stake a claim, and, if the mineral deposit
    could be mined, removed, and marketed at a profit, patent the claim.
    Patenting results in the claimant acquiring ownership not only of the
    mineral resources but also of the lands containing these mineral
    deposits at the statutory price of $2.50 or $5.00 per acre.
        By 1976, when the Federal Land Policy and Management Act (FLPMA)
    was enacted, settlement of the West was no longer the primary force
    driving federal land and resource management policies. FLPMA provides
    that the Secretary shall take any action necessary to prevent
    unnecessary or undue degradation of the lands. Today, the provisions of
    the 1872 Mining Law are implemented alongside the multiple use mandate
    of FLPMA.
    Mining's Importance to the United States
        We often take for granted the availability of gold, silver, copper,
    lead, zinc and other minerals and their contribution to the quality of
    life we enjoy in this country. In 2006, the total value from domestic
    metals production was approximately $23.5 billion. Computers,
    telephones, clothing, toothpaste, cosmetics, medicines, cars, sports
    and recreation equipment, appliances that make our homes safe,
    convenient, and comfortable--none of these would exist without the
    types of minerals discovered and developed under the 1872 Mining Law.
        As much as we enjoy these conveniences and luxuries, it is the
    mineral products used in areas such as agricultural production,
    communication, transportation, technology, and national defense that
    make a truly profound contribution to our way of life. The phenomenal
    advance of culture, science and technology remains dependent on mineral
    resources. In an example that is close to home for Americans, the
    automobiles most of us drive every day contain nearly 60 pounds of
    copper, and the newly popularized hybrid vehicles use nearly three
    times as much copper as the average automobile. Furthermore, most
    vehicle manufacturers specify that the copper used be ``new'' copper.
    In another example, the calcium contained in the vitamin supplements
    many of take every day comes from mined calcium deposits.
        Metal mining is an international business, with purchasing and
    sales conducted through the London Metals Exchange and the New York
    Commodities Exchange and secondary exchanges. Metal marketing operates
    within a free market system, in which the price is determined by what a
    willing buyer and a willing seller agree upon. The international prices
    for the metals are fixed daily on the exchanges, and costs of
    production control the economics of particular companies.
        In contrast, some of the benefits from production of these minerals
    can be very local, providing jobs in small communities throughout the
    West where employment opportunities are often limited. For every direct
    job in mining, three supporting jobs are created. Producers must buy
    fuel, pipes, wire, and other industrial products, and as a general
    rule, these requirements are contracted out to local fuel distributors,
    hardware suppliers, and related businesses. Producers pay Federal,
    State, and local taxes, both income and property taxes.
    BLM's Management and Regulation of Mining
        BLM has the responsibility to ensure that, as with other multiple
    uses, minerals production on Federal lands is conducted in a
    responsible manner that serves the social and economic needs of the
    nation and protects the environment. BLM has accomplished this through
    the principles of sustainable development, the promulgation of surface
    management regulations, and the issuance of policy guidance.
        Sustainable development is the basis for a policy framework that
    ensures that minerals and metals are produced, used, and recycled
    properly. In the context of mining, the United States joined 193 other
    nations in 2002 in signing the Sustainable Development Plan of
    Implementation applicable to mineral resources.
        BLM's surface management regulations were issued under the
    authority of FLPMA in 1981 and amended in 2000 and 2001. The
    regulations seek to provide protection of the public lands from
    unnecessary or undue degradation during hardrock mining and reclamation
    of areas disturbed during the search for and extraction of mineral
    resources.
        The 2000 and 2001 revisions to BLM's surface management regulations
    incorporated many of the recommendations of the Congressionally-
    mandated study by the National Research Council (NRC) Board on Earth
    Sciences and Resources in its report, ``Hardrock Mining on Federal
    Lands (1999).'' The study examined the environmental and reclamation
    requirements relating to mining of locatable minerals on public lands
    and the adequacy of those requirements to prevent unnecessary or undue
    degradation of public lands.
        Under the regulations, all mining and milling activities are
    conducted under a plan of operations approved by BLM, and following
    environmental analysis under the National Environmental Policy Act
    (NEPA). BLM must disapprove any mining that would cause unnecessary or
    undue degradation of the public lands. A mining operator, as well as an
    exploration operator (exceeding casual use), must provide financial
    guarantees covering the full cost to reclaim the operation. BLM may
    require an operator to establish a trust fund or other funding
    mechanism to ensure the continuation of long-term treatment to achieve
    water quality standards and for other long-term, post-mining
    reclamation and maintenance requirements after a mine is closed. In
    response to previous GAO recommendations, the BLM has implemented a
    tracking system under which BLM state directors are required to certify
    each fiscal year that the reclamation cost estimates for proposed and
    operating mines have been reviewed and are sufficient to cover the cost
    of reclamation. Currently, the BLM holds financial guarantees in excess
    of $900,000,000 to cover the costs of reclamation of mining operations
    on BLM-managed public lands.
        BLM policy guidance was set out in 1984 and updated by the BLM
    Director in 2006. The guidelines promote balancing environmental,
    social, and economic needs while practicing environmental stewardship
    and promoting stakeholder participation. These efforts include:
          reviewing and processing notices and plans of operations
    to prevent unnecessary or undue degradation;
          requiring financial assurances to provide for reclamation
    of the land; and
          considering alternative forms of reclamation after a mine
    is closed such as using the land for landfills, wind farms, biomass
    facilities and other industrial uses, in order to attract partnerships
    to utilize the existing mine infrastructure for a future economic
    opportunity.
        In 2005, the Administration completed an assessment of the BLM
    Mining Law Administration Program that, in addition to highlighting
    options for BLM management improvements, reiterated the point that the
    program suffers from deficiencies relating to its enabling legislation,
    the 1872 Mining Law. In particular, this review noted that the program
    is operating under several temporary authorities, producers do not
    compensate the government for minerals extracted from Federal lands,
    and the program lacks clear authority to assess administrative
    penalties.
    Congressional Moratorium on Patenting
        In the FY 1995 Interior Appropriations Act (and in each succeeding
    year to date), Congress prohibited the Department from accepting new
    mineral patent applications or processing those applications which had
    not reached a defined point in the patent review process. Congress
    authorized the Department to continue to process those applications
    that were grandfathered under the moratorium and also required an
    annual report to Congress on the status of BLM's progress. When the
    moratorium was first put into effect in 1994, 626 patent applications
    were pending, of which 221 were subject to the moratorium and 405 were
    grandfathered and not subject to moratorium. Of those 405 grandfathered
    applications, 38 remain for BLM to process as of this date. The
    Department transmitted the most recent status report on mineral
    patenting to Congress on June 27, 2007.
    H.R. 2262
        Despite the BLM's efforts administratively to improve mining
    operations, certain issues cannot be resolved without additional
    statutory authority. Unfortunately, H.R. 2262 does not adequately
    address these issues. We offer four examples for discussion in this
    testimony.
      Patents on Mining Claims
        Under the 1872 Mining Law, any citizen who can prove to the
    satisfaction of the Secretary of the Interior the discovery of
    commercially exploitable hardrock mineral deposits on the public lands
    and who has complied with all other applicable requirements may obtain
    a property right in both the minerals and the surface lands within the
    boundaries of the mining claim. This provision encouraged explorers and
    settlers to move West during the decades following the Civil War. H.R.
    2262 proposes to expand on the current annual appropriations moratoria
    and permanently eliminate the issuance of patents, except for those
    grandfathered under the moratorium that began in 1994. While expansion
    of the West is no longer relevant, the Department believes this issue
    warrants additional consideration and would like to work with the
    Committee toward resolution.
      Royalty
        A second key aspect of the 1872 Mining Law is that it grants
    citizens the right to develop and extract hardrock minerals from the
    public lands. Under the 1872 Mining Law, a hardrock mining operator is
    not required to pay the government any percentage of the value of the
    minerals extracted in the form of a royalty or production payment,
    although profits from mining operations are subject to Federal and
    state income tax. At least until 2008, payment of a $125/year
    maintenance fee also is required by the Mining Law, as amended by
    various Appropriations Acts.
        In contrast, Federal coal and onshore oil and gas resources remain
    in Federal ownership and are leased by the Federal government subject
    to a royalty, as provided under applicable laws. In 2006, the Federal
    government collected more than $3.6 billion in royalty payments from
    these onshore (non-Indian) leases.
        The Department believes that the prospective application of a
    royalty or production payment issue merits further discussion. However,
    we are concerned that a royalty or production payment applied to
    existing claims could raise Constitutional concerns.
      Environmental Compliance
        Hardrock mining operators on public lands are required to comply
    with existing state and Federal laws, including the Clean Water Act;
    Clean Air Act; Endangered Species Act; Federal Land Policy and
    Management Act (FLPMA); National Environmental Policy Act (NEPA); and
    National Historic Preservation Act. We believe that these existing
    statutes and related regulations provide sufficient authority to
    regulate mining operations when properly monitored and enforced by
    state and Federal regulatory agencies. BLM's 2000 and 2001 revision to
    its surface management regulation discussed earlier provide a sound
    framework to prevent unnecessary or undue degradation of the public
    lands and are consistent with the recommendations of the National
    Academy of Sciences. These regulations were upheld by the D.C. District
    Court in 2003. We believe the legislative restatement and expansion of
    the existing environmental standards and permitting requirements in
    H.R. 2262 are both unnecessary and redundant and would only complicate
    BLM administration of its program and operator compliance.
      Procedural Concerns
        We support full and transparent public participation at appropriate
    stages. Under such landmark statutes as NEPA and FLPMA, Congress
    established a role for members of the public and structured a process
    by which the public could make their views known about a proposed
    governmental action--approval of a mining plan of operations, for
    example--to agency decision-makers. This role has been appropriately
    implemented through BLM regulations and policy. What Congress did not
    do in those statutes was give an individual the ability to block
    Federal actions unnecessarily. Certain provisions in H.R. 2262 appear
    to do just that.
        Congress has entrusted to the Secretary of the Interior the final
    decision as to whether a petitioning party has met the requirements of
    the law concerning the issuance of a lease, right-of-way, or the
    granting of a land or mineral patent. The Secretary exercises this
    authority judiciously. For example, of the 405 grandfathered patent
    applications, the Secretary has contested the validity of 99
    applications, and another 80 were withdrawn by the applicants, at least
    in part due to concerns raised by the Department. We see no purpose in
    disturbing the Secretary's long-established authority in this area of
    public land administration.
    Conclusion
        The Department remains committed to continuing to find
    administrative solutions to emerging issues as well as working with the
    Congress and other interested parties to find legislative solutions to
    those problems that cannot be resolved administratively, including the
    role of mineral patenting and requiring some form of prospective
    royalty or production payment. Because H.R. 2262, in our view, does not
    present workable solutions on these issues, we look forward to working
    with the Congress, industry, the environmental community, and other
    interested parties to consider other options. I will be glad to answer
    any questions.
                                     ______

        Mr. Costa. Thank you, Mr. Bisson, and at the appropriate
    time I believe there will be questions for you. The Chair would
    now recognize Mr. Leshy to testify for five minutes.

     STATEMENT OF THE HONORABLE JOHN LESHY, FORMER SOLICITOR, U.S.
                       DEPARTMENT OF THE INTERIOR

        Mr. Leshy. Thank you, Mr. Chairman. I appreciate your
    invitation to testify here today, and it is nice to be back in
    this room, and nice to be addressing this issue in the Congress
    again as we all have for many years. I want to make three
    points. First, why is reform of the mining law important? The
    mining law is actually applicable to somewhere between 3 and
    400 million acres of Federal land. That is about four times the
    size of California, and it can affect many more acres than that
    because mining, like it or not, is a dirty and disruptive
    business. It involves moving vast amounts of earth. It involves
    chemicals like cyanide and mercury. It can have great effects
    on water pollution, wildlife habitat, et cetera.
        It is also a major industry. It is a multi-billion dollar
    industry, and it can, the mining law can, absent annual action
    by Congress, lead to the privatization of public lands, and in
    fact over the years something more than 3 million acres of
    public land, an area about the size of Connecticut, has been
    privatized under the mining law.
        Second, what is wrong with it? Well, to reiterate points
    that have already been made, one thing that is wrong with it is
    that the mining law does allow a privatization, and in this it
    is really terrifically out-of-step with just about every other
    public land policy. This country made a decision dating back
    seven or eight decades ago to essentially keep public lands in
    public hands, and the mining law is sort of the last remaining
    glaring exception to this policy.
        Second, another glaring exception to contemporary public
    land policy, the owners of these minerals are not compensated
    for their extraction and use. That is the owners being the
    American public, the American taxpayers. The mining law makes
    the Federal lands about the only place on this planet where the
    owners of the minerals are not directly paid when the minerals
    are removed. If you mine on private lands, if you mine on state
    lands, if you mine in any country elsewhere in the world, you
    are paying the owner of the mineral a royalty. The Federal
    lands under the Mining Law of 1872 is about the only place
    where this does not happen.
        Today, as we all know, every other user of the public
    lands, whether it is a rancher, a hunter, a fisherman, a timber
    harvester, all pay the United States something for the
    privilege of using and extracting that resource. Not so under
    the mining law.
        Third, the mining law has some or at least grafted onto the
    mining law has been some environmental regulation but that
    environmental regulation is unfortunately inadequate. It is not
    comprehensive. It does not address things like balancing the
    use of Federal lands for mining against other uses such as
    wildlife habitat, and it has regulatory holes in it such as
    groundwater and groundwater pollution which are not regulated
    under the Clean Water Act and other environmental laws. So
    there are some big problems with the mining law, and this has
    been recognized by study commissions, blue ribbon commissions
    that go back 100 years.
        Third, why now? Why is now an important time, an
    appropriate time to reform the mining law? First of all, I
    think industry or at least more progressive segments of the
    industry are ready for it. They understand that it is
    increasingly difficult to defend these kinds of special
    exemptions from contemporary policy, a contemporary public land
    policy. Second, the West where the mining law operates and only
    operates has changed dramatically in the last 20 years since
    this Congress last seriously considered reform.
        The West has changed. It is the fastest growing and most
    urban region in the country. Its politics have changed. Now
    there are hunters and fishermen and local governments and
    ranchers and farmers who are concerned because the mining law
    still applies to about 60 million acres of land where the
    Federal government owns the minerals but not the surface.
        So ranchers and farmers find themselves looking out on
    their lands and companies are staking mining claims on it to
    get at the Federal minerals underneath. The surface owners have
    inadequate ability to deal with those mining proposals. The
    tourism industry, which is a huge industry in the West now, and
    the residents of the West, generally whose quality of life
    depends on those open spaces, all look at mining differently
    today. They all look at it and say, ``Why are these special
    exemptions justified?''
        So that these special favors that the mining industry
    enjoys under the mining law really are increasingly difficult
    to defend. So for that, I applaud this committee in taking on
    this really important public land issue. Reforming the mining
    law would be a huge legacy issue for future generations of
    Americans, and it would bring this industry into the 21st
    century. Badly needed. Thank you very much, Mr. Chairman.
        [The prepared statement of Mr. Leshy follows:]

    Statement of John D. Leshy, Harry D. Sunderland Distinguished Professor
         of Law, University of California, Hastings College of the Law

        I appreciate your invitation to testify today, and I especially
    appreciate this subcommittee taking the initiative to address reform of
    the Mining Law of 1872. There is no more important task among the
    constellation of issues raised by our public lands, which encompass
    nearly one-third of the Nation's real estate and a much larger portion
    of its valuable natural resources, including minerals.
        I appear here today as a private citizen, expressing my own views,
    and not representing any group. I have worked on Mining Law issues for
    thirty-five years, in academia, in government and in the nonprofit
    sector. I hope in this testimony to provide some larger perspective on
    the effort you have initiated with the introduction of H.R. 2262.
        Calls to reform the Mining Law date back to a few years from its
    passage, and have been made by many U.S. Presidents, from Republicans
    like Theodore Roosevelt and Richard Nixon to Democrats like Jimmy
    Carter and Bill Clinton. Almost forty years ago, as Stewart Udall was
    stepping down after eight years as Secretary of the Interior, he called
    its repeal the biggest unfinished business on the Nation's natural
    resources agenda.
        Signed into law by President Ulysses S. Grant four years before the
    telephone was invented, this antiquated relic is the last statutory
    survivor of a colorful period in the Nation's history that began with
    discovery of gold in the foothills of the Sierra Nevada in 1848. The
    mining ``rushes'' that ensued accelerated the great westward expansion
    of settlement. And they swept to statehood California (the golden
    state), Nevada (the silver state), Montana (the treasure state), Idaho
    (the gem state) and eventually Arizona (the copper state). The same era
    witnessed the enactment of numerous other laws filling out the
    framework for that great movement--laws like the railroad land grant
    acts and the Homestead Act of 1862. A generation later, Congress
    followed up with landmark laws like the National Forest Organic Act in
    1897 and the Reclamation Act of 1902, and a generation after that, with
    the National Park Organic Act of 1916 and, in 1920, the Mineral Leasing
    Act and the Federal Power Act.
        All of those other laws have long since been repealed, replaced, or
    fundamentally reformed, often more than once. Today the public lands
    and resources are managed under laws like the Federal Land Policy &
    Management Act of 1976, the Federal Coal Leasing Amendments of 1976,
    the Surface Management Control and Reclamation Act of 1977, the
    National Forest Management Act of 1978, the Reclamation Reform Act of
    1982, and the Federal Oil and Gas Leasing Reform Act of 1987.
        Amazingly, despite the fact that, since 1872, the population of the
    U.S. has grown more than seven-fold (from less than forty million to
    more than 300 million), the population of the eleven western states
    plus Alaska (where the Mining Law principally applies) has grown from
    about one million to nearly 70 million, and our society and economy
    have changed in ways beyond comprehension, the Mining Law has escaped
    fundamental overhaul.
        It is not for lack of trying. It has long been recognized that the
    Mining Law is thoroughly out of step with evolving public resource
    management principles. Indeed, the first Public Land Commission created
    by Congress to assess public land policies recommended in 1880 that it
    be thoroughly rewritten. That recommendation has been echoed by many
    blue-ribbon commissions since. There is widespread agreement that the
    Law's three most important shortcomings are as follows:
              First, the Mining Law allows privatization of valuable public
            resources, at bargain-basement rates. This so-called patenting
            feature is the last vestige in federal law of nineteenth
            century public land disposal policy. Much abused for purposes
            that have nothing to do with mining, it has resulted in an area
            of federal land larger than the State of Connecticut passing
            into private ownership, much of it in scattershot inholdings
            that continue to complicate land uses throughout the West to
            this day. While Congress has since 1994 enacted appropriation
            riders to forestall new applications for patents, it must do so
            each year, or patenting resumes.
              The fragility of these riders was driven home in the fall of
            2005 by the now-infamous Pombo-Gibbons legislative proposal
            that would have lifted the moratorium on new patents and
            greatly liberalized the terms of patenting. That ill-conceived
            proposal--which passed the House but then died under a storm of
            protest--could have resulted in the privatization of more
            millions of acres of federal lands.
              As long as privatization remains a core feature of the Mining
            Law, the temptation remains for future mischief-makers to try
            similar stunts. Patenting is not necessary to mine; indeed, the
            Supreme Court recognized in 1884 that the ``patent adds little
            to the security of the party in continuous possession of a mine
            he has discovered or bought.'' Many large mines are found at
            least partly on un-patented federal lands. It is time for
            Congress to repeal, once and for all, the Mining Law policy
            allowing willy-nilly privatizing of the federal lands.
              Second, the Mining Law fails to produce any direct financial
            return to the public. Mining companies are charged no rental,
            pay no royalty, and make no other payment that recognizes that
            the people of the U.S. own the minerals being mined. This is
            unique in two ways. First, virtually all other users of the
            public lands--oil and gas and coal developers, timber
            harvesters, energy companies that run transmission lines across
            the federal lands, cattle grazers, and even, these days,
            hunters, anglers and other recreationists--pay the government
            something (in most cases, something like market value) for the
            publicly-owned resources being used or removed. Second,
            everywhere else hardrock mining companies operate on this
            earth--on state or private lands in the U.S., and just about
            everywhere abroad--they pay royalties to the governments and
            others who own the minerals.
              It is time for Congress to close this glaring loophole.
            Whatever justification might once have been offered for such a
            giveaway of public property--such as when gold had strategic
            value and the West was sparsely settled--has long since
            disappeared. Today 85% of the gold mined is used to make
            jewelry, and the West has long been the fastest-growing region
            of the country.
              Third, the Mining Law results in inadequate protection of the
            environment and other uses of the public lands. All other users
            of the public lands who can cause significant environmental
            disruption are subject to a straightforward system of
            regulation which requires them to minimize the environmental
            effects of their activities and clean up any mess they create.
            And all other users are subject to the fail-safe authority of
            the government to say no to proposed activities that threaten
            major environmental harm which cannot be prevented or mitigated
            appropriately.
              The Mining Law itself is utterly silent on environmental
            regulation. While it is the case that operations carried out
            under it no longer escape regulation, thanks to laws like the
            Clean Water Act, these other laws do not comprehensively
            address the myriad of environmental threats posed by hardrock
            mining (such as groundwater depletion and pollution and
            disruption of wildlife habitat), nor do they weigh the value of
            mining against other values and uses of the public lands. The
            hardrock mining industry has long used the silence of the
            Mining Law on such issues to stoutly contest the reach of the
            government's authority over its activities.
              The industry has long had powerful allies in the government
            on these matters. For example, just within the last few years
            my two immediate successors as Solicitor of the Interior
            Department issued legal opinions agreeing with the industry
            that the Mining Law hamstrings government authority. One
            concluded that the government lacks authority to say no to
            Mining Law hardrock mining operations proposed for the public
            lands even if they pose huge threats to the environment.
            Another concluded that the Mining Law gives the mining industry
            the right to use as much public land as it thinks it needs as a
            dumping ground for the residue of its vast hardrock
            operations--operations which these days can involve hundreds of
            millions of tons of waste from gigantic open pits several miles
            across and a mile or more deep. It is no wonder that the
            federal land management agencies continue to feel cowed when
            they contemplate exercising regulatory controls over this
            industry.
              Mining is a dirty business, and must be carefully controlled
            to prevent environmental disasters. History teaches not only
            that things can go bad with hardrock mining operations, but
            when they do, the costs to repair the damage can be enormous.
            Well over a century of mining under the Mining Law of 1872 has
            saddled the Nation's taxpayers with a cleanup cost for
            thousands of abandoned mines that, according to some estimates,
            approaches fifty billion dollars. While the industry is now
            subject to some regulation, bad things still happen. Montana
            and U.S. taxpayers are paying millions of dollars to clean up
            the Zortman-Landusky mine in Montana--a mine which was approved
            under so-called ``modern'' regulatory standards that the
            industry argues are adequate and don't need strengthening.
              It is long past time to close these regulatory loopholes and
            eliminate these ambiguities so as to make clear to all in the
            industry--as well as to federal land managers--that the
            hardrock mining industry will be held to the same standards,
            and be subject to the same kinds of regulatory authority, that
            apply to all other users of the public lands.

                                     * * *

        About fourteen years ago, the House of Representatives handily
    approved a comprehensive reform proposal introduced by Chairman Rahall
    and others. That effort nearly succeeded, failing in the last hours of
    the 103rd Congress. In the years since then, much has changed. Today,
    Mining Law reform is both more imperative and, in my judgment, more
    achievable. I'd like to take a few moments to explain why.
        First, the industry structure, operations and economic impact have
    evolved considerably. The domestic hardrock industry now produces much
    more gold than it ever did--the U.S. is the third leading producer in
    the world. And the industry is heavily concentrated, with many fewer
    companies and many fewer mines than ever before. More than four-fifths
    of U.S. gold production now comes from a single state--Nevada. The four
    largest mines, all in Nevada, account for well over half the total
    domestic production. The thirty biggest mines (more than half in
    Nevada, including twelve of the fifteen largest) yield 99% of total
    production. Barrick Gold, a Canadian company, is the biggest,
    accounting for about 40% of domestic U.S. (and 8% of world) gold
    production. Production of copper and other precious metals are
    similarly concentrated. Moreover, the hardrock industry now operates
    with such ruthless efficiency that it employs far fewer people than it
    used to. Its workers may be relatively well-paid, but they are far
    fewer in number and much more geographically concentrated than they
    ever were.
        In the meantime, the economies of the western states have evolved
    rapidly away from their historic roots dependent on resource
    extraction. Today the regional economy where the Mining Law applies--
    the western states in the lower 48 plus Alaska--has changed
    dramatically. While mining used to be a dominant industry in many
    western locales, today in most places its impact is small, even
    minuscule. The West is now the most urban and fastest growing region in
    the country. Moreover, its dynamic growth and economic health are
    fundamentally linked to the quality of life provided by the open spaces
    and recreational amenities of the public lands.
        As a result, the politics of the region have changed at the ground
    level. Westerners are increasingly unsympathetic to the idea that the
    hardrock mining industry deserves these special exemptions from the
    laws and policies that apply to everyone else. It is not surprising,
    then, that when the mining industry seeks to exploit its favored
    position under the Mining Law, more and more local people--ranchers,
    hunters, anglers, retirees, land developers, tourist industry
    officials, municipal water providers and other local government
    officials--are asking why this nineteenth century policy still exists.
    And their concerns are growing because soaring mineral prices,
    particularly for gold, copper and uranium, have led to a new rush of
    claimstaking under the Mining Law in areas with high values for other
    uses.
        People in the west are also more familiar than most with the
    consequences of failing to control the industry. They live with the
    thousands of abandoned mines scattered throughout the region, and are
    familiar with the sorry legacy of polluted streams and disrupted
    landscapes that will require billions of dollars to repair. And they
    resent the fact that, under the current regime, the dollars to pay for
    this cleanup will come more from taxpayers than from the industry that
    created the mess.
        Another noteworthy change in recent years is that, for the first
    time, the hardrock mining industry is facing some pressure to reform
    from the demand side--the jewelry industry that consumes much of its
    product. With leadership from Tiffany and other major jewelers, this
    movement has helped persuade some major mining companies, concerned
    about their reputations as well as their impacts, to work to improve
    their practices and make other accommodations to modern social and
    environmental values. In short, the industry is no longer so monolithic
    and so reflexively hostile to change.
        It bears repeating that the H.R. 2262's reforms do no more than put
    in place practices and policies that oil and gas operators, coal
    miners, electrical utilities, ski areas, and other intensive users of
    the federal lands have operated under quite successfully for decades. I
    have no doubt that the innovative, progressive companies in this
    industry--and there are some, who have flourished around the world by
    being so--will adapt readily to such reforms, just like other public
    land users have.
        I am also confident that reforming the archaic Mining Law will
    not--as some industry spokespeople have ritually maintained--put an end
    to the domestic hardrock mining industry. Every year Canada's Fraser
    Institute surveys mining industry executives and uses the results to
    rank the most favorable jurisdictions in the world for hardrock mining,
    considering a variety of factors, including political stability. The
    American West is always at or near the top of the rankings.
    Furthermore, skyrocketing mineral prices means the industry is thriving
    as never before, and any modest increase in production costs that might
    result from reforms like H.R. 2262 can readily be absorbed.
        Once again, I commend your leadership for taking up this important
    issue. You have the best opportunity in a generation to achieve a
    landmark legacy in public land policymaking. I stand ready to help any
    way I can to move this forward, and I would be happy to answer any
    questions you may have.
                                     ______

    Response to questions submitted for the record by John D. Leshy, Harry
    D. Sunderland Distinguished Professor of Law, U.C. Hastings College of
                       the Law, San Francisco, California

     Question 1: The BLM's current ``Part 3809'' Regulations governing
            surface management of hard rock mining on federal lands have
            been in place since 2001. What is your assessment of the
            adequacy of these regulations in terms of protecting the
            environment in hardrock mining operations?
        Answer: In my judgment, the current Part 3809 Regulations are not
    adequate, for several reasons.
        First, early on the Bush (II) Administration weakened these
    regulations significantly, removing a number of key provisions that had
    been added by the Clinton Administration. Compare 65 Fed. Reg. 69,998
    (2000) with 66 Fed. Reg. 54,837 (2001). One of the most important was
    to eliminate the federal government's so-called ``right to say no'' to
    proposed hardrock mines that threaten devastating, uncontrollable
    effects on the natural and cultural resources of the public lands.
        The Bush Administration acted on the basis of a Solicitor's Opinion
    issued by my successor, which overruled an opinion I had issued in
    1999. These legal opinions differed on how to interpret a key phrase in
    the Federal Land Policy and Management Act of 1976 (FLPMA), where
    Congress expressly amended the Mining Law to require the Interior
    Secretary to protect the public lands from ``unnecessary or undue
    degradation'' (emphasis added). 43 U.S.C. Sec. 1732(b).
        My legal opinion was that ``or'' means ``or,'' so that BLM has a
    responsibility to regulate hardrock mining on the public lands to
    protect against ``undue'' degradation, even if that degradation is
    regarded as ``necessary'' to mining. My successor's legal opinion was
    that ``or'' really ought to be construed as meaning ``and.'' Thus, in
    his view, BLM has no authority to prevent hardrock mining that causes
    ``undue'' degradation if such degradation is ``necessary'' to mining.
        Environmental groups asked a federal court to settle this dispute.
    After full briefing and argument, the court ruled that my reading of
    FLPMA was correct, and the Department has the responsibility to say no
    to proposed hardrock mines that cause ``undue'' degradation even if it
    is ``necessary'' to mining.
        Somewhat bizarrely, however, the court decided not to set aside the
    Bush Administration's removal of the express ``right to say no'' from
    the 3809 regulations. Conceding the question was ``indeed extremely
    close,'' the court was persuaded by the Department of Justice's
    argument that, even if my view was correct and the Bush Solicitor's
    view incorrect, those regulations need not contain an express right to
    say no because they could still be interpreted as allowing the
    Department to prevent ``undue'' degradation. Environmental groups
    could, the court reasoned, challenge Interior's implementation of those
    regulations if they believed the Department was allowing ``undue''
    degradation in particular cases in the future. Mineral Policy Center v.
    Norton, 292 F. Supp. 2d 30, 46 n. 18 (D.D.C. 2003). Neither side
    appealed this ruling.
        In my judgment, this is too important a matter to be left in this
    current muddled state. H.R. 2262 would require the BLM and the Forest
    Service to deny approval of proposed operations unless they determine
    that ``there will be no undue degradation of natural or cultural
    resources. (Sec. 303(d)(1)(H); see also Sec. 301(1) (mineral activities
    shall be required to ``protect the environment, public health, and
    public safety from undue degradation''). By disjoining ``undue'' from
    ``unnecessary,'' H.R. 2262 makes clear that the government has the
    responsibility to say no to a proposed hardrock mining operation if it
    finds severe, un-mitigatable adverse impacts would be visited on other
    public resources and values.
        As I said in my statement to this Committee on July 25, I believe
    the public interest requires no less. Every other user of the public
    lands--oil or coal company, forest products company, rancher, hunter,
    angler, or hiker--is held to that common-sense standard. Hardrock
    mining, which has the potential to cause more serious disruption than
    any of these others, deserves no special exemption.
        The current Part 3809 regulations have other shortcomings. For
    example, they inadequately address hardrock mining's potential for
    adverse impacts on surface and groundwater supplies, which can be
    considerable. The Ninth Circuit recently ruled that existing federal
    law did not require BLM to protect water supplies in approving hardrock
    mining plans. Great Basin Mine Watch v. Hankins, 456 F.3d 955 (9th Cir.
    2006).
        They also do not apply to national forest land, and the counterpart
    U.S.F.S. regulations (36 C.F.R. Part 228) are even weaker. This is not
    surprising, for the Forest Service was long reluctant to do any
    regulation of hardrock mining on national forests. Congress gave the
    U.S.F.S. express authority to regulate mining to prevent destruction of
    the national forests way back in 1897 (see 16 U.S.C. Sec. Sec. 478,
    551), but the agency waited more than three-quarters of a century to
    adopt its first regulations on the subject. The regulations it finally
    adopted in 1974 were relatively tepid and have changed very little
    since, despite the vast changes in hardrock mining technology and
    practices.
        Among other things, they claim authority only to ``minimize''
    adverse impacts to the forests. In other words, the Forest Service,
    like the Interior Department, currently takes the position that the
    government cannot say ``no'' to a proposed hardrock mine on lands it
    manages that threatens dire environmental harm. The courts have agreed
    that existing law applicable to the Forest Service requires no more.
    Okanogan Highlands Alliance v. Williams, 236 F.3d 4676 (9th Cir. 2000).
        Neither the BLM nor the Forest Service do a very good job
    regulating small-scale mining operations--so-called ``notice only''
    mines and wildcat explorations. These kinds of operations can devastate
    fish and wildlife habitat, because some of these operators mishandle
    toxic chemicals and use earthmoving equipment carelessly. Yet many
    times the government land managers (as well as other users of federal
    lands and the public) do not even get notice in advance of these
    operations, and compliance with laws like NEPA, the Clean Water Act or
    the Endangered Species Act are often wanting.
        Finally, there is the matter of ``bonding,'' where the government
    requires operators to provide financial assurance for cleanup so that
    the taxpayer does not foot the bill if the operator defaults or goes
    bankrupt. The Part 3809 regulations are better than they used to be on
    bonding. (To its credit, the Bush Administration did not water down the
    Clinton Administration's stiffening of bonding standards in the Part
    3809 regulations intact.) The Forest Service regulations here too are
    not as good, leaving it with much more discretion on bonding.
        As several governmental reports document, bonds are still sometimes
    set at inadequate levels, putting the taxpayers at risk. See, e.g.,
    Hardrock Mining: BLM Needs to Better Manage Financial Assurances to
    Guarantee Coverage of Reclamation Costs (GAO # 05-377, June 2005)
    (reporting on a 2004 survey showing 48 mining operations on public
    lands had closed without cleanup since BLM began requiring financial
    assurances; in more than half the cases, the financial assurance was
    inadequate, to the tune of at least $56 million, to cover the cleanup
    costs); see also Environmental Liabilities: Hardrock Mining Cleanup
    Obligations (GAO #06-884T, June 14, 2006) (recommending hardrock mining
    be given a high priority in developing financial assurance
    requirements, because it presents taxpayers with an especially serious
    risk of having to pay cleanup costs, with some mine owners defaulting
    on multiple occasions, leaving taxpayers to bear cleanup costs);
    Environmental Liabilities: EPA Should Do More to Ensure that Liable
    Parties Meet Their Cleanup Obligations (GAO #05-658, August 17, 2005);
    U.S. EPA, Office of Inspector General, Nationwide Identification of
    Hardrock Mining Sites (Report No. 2004-P-00005, March 31, 2004).
        Federal officials require financial assurances in the amount
    sufficient to repair and reclaim what they forecast will be the adverse
    effects of the proposed mine, but their forecasts often prove to be
    unduly optimistic. Recent studies show they often underestimate the
    amount of environmental degradation from proposed hardrock mines,
    particularly from disruption and pollution of water supplies. See Ann
    Maest and Jim Kuipers, Comparison of Predicted and Actual Water Quality
    at Hardrock Mines: The Reliability of Predictions in Environmental
    Impact Statements (2006); and Predicting Water Quality at Hardrock
    Mines: Methods and Models, Uncertainties, and State-of-the-Art (2006).
    The cost to repair or control that kind of damage can be high, and the
    bond amount--which is often calculated simply on the basis of moving
    dirt, replacing soil and reestablishing a vegetative cover--can be
    woefully insufficient to cover it.
     Question 2: Do you think there are any circumstances under which
            patenting, or transferring title to federal land to hardrock
            mining companies, is ever justified?
        Answer: I have thought hard about this question over the years. At
    one time, I thought the answer was clearly no--patenting was never
    justified. But as I have continued to ponder the matter, I have come to
    a somewhat different conclusion, and believe that privatization of the
    federal lands involved in large hardrock mining operations can be
    justified under certain carefully defined conditions.
        I start with the proposition that many, perhaps even most, major
    hardrock mining operations in the West are on lands in a mixture of
    ownerships--private, state and federal. Often the federal lands,
    particularly those where the ore body is found, may be mere slivers or
    odd-shaped parcels intermixed with others. See, e.g., Mineral
    Resources: Value of Hardrock Minerals Extracted From and Remaining on
    Federal Lands (GAO/RCED-92-192, August, 1992).
        Giving mining companies title to federal lands involved in these
    active, major, heavily capitalized mining operations would consolidate
    and simplify ownership and reduce regulatory and other complexities.
    After major hardrock mining operations cease, the lands involved often
    serve very little public value for other uses. Moreover, continuing
    federal ownership can cloud the responsibility for protecting public
    health, safety, and the environment from pollution endemic to these
    sites.
        On the other hand, I can think of at least two federal interests
    that ought to be protected.
        First, taxpayers have an interest in getting a fair return on
    valuable publicly-owned resources. But I see no reason why the U.S.
    could not protect this fiscal interest while still privatizing these
    lands. Congress could make privatization contingent upon the mining
    operation making a payment (lump sum or periodic) to the Treasury to
    capture an appropriate share of future income streams made possible by
    the use of these federal lands in these mining operations.
        Mining companies have sometimes showed a willingness to entertain
    such arrangements and pay real money to simplify and secure their land
    positions. In the last Congress and again in this one, for example,
    legislation has been introduced to approve a complex series of land
    exchanges in Arizona between the United States and the Resolution
    Copper Company (a joint venture between BHP Billiton and Rio Tinto).
    According to news reports, Resolution is seeking to tap a large deep
    underground copper deposit. While it already owns or controls
    considerable land in the area, it wants title to some federal land
    (which may or may not include part of the ore body) to facilitate the
    operation. To gain title (through a proposed congressionally-approved
    exchange), Resolution is apparently willing to pay the United States
    substantially more than it would be required to pay to gain title under
    the Mining Law (assuming Congress failed to renew the annual moratorium
    on patenting, and assuming Resolution qualified for patents). That is,
    Resolution has acquired title to and is offering to trade to the United
    States considerable land of high conservation and recreational value.
    Not having examined the details of this proposal, I am not prepared to
    comment on whether the arrangement represents a fair return to the
    federal taxpayer. But it is an example of a major mining entity being
    willing to pay genuine value for privatizing federal land in order to
    facilitate a major mining operation.
        Second, the U.S. should ensure that privatization does not unduly
    threaten the environment in general, and nearby federal lands in
    particular. So long as the U.S. retains title to some of the lands
    affected, some environmental regulations and procedures that attach
    only to activities on public lands would continue to apply--such as
    NEPA, Endangered Species Act Sec. 7, National Historic Preservation
    Act, Native American consultation and protection laws, and parts of the
    Clean Water Act. Here too, however, I believe it should be possible,
    with some creativity, to fashion ways to protect this federal
    environmental interest. For example, privatization could be conditioned
    on working out an agreement or compact between state and federal
    regulators that establishes a regulatory framework to allow this
    interest to be protected.
        For these reasons, I think privatizing federal lands involved in
    major hardrock mining operations can be considered. I hasten to point
    out that Mining Law patenting has a long and sorry history of abuse.
    Most of the 3.2 million acres patented have in fact never been used, or
    used very little, for mining. Instead, they have been used for
    residential or other kinds of development, as private recreational
    retreats, spas, golf courses, and many other things. Given that record,
    any legislation that retains some opportunity to privatize lands in
    connection with hardrock mining must be very carefully drawn.
        In short, I think privatization is an option worth considering, so
    long as it (a) is narrowly tailored to apply only to active or approved
    bona fide major mining operations; (b) retains for the U.S. the
    discretion to decide whether, under all the circumstances, the public
    interest is better served by deeding the land to the mining company
    rather retaining it in public ownership; (c) provides appropriate
    compensation to the United States for the fair value of the federal
    lands and minerals involved in the land being privatized; and (d)
    accommodates federal interests in protecting federal lands and
    resources not being privatized through some arrangement worked out in
    advance with state regulators.
     Question 3: Should uranium be treated separately from other Mining Law
            minerals?
        Answer: I believe a very powerful case can be made that uranium
    ought to be treated more like the fossil fuels and other energy
    minerals. Coal, oil and gas, tar sands, oil shale, and geothermal
    resources are all governed by leasing systems, most of them dating back
    to 1920. These industries have generally flourished under leasing
    systems, and the public's fiscal and environmental interests are (at
    least for the most part) adequately protected. Uranium is the only
    energy mineral treated differently, and only to some extent, for some
    federal uranium is already subject to leasing rather than to the Mining
    Law--a result of some post World War II withdrawals of some federal
    land on the Colorado Plateau which transferred jurisdiction to the
    Atomic Energy Commission (the Department of Energy has since succeeded
    to this jurisdiction). Moreover, uranium is often found in geological
    beds and thus shares characteristics with the other fossil fuels.
        Furthermore, there is no justification for continuing to subsidize
    the domestic uranium industry (and with it the civilian nuclear power
    industry) by allowing publicly-owned uranium to be mined without a
    royalty or other payment to the Treasury. As with hardrock mining, past
    uranium mining and milling has left a big cleanup bill for the
    taxpayer. The government is currently spending many millions of
    dollars, for example, to move a large mill tailings pile away from the
    banks of the Colorado River adjacent to Moab, Utah, and has spent much
    public money in cleaning up uranium mines and mills in the past. And
    there is more to do. Consumers of uranium should pay these bills, not
    taxpayers. Finally, there is no strategic argument for subsidizing
    domestic uranium production (some of which might in fact be exported).
    Canada and Australia, two friendly countries, have abundant uranium
    resources.
        For all these reasons, I believe the idea of simply putting uranium
    under the Mineral Leasing Act ought to be given very serious
    consideration. It would be a welcome part (but only a part) of Mining
    Law reform.
     Question 4: What improvements might be made to H.R. 2262? What are
            your thoughts on the bill's treatment of the royalty issue?
        Answer: As I read H.R. 2262, it applies a royalty only to mineral
    ore extracted from federal lands. It does not apply any kind of rental
    (other than the claim holding fee already in law) or royalty to the use
    of federal lands to support minerals that have already been patented.
    Yet it is very common, as I noted in response to question 2, above, for
    there to be a jumbled mixture of private, state and federal ownership
    of large hardrock mines. Sometimes all or most of the actual ore body
    is on non-federal land (often, because it has already been patented
    under the generous terms of the Mining Law).
        Even where the U.S. no longer owns any part of the ore body, the
    federal lands play a key role in bringing the ore body into
    production--by providing lands for mineral processing, for dumping
    waste rock and mine tailings, and so forth. The United States should,
    in my judgment, receive a return for the use of its land in these
    circumstances that reflects its contribution, both past and present, to
    the overall operation.
        Suppose, for example, that the ore body of a large producing mine
    was 75% in private ownership, having been previously patented under the
    Mining Law, and 25% federal land. And suppose that thousands of acres
    of federal land are being used as waste rock dumps and tailings piles
    for the mining operation. It seems to me that a royalty or payment to
    the Treasury which is limited to the 25% of the ore body still in
    federal ownership is inadequate return to the public for this use of
    the public's resources. Mine operators who use thousands of acres of
    federal land as a dumping ground ought to pay something more than a
    nominal fee. Their payment ought to reflect some measure of the value
    these federal lands contribute to the entire mining operation. I would
    be happy to work with the committee to try fashion something that would
    do that.
        Regarding other improvements in H.R. 2262, I would note that
    previous reform bills addressed various matters connected with claim
    location, claim size and the like, trying to simplify the red tape that
    has long plagued the on-the-ground implementation of the old Mining
    Law. I devoted some attention in my book on the Mining Law to some of
    these anachronistic--even silly, to modern eyes--features, such as the
    distinction between lode and placer claims. The Mining Law also
    contains, in my judgment, inadequate protection for legitimate
    explorers against claim-jumping by rival miners, and has some limits on
    claim size that seem arbitrary and anachronistic. H.R. 2262 is silent
    on these matters. It is worth considering whether to address these
    matters in reform legislation.
        As I said in my written statement to the Committee, I believe the
    most important reasons to reform the Mining Law are to end the
    opportunity for wholesale patenting, to capture some revenue for the
    public which owns the minerals and land involved, and to hold the
    hardrock mining industry to the same kinds of environmental standards
    and regard for other uses of the federal lands that are routinely
    applied to all other users of the federal lands.
        If the legislation contains adequate measures on these three
    points, I believe it is appropriate for the Congress to consider and
    incorporate any reasonable suggestions the hardrock mining industry has
    to make the Law more simple and efficient from its perspective. The
    Congress should, however, take care to ensure such improvements do not
    undermine or defeat the thrust of the legislation on the three most
    important points.
        Finally, I have one other suggestions for improvement in H.R. 2262.
    Section 307 is a generally thoughtful attempt to mesh federal and state
    regulatory authority and responsibility by providing for a ``common
    regulatory framework.'' Sec. 307(c)(2). As I noted in response to
    question 2, this is especially important because many large mines are
    on a mixture of federal and state or private lands. So long as federal
    lands are involved, however, the federal government needs to have the
    right unilaterally to inspect and enforce federal regulations, and this
    should not be left to implication, as it is now. Therefore, I recommend
    adding, at the end of this subsection, a new sentence along the
    following lines: ``Under this common regulatory framework the United
    States shall retain the right independently to inspect the mining
    operations and to bring enforcement actions.''
     Question 5: At the hearing on July 26, the Administration suggested
            that applying a royalty to existing mining claims might be
            unconstitutional. What are your views on this? In your answer,
            please address generally the extent to which Congress's
            authority to apply reforms of the Mining Law to existing mining
            claims might be limited by constitutional protections for
            private property.
        Answer: There are very few limits on Congress's ability to apply
    reforms to existing mining claims. First of all, it has long been
    clear--and reaffirmed in many decisions of the U.S. Supreme Court--that
    a mining claim located on the federal lands does not automatically
    carry with it a constitutionally protected property right. Mining
    claims where there has not yet been a ``discovery'' of a ``valuable
    mineral deposit'' are mere licenses to occupy the federal lands. Their
    legal status is no different from that of a hunter or angler or other
    recreational user of federal lands. ``[I]t is clear that in order to
    create valid rights...against the United States [under the Mining Law]
    a discovery of mineral is essential.'' Union Oil v. Smith, 249 U.S.
    337, 346 (1919); see also Cole v. Ralph, 252 U.S. 286, 296 (1920).
        The locator of a claim on which a discovery is lacking does have
    the right to exclude other miners from the claim, so long as the
    original locator is actively exploring for a mineral. This is the
    ``pedis possessio'' (foothold) doctrine recognized by the Supreme Court
    almost ninety years ago. Union Oil v. Smith, supra. But the locator has
    no rights against the United States until a discovery is made. This
    means the United States can change its policy or rules, and even
    effectively extinguish such claims, at any time before a discovery is
    made, without any obligation to pay compensation.
        In practice, almost all mining claims are located in advance of
    discovery, to provide a foothold on public lands in order to explore
    for valuable mineral deposits; that is, people locate mining claims in
    speculation that a mineral might possibly exist and be profitably mined
    from the claimed land. But hopes and speculations, the courts have long
    made clear, are not tantamount to a ``discovery.'' See, e.g., United
    States v. Coleman, 390 U.S. 599 (1968); Sullivan v. Iron Silver Mining
    Co., 143 U.S. 431 (1892). Thus most mining claims do not carry with
    them constitutionally protected property rights, and Congress retains
    practically unfettered authority to change the rules regarding them.
        With regard to mining claims that are buttressed by a ``discovery''
    of a ``valuable mineral deposit,'' the analysis is a little different.
    These contain property rights that are good against the government, so
    that if the government utterly prevents or shuts down mining
    operations, the claimant may--and I emphasize may--have a legal
    argument for compensation. Whether the argument for compensation is
    successful depends on a case-by-case, fact-intensive analysis. See,
    e.g., Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional
    Planning Agency, 535 U.S. 302 (2002). It is clear, for example, that
    the government retains ongoing regulatory authority over even
    unpatented mining claims that have a discovery and a property right.
    The government can tighten up regulations or impose new regulations if
    it has a reasonable case for doing so. The U.S. Supreme Court addressed
    this exact question in 1985, and its guidance is worth quoting at some
    length:
              Even with respect to vested property rights, a legislature
            generally has the power to impose new regulatory constraints on
            the way in which those rights are used, or to condition their
            continued retention on performance of certain affirmative
            duties. As long as the constraint or duty imposed is a
            reasonable restriction designed to further legitimate
            legislative objectives, the legislature acts within its powers
            in imposing such new constraints or duties. ***
              This power to qualify existing property rights is
            particularly broad with respect to the ``character'' of the
            property rights at issue here. Although owners of unpatented
            mining claims hold fully recognized possessory interests in
            their claims, we have recognized that these interests are a
            ``unique form of property.'' *** The United States, as owner of
            the underlying fee title to the public domain, maintains broad
            powers over the terms and conditions upon which the public
            lands can be used, leased, and acquired. See, e.g., Kleppe v.
            New Mexico, 426 U.S. 529, 539 (1976). ***
              Claimants thus take their mineral interests with the
            knowledge that the Government retains substantial regulatory
            power over those interests. *** In addition, the property right
            here is the right to a flow of income from production of the
            claim. Similar vested economic rights are held subject to the
            Government's substantial power to regulate for the public good
            the conditions under which business is carried out and to
            redistribute the benefits and burdens of economic life.
    United States v. Locke, 471 U.S. 84, 104-05 (1985). As the last-quoted
    sentence makes clear, the government retains the right to require a
    payment (whether labeled a tax, royalty, fee, or something else) from a
    holder of a mining claim on federal lands, even one with a discovery
    and a property right, as part of its continuing redistribution of the
    benefits and burdens of economic life.
        Finally, it is important to note that the discovery creating a
    property right against the government is dependent upon the
    marketability of the mineral. This means it may disappear--and with it
    the property right against the government--as a result of changing
    market conditions and other factors relevant to marketability. As the
    Supreme Court has held, a ``locator who does not carry his claim to
    patent...does take the risk that his claim will no longer support
    issuance of a patent.'' Best v. Humboldt Placer Mining Co., 371 U.S.
    334, 336 (1963).
        In this connection, the Interior Department and the federal courts
    have long held that, in determining whether a discovery exists, the
    cost of complying with environmental laws and regulations must be taken
    into account. The courts have recognized that adding environmental
    restrictions may in fact affect claim validity, and thus in effect
    reduce or eliminate the government's obligation to compensate
    claimants. See, e.g., Clouser v. Espy, 42 F.3d 1522 (9th Cir. 1994)
    (``virtually all forms of [government] regulation of mining claims--for
    instance, limiting the permissible methods of mining and prospecting in
    order to reduce incidental environmental damage--will result in
    increased operating costs, and thereby will affect claim validity.
    However, the...case law makes clear that such matters may be regulated
    by the government''); Reeves v. United States, 54 Fed. Cl. 652 (2002)
    (person who located mining claims in a wilderness study area had no
    compensable property right to have a mining plan approved).
        For all these reasons, I believe it is well settled that the
    government has nearly unfettered authority to apply newly enacted laws
    and regulations, including a royalty, to mining claims that are not
    accompanied by a discovery; that is to say, most of the several hundred
    thousand claims currently of record. It also has very considerable
    power to apply to new regulations to mining claims that have a
    discovery without creating any obligation to compensate the claimants.
        Because of the strength of the case for congressional authority, I
    was wholly unpersuaded by the rather casual assertion in BLM Deputy
    Director Bisson's testimony on July 26 that a royalty on existing
    claims would raise constitutional ``takings'' questions. Given the
    analysis I set out here, I recommend the Committee give no weight to
    his assertion unless the executive branch--and I would include here the
    Department of Justice as well as the Solicitor's Office of the Interior
    Department--supplies the committee with a legal memorandum backing up
    Mr. Bisson's statement and refuting my analysis.
                                     ______

        Mr. Costa. Thank you very much, Mr. Leshy. Our last witness
    on this panel is Mr. Tangen, who will testify for five minutes.
    I am sorry. Ms. Martin. I am getting ahead of myself. I
    apologize. Ms. Martin, and then we will have Mr. Tangen.

              STATEMENT OF JENNIFER MARTIN, COMMISSIONER,
                    ARIZONA GAME AND FISH COMMISSION

        Ms. Martin. Thank you, Mr. Chairman, and members of the
    Subcommittee. My name is Jennifer Martin, and again I am a
    member of the Arizona Game and Fish Commission, and I
    appreciate this opportunity to voice support for House
    Resolution 2262. The Southwest is the nation's richest store of
    minerals and industrial metals, and Arizona ranked first in
    mineral production in the U.S. in recent years. Mineral
    development remains a major component of the economy throughout
    the West.
        The General Mining Act of 1872 was highly effective in
    settling the West and providing economic growth not just to the
    West but to the nation, and it is in the public interest to
    continue to benefit from our mineral resources. However, the
    focus on westward migration in the 1872 act is antiquated. The
    question is not if the 1872 act needs to be updated to address
    current natural resource issues but how it needs to be updated
    so that the mining industry can continue to fulfill its vital
    economic role while providing sound stewardship of the land and
    opportunities for outdoor recreation.
        While mining has boosted western economies over many
    decades, it has also impacted the West's natural resources
    including native wildlife and habitat and vital springs,
    streams and wetlands. The 1872 act was written when some of
    today's most valuable mineral resources and most expedient
    extraction techniques were completely unknown and when the
    American West was a vast and seemingly endless continuum of
    wide open space.
        One hundred and thirty years later westward expansion is
    clearly not the national priority that it was. Those seemingly
    endless open spaces have been transformed. Urban development
    continues to spread throughout the West, and the remaining open
    public lands compete for many uses. It is the charge of each of
    us to balance those uses in the public's best interest.
        The 1872 act contains no measures for environmental
    impacts. That was simply not the concern then that it is now.
    Because no mechanism for cleanup and restoration following
    extraction was identified, the Environmental Protection Agency
    now estimates that 40 percent of western headwaters are now
    contaminated by a combination of acidity, heavy metals and
    sediment resulting from abandoned mines. H.R. 2262 addresses
    this issue by creating a fund derived from royalties placed on
    mining revenue to reclaim and restore natural systems and
    watersheds following mining activities.
        Since bonding programs established at the state level vary
    widely throughout the West and in many cases fall well below
    the actual cost of reclamation, taxpayers carry the burden of
    restoring our public lands. The proposed legislation would
    establish a consistent and more adequate standard and funding
    mechanism for reclamation. This is especially crucial in
    relation to watersheds in the arid Southwest.
        Water availability is a critical issue and water
    contamination has severe implications for human health as well
    as wildlife. The majority of our Federally listed endangered
    species in Arizona are aquatic wildlife which are highly
    sensitive to watershed contaminants, and 75 percent of all of
    Arizona's wildlife species depend on riparian systems during
    some portion of their life cycles. H.R. 2262 takes positive
    steps toward ensuring that mining activities will be conducted
    in a manner that allows for the continuation of wildlife
    species.
        Because H.R. 2262 requires reclamation of not only
    developed sites but also exploration activities, road systems
    and other exploration impacts that have been left unmitigated
    in the past will be addressed in the future. While H.R. 2262
    proposes to provide a mechanism for restoring mined areas, it
    also protects special places from initial impacts. Title 2
    identifies national monuments and parks, wilderness and
    roadless areas and other sensitive places ineligible for mining
    activities, and this will provide a tremendous benefit to
    wildlife and outdoor recreation by setting aside our remaining
    relatively untouched areas.
        Studies indicate that hunting, angling, wildlife viewing
    and other outdoor activities generate an economic impact of
    approximately $5 billion annually to the State of Arizona,
    roughly equalling that of hardrock mining enterprises, yet the
    1872 law is interpreted to identify mining as the best and
    highest use of public land where minerals have been located.
    That may well have been the case at the time but the need
    clearly exists to prioritize mining activities as they relate
    to the economy and the public interest as they stand today.
        H.R. 2262 accomplishes this by protecting special places,
    establishing environmental standards and implementing fiscal
    reforms. I am glad to be here discussing this topic today, and
    I applaud your interest in updating the 1872 act, and I urge
    you to continue to move forward on this issue. Thank you.
        [The prepared statement of Ms. Martin follows:]

       Statement of Jennifer L. Martin, Arizona Game and Fish Commission

        Mr. Chairman and members of the Subcommittee, my name is Jennifer
    Martin, and I am a Member of the Arizona Game and Fish Commission. I
    appreciate this opportunity to voice support for House Resolution 2262,
    the Hardrock Mining and Reclamation Act of 2007.
        The Southwest is the nation's richest store of minerals and
    industrial metals, and Arizona ranked first in mineral production in
    the U.S. in recent years. Mineral development remains a major component
    of the economy throughout the west. The General Mining Act of 1872 was
    highly effective in settling the West and providing economic growth not
    just to the West, but to the nation. It is in the public interest to
    continue to benefit from our mineral resources. However, the focus on
    westward migration in the 1872 act is antiquated. The question is not
    if the 1872 act needs to be updated to address current natural resource
    issues, but how it needs to be updated so that the mining industry can
    continue to fulfill its vital economic role while providing sound
    stewardship of the land and opportunities for outdoor recreation.
        While mining has boosted western states' economies over many
    decades, it has also impacted the west's natural resources, including
    native wildlife and habitat, and vital springs, streams and wetlands.
    The 1872 act was written when some of today's most valuable mineral
    resources and most expedient extraction techniques were completely
    unknown, and when the American West was a vast and seemingly endless
    continuum of wide open space.
        130 years later, westward expansion is clearly not the national
    priority that it was. Those seemingly endless open spaces have been
    transformed. Urban development continues to spread throughout the west,
    and the remaining open public lands compete for many uses. It is the
    charge of each of us to balance those uses in the public's best
    interest.
        The 1872 act contains no measures for environmental impacts. That
    was simply not the concern then that it is now. Because no mechanism
    for cleanup and restoration following extraction was identified, the
    Environmental Protection Agency now estimates that 40 percent of
    western headwaters are contaminated by a combination of acidity, heavy
    metals and sediment resulting from abandoned mines. H.R.2262 addresses
    this issue by creating a fund derived from royalties placed on mining
    revenue to reclaim and restore natural systems and watersheds following
    mining activities. Since bonding programs established at the state
    level vary widely throughout the west, and in many cases fall well
    below the actual cost of reclamation, taxpayers carry the burden of
    restoring our public lands. The proposed legislation would establish a
    consistent and more adequate standard and funding mechanism for
    reclamation.
        This is especially crucial in relation to watersheds in the arid
    Southwest. Water availability is critical issue, and water
    contamination has severe implications for human health as well as
    wildlife. The majority of our federally listed endangered species in
    Arizona are aquatic wildlife, which are highly sensitive to watershed
    contaminants. 75% of all of Arizona's wildlife species depend on
    riparian systems during some portion of their life cycles. H.R. 2262
    takes positive steps towards ensuring that mining activities will be
    conducted in a manner that allows for the continuation of wildlife
    species.
        Because H.R. 2262 requires reclamation of not only developed sites,
    but also exploration activities, road systems and other exploration
    impacts that in the past have been left unmitigated will be addressed
    in the future.
        While H.R. 2262 proposes to provide a mechanism for restoring mined
    areas, it also protects special places from initial impacts. Title II
    identifies National Monuments and Parks, Wilderness and Roadless Areas
    and other special and sensitive places as ineligible for mining
    activities. This will provide a tremendous benefit to wildlife and
    outdoor recreation, by setting aside our remaining relatively untouched
    areas.
        Studies indicate that hunting, angling, wildlife viewing and other
    outdoor activities generate an economic impact of approximately $5
    billion annually to the State of Arizona, roughly equaling that of
    hardrock mining enterprises. Yet the 1872 law is interpreted to
    identify mining as the best and highest use of public land where
    minerals have been located. That may well have been the case at that
    time, but the need clearly exists to prioritize mining activities as
    they relate to the economy and the public interest as they stand today.
    H.R. 2262 accomplishes this by protecting special places, establishing
    environmental standards, and implementing fiscal reforms.
        I am glad to be here discussing this topic today. I applaud your
    interest in updating the 1872 act, and I urge you to continue to move
    forward on this issue.
        Thank you.
                                     ______

        Mr. Costa. Thank you, Ms. Martin, for your testimony, and
    we will look forward to the Q and A when that time arrives. Now
    we have last, but certainly not least on this panel, Mr.
    Tangen, who will testify for five minutes.

                       STATEMENT OF J.P. TANGEN,
                   FORMER REGIONAL SOLICITOR, ALASKA

        Mr. Tangen. Thank you, Mr. Chairman. My name is J. P.
    Tangen. I am a practicing attorney in Alaska, and I have
    represented mining clients from 1975 until 1990. In 1990, I
    became Regional Solicitor for the Department of the Interior
    serving under Secretaries Lujan and Babbitt and working for my
    good friend John Leshy, and in 1994 I left the Department to
    become President of a publicly traded Canadian gold mining
    company. In 1998 I returned to the private practice of law, in
    which I have been engaged ever since.
        The Alaska Miner's Association, who I am representing
    today, is an organization of approximately 1,000 members
    consisting of a broad array of individuals, mining companies
    and supporting businesses. Alaska hosts the largest amount of
    public land in the United States, including the two largest
    national forests. Alaska also hosts five large operating lode
    mines and over 100 placer mines generally of a smaller ``mom
    and pop'' size.
        Alaska boasts the largest silver producing mine in North
    America and the largest producing zinc mine in the world. We
    also lay claim to be what may become one of the largest copper
    properties in the world and several exploration projects with
    production potential well in excess of a million troy ounces of
    gold.
        Every operation in the state is under intense scrutiny from
    Federal and state agencies, and in many instances there is
    intense local scrutiny as well. Alaska has an active community
    of nongovernment organizations that monitor mining operations
    and aggressively use the courts and the media to advance their
    agenda. Alaska has an excellent record for reclamation
    operations at Valdez Creek, Poker Flats, Illinois Creek and
    numerous small placer mines have been properly cleaned up
    following the completion of successful mining operations.
        Likewise, Alaska is sensitive to local concerns. The A. J.
    Mine in Juneau was not reopened despite an extensive investment
    primarily due to public opposition. The Kensington project,
    also in the Juneau area, remains in a preproduction mode
    because of intense public scrutiny for over 20 years. Mines in
    other populated areas on the other hand, such as the Fort Knox
    mine in Fairbanks and the Rock Creek project in Nome, while
    having been held to strict standards and careful evaluation,
    have generally been greeted with local acceptance.
        Presently nearly 50 million acres of prospecting land in
    Alaska remains potentially available for mineral development.
    Although geologists believe there are many opportunities to
    develop mines on Federal lands in Alaska, the number of Federal
    claims has diminished. For many years Federal mining claims
    were attractive because of two cornerstone qualities: self-
    initiation and security of tenure.
        Under the current law, any qualified person can locate a
    mining claim on vacant, unappropriated public domain without
    prior governmental consent. Under H.R. 2262, the explorer would
    have to secure a permit, with attendant cost delays, before
    conducting any noncasual mineral activities. A mining claim is
    not valid unless it contains a certain minimum amount of
    mineralization. Ascertaining whether adequate mineralization is
    present will require such a permit. That means to get a permit
    the applicant will have to have knowledge he cannot gather
    without a permit, a classic ``Catch-22.''
        The bill eliminates patents. That in itself is not a
    barrier to the location of Federal claims but it has resulted
    in many Federal claimants losing their claims and their
    investments as a result of inadvertent clerical failures under
    the current law. H.R. 2262 also imposes a royalty on mining
    operations. A royalty is a tax on gross income. It is analogous
    to taxing a bank solely on its deposits.
        The true benefit of a mine is often that it brings jobs,
    goods and services to areas where such things are scarce.
    Furthermore, there is usually a long delay between exploration
    and commencement of production. Typically a decade or more
    passes before a return on investment is realized. Only after a
    mine is permitted, construction is complete and production
    begins is capital investment realized. An unfair royalty delays
    pay back, makes mining less attractive and competitive
    investments.
        There are lots of other problems with the bill. Title 3 has
    a lot of problems in it as far as how people can manage it.
    Title 5, the administrative provisions particularly are going
    to precipitate litigation but on behalf of the Alaskan Miner's
    Association let me simply summarize by saying we regard 2262 as
    anti-environment because it may induce operators to relocate
    offshore where they are not going to be faced with the same
    high standards of environmental protections as is found in the
    United States.
        It will cause the loss of high paying mining jobs because
    relocating mines offshore will result in the loss of thousands
    of jobs. It is a risk to the health and safety of mine workers
    because miners know the countries may not be able to get the
    benefit of our stringent health and safety laws. It will
    contain an unfair royalty requirement because the proposed
    royalty is calculated on gross receipts. It is wasteful because
    a gross royalty will encourage operators to leave lower grade
    mineralized material in the ground.
        It is a threat to national security because domestic
    production of needed commodities will be reduced or eliminated.
    It is unlikely to generate substantial revenue in the United
    States because mining operators move offshore. They will not
    pay royalties, taxes and fees. It will create three large, new
    unfunded bureaucracies because the BLM will have to staff up to
    deal with a huge volume of additional paperwork created by
    applicants, all of which must be reviewed and adjudicated.
        The bill will require a significant new law enforcement
    inspection arm to oversee on-the-ground compliance, and the
    bill will require a separate new bureaucracy to adjudicate the
    royalty matters. It is likely to foster litigation because
    NGO's are encouraged to sue. It is anti-Alaskan because a large
    percentage of the vacant and unappropriated public domain is in
    Alaska.
        It is anti-business because mines in foreign countries will
    purchase equipment, supplies and services locally bypassing
    U.S. suppliers. It is anti-small miner because small miners
    simply cannot afford the cost of compliance, and it is a
    violation of the ANILCA clause, Alaska National Interest Lands
    Conversation Act clause because by making it possible to
    declare certain lands special places there is a risk that
    additional lands will be placed under restrictive land use
    status.
        Mr. Chairman, I thank you for the time and attention. I
    respectfully request that this bill not be passed as it is
    written.
        [The prepared statement of Mr. Tangen follows:]

                  Statement of J. P. Tangen, on behalf of the
                           Alaska Miners Association

        Good Morning Mr. Chairman.
        My name is J. P. Tangen; I am appearing hear today at the
    invitation of the subcommittee on behalf of the Alaska Miners
    Association.
        The Alaska Miners Association is an organization of approximately
    1,000 members consisting of a broad array of individuals, mining
    companies and supporting businesses.
        Alaska hosts the largest amount of public land in the United States
    including the two largest National Forests.
        Alaska also hosts five large operating lode mines and over 100
    placer mines generally of a smaller, ``mom and pop'' size. Alaska
    boasts of the largest silver producing mine in North America and the
    largest producing zinc mine in the world. We also lay claim to what may
    become one of the largest copper properties in the world and several
    exploration projects with production potential well in excess of
    1,000,000 Troy ounces.
        Alaska mines and prospects are located on state land, private land
    and federal public land. Every operation in the state operates under
    intense scrutiny from federal and state agencies. In many instances,
    there is additional local oversight of the mining operations as well.
    Alaska has an active community of non-governmental organizations that
    monitor mining operations and aggressively use the courts and the media
    to advance their agenda.
        Alaska has an excellent record for reclamation. Operations at
    Valdez Creek, Poker Flats, Illinois Creek, and numerous small placer
    gold mines have been properly cleaned-up following the completion of
    successful mining activities, and the affected areas has been restored
    to a landscape that makes the detection of the past mining operations
    literally impossible.
        Likewise, Alaska is sensitive to local concerns. The A.J. Mine in
    Juneau was not reopened despite an extensive investment, primarily due
    to public opposition, and the Kensington Project, also in the Juneau
    area, remains in a pre-production mode because of intense public
    scrutiny for over twenty years.
        Other mines in populated areas, on the other hand, such as the Fort
    Knox Mine in Fairbanks and the Rock Creek Project in Nome, while having
    been held to strict standards and careful evaluation, have been
    generally greeted with local acceptance.
        In a word, there are many mining success stories in Alaska, and
    those stories embrace a history of nearly 150 years. Ours is a proud
    industry that has produced many of the commodities that America has
    demanded and required and has excellent prospects for doing so into the
    future.
        Much of the land selected by the State pursuant to the Alaska
    Statehood Act and by Alaska Native Regional Corporations pursuant to
    the Alaska Native Claims Settlement Act was chosen because of its
    mineral potential. However, even after those large tracts were removed
    from the public domain and National Forests and after another 108
    million acres were set aside for inclusion in National Parks,
    Preserves, Wildlife Refuges, Monuments, Wilderness and Wild and Scenic
    River System Areas, nearly fifty million acres of prospective land
    remains potentially available for mineral development. It is those
    fifty million acres that would be among the lands targeted by H.R.2262.
        Although geologists believe that there are many opportunities to
    develop mines on federal lands in Alaska, the number of federal mining
    claims has diminished in recent years to only approximately 8,000.
    Prospectors and developers have demonstrated a preference to look to
    state and private land rather than to hassle with the federal
    government.
        The attractive qualities of federal claims have been diminishing in
    recent years. Initially, a federal mining claim, whether placer or
    lode, was an attractive choice because of two cornerstone qualities:
    self-initiation and security of tenure. By self-initiation I mean that
    any qualified person, under the law, could locate a federal mining
    claim on vacant and unappropriated public land without a permit or
    prior governmental consent. By security of tenure, I mean that the
    locator would have prior rights against all the world, and under the
    statute, have the right to purchase the fee title to that land from the
    United States once their time, talent and effort established that
    minerals existed and were economically mineable. These basic rights
    will disappear if H.R. 2262 becomes law.
    H.R. 2262
        Under H.R. 2262, instead of citizens having the right to go onto
    public lands and locate mining claims, the explorer would have to
    secure a permit, with attendant costs and delays, before conducting any
    mineral activities. Since a mining claim is not valid unless it
    contains a certain minimum amount of mineralization, and since
    ascertaining whether that minimum mineralization is present in a given
    location, meaningful exploration would require a permit.
        Ironically, the issuance of a permit to conduct such mining
    activities appears to be dependent upon the applicant having knowledge
    about the property that he cannot gather without having a permit in
    hand. In essence, this initial hurdle will bring an end to most
    exploration activity on public land.
    Patents
        The bill terminates the possibility for issuing patents. Since the
    moratorium imposed by the United States Senate in 1994 and renewed each
    year since then in the Interior Appropriations Acts, new patent
    applications have not been processed by the Department of the Interior.
    In an environment of rising commodities prices, that in itself has not
    constituted a barrier to the location of federal mining claims;
    however, when combined with the stringent reporting requirements
    enacted by FLPMA, many federal claimants have lost their claims and
    their investment as the result of inadvertent clerical failures.
    Royalties
        Concomitant with these two negative qualities, H.R. 2262 also would
    impose an overwhelmingly burdensome royalty on mining operations. This
    royalty, although called a ``net smelter return'' royalty, is defined
    to be a gross income royalty, which means that no deductions, not even
    those customary in the industry, would be allowed. This is analogous to
    taxing a bank on its deposits and or a grocery store on its total value
    of inventory. Generally, because mining is a labor intensive industry
    that employs local people in remote locations, the true benefit of a
    mining operation is that it brings jobs, goods and services to areas
    where such things are scarce, not that it can generate a revenue stream
    through royalties or taxes.
        In addition, because there generally is a very long delay between
    initial exploration and the commencement of production, typically a
    decade or more passes before a return on investment is realized. It is
    only after a mine is permitted, construction is completed and
    production begins that the capital investment can be rewarded. A
    royalty based on gross production will unnecessarily delay payback and
    dilute the return on investment, making an operation less attractive
    than competitive investments. If the royalty is too high, it alone will
    make the project uneconomic.
        Any royalty imposed on a mining operation should always be based on
    net profits and never on gross receipts. I understand that the State of
    Nevada has a net profits tax law that might be readily adaptable for
    federal use. Miners are not opposed to paying fair royalties and taxes,
    but are opposed to paying punitive royalties and taxes where there are
    no operating revenues available to satisfy the government's demands.
        In another sense, however, the imposition of a royalty on mining
    operations in the United States is very bad public policy because
    American mines compete on a global market. Domestic production of
    commodities sold around the world directly reduces our adverse balance
    of trade. Production of metals and mineral products inside the United
    States benefit the nation; but, producers have to be competitive.
        Mineral deposits are scattered around the globe in a pattern that
    is independent of political boundaries. Some governments are more
    solicitous of the health and welfare of their people and the
    environment than others. In the United States, where we have stringent
    health and safety laws, environmental and natural resource laws, and
    wage and hour laws to protect our workers and the environment, the per
    pound or per ounce cost of production is going to be higher than in
    places that do not impose or enforce such legal requirements.
        America is a favored target for exploration because of government
    stability, but if the costs of production outweigh the risks of
    nationalization, for instance, then it follows that mining companies
    will migrate off-shore. In a very tangible sense, an excessive
    financial burden on domestic mining has two palpable consequences: 1.)
    mining companies will emigrate to places where the strictures are not
    so oppressive and; 2,) mining companies will be dissuaded from
    maximizing the return from a given deposit.
        Inducing mining companies to move offshore engenders a cascade of
    problems. Where the operating standards are not as stringent as they
    are in the United States, wages may be lower, worker safety may be
    compromised, and the environment may be threatened.
        This is not to imply that global mining companies are unscrupulous.
    On the contrary, the common experience is that once a global company
    establishes profitability in a third world nation, it becomes at risk
    for nationalization or aggressive efforts on the part of the host
    government to sequester as much of that profitability as possible. In
    such cases, it is the host country rather than the mining company that
    is externalizing the social costs. Working profitably in industrialized
    countries with sophisticated social mores, therefore, is good for the
    planet and the people on it. As a nation, we ought to be exporting our
    standards and not our mining industry.
        To clarify the second point--mineral deposits are often
    concentrated in a central core with grades tapering out toward the
    periphery. Efficient operations recover as much as they profitably can.
    The higher the operating cost, the more likely that low grade material
    will be left behind. Royalties and taxes are an arbitrary operating
    cost; therefore, such royalties and taxes directly beget waste of the
    mineral resources on an area.
    The Demise of Self-Initiation
        H.R. 2262 has a lengthy section specifying the requirements for a
    permit to conduct non-casual mining activities on federal public lands.
    These requirements are deliberately stacked to ensure that compliance
    is overwhelmingly burdensome financially, if not physically impossible.
        To illustrate, under section 304(b) of the bill, the Secretary is
    required to suspend an operating permit if he determines that any
    affiliate of any claimholder is in violation of any regulation
    promulgated under this Act. In other words a sister company holding a
    single mining claim in Arizona could be the cause of a major mine
    shutting down in Alaska simply because the Arizona affiliate committed
    a minor violation of a regulation. This is not discretionary, and under
    Section 504 providing for citizen suits any person may sue to compel
    the Secretary to suspend such a permit.
        The bill specifies that a permit application must contain details
    in twenty-two information categories, including: violations of various
    environmental and mining laws by the applicant or an affiliate within
    the preceding five years; all forfeitures or revocations of any mining
    bonds or permits by an applicant or an affiliate; all permits ever
    issued under SMCRA or FLPMA; the type and method of mineral activities
    proposed; the anticipated starting and termination dates of each phase;
    maps; information on facilities; soils and vegetation; topography;
    water supply intakes and surface water bodies; biological resources;
    measures to exclude fish and wildlife; predisturbance monitoring of
    groundwater; an assessment of cumulative impacts on the hydrology; a
    description of the monitoring and reporting systems; accident
    contingency plans; compliance with any land use plans; cumulative
    impacts; evidence of financial assurance; site security; information on
    soils and geology; a copy of the applicant's required public notice;
    and such other environmental baseline data as the Secretary may
    require.
        Any person who may be adversely affected by the proposed mineral
    activities may request a public hearing to be held near where the
    mineral activities are proposed. After a public hearing, the Secretary
    must formally determine whether the application is complete; whether
    the proposed reclamation is likely to be accomplished by the applicant;
    whether the land can be returned to a productive use; whether the area
    is open to location; whether the applicant has obtained all necessary
    Federal, State, and local permits; whether the cumulative impacts to
    human health, water resources, wildlife habitat, and other natural
    resources will not cause undue degradation; whether the applicant has
    given adequate financial assurance; whether there will be no undue
    degradation of natural or cultural resources; whether the applicant or
    any affiliate is ineligible to receive a permit; and whether ten years
    following mine closure, treatment of surface or ground water will be
    required. Permits cannot be issued for more than ten years at a time,
    must be reviewed every 3 years, and are subject to modification by the
    Secretary.
        What was once a prime virtue of the federal mining law, under H.R.
    2262 will now be completely eliminated and virtually no one would be
    well-advised to seek mining opportunities on federal public lands.
    There is nothing in Title III that that is needed to improve the safety
    or environmental quality of mining in the United States. This Title
    should not be enacted into law.
    Title V--Administrative Provisions
        The ``administrative provisions'' set forth in Title V of H.R. 2262
    provide an enforcement regimen that further deters mining activities on
    federal public lands. The provisions of Title V grant unusual and
    pervasive powers to the Secretary and the general public.
        For instance, ``[a]ny person who knowingly--engages in [an activity
    incidental to mineral exploration] without a permit required under
    title III--shall, upon conviction, be punished by a fine of not more
    than $50,000, or by imprisonment for not more than 2 years, or both.''
    Sec. 506(g-h). The Secretary is granted the authority to issue and
    enforce cessation orders or ``take such alternative enforcement action
    [without limitation] against the claim holder or operator (or any
    person who controls the claim holder or operator) as will most likely
    bring about abatement in the most expeditions manner possible.''
        Anyone, ``without regard to--the citizenship of the parties'' can
    commence a civil action ``against any person'' to compel compliance
    with any provision of this Act or any regulation promulgated under
    title III.
        [A]ny authorized representative [of either the Secretary of
    Agriculture or the Interior] may--without advance notice, stop and
    inspect any motorized form of transportation that such Secretary has
    probable cause to believe is carrying locatable minerals--for the
    purpose of determining whether the operator of such vehicle has
    documentation ``if such documentation is required under [Sec. 102(b)(4)
    of] this Act....''
        These illustrations are not exhaustive. The draconian powers
    afforded the Secretaries put prospective claimholders at such risk and
    to such expense as to ensure that no one could conceivably justify
    seeking a permit under this bill as a reasonable business proposition.
    Special Places
        In addition to the foregoing burdens which would be placed on the
    mining industry by this bill, virtually anyone could preclude a
    mineralized site from being developed by identifying it as a ``special
    place'' under the provisions of title II. Special places include lands
    recommended for wilderness designation; lands designated as wilderness
    study areas or National Monuments; lands in, under study for inclusion
    in, or eligible for inclusion in the National Wild and Scenic Rivers
    System; lands segregated from mineral entry; lands designated as Areas
    of Critical Environmental Concern; lands identified as sacred sites in
    accordance with Executive Order 13007; and lands identified in the
    Roadless Area Conservation rule of January 2001.
    Summary
        This bill, if enacted, would prevent all further mining and
    exploration and on federal public lands in the United States. The steps
    necessary to get permission to engage in mineral activities are
    extensive, burdensome, unnecessary and very expensive. The risks, for
    even the slightest violation by affiliates remote from an operation of
    the most inconsequential regulation, include loss of all rights as well
    as possible fines and imprisonment. Even operating mines have only a
    maximum of three years to either close or bring themselves into full
    compliance. The rewards for successfully complying with the proposed
    law are severely curtailed through the imposition of a disproportionate
    gross royalty.
        From the perspective of the Alaska Miners Association, there is
    nothing positive included within this bill and we regard it as:
          Anti-Alaska, because a large percentage of the vacant and
    unappropriated public land in the United States is in Alaska and, to
    the extent that this bill adversely impacts the hardrock mining
    industry, it impacts Alaska the most;
          Anti-small miner, because many of Alaska's miners are mom
    and pop placer operators and they cannot possibly afford the cost of
    compliance;
          Anti-environment, because it will force operators to
    relocate their operations off-shore where there are not the same high
    standards of environmental protection as are found in the United
    States;
          Anti-worker, because many prospects will not become mines
    and will not create new jobs in this country;
          Anti-business, because mines in foreign countries will
    purchase equipment, supplies and services locally, by-passing U.S.
    suppliers;
          Wasteful, because by charging a high gross royalty on
    mining operations, it will encourage operators to mine only the high-
    grade areas of a deposit and leave lower grade mineralized material in
    the ground;
          A threat to the national security, because, by
    encouraging operators to relocate off-shore, domestic production of
    needed commodities will be eliminated or reduced, as is currently the
    case with oil and gas;
          Causing the loss of high-paying mining jobs, because
    workers at major mines in the United States today often earn $50,000
    per year or more while relocating mines off-shore will result in the
    loss of thousands of those mining jobs;
          A risk to the health and safety of mineworkers, because
    miners in the United States benefit from stringent laws that protect
    their health and safety, while miners in other countries may not be
    able to get the benefit of such laws;
          Unlikely to generate substantial revenue for the United
    States, because if mining operations move off-shore, they will not pay
    royalties, taxes or fees;
          Creating three large, new bureaucracies, because the BLM
    will have to staff up to deal with the huge volume of additional
    paperwork created by applicants, all of which must be reviewed and
    adjudicated, the bill will require a significant new enforcement and
    inspection arm to oversee on the ground compliance, and the bill will
    require a separate new bureaucracy to adjudicate the royalty
    calculations;
          Containing an unfair royalty requirement, because
    royalties are calculated on gross receipts;
          Likely to foster litigation, because NGO's are encouraged
    to sue to enforce the statutory requirements; and
          A violation of ANILCA's ``no more'' clause, because by
    making it possible to declare certain lands ``special places'' there is
    a risk that additional lands will be placed into a restricted land use
    status.
        We respectfully request that this bill not be enacted.
                                     ______

        Mr. Costa. Mr. Tangen, we will list you doubtful, and you
    exceeded the time that was allotted by a minute and 15 seconds.
    So I am feeling very charitable this morning.
        Mr. Tangen. I appreciate that. Thank you, sir.
        Mr. Costa. That completes the testimony of this panel. We
    will move to questions but, before we do, I misstated. The
    gentleman from Nevada was not the Ranking Member de jour. He
    was only the Ranking Member for a half an hour. Maybe 45
    minutes. The Ranking Member from New Mexico, the gentleman from
    New Mexico has been able to rejoin us, and we appreciate that,
    and I will allow him to make a brief opening statement.

       STATEMENT OF THE HON. STEVAN PEARCE, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF NEW MEXICO

        Mr. Pearce. Thank you, Mr. Chairman. Yesterday, as you
    know, we had a full committee oversight hearing on the Surface
    Mining Control and Reclamation Act of 1977 to look at what has
    transpired in the 30 years since the law was enacted. The
    testimony provided by the witnesses was informative. Today we
    are meeting for the first of what I assume will be several
    legislative hearings on H.R. 2262, the Hardrock Mining and
    Reclamation Act of 2007. Many of the provisions in H.R. 2262
    are similar to the provisions in SMCRA.
        In other words, it is like SMCRA for hardrock mining. The
    problem is that this is unnecessary, and the more plumbing you
    have the more ways there are to clog up the drain. Hardrock
    mining already has its own set of reclamation standards that
    were promulgated after the National Forest Management Act and
    the Federal Land Policy and Management Act were enacted in
    1976, a year before SMCRA.
        These laws are the statutes that directed the respective
    agencies to develop regulations governing hardrock mining on
    the Forest Service and BLM managed lands. This was and is
    appropriate, and as the vast majority of hardrock mining is in
    the West, it is on Federal land. Primarily in most western
    states the majority of the land is owned by the Federal
    government.
        It is a very different playing field in coal mining, which
    is primarily located on private lands in the Midwest and the
    eastern states at the time the Surface Mining Act was enacted.
    These land management statutes are coupled with other
    environmental laws to manage mining activities on Federal
    lands. The environmental regulations include the Clean Air Act,
    the Clean Water Act, the Endangered Species Act, the Resource
    Conservation Recovery Act, the Comprehensive Environmental
    Response Compensation Liability Act and the Toxic Substance
    Control Act, and finally the National Environmental Policy Act.
        These laws provide for public notice and comment
    opportunities, citizen suit provisions and various appeal
    processes that allow the public and affected communities to
    fully participate in the mine processes. In fact, all of these
    opportunities to challenge mining projects have served to draw
    out the permitting process on Federal lands, and it can take 12
    years or more to get final approval to operate a mine.
        Proposed provisions in Title 3 and 5 of H.R. 2262 would
    greatly exacerbate already cumbersome permitting processes. Any
    company trying to operate would be in perpetual permitting
    nightmare. Every three years a permit would be subject to
    review. Compare this to hydroelectric facilities that are
    permitted for 50 years or nuclear facilities that are permitted
    for 40 years. I doubt that we would see any revenue to the
    Federal Treasury for mines on Federal lands under H.R. 2262.
    The only individuals that appear to be getting rich off this
    scheme are the environmental trial lawyers. There certainly
    will not be any money for hardrock abandoned mine land
    programs.
        This is not the direction that we should be taking in our
    national minerals policy. With the economic growth and
    industrialization we are seeing in China and India, the demand
    for all commodities worldwide has skyrocketed. This will
    continue in the future. I would ask unanimous consent to submit
    for the record today's Washington Times front page article that
    says that China is powering the world's economy. They have
    surpassed the United States. At a time when we face very
    difficult circumstances in our economic future, we are going to
    take steps that will make hardrock mining more difficult.
        The main thing that we have in New Mexico as hardrock
    mining is copper. The copper resources need to be available if
    we are going to continue to, for instance, use hybrid cars
    because they use 100 percent more copper than a standard full-
    size vehicle. Copper is not the only significant resource that
    we are mining. Clearly we are moving in the wrong direction on
    national minerals policy. We should be holding hearings to
    identify what needs to change to encourage domestic mineral
    development not on bills that will drive it offshore.
        I fear that if this bill passes we will not see these
    resources developed. We will export these high paying family
    wage jobs with benefits offshore and undermine our economic and
    national security. I thank the witnesses for their testimony
    and look forward to hearing from them. Thank you, Mr. Chairman.
        Mr. Costa. Thank the gentleman from New Mexico. I will
    begin with the first line of questioning. Mr. Leshy, you
    testified in your opening statement about the three issues that
    you think need to be addressed: The privatization of public
    lands impact; the direct financial return, i.e., royalties;
    and, of course, the protection of the environment as it relates
    to cleanup. As a number of my colleagues have stated in their
    comments, opening statements, notwithstanding the fact that the
    law has not changed since 1872, there have been other laws that
    have been enacted that do impact hardrock mining and
    regulations that have been implemented governing surface
    management of hardrock mining. I am talking BLM's current part
    3809 that was issued, I believe, in 2001.
        What is your assessment of the adequacy of these
    regulations and the other overlapping laws that others claim
    adequately provide the protection?
        Mr. Leshy. Thank you, Mr. Chairman. First of all, I would
    say that the BLM 3809 regulations have been the subject of
    controversy and litigation and in the Clinton Administration we
    tightened up those regulations, and then one of the very first
    things the Bush Administration did was to essentially gut most
    of the reforms that we tried to put into place.
        So they really do inadequately consider the environmental
    impacts of hardrock mining in several key ways, particularly
    concerning--as I mentioned in my opening statement--
    groundwater, and I should also point out in this connection
    that the Bush Administration also reversed a couple of legal
    opinions that I wrote--which is their prerogative--which says
    that their legal position is that the government has no
    authority under the Mining Law of 1872, despite all of these
    other environmental laws that have been mentioned.
        It has no legal authority to say ``No'' to a proposed
    hardrock mining operation on public land, no matter how
    devastating the effect on the environment. If it cannot be
    controlled, if it cannot be mitigated, no matter how
    devastating the effect, the mining law prohibits the government
    from saying no.
        Another legal opinion that they have signed takes the
    position that the hardrock mining industry has the right under
    the mining law to use as much public land as it thinks it needs
    as a dumping ground for the residue of its vast hardrock
    operations. Tailings piles, waste dumps, et cetera. If it needs
    10,000 acres, the mining law gives it the right to have those
    10,000 acres.
        Mr. Costa. All right. Mr. Leshy, I do not want to occupy
    all my time on that area but I will submit some additional
    questions, and you can provide additional information. This
    issue of patenting I am interested in or the privatization of
    Federal lands as it relates to the hardrock mining. Do you
    think there are any circumstances under which the patenting
    makes sense, and if so, please explain briefly?
        Mr. Leshy. The issue of patenting is an interesting one,
    and frankly it is one I thought about a lot over the last 30
    years and have somewhat changed my position on frankly. I
    believe that generally speaking that the patent provision in
    the mining law has been frankly much abused. I mean the
    historical record is clear about that. The 3 million acres have
    been patented. Almost none of them are actually used for
    mining. Most of them are used for weekend cabins and that sort
    of thing.
        So there is a big problem with abuse of that patenting
    provision. But your question, I think, really focuses on with
    an actual ongoing mining operation does it make sense for the
    government to keep title to that land, if it is in the middle
    of a big open pit, for example, and I think there are two
    interests of the government in keeping title. One is because of
    the need to make a financial recovery. That is get a royalty or
    some sort of financial payment for that.
        The second is to make sure that the environment is
    protected in the mining operation. The Federal title gives the
    government regulatory authority.
        Mr. Costa. All right. Let me----
        Mr. Leshy. Both of those things can be----
        Mr. Costa. How about the issue of uranium? Should it be
    treated differently than other mining law minerals?
        Mr. Leshy. Well, you know it is interesting. Uranium is the
    only energy mineral that is not leasable. Every other mineral
    that the Federal government owns that has energy value, whether
    it is oil shale, oil and gas, coal, tar sands, everything else
    is leasable. Uranium is not. It is under the old mining law
    although interestingly some uranium is leasable because the old
    Atomic Energy Commission actually reserved some lands and
    leases the uranium on those lands.
        So uranium is in this oddball category. It is very
    different from the other hardrock minerals, and I think you
    could make a pretty powerful case that uranium really does not
    belong under the mining law at all--that it ought to be
    leasable like the other energy minerals are.
        Mr. Costa. My other questions I will submit to you for the
    record, but I would like you to at a later date provide
    recommendations how this proposed legislation could be
    improved. My time has expired. I will have another round but I
    will defer now to the Ranking Member, the gentleman from New
    Mexico, Mr. Pearce.
        Mr. Pearce. Thank you, Mr. Chairman. Mr. Leshy, when I
    contemplate your testimony do you think that we are doing a
    very bad job then with respect to the stewardship of the public
    lands and hardrock mining, specifically where they intersect?
        Mr. Leshy. We could do a much better job, especially if you
    compare how hardrock mining is regulated and sort of fits into
    the public land landscape compared to other uses, whether it be
    oil and gas, coal, timber harvesting, cattle grazing. Hardrock
    mining really stands out.
        Mr. Pearce. Are there examples worldwide of countries who
    do that better?
        Mr. Leshy. I have not made a careful study but I think if
    you look at other countries they do a better job. They
    certainly do a better job of getting money from their ownership
    of hardrock mines. As I said in my statement, the United States
    public lands are the only place in the world I think where the
    owner of the mineral does not get a financial return on the
    extraction.
        Mr. Pearce. So you do not really think that there should be
    a move to withdraw hardrock mining from Federal lands? In other
    words, that would not be the end result of what you are
    suggesting?
        Mr. Leshy. No. I think the industry is a very viable
    industry. It is making record profits. It is producing more
    hardrock minerals than ever before. The talk has been, for
    example, about the importance of patenting. To some, you know
    there has been no patenting for the last 13 years because of
    the annual moratoria that Congress has put on and production
    has gone way up.
        Mr. Pearce. When you consider the record profits, does it
    concern you that the profits--there are only about three major
    mining corporations left in the country, and I was looking at
    rates of return on assets which is in the 8 percent range. As a
    business owner, I can tell you that that is extraordinarily
    low. Now there are some companies worldwide who do have
    tremendous returns. Now does it concern you that the U.S. firms
    appear to be weakened tremendously economically and may even go
    the direction of other companies previously that have simply
    had to cease operations because the environment in the U.S. is
    not very open to profit making?
        Mr. Leshy. The Frazier Institute in Canada takes a survey
    every year of mining industry executives and looks at all
    jurisdictions around the world in terms of is this a good place
    to do business? The United States always ranks at or near the
    top of those surveys.
        Mr. Pearce. Mr. Bisson, I have a follow-up question. Say 10
    years ago, what rank was the U.S. in total exploration dollars
    10 years ago and what is it today?
        Mr. Bisson. Mr. Pearce, it is my understanding from some
    statistics I have looked at recently that the U.S. currently
    ranks at about 8 percent of the total mining exploration
    dollars spent in the U.S. Ten years ago, it was about 20
    percent.
        Mr. Pearce. So worldwide it looks like investment is
    evacuating out. Twelve percent has evacuated out of the U.S.
        Mr. Bisson. In mining exploration.
        Mr. Pearce. That is 12 percent of the total world market
    used to be here but now it has left here. Mr. Tangen, any
    reason why you can imagine that that capital is fleeing the
    U.S.? How much are we talking about? How many dollars are we
    talking about that 12 percent drop in investment in U.S.
    properties? Would you have a clue how big the industry is?
        Mr. Tangen. I cannot answer that.
        Mr. Pearce. Mr. Bisson, do you know approximately?
        Mr. Bisson. In 2006, the total amount was something like
    $13.9 billion. So it is 8 percent of that. If it is anywhere
    near----
        Mr. Pearce. So it is in the billions?
        Mr. Bisson. It is close to a billion dollars.
        Mr. Pearce. OK. Mr. Tangen, I am sorry I interrupted. So
    why would that capital be saying we are not going to invest any
    more in the U.S.?
        Mr. Tangen. I expect it is probably----
        Mr. Pearce. Is your microphone on?
        Mr. Tangen. I am sorry. I expect there are a couple of
    reasons. Number one is that there is better opportunities
    elsewhere where the governments are trying very hard to invite
    them into the country, and a lot of people feel oppressed by
    the regulatory regimen that is in place in the United States
    right now that I know of.
        Mr. Pearce. So you are saying that other countries have an
    inviting atmosphere, and would you describe the atmosphere here
    as not inviting?
        Mr. Tangen. I believe that it depends on the
    Administration. It varies from time-to-time. It is a lot more
    friendly. It has been a lot more friendly in some years than it
    has been in others.
        Mr. Pearce. Thank you, Mr. Chairman. I see my time has
    expired. I will have a second round if you go that way.
        Mr. Costa. Yes. Thank you. Next is the gentleman from
    Arizona, the Chairman of the Subcommittee on National Parks and
    Forestry, Mr. Raul Grijalva.
        Mr. Grijalva. Thank you, Mr. Chairman, and I think somebody
    used the analogy in the agonizing people are doing over
    royalties that it is like taxing a bank, and I think there is
    some data that is important for us to be aware of that there
    were 207,000 active claims in 2005 in this country. Two hundred
    and forty-five billion is the value of minerals that have been
    extracted since the law went into effect.
        Zero is the amount of royalties we have collected on that
    extraction and on those patents on those private lands. There
    are half a million abandoned hardrock mines in this country.
    The Interior Department itself said that the reclamation, the
    cleanup price tag is $32 billion, and we have collected zero in
    royalties in the past. So I think that you know while royalties
    are the issue to some extent here, the patenting process is the
    issue here, there is an attendant cost to the taxpayer of this
    country that is also part of this legislation, and I think we
    need to be aware of it as well.
        But a couple of quick questions. Mr. Bisson, are there
    examples for where taxpayers have had to pay millions of
    dollars to buy back critical lands, say, for a wilderness area,
    a national monument that has already been patented under the
    mining law? Do we have any figures about how much the Federal
    agencies have spent in this recovery process, for lack of a
    better word?
        Mr. Bisson. Your question is directed at me, sir?
        Mr. Grijalva. Yes. I am sorry.
        Mr. Bisson. I am vaguely aware of some instances where that
    has happened but I do not have any specifics today but would be
    happy to provide that information.
        Mr. Grijalva. I think that would be important information
    for the Committee to know what that cost has been and look
    forward to that information. Mr. Leshy, we received some
    testimony that says that Congress really does not have the
    ability to affect existing mining claims. I would like your
    thoughts on that. Are there really limits on the ability of
    Congress to apply reforms to existing mining claims?
        Mr. Leshy. Mr. Chairman and Mr. Grijalva, I think the
    Federal government, that Congress has a very broad authority to
    regulate the existing mining claims including putting a royalty
    on existing mining claims, and on that point I disagree with
    the suggestion of the Interior Department on this. I would be
    happy to submit a legal memorandum that explains this further
    but I think one essential point to understand is that a mining
    claim in and of itself is not any kind of property interest
    against the government.
        This has been clear in Supreme Court decisions for 100
    years. A mining claim without a proven discovery is essentially
    a license to occupy the lands. A mining claimant without a
    discovery is in the same position as a hiker on the Federal
    lands from a property standpoint. Most mining claims do not
    have a discovery. Therefore, most mining claims there is really
    no constitutional restraint on what Congress could do.
        Mr. Grijalva. Thank you. And let me ask a question of Ms.
    Martin from the great and wonderful State of Arizona. Under the
    Commission, Arizona Game and Fish Commission, when there is a
    fish kill or a migratory bird treaty act violation that occurs
    as a direct result about mining, what happens? What is the
    Commission's role? What is the Commission's ability to
    mitigate?
        Ms. Martin. Chairman, members of the Subcommittee, it is
    certainly our role to manage wildlife to try to address those
    issues as best we can. We really do not have financial support
    from any sources relating to where the impact was generated
    typically to deal with that. Our funding sources come from the
    supporting community, Federal funds that are devoted to nongame
    wildlife and those kinds of sources.
        So we work on habitat. We manage wildlife. We reintroduce
    species when necessary, and the type of situations that you are
    talking about that frequently has occurred in the State of
    Arizona that there have been fish kills and streams
    contaminated by mining activities, migratory waterfowl using
    tailing ponds at stopover points. There have been high
    mortality there.
        In some cases when the EPA or DEQ gets involved there are
    citations. Agencies that have the authority to do so can assess
    fines, and sometimes then some of those funds will go back to
    reclamation of those sites. Sometimes there is litigations and
    a ruling will take money from the industry and put it back into
    that site but I think what legislation like this could do would
    be streamline that process and preclude the need for
    litigation, preclude the need for those agencies to issue
    citations, and just initially have legislation that identifies
    where the funding will come from to address those kinds of
    issues.
        Mr. Grijalva. Thank you very much. Mr. Chairman, my time is
    up, and thank you for the opportunity to be part of this
    hearing.
        Mr. Costa. Thank you, gentleman from Arizona. We always
    like your participation in our hearing. Next we have the
    gentleman from Texas I do believe, Mr. Gohmert, my classmate,
    for five minutes.
        Mr. Gohmert. Thank you, Mr. Chairman. I do appreciate all
    the witnesses being here and it seems like a rather fortuitous
    confluence of circumstances. I heard somebody use that term
    before. We previously had hearings this year on the Deep Water
    Royalty Relief Act of 1995, and Mr. Leshy, I see that you were
    Solicitor during the Clinton Administration from 1993 to 2001,
    and so you may be able to fill in a gap here.
        There was some conflicting testimony whether the failure to
    include the price thresholds in leases issued in 1998 and 1999
    may have been a mistake or not, and since you were the
    Solicitor I just wanted to ask were you involved in that
    process, in the negotiation of those leases in 1998 or 1999?
        Mr. Costa. Would the gentleman yield for a moment?
        Mr. Gohmert. Yes, sir.
        Mr. Costa. Is this related to the hardrock mining?
        Mr. Gohmert. Well, it is related from this standpoint.
    Attorneys and judges generally know a witness' credibility is
    always at issue, and it would go to that.
        Mr. Costa. But we are not in a courtroom, and we are not--
    --
        Mr. Gohmert. I realize that.
        Mr. Costa. You are a very effective Congressperson, and I
    suspect those days that when you sat on the bench, you were a
    very effective judge. I have no doubt but we are here to get
    information and testimony on the subject matter before the
    Committee. The Chair will rule that we maintain germaneness as
    it relates to the subject matter. You and I----
        Mr. Gohmert. So credibility is not an issue here? You are
    saying I cannot find out about the credibility of this witness'
    judgment when he has come in here and he has told us about what
    we should and should not do, what would and would not be
    effective, and we do not know if he just cost this country $10
    billion? I think that is important.
        Mr. Costa. Well, I do not doubt that the gentleman thinks
    it is important. The fact is that the majority and minority try
    to fairly determine who the witnesses will be, and it is not
    our intent, it is not this Chair's intent, to impugn the
    integrity of any of the witnesses. I may disagree with their
    statements. I may take issue with their points of view, and you
    may do so as well. That is perfectly within the rules but none
    of these witnesses here today are being cross-examined about
    their sincerity as to their testimony.
        Mr. Gohmert. Sir, I have never questioned the sincerity,
    and I have never impugned the integrity. That was not part of
    my question. I was not doing that whatsoever. The question is
    one regarding credibility and credibility of judgment, and that
    is always an issue, and my understanding of the rules, the
    administrative rules in these hearings is that they are not
    nearly as strict as the rules in court, and that what in the
    minds of a relevant person would be relevant would come into
    play.
        I understand your ruling but I did not impugn his
    integrity. It is not an issue of integrity. It is an issue of
    judgment, and we have just heard his judgment on a number of
    these issues, and I felt like if perhaps his call cost this
    country $10 billion it could be relevant, and it could affect
    the way that we looked at these leases.
        Mr. Costa. Well the----
        Mr. Gohmert. But I appreciate your defense of the
    gentleman, and I will move on with respect to your ruling.
        Mr. Costa. Then the gentleman from Texas has had an
    opportunity to make his point of view known.
        Mr. Gohmert. I did not find out the answer though.
        Mr. Costa. Well, the point is that I want to ensure that we
    have comity and we have cooperation on a bipartisan fashion
    with this hearing, and I just think it is important that we
    stay to the subject at hand, and I just think that the question
    was moving beyond the germaneness of this legislation that we
    are talking about here.
        Mr. Pearce. Would the Chairman yield?
        Mr. Costa. Yes, I will yield to the gentleman from New
    Mexico.
        Mr. Pearce. Thank you. First of all, I would note that I
    would hope the gentleman from Texas has his time restored to
    the point at which we began the discussion. Also on the case of
    impugning, I remember in this hearing room, in this year that
    Johnnie Burton came as a witness and her entire character was
    called into question and whether or not she was adequately
    discharging the responsibilities of her job. Also I had to
    stand and defend Mr. Bisson at an earlier hearing. So the fact
    that we will or do not impugn character is one that would stand
    for open discussion itself.
        Mr. Costa. Well, I hope the gentleman from New Mexico
    believes that I have been fair in my application of allowing
    members to express their views and to ask question as they see
    fit and to have an opportunity----
        Mr. Pearce. Absolutely do.
        Mr. Costa. So I would like to get on with the hearing.
        Mr. Pearce. You bet. I just wanted to make some
    observations.
        Mr. Costa. I would like to explore the opportunity for the
    gentleman from Texas to continue his questions, and I am not
    sure where he was at the point of the time where I----
        Mr. Pearce. He was probably about----
        Mr. Gohmert. I would be glad to go back to that point.
        Mr. Pearce.--three and a half. I would guess at about the
    3:45.
        Mr. Gohmert. I know exactly where I was. I could go right
    back to it. But----
        Mr. Costa. No. I am talking about your----
        Mr. Gohmert. Since you ruled otherwise.
        Mr. Costa. I am talking about in terms of your time.
        Mr. Gohmert. Well, Mr. Leshy, I noted that you had
    commented earlier. In my years on the bench, sometimes you
    notice the look in a person's eye, the way they say things.
    Your comment that the Bush Administration had gutted many of
    the regulations that you had put in place seemed to be with
    some sense of disdain, even though you followed up by saying,
    of course, that is any Administration's right. You were not
    pleased about the Bush Administration's gutting some of the
    regulations that perhaps you had worked on, is that correct?
        Mr. Leshy. That is correct.
        Mr. Gohmert. OK. Thank you. I did want to ask, Mr. Bisson,
    do you happen to know what percentage of the known coal
    reserves in the United States are available for lease in
    mining?
        Mr. Bisson. I do not have that figure but I would be happy
    to research it and get that information for you, sir.
        Mr. Gohmert. Do you have any kind of estimate?
        Mr. Bisson. No. Because all of my work has been in the
    West. I am really unfamiliar with coal resources in the eastern
    part of the United States where there are substantial
    resources. I am aware that as an example in Alaska, the
    International Petroleum Reserve Alaska, that 40 percent of the
    nation's coal reserves are there, and they are currently
    withdrawn from being made available.
        Mr. Gohmert. Right. And that was my understanding, when we
    were talking about mining, that we have tremendous reserves,
    and then for some reason the Clinton Administration, for
    example, I know put much of our coal reserves off limits, and I
    have always been intrigued how we pay so much to countries that
    hate us for our energy when we keep shooting ourselves in the
    foot in putting things off limit that would allow us to
    discontinue paying people that hate us.
        But with regard to mining policies, I would like to say I
    have seen a couple of letters submitted here who have typed
    names and that always makes me concerned. I never used to
    accept those as a judge but here again normally in court the
    rules of evidence are much more strict than they are at a
    hearing like this.
        Mr. Costa. They are.
        Mr. Gohmert. Under most circumstances. Obviously there are
    some exceptions but I would like to submit that when I see that
    letters are speaking for the millions of hunters and anglers of
    which I am one, and though I may agree with most of the things
    in these letters, having things in there spoken on my behalf, I
    would just like the record to reflect they are not speaking for
    me on all issues, and that also you know having a lot of
    natural resources in east Texas where I am from we see two ways
    of doing things, and one is you can mine, you can extract
    resources that God has blessed this nation with, and require
    with adequate regulations an environment which actually is
    better after the mining than before, and everybody comes out a
    winner, and we have seen situations where there is actually
    companies coming in and extracting resources that allowed the
    area to be improved after it was over.
        It was all a matter of what was enforced and what was
    required. So I am not against mining, extracting resources,
    getting off the dole from the----
        Mr. Costa. I think the gentleman has clearly made his
    statement. We will take that as a statement, not a question, of
    course; and I might remind the gentleman that coal is not under
    the 1872 Hardrock Mining Act.
        Mr. Gohmert. Well, in view of some of the comments, I still
    felt it was relevant because some of those seem to be alluded
    to as the biggest polluters. It still applies.
        Mr. Costa. I understand your point.
        Mr. Gohmert. Thank you.
        Mr. Costa. Let us move on. It is my turn, and a quick
    question for Ms. Martin from Arizona. Why do you think the
    Superfund is not sufficient to address the impacts of mining in
    Arizona and elsewhere?
        Ms. Martin. Mr. Chairman, the Superfund is an excellent
    tool for----
        Mr. Costa. Speak closer to the mic, please.
        Ms. Martin. I am sorry. Thank you, sir. The Superfund is an
    excellent tool for addressing sites with very high contaminant
    concentrations but that still neglects the majority of mined
    areas. Because the fund is limited, the criteria that need to
    be met to make it on the national priority list, which guides
    allocations of those funds, it is very difficult to get a site
    placed on that list.
        In Arizona, we have over 100,000 abandoned mine sites, 55
    of those proposed to maybe someday be on the NPL, 9 sites
    actually are Superfund sites in the State of Arizona, and sites
    with relatively low levels of contamination can have severe
    wildlife impacts to waterfowl and also throughout the food
    chain because contaminants have a tendency to concentrate as
    they move up the food chain.
        In addition to that, the Superfund addresses only hazardous
    waste. So there is a public safety issue that is clearly not
    addressed by the Superfund. We have 80,000 open mine shafts
    scattered throughout our public lands.
        Mr. Costa. In essence, the problem is much bigger than the
    Superfund is capable of handling? I mean is that your bottom
    line?
        Ms. Martin. That is correct, sir.
        Mr. Costa. All right. Mr. Bisson, I want to move over to
    you. As was discussed by both Senator Craig and in the question
    that I addressed earlier to Mr. Leshy, the issue of patents, of
    course, is part of the discussion in this legislation. As you
    know, the annual Congress imposed moratorium since 1994 but
    notwithstanding that there are or were patents in the pipeline.
    Can you tell me roughly how much acreage has been covered since
    1994 on patents?
        Mr. Bisson. I do not know that I have the acres with me. I
    could follow up with you.
        Mr. Costa. Please provide that information.
        Mr. Bisson. But I can tell you that in fact we have issued
    over the 405 cases we had when the moratorium was put in
    effect, more than 90 percent of the patents have been
    addressed, and we only have 38 left to complete.
        Mr. Costa. OK. At $2.50 to $5.00 per acre, how much money
    did those patents reflect?
        Mr. Bisson. I do not have that information with me.
        Mr. Costa. Can you provide that for us too?
        Mr. Bisson. Yes.
        Mr. Costa. My understanding--and I do not know how in-depth
    your knowledge is on it--but that the Bureau of Land Management
    must disapprove of the mining or any mining that would cause
    unnecessary or undue degradation of public lands. To your
    knowledge, do you know how many times the Bureau of Land
    Management has disapproved any of those permits?
        Mr. Bisson. I cannot tell you the exact number but I am
    aware of a particular mining situation in California where the
    Bureau has taken the position to prevent the mining from
    happening, and it is in the courts right now.
        Mr. Costa. OK. In 2005, and this relates to the regulations
    3809 that we spoke of earlier, there was a report that not all
    hardrock mining operations on BLM lands had required the
    financial assistance in place and that some lacked reclamation
    plans or current cost estimates as it related to the
    requirements under the law. Could you tell me your response to
    that government accountability report?
        Mr. Bisson. I can tell you that at this point in time we
    have close to $1 billion in financial assurances in place for
    the mines that are on public lands. We require financial
    assurances that cover the complete cost of reclamation, and we
    have the ability to require establishment of a trust fund to
    address any follow up monitoring of water quality or any other
    issues into the future once a mine is closed.
        Mr. Costa. Our research tells us that there are about 48
    hardrock mining operations that have been closed due to
    bankruptcy, and it is estimated that there may be a $50-
    million-plus cleanup that the taxpayers may inherit on that. Do
    you think there is a problem as it relates to the Bureau of
    Land Management's efforts to require that the 3809 regulations
    were implemented so that the guarantees that were required as a
    part of those permits that those costs would be maintained? Do
    you see a problem there?
        Mr. Bisson. It is my understanding that the bulk of those
    bankruptcies occurred on operations that were preexisting,
    using past practices. I am not aware of any specific
    bankruptcies where lands remain to be reclaimed that have gone
    into and have been mined while the 3809 regulations we are
    dealing with right now have been in place but I can do some
    more research.
        Mr. Costa. We would like you to look at that and find out
    because I am not sure that is not the case but between now and
    our hearing in Elko in August if you could provide that
    information and the other information. My time has expired but
    to know what percent of the operating mines and how many mines
    does the Bureau of Land Management inspect each year, and you
    can submit that later on.
        Mr. Bisson. Yes, sir.
        Mr. Costa. OK. And the next witness is the gentleman from
    Nevada, the once Ranking Member of this committee, Mr. Heller.
        Mr. Heller. Thank you, Mr. Chairman.
        Mr. Costa. You did a very good job.
        Mr. Heller. Thank you. It was an honor. I will yield my
    time to the Ranking Member.
        Mr. Costa. OK.
        Mr. Pearce. Thank you. I thank the gentleman for yielding.
    Mr. Leshy, when I read in Section 505, the Administrative and
    Judicial Review, subparagraph [b][6][b], I read that
    notwithstanding the decision of the United States Court of
    Appeals for the 10th Circuit in the High Country Citizens
    Alliance v. Clark that the appropriate Federal District Court
    has jurisdiction to hear any judicial challenge to the
    Secretary's actions described in subparagraph [a], and it
    continues on. So are you familiar with that case at all?
        Mr. Leshy. Yes, I am.
        Mr. Pearce. Has that case ever been heard in court?
        Mr. Leshy. Yes. It was a decision of the 10th Circuit Court
    of Appeals I think.
        Mr. Pearce. Was it heard before the 10th Circuit?
        Mr. Leshy. Yes, and it was decided by the 10th Circuit.
        Mr. Pearce. It went to District Court--Federal District
    Court.
        Mr. Leshy. Federal.
        Mr. Pearce. And what was decided there?
        Mr. Leshy. Yes. The 10th Circuit Federal Court of Appeals.
        Mr. Pearce. No. What did the District Court decide?
        Mr. Leshy. I cannot remember actually. I know----
        Mr. Pearce. Actually, I think I have that information
    surprisingly enough, and they decided against, against the
    request by the plaintiffs I think.
        Mr. Leshy. Well, I know what the----
        Mr. Pearce. And then it was appealed. Was it not appealed
    to the 10th Circuit?
        Mr. Leshy. Yes.
        Mr. Pearce. So if you were not familiar with what decision
    was made why would it be appealed?
        Mr. Leshy. No.
        Mr. Pearce. What is your relationship to the case as a
    matter of fact?
        Mr. Leshy. Well, I followed it as an academic. The 10th
    Circuit decided the case. The case is over.
        Mr. Pearce. Did you ever or were you involved specifically
    in the case?
        Mr. Leshy. I believe I signed onto an amicus brief that
    asked the Supreme Court to----
        Mr. Pearce. So you signed on, and you were acting in some
    consulting fashion, and you were not familiar with the first
    decision?
        Mr. Leshy. Well, I cannot remember what the first decision
    was but I know what the 10th Circuit----
        Mr. Pearce. But would it be appealed? You are a lawyer. I
    am not. The appeal process I would consider it is only going to
    be appealed if there is some decision that is contrary to the
    beliefs of the people who bring the suit. So of giving that,
    let us move on. So what the 10th Circuit Court did is basically
    they said yes or no, we are going to agree or disagree?
        Mr. Leshy. This was a case where a local community of
    Crested Butte, Colorado----
        Mr. Pearce. Yes, I appreciate knowing that but I am asking
    what the Court decided, sir.
        Mr. Leshy. The case was the local community of Crested
    Butte, Colorado----
        Mr. Pearce. If you would tell me what the 10th Circuit. I
    have five minutes, sir. What did the 10th Circuit say?
        Mr. Leshy. Asked the Court to review the decision of the
    Department of Interior to issue a patent for a mountaintop
    overlooking the town. They did not want that land to be
    privatized under the Mining Law of 1872.
        Mr. Pearce. Was that review done?
        Mr. Leshy. The 10th Circuit said in its final decision and
    the final decision of the Courts was that under the old mining
    law because of its peculiarities no citizen had the right to
    bring a Court action to review the government's decision to
    issue that patent. That, in my judgment and the judgment of
    about 25 other law professors who signed this brief, was
    totally out of step with the law. What the law ought to be.
        Mr. Pearce. So you then had remedy, and the remedy was?
    What remedy did you take then?
        Mr. Leshy. The remedy is in this legislation.
        Mr. Pearce. The remedy. You did not go to the Supreme
    Court?
        Mr. Leshy. The Supreme Court denied review.
        Mr. Pearce. So the request was made for the Supreme Court
    to look at it?
        Mr. Leshy. Right.
        Mr. Pearce. And they said we do not feel any facts that are
    compelling?
        Mr. Leshy. They did not say anything. They said, we deny
    review.
        Mr. Pearce. We are not going to review?
        Mr. Leshy. Right.
        Mr. Pearce. So we have now----
        Mr. Leshy. The issue----
        Mr. Pearce.--carried this to the District Court, and they
    found against. We have carried it to the Appellate Court, and
    they found against. It went to the Supreme Court, and they
    said, we do not really see a problem that would rise to that
    level. And you here testifying today have been signed onto that
    for whatever you call that, and now I find the legislative fix
    that would bypass every Circuit, every decision made up to this
    point. It is amazing. Stunning.
        Mr. Leshy. Every----
        Mr. Pearce. Did you talk with anybody about this section?
    Have you in any time in your history conferred with anybody,
    staff or anybody about this section and the inclusion in the
    bill or has that just kind of come out of the blue?
        Mr. Leshy. No. I have talked to the staff about this.
        Mr. Pearce. You have talked to staff.
        Mr. Leshy. Yes.
        Mr. Pearce. So you were signing on in Court. You were a
    participant through all processes. You know that the Court
    system found. Mr. Bisson, did the agency ever take a look at
    that request?
        Mr. Bisson. I am not aware of it, sir.
        Mr. Pearce. OK. Do you have any regulatory status on such
    things?
        Mr. Bisson. On the----
        Mr. Pearce. On such reviews.
        Mr. Bisson. Not that I am aware of. Are you talking about
    the patent review?
        Mr. Pearce. Yes.
        Mr. Bisson. We do have regulatory requirements for patent
    review and standards that we have to comply with.
        Mr. Pearce. I thank the gentleman. I see that my time has
    expired. I thank the gentleman for yielding his time.
        Mr. Costa. Thank you, gentleman from New Mexico. I will add
    that whether one is a private citizen or whether one serves in
    the legislative or executive branch or the judicial branch I do
    not think one gives up their rights as citizens to participate
    in the legislative process, and certainly, Mr. Leshy, you are
    viewed as valuable to the Chairman in writing any legislation,
    and your views are opined that is certainly the privilege that
    we all can take of all the people who have expertise here.
        So I want to thank you, and I want to thank this panel for
    your testimony, and we need to move on because we have a lot of
    things going on on the Floor, and we have another panel that is
    patiently waiting, and we would like that new panel to come
    forward. We have I believe five witnesses on the new panel, and
    we will look forward to hearing your statement. No, there are
    three of us. So we are going to run through regular order here.
        I was wrong. We have six members of this panel. Well, we
    are pleased to have all of you, and let me make sure that I am
    on the proper page here. Our next panel involves the following
    witnesses: Mr. Steve Ellis, Vice President of Programs for
    Taxpayers for Common Sense; Mr. Dusty Horwitt from Public Lands
    Program Analyst for Environmental Working Group; Mr. Tony Dean,
    Sportsman and Radio Host of Tony Dean Outdoors; Mr. Michael
    Marchand, Chairman of the Confederated Tribes of Colville--
    Colville I am told, is that proper pronunciation--Reservation;
    Mr. William Champion, President and CEO of Kennecott Utah
    Copper Corporation; and Mr. Ted Wilton, Executive Vice
    President of Neutron Energy Company.
        I think I have included everyone, and so we will begin with
    Mr. Ellis and recognize him for five minutes. As I told the
    previous panel, for those of you who may not be familiar with
    the process here testifying in Congress, we have a five-minute
    rule. I try to apply that equally. Some days more successfully
    than others.
        Nonetheless, we would appreciate your following within that
    five-minute rule, and if you go beyond that, I will politely
    let you know that you need to wind up. So we appreciate your
    time and the distance you traveled and any further information
    obviously will be submitted for the record. Mr. Ellis for five
    minutes.

    STATEMENT OF STEVE ELLIS, VICE PRESIDENT OF PROGRAMS, TAXPAYERS
                            FOR COMMON SENSE

        Mr. Ellis. Thank you. Good morning, Chairman Costa, Ranking
    Member Pearce, members of the Subcommittee. Thank you for
    inviting me to testify this morning on H.R. 2262, the Hardrock
    Mining and Reclamation Act of 2007. I am Steve Ellis, Vice
    President of Taxpayers for Common Sense, a national nonpartisan
    budget watchdog group. Since its inception in 1995, TCS has
    pushed for the reform of the General Mining Act of 1872. It is
    a relic of an entirely different era and high time it is
    amended to reduce its exorbitant taxpayer subsidies.
        Taxpayers for Common Sense supports H.R. 2262 as a strong
    step toward reigning in the excesses of the Mining Law of 1872.
    I will detail some of these reasons. The 1872 Mining Law
    enables entitles to patent or buy Federal land for a pittance.
        Under the law you would pay in 1872 dollars less than 31
    cents to buy an acre of Federal land. So you end up with
    examples such as in Crested Butte, Colorado where the Federal
    government sold 155 acres to the Phelps Dodge Mining Company
    for approximately $790, despite a company estimate that the
    land could produce up to $158 million in after tax profits over
    11 years. This is an area where land prices range as high as a
    million dollars per acre.
        In 1994, Congress began enacting one-year patent
    moratoriums. However, continuing the decade-long process of
    one-year extensions makes little sense for anyone. H.R. 2262
    rightly throws patenting of Federal land onto the ash heap of
    history. Despite the private sector extracting public assets
    from the ground, under the Mining Law of 1872 taxpayers receive
    no compensation whatsoever.
        Since enactment of the mining law, the total value of
    minerals that have been taken without compensation is an
    estimated $245 billion. That is the equivalent of emptying Fort
    Knox of all its gold two and a half times over. By comparison,
    the oil and gas industry generally pays 12 and a half percent
    in royalties on what they extract from onshore Federal lands.
    H.R. 2262 requires an 8 percent royalty on net smelter returns.
    Net smelter is essentially the gross revenue for the mineral
    product that the mine receives from a refinery or smelter.
        This ensures that the royalty automatically adjusts to
    changes in the market and does not over- or undercharge. TCS is
    aware of other proposals such as net revenue or net profits
    royalty but we believe these offer too much opportunity for
    gamesmanship on what the deductible costs will be.
        Mineral Business Appraisal, a self-described geologic and
    mining expert in the appraisal of all types of mineral property
    describes net profits royalty indicating, ``There are virtually
    no buyers for this type of royalty because of the creative
    accounting that the mining operator can use to depress the
    royalty payment. The distinguishing feature of net profits
    royalty is that depending upon the exact definitions in the
    mining lease in the actual calculations, it will very often be
    zero.''
        According to Mineral Business Appraisal, net smelter
    royalty payments are ``also fairly simple to calculate and
    administer, in that only the selling price and the quantity of
    mineral product produced or sold are required for the
    determination.'' In addition, ``this type of royalty will
    usually have the highest market value of all the royalty
    types.''
        One significant change that Taxpayers for Common Sense
    would like to see in H.R. 2262's royalty structure is to
    increase the payment to at least 12-and-a-half percent, which
    would harmonize it with high rates for other extractive
    industries. All too often after the minerals have been removed
    mining operations split town and leave communities with a mess
    and taxpayers holding the bag for cleanup. It is a big bag.
        A 2004 report by the EPA put the cost of remediation of
    hardrock mines at $20-to-$54 billion. To address these unfunded
    liabilities, H.R. 2262 tightens existing regulations requiring
    financial assurance and operation plans and restricts mining
    from areas where the risk of an expensive cleanup is too great.
        Over the years, the Department of Interior has been prodded
    repeatedly to require adequate financial assurances in the form
    of surety bonds and other tangible assets. To help taxpayers
    deal with the existing fiscal hangover, H.R. 2262 uses the
    royalty payments to establish two trust funds. One would
    receive two-thirds of the royalty payments to clean up areas
    where the mining industry left communities and taxpayers with a
    costly mess. The other would receive one-third of the royalty
    payments to help states, communities and Indian tribes that are
    socially and economically impacted by past mineral activities.
        Both of these trust funds would remain on budget and would
    be subject to future appropriations. These two trust funds
    absorb the entire revenue generated by the royalties in H.R.
    2262. As the bill progresses toward enactment, TCS urges
    Congress to enable a portion of the revenue generated by the
    bill to be deposited in the general treasury. The minerals
    extracted from the land are owned by all of us, and all
    Americans should reap the financial benefits.
        In conclusion, taxpayers have waited for far too long for
    real reform of the Mining Law of 1872. Public lands are
    taxpayer assets and should be managed in a way that preserves
    their value, ensures a fair return from private industry using
    them for profit, and avoids future liability. Thank you very
    much, and I would be happy to take any questions that you might
    have.
        [The prepared statement of Mr. Ellis follows:]

      Statement of Steve Ellis, Vice President, Taxpayers for Common Sense

        Good morning Chairman Costa, Ranking Member Pearce, members of the
    Subcommittee. Thank you for inviting me to testify this morning on H.R.
    2262, The Hardrock Mining and Reclamation Act of 2007. I am Steve
    Ellis, Vice President of Taxpayers for Common Sense, a national non-
    partisan budget watchdog group.
        Since its inception in 1995, TCS has pushed for reform of the
    General Mining Law of 1872. We are not advocating modernizing this law
    simply because it is 135 years old. After all, our Constitution is well
    over 200 years old and we all think that it is a very fine document.
    However, we have amended the Constitution 27 times over the years for
    good reasons. The Mining Law of 1872 is a relic of an entirely
    different era and it is high time it is amended to reduce its
    exorbitant taxpayer subsidies.
        Subsidies are simply a tool to encourage behavior that might
    otherwise not occur. The subsidies in the Mining Law of 1872 were
    intended as an incentive to populate the West and encourage economic
    development and production that Congress and President Grant believed
    would not otherwise occur. H.R. 2262 recognizes that the law is an
    anachronism, and now it is time to ensure that taxpayers aren't forced
    to continue picking up the tab.
        Taxpayers for Common Sense supports H.R. 2262 as a strong step
    toward reigning in the excesses of the Mining Law of 1872. I will
    detail some of these excesses and describe how H.R. 2262 addresses
    them.
    Giveaway of Federal Land
        Under the Mining Law of 1872, a claimant can ``patent'' or purchase
    a claim for either $2.50 or $5.00 per acre. Just to put that in
    perspective, the 2006 purchasing power of $2.50 from 1872 is just 15
    cents. $5.00 is 31 cents. That's how little we are valuing taxpayer's
    property. Staking a claim on federal land simply requires an annual
    maintenance fee of $125 per acre plus an additional $30 location fee
    and $15 new mining claim service fee for first timers.
        A couple examples of taxpayers getting soaked by patenting:
          In Crested Butte, Colorado the federal government sold
    155 acres to the Phelps Dodge mining company for approximately $790,
    despite a company estimate that the land could produce up to $158
    million in after-tax profits over 11 years. This is in an area where
    land prices range as high as $1 million per acre.
          In Nevada, in 1994, American Barrick paid $9,765 for
    1,950 acres that contained an estimated $10 billion in gold.
        In some cases, it appears that mining patents have been little more
    than a ruse for developers to get their hands on valuable federal
    property before flipping it for other, more lucrative uses. A few
    examples:
          In 1983, the Forest Service sold 160 acres near the
    Keystone, CO ski resort for $400. Six years later the land sold for $1
    million.
          In 1970, a businessman bought 61 acres in Arizona for
    $153. Just ten years later he sold it to a developer for $400,000 plus
    an 11% share in future profits.
        In FY1995, Congress began enacting one-year patent moratoriums.
    Patent applications that were in the pipeline have been grandfathered,
    but new patents have not been issued. However, continuing the decade-
    long practice of one-year extensions makes little sense for the mining
    industry or taxpayers. H.R. 2262 rightly throws patenting of federal
    land onto the ash heap of history. The Congressional Research Service
    points out a critical fact: ending the practice of patenting ``will not
    stop the production of valuable mineral resources from the public
    lands, but will prevent the further transfer of ownership of public
    lands to the private sector.'' Transfer of public lands to the private
    sector at bargain basement prices should be stopped permanently.
    Gold and Other Valuable Minerals for Free
        After charging a pittance for the land, the Mining Law of 1872
    essentially ignores that mining is about recovering valuable minerals
    from the land. Despite the private sector extracting public assets from
    the ground, taxpayers receive no compensation whatsoever. Since
    enactment of the mining law, the total value of minerals that have been
    taken without compensation is an estimated $245 billion. That's the
    equivalent of emptying Fort Knox of all its gold two and a half times
    over.
        By comparison, the oil and gas industry generally pays 12.5% in
    royalties on what they extract from onshore federal lands. States
    appear smarter than the federal government on this issue as well, with
    many of them requiring royalties for mining on state lands.
        H.R. 2262 requires an 8% royalty on net smelter returns. Net
    smelter return is essentially the gross revenue for the mineral product
    that the mine receives from a refinery or smelter. This ensures that
    the royalty automatically adjusts to changes in the market and does not
    over- or undercharge. TCS is aware of other proposals such as net
    revenue or net profits royalty, but we believe these offer too much
    opportunity of gamesmanship on what the deductible costs will be. I am
    reminded of naive film investors that agree to take a share of the
    profits--after the expenses, there are no profits.
        Mineral Business Appraisal, self-described geologic and mining
    experts in the appraisal of all types of mineral property, describe net
    profits royalty, indicating ``[t]here are virtually no buyers for this
    type of royalty because of the creative accounting that the mining
    operator can use to depress the royalty payment amount. The
    distinguishing feature of a net profits royalty is that, depending upon
    the exact definitions in the mining lease and the actual calculations,
    it will very often be zero.''
        According to Mineral Business Appraisal, net smelter ``royalty
    payments are also fairly simple to calculate and administer in that
    only the selling price and quantity of mineral product produced or sold
    are required for their determination.'' In addition, ``this type of
    royalty will usually have the highest market value of all the royalty
    types.'' Simple, predictable, and valuable, that sounds like it is in
    the taxpayer's interest.
        One significant change Taxpayers for Common Sense would like to see
    in H.R. 2262 royalty structure is to increase the payment to at least
    12.5%, which would be more commensurate with other extractive
    industries. A key point to remember is that the 12.5% royalty would
    still be based on current markets and still represents a very small
    share of the gross return.
    Sticking Taxpayers with the Fiscal Hangover
        All too often, after all the minerals have been removed, mining
    operations split town and leave communities with a mess and taxpayers
    holding the bag to pay for clean up. A 2004 report by the U.S.
    Environmental Protection Agency (EPA) Inspector General indicated that
    the Superfund National Priority List contained 63 hardrock mining sites
    and another nearly 100 sites could be added in the future. The price
    tag for cleaning up all of these sites was $7-$24 billion, with more
    than half of that amount likely to be stuck on taxpayers. Because
    clean-up takes such a long time, it is likely that some of the
    businesses currently on the hook will no longer remain viable and the
    taxpayer's share of clean-up will increase.
        The potential unfunded liability from hardrock mining sites is even
    larger. A 2004 report by the EPA put the cost of remediation of hard
    rock mines at $20-$54 billion. Although regulations for bonding were
    tightened with Section 3809 rules, they are still too weak to
    adequately protect taxpayers. According to a June 2005 report by the
    Government Accountability Office (GAO), the Bureau of Land Management
    (BLM) indicated that 48 hardrock operations on BLM land had ceased
    without reclamation since the agency began requesting some form of
    financial assurances in 1981. BLM estimated the costs of reclaiming 43
    sites at $136 million, which the GAO indicated is a low-ball estimate.
        To address these unfunded liabilities, H.R. 2262 requires financial
    assurance and operation plans, and restricts mining from areas where
    the risk of an expensive clean-up is too great. Over the years, the
    Department of Interior has had to be prodded repeatedly to require
    adequate financial assurances in the form of surety bonds and other
    tangible assets. Clearly, further legislation to ensure taxpayers are
    not stuck with the tab for cleaning up mining messes is required.
        To help taxpayers with the fiscal hangover, H.R. 2262 uses the
    royalty payments to establish two trust funds. The Abandoned Locatable
    Minerals Mine Reclamation Fund would receive two-thirds of the royalty
    payments and other fees and related collections. The Locatable Minerals
    Community Impact Assistance Fund would receive one-third of the royalty
    payments. Both of these trust funds would remain on budget and would be
    subject to future appropriations.
        The abandoned mines fund would essentially tap mining industry
    royalties and other payments to clean up areas where the mining
    industry left communities and taxpayers with a costly mess. The
    community impact assistance fund would help States, communities and
    Indian tribes that are socially or economically impacted by past
    mineral activities.
        These two trust funds absorb the entire revenue generated by the
    royalties and other fees associated with H.R. 2262. As the bill
    progresses toward enactment, TCS urges Congress to enable a portion of
    the revenue generated by the bill to be deposited in the General
    Treasury. The minerals are extracted from land owned by all taxpayers,
    and all taxpayers should reap the financial benefits. Moreover, TCS
    believes that the standards for both funds should be clarified and
    tightened. Clean-up standards should be strong and explicit, and
    restrictions placed on the community impact fund to ensure that it
    doesn't become a long term subsidy, but rather a time-limited tool to
    help communities redirect their economy in the wake of a mining
    operation.
        An additional provision in H.R. 2262 prevents bad actors from being
    involved in future operation of mines. This will hopefully put an end
    to the racket where shell companies and foreign subsidiaries make a
    business decision to declare bankruptcy or close shop only to sprout up
    with another mine in a different location.
    Conclusion
        Taxpayers have waited far too long for real reform of the Mining
    Law of 1872. Public lands are taxpayer assets, and should be managed in
    a way that preserves their value, ensures a fair return from private
    interests using them for profit, and avoids future liability. H.R. 2262
    certainly advances that cause, which is why Taxpayers for Common Sense
    supports the bill. As it moves through the legislative process we will
    work to ensure that taxpayer protections are strengthened, some
    percentage of the royalty payments are returned to the treasury, and
    that the royalty rates are increased to match those for oil and gas.
                                     ______

        Mr. Costa. Thank you, Mr. Ellis, and thank you for staying
    within the five-minute rule. Our next witness before us is Mr.
    Horwitt, who I will ask to testify for five minutes, please.

       STATEMENT OF DUSTY HORWITT, PUBLIC LANDS PROGRAM ANALYST,
                      ENVIRONMENTAL WORKING GROUP

        Mr. Horwitt. Thank you, Mr. Chairman, distinguished members
    of the Subcommittee. My name is Dusty Horwitt. I am a Public
    Lands Analyst with Environmental Working Group. We are a
    nonprofit research organization here in Washington and Oakland,
    California. Thank you for this opportunity.
        As we speak, there is a land rush in the West for mining
    claims that is driven by the sky high price for uranium and
    other metals and caused by demand from our own nation, China,
    India and other countries around the world. For the last
    several years, Environmental Working Group has analyzed mining
    claims on Federal lands using a computerized database from the
    Bureau of Land Management. Our work has appeared in
    publications around the country--The Arizona Republic,
    Albuquerque Journal, Fresno Bee, Denver Post, New York Times,
    and The U.S. News and World Report.
        Mr. Chairman, what we have found is that each and every day
    there is a frenzy of claims escalating throughout the West.
    This threatens a crisis for the Grand Canyon, where there has
    been an explosion of uranium mining claims. I would like to
    show a graph that is up on the screen.
        Our research has found that in 12 western states mining
    claims have increased more than 80 percent since January 2003.
    Over an eight-month period from last September to this May, the
    BLM has recorded 50,000 new mining claims. This land rush is
    sweeping the West, despite the remnants of an earlier
    generation of uranium mining that left a legacy of death and
    disease, despite the fact that mining is our leading source of
    toxic pollution, and despite the fact that valid mining claims
    give the claim holders a property right that the Federal
    government has interpreted as superseding efforts to protect
    the environment and preserve our American heritage.
        What this means is that speculative Chinese demand for
    uranium has more influence over the fate of mining in the West
    than people who work and live there. I would like to show a few
    images that show the threats to some of our treasured places,
    show areas that bear the legacy of past uranium mining, and
    remind us that mining impacts can spread across great
    distances.
        Up on the screen is an image of Grand Canyon National Park.
    The claims are featured in blue on the North and South Rims.
    What we found is that as of July of this year mining interests
    hold 815 claims within five miles of the park, 805 of those
    stakes since January 2003, and most of these are for uranium. A
    Canadian company, Quaterra Resources, has already proposed to
    drill exploratory holes for uranium north of the Canyon. This
    operation would include a helicopter pad to carry supplies in
    and out in already crowded air space.
        Next let us look at a map of the canyon country in southern
    Utah and Nevada. Here we can see many claims that are also for
    uranium. Arches National Park in Utah has 869 claims within
    five minutes of its boundary, 864 of them stakes since January
    2003. Canyonlands National Park, 233 claims within five miles,
    all of them staked since January 2003.
        Some of the claimed land that you can see on the Colorado
    side are areas treasured for their scenic and recreational
    values. You will note the town of Moab, Utah, near the top left
    corner of the map. The Department of Energy has started a
    decade-long project there to clean up 12 million tons of
    uranium mine waste near Moab that has contaminated the land
    near the Colorado River. This waste is a threat that could
    contaminate drinking water for millions of people. The cleanup
    costs are estimated anywhere from $412 million to $697 million.
        One other place I would like to show is Yosemite National
    Park in California. Here you will see 83 claims within five
    miles of the park, 50 of them staked in the last four years.
    Without proper protections for our public lands, these claims
    can be costly. In 1996, the Federal government paid $65 million
    to buy out patented claims just three miles from Yellowstone
    National Park. These claims would have been a mine at the
    headwaters of three streams that flow into the park.
        What this incident shows is that mine pollution can spread
    across great distances. In 1992 in Summitville a spill of
    cyanide heavy metal laden water killed some 20 miles of the
    Alamosa River in Summitville, Colorado. The area is now a
    Superfund site. Other towns in the West currently face mine
    proposals that could affect their drinking water.
        H.R. 2262 would help address these problems by providing
    standards to protect water quality, permanently ending the sale
    of public land for no more than $5 an acre, and empowering land
    managers to balance mining with other values and resources,
    just like they do with other industries that operate on Federal
    land. Mining provides materials essential to our economy but it
    must be conducted in a way that strikes a balance with other
    resources, especially increasingly scarce water supplies in the
    West.
        When hundreds of mining claims are pushing up to the edge
    of the Grand Canyon, it is time to draw the line. We need
    reform, and we need it now. Thank you.
        [The prepared statement of Mr. Horwitt follows:]

             Statement of Dusty Horwitt, JD, Public Lands Analyst,
                          Environmental Working Group

    Background
        Mr. Chairman, distinguished Members of the Subcommittee: My name is
    Dusty Horwitt, and I am a Public Lands Analyst at Environmental Working
    Group (EWG), a nonprofit research and advocacy organization based in
    Washington, DC, and Oakland, California. I thank the members of the
    subcommittee for this opportunity to testify.
        The Washington Post recently reported that China plans to spend $50
    billion to build 32 nuclear power plants by the year 2020. Some experts
    predict that China may need 200 or even 300 plants by 2050. And China
    is hardly alone in its desire to increase the use of nuclear power.
        At first glance, this issue would appear to have little to do with
    today's hearing on reforming the Mining Law of 1872. But there's a land
    rush in the West for mining claims and it's driven by the sky-high
    price of uranium and other metals caused by speculative demand from
    China, the United States and players around the globe.
        Today, in the world of U.S. mining law, speculative Chinese demand
    for nuclear fuel has more influence over the fate of mining in the
    American West than the people who work and live there. Short of buying
    out the claims or other congressional intervention, the federal
    government interprets mining law as providing virtually no way to stop
    uranium or other hard rock mining, even when it is in plain view of
    national parks such as the Grand Canyon, once a claim is staked.
        For the last several years, the Environmental Working Group has
    analyzed mining claims on federal land, using computerized data
    provided by the Bureau of Land Management. Our work has been reported
    in dozens of news outlets including the Albuquerque Journal, Arizona
    Republic, Fresno Bee, Denver Post, and Seattle Post-Intelligencer (see
    attachment #1 for full list).
        Mr. Chairman, what we have found is a frenzy of claim staking that
    is escalating each day and threatens a crisis for the Grand Canyon,
    where there has been an explosion of uranium mining claims. A mining
    claim gives the claim holder the right to mine on federal land.
    [GRAPHIC] [TIFF OMITTED] T7014.001

        .epsOur research shows that in 12 Western states, the total number
    of active mining claims has increased from 207,540 in January 2003 to
    376,493 in July 2007, a rise of more than 80 percent. Over an eight-
    month period, from last September to this May, the BLM recorded more
    than 50,000 new mining claims. Current claims cover an estimated 9.3
    million acres.
        Source: Environmental Working Group analysis of Bureau of Land
    Management's LR2000 Database, July 2007 download.
        We have seen this increase in every Western state, with claims for
    all metals increasing by 50 percent or more in Arizona, Colorado, New
    Mexico, Nevada, South Dakota, Utah and Wyoming.
    [GRAPHIC] [TIFF OMITTED] T7014.002

        .epsMany of the new claims are for uranium. The BLM reports that
    the estimated number of uranium claims staked in Colorado, New Mexico,
    Utah and Wyoming combined increased from less than 4,300 in Fiscal Year
    2004 to more than 32,000 in Fiscal Year 2006.
    [GRAPHIC] [TIFF OMITTED] T7014.003

        .epsMany of these claims are being staked by foreign mining
    companies and speculators who could mine the land or sell to
    multinational corporations who often extract minerals using techniques
    involving toxic chemicals, giant earthmoving equipment, sprawling road
    networks and vast quantities of water where water is a precious, scarce
    resource.
        This land rush is sweeping the West despite the remnants of an
    earlier generation of uranium mines that have left a legacy of death
    and disease, despite the fact that mining as a whole is our leading
    source of toxic pollution and despite the fact that mining claims give
    companies a property right that effectively supercedes efforts to
    protect the environment and preserve our American heritage.
        In the face of a landslide of global economic forces that threaten
    many of our most valued natural places and the health of people all
    across the American West, the 1872 Mining Law offers the legal
    equivalent of a pick and a shovel.
        The following photo images were produced by EWG by linking federal
    data on mining claims with Google Earth satellite photos of national
    parks. They show the clear threats to just a handful of our most
    treasured national parks and depict areas that bear the legacy of past
    uranium mining pollution. They remind us that mining impacts can spread
    across great distances carried by wind and water.
    [GRAPHIC] [TIFF OMITTED] T7014.004

        .epsThis satellite image of Grand Canyon National Park from our
    website shows mining claims featured in blue, clustered on both the
    north and south rims. We found that as of July, mining interests hold
    815 claims within five miles of the Park, 805 of them staked since
    January 2003. Many of these claims are for uranium.
        A Canadian company, Quaterra Resources, has already proposed to
    drill exploratory holes for uranium on claims just north of the Canyon.
    The operation would include a helicopter pad to carry supplies in and
    out. The idea of uranium mining near America's greatest national
    treasure is troubling and the thought of helicopter flights of
    radioactive material in an area already crisscrossed by dozens of
    tourist flyovers a day is even more disconcerting.
        The same explosion of claims has occurred in the canyon country of
    southern Utah and Colorado.
    [GRAPHIC] [TIFF OMITTED] T7014.005

        .epsMany of these claims are also for uranium. Arches National Park
    in Utah has 869 claims within five miles of its boundary, 864 of them
    staked since January 2003. Nearby, Canyonlands National Park has 233
    claims within five miles, all staked since January 2003. Many of the
    claims on the Colorado side are near lands treasured for their scenic
    and recreational values.
    The Legacy of Uranium Mining
        Near the top left of the map is the town of Moab, Utah. The
    Department of Energy has begun a decade-long project to clean up 12
    million tons of radioactive uranium mine waste near Moab that have
    contaminated land near the Colorado River. The waste is a threat that
    could pollute drinking water for millions. Cleanup estimates range
    between $412 million and $697 million.
        You'll also note the town of Monticello, Utah at the far south of
    the map. Colorado's Grand Junction Daily Sentinel recently reported
    that residents of Monticello claim unusually high rates of cancer they
    believe were caused by a now-closed uranium mill.
        The Los Angeles Times reported in a landmark series last year how
    uranium mining has left a legacy of cancer and a degenerative disease
    known as Navajo Neuropathy on the Navajo reservation that includes
    Arizona, Colorado, Utah and New Mexico.
        The last image shows Yosemite National Park in California.

        [GRAPHIC] [TIFF OMITTED] 37014.006

        .epsHere, there are 83 claims within five miles of the Park, 50 of
    them staked in the last four years. You can see the five-mile boundary
    in a lighter shade of green. And there are still more national parks
    and monuments that face threats from mining.
    [GRAPHIC] [TIFF OMITTED] 37014.007

        .epsWithout proper safeguards for our public lands, protecting
    national parks from these claims can be very costly. In 1996, the
    federal government paid $65 million to buy out patented claims just
    three miles from Yellowstone National Park that would have been the
    site of a major gold mine. The mine would have been located at the
    headwaters of three streams that flow into the park.
    Mining is the Nation's Leading Source of Toxic Pollution
        The increase in claims including those near our most treasured
    places is cause for concern given the significant impacts of mining for
    uranium and other metals. According to the U.S. Environmental
    Protection Agency's Toxics Release Inventory (TRI), metal mining is the
    leading source of toxic pollution in the United States--a distinction
    the industry has held for eight consecutive years (1998-2005), ever
    since mining was added to the TRI list.
        The EPA has also reported that more than 40 percent of Western
    watersheds have mining contamination in their headwaters. The total
    cost of cleaning up metal mining sites throughout the West is an
    estimated $32 billion or more.
    Unearthing Pollution
        The extraordinary pollution generated by metal mining is caused
    largely by digging and the sheer size of contemporary mining
    operations. Modern mining practices are a far cry from the use of mules
    and pick axes that were common during the late 1800s when the Mining
    Law was written. In part, the techniques have changed because
    concentrated deposits of gold and other metals are largely gone. Mining
    companies now excavate ``mineralized deposits,'' or ore that contains
    microscopic amounts of precious metal.
        To extract the amount of ore they desire, modern mining operations
    typically have to remove enormous quantities of rock and dirt with
    heavy, earthmoving equipment. The holes they dig can exceed one mile in
    diameter and 1,000 feet in depth.
        Mining companies commonly use cyanide or other chemicals to extract
    metal from tons of low-grade ore excavated in modern mining operations.
    In this process, known as heap leaching, companies excavate huge
    quantities of rock and earth filled with microscopic particles of
    precious metal. They place the earth on a plastic-lined heap leach pad
    and then spray or drip cyanide over the earth. As the cyanide trickles
    through the heap, it binds to the precious metal. The mining company
    then collects the metal from the cyanide solution in liquid-filled pits
    at the base of the rock pile
        Cyanide and other chemicals can poison water, land and wildlife
    near mines, but most mining pollution results from digging. When mining
    companies dig for metals, they expose sulfur-laden rock to air and
    water, resulting in the formation of sulfuric acid. The acid often
    drains away from the mine site into ground or surface water where it
    makes the water so acidic that fish and other organisms cannot survive.
    This phenomenon is known as acid mine drainage. At California's
    abandoned Iron Mountain mine, for instance, scientists discovered the
    world's most acidic water with a pH of -3.6, 10,000 times more acidic
    than battery acid.
        The acid itself is not the only problem. When the acid comes in
    contact with rock, it dissolves toxic metals including arsenic,
    cadmium, lead and mercury, and carries those metals into water sources.
    Acid mine drainage from the Iron Mountain Mine, for example, has
    periodically released harmful levels of heavy metals into the
    Sacramento River and has virtually eliminated aquatic life in several
    nearby creeks. Roughly 70,000 people use surface water within three
    miles of Iron Mountain Mine as their source of drinking water. Acid
    mine drainage laden with heavy metals is a problem throughout the West
    from past and present mines.
        Once it begins, such pollution is very difficult to stop. For
    example, Roman metal mines are still draining acid in Europe. Closer to
    home, the EPA wrote that Newmont's Phoenix proposal in Nevada ``will
    likely create a perpetual and significant acid mine drainage problem
    requiring mitigation for hundreds of years.'' Furthermore, reclaiming
    acid draining mines after mining ceases is a huge financial liability.
    That State of New Mexico estimates that one copper mine will cost more
    than a quarter billion dollars to clean up.
    Spreading Pollution
        It is important to understand that mining pollution often spreads
    far beyond the site of the mine. For example, in Summitville, Colorado
    in 1992 a spill of cyanide and heavy metal-laden water killed some 20
    miles of the Alamosa River. The area is now a Superfund Site. Taxpayers
    have already spent $190 million to clean up the area and will likely be
    tapped for millions more in the future.
        Another example of extended mining impacts is the plume of
    contaminated groundwater beneath the Bingham Canyon mine. The EPA
    reports that the plume extends for 72 square miles. The mine is part of
    the Kennecott South site about 25 miles southwest of Salt Lake City
    that has been proposed for Superfund status. The mining watchdog group,
    Earthworks, estimated that the Bingham Canyon mine will leave taxpayers
    with the largest liability of any mine in the United States: more than
    $1.3 billion.
        A third example comes from Arizona in 2006, where dust from a 400-
    foot-high tailings pile at Phelps Dodge's Sierrita Mine spread over a
    two- to four-and-a-half-mile radius, coating homes and lawns in nearby
    Green Valley with white powder. The company said it sampled the
    tailings several years earlier and found no cause for concern but the
    state cited the company for failing to prevent the dust from blowing
    onto homes.
        Residents of Crested Butte, Colorado, Boise, Idaho and other towns,
    are currently facing significant mine proposals that could threaten
    local water supplies and other resources.
        The threat we face today, however, is more serious than in years
    past. The specter of uranium mining operations is looming over the
    Grand Canyon and many other treasured national parks and monuments, and
    the 1872 Mining Law provides inadequate tools to control it. Indeed,
    the 1872 Mining Law does the opposite: it directly facilitates the
    problem by granting property rights with huge speculative incentives
    for staking claims, providing weak standards for protecting water, and
    creating a potential bonanza with no royalty payments if the claim pans
    out. Under current law, speculative plans to increase the use of
    uranium by nuclear industry officials and political leaders around the
    globe can place our public lands at risk and leave Westerners and
    federal land managers at the mercy of multinational mining companies.
        When mining threatens to scar if not destroy places like the Grand
    Canyon, it is time to draw the line. We no longer need to subsidize the
    mining industry, particularly when other extractive industries operate
    on our public lands without the mining industry's special treatment and
    particularly when our national parks and monuments are at risk. We need
    reform, and we need it now.
    HR2262 Would Bring Much-Needed Improvements to Mining Law
        We recommend a number of changes to mining law, several of which
    parallel provisions contained in HR2262.
          Royalty payments: Mining companies should pay taxpayers a
    royalty on the value of the metal they extract. Currently, mining
    companies pay no royalty unlike every other extractive industry
    operating on federal land.
          Abandoned mine cleanup fund: Cleaning up abandoned mines
    is estimated to cost $32 billion or more. Congress should create a fund
    to accomplish this important task.
          Tougher standards for mine cleanup: Mining companies
    should be required to prevent perpetual water contamination and put up
    enough money before operations begin to cover the full costs of cleanup
    should the company go bankrupt or abandon the site.
          An end to mining's tax break: In addition to being able
    to mine royalty-free, mining companies can claim a tax break on up to
    22 percent of the income that they make off hardrock minerals mined on
    federal public lands. Congress should close this loophole.
          No more land giveaways: For years, mining interests have
    been able to buy claimed land from the federal government for $2.50 or
    $5.00 an acre. Since 1994, Congress has placed a moratorium on these
    giveaways that must be renewed annually. Congress should enact a
    permanent ban.
        Mining provides materials essential to our economy, but it must be
    conducted in a way that strikes a balance with other values. We look
    forward to working with the subcommittee to ensure that mining on our
    public lands is conducted in a responsible manner.
        Thank you for this opportunity to testify.
                                     ______

    Attachment #1
        Coverage of EWG Mining Research Has Appeared in the Following
    Outlets:
            ABC News
            Albuquerque Journal
            Argus Leader (Sioux Falls, South Dakota)
            Arizona Daily Star (Tucson)
            Arizona Republic (Phoenix)
            Ashville Citizen-Times (North Carolina)
            Associated Press
            Billings Gazette
            Boston Globe
            Christian Science Monitor
            The Daily News (Los Angeles)
            Duluth News-Tribune (Minnesota)
            Denver Post
            Deseret Morning News (Salt Lake City)
            Eugene (Oregon) Register-Guard
            Fresno Bee (California)
            The Gazette (Colorado Springs)
            Houston Chronicle
            Idaho Statesman (Boise)
            International Herald-Tribune
            Las Vegas Review-Journal
            Modesto Bee (California)
            New York Times
            Philadelphia Inquirer
            The Press-Enterprise (Riverside, California)
            The Record (Stockton, California)
            Reno Gazette-Journal (Nevada)
            Rocky Mountain News (Denver)
            Sacramento Bee
            Salt Lake Tribune
            San Francisco Chronicle
            Seattle Post-Intelligencer
            Spokesman-Review (Spokane, Washington)
            The Star-Ledger (Newark, NJ)
            St. Louis Post-Dispatch
            St. Paul Pioneer Press (Minnesota)
            St. Petersburg Times (Florida)
            U.S. News & World Report
            Ventura County Star (California)
            Washington Post
    Attachment #2
        At the request of the Committee on Natural Resources Subcommittee
    on Energy and Minerals, we have included tables that show the
    distribution of mining claims among Congressional Districts.
    [GRAPHIC] [TIFF OMITTED] 37014.008

    .eps[GRAPHIC] [TIFF OMITTED] 37014.009

                                     .eps__

        Mr. Costa. Thank you, Mr. Horwitt. I appreciate your
    testimony. Our next witness here is Mr. Dean to testify for
    five minutes.

            STATEMENT OF TONY DEAN, RADIO HOST, SPORTSMAN,
                           TONY DEAN OUTDOORS

        Mr. Dean. Chairman Costa and members of the Subcommittee,
    thank you so much for the opportunity to speak today. I
    consider it an honor to address this committee. My name is Tony
    Dean. I am a sportsman, conservationist and producer and host
    of radio and television outdoor shows. I live in Pierce, South
    Dakota. I am also a member of Sportsmen United for Sensible
    Mining, a campaign led by the Theodore Roosevelt Conservation
    Partnership, Trout Unlimited and the National Wildlife
    Federation, and with all due respect to the gentleman from
    Texas who is not with us, I think he was referring to my
    written testimony.
        I am going to say that I am here on behalf of millions of
    hunters and anglers with the exception of the gentleman from
    Texas at his request, and others who recreate on and enjoy our
    public lands to address the need for reform of the general
    Mining Law of 1872.
        I want to make clear of the fact we are not anti-mining. In
    fact, we support responsible mining. I have a letter with me
    today that is signed by 22 national hunting and fishing
    organizations, including the Congressional Sportsmen's Caucus,
    calling for commonsense reforms to the hardrock mining law, and
    I respectfully request that letter be submitted for the record.
        If there is an overriding theme in what we have to say it
    is simply keep the public lands in public hands. The lands
    managed by the BLM and the Forest Service harbor some of the
    most important fish and wildlife habitat and provide some of
    the very finest angling and hunting opportunities in the
    country. Fifty percent of our blue ribbon trout streams are
    found on public lands administered by the BLM and Forest
    Service.
        More than 80 percent of the critical elk habitat in America
    is found on lands managed by the Forest Service and the BLM.
    Unfortunately, more than three million acres of our public
    lands, along with the extraordinary habitat they once provided,
    have essentially been given away to mining companies for as
    little as two and a half dollars to $5 an acre under the
    patenting provisions of the Mining Law of 1872. I want to
    applaud Chairman Costa and Chairman Rahall for introducing this
    legislation which would prohibit the continued forced sale or
    patenting of public lands and help keep public lands in public
    hands.
        In addition to ending the forced sale of our public lands,
    this bill does protect special places on our public lands by
    declaring certain types of lands too special to ruin with
    industrial development. In addition to those listed in my
    written testimony, we would hope you could also include
    national wildlife refuges.
        Sportsmen simply want biologists and resource professionals
    of the BLM and the Forest Service to have the authority to deny
    permits for mining in areas that are vital to fish, water and
    wildlife, and we strongly believe that mining should be on a
    level playing field with other resources when it comes to
    deciding where and how to develop our public lands. The Mining
    Law of 1872 does not require protection of natural resources.
    Mining activities and their harmful impacts on water quality,
    habitat and other resources are governed by a vague and weak
    patchwork of a combination of Federal and state laws.
        At least $32 billion is estimated to be needed for mine
    waste cleanup in the United States. Sportsmen support a fair
    royalty on the mining industry with the returns going to states
    to help restore fish and wildlife habitat. I want to point out
    some places where mining done in a relatively irresponsible
    manner has caused some real problems. How not to mine in the
    West.
        The Zortman Landusky Mine in Montana will be generating
    acid mine drainage for thousands of years, and will probably
    take tens of millions of taxpayer dollars and long-term water
    quality treatment. Then there is Mores Creek, just north of
    Boise, Idaho, which has literally been turned upside down by
    mine waste. The Stibnite mine on the Payette National Forest in
    southern Idaho pours arsenic, arsenic into the Salmon River.
        The Silver Butte Mine in Oregon decimated 18 miles of
    Middle Creek, Rock Creek and Kentucky as a blue-ribbon trout
    stream but in stretches it is essentially dead because of coal
    mining, and the mines in the Coeur D'Alene River Basin in Idaho
    ruined thousands of acres of important wildlife habitat and
    miles of valuable fisheries but the example I am personally
    most familiar with is in my state, South Dakota.
        In the early 1970s, I traveled to our lovely Black Hills to
    do some trout fishing in some of the Black Hills streams, and
    for the first time I saw Whitewood Creek, going on the
    outskirts of Lead and Deadwood, South Dakota. Deadwood, of
    course, is relatively famous. I think they named a TV series
    after it or maybe they named Deadwood after the TV series. I am
    not sure.
        But there I saw Whitewood Creek which looked like any other
    trout stream in that it tumbled over rocks and had what we fly
    fishermen call pocket water but it had something else. It had
    the foulest looking color I have ever seen. It was like dirty
    dishwater gray. I would not dare cast a fly into that water,
    and I did some nosing around. What is causing this? And I was
    told it was the mine tailings from Home Stake Gold Mine, and I
    remember saying to my wife, ``How can anyone allow something
    like this?''
        Well, they did allow it, and frankly it was not until
    Governor Bill Janklow, our former Governor and a former member
    of this body and then Attorney General took Home Stake to court
    and, of course, I should preface it by saying every time
    somebody questioned what Home Stake was doing they trotted out
    the old argument, well maybe we will close the mine and take
    all these jobs with us, and that would usually shut up the
    local population.
        But Governor Janklow, then the Attorney General, took Home
    Stake to court and won an out-of-court settlement which state
    biologists used to restore the stream, and just this past
    spring I caught and released two 20-plus-inch browns in
    Whitewood Creek, and it now boasts a good population of wild
    brown trout.
        I want to thank you most sincerely for this opportunity to
    express my views to the Committee. We strongly support these
    efforts. We look forward to working with you to ensure that
    mining on public lands is modernized to the benefit of fish,
    wildlife and water resources. Thank you.
        [The prepared statement of Mr. Dean follows:]

                      Statement of Tony Dean, Sportsman,
                  Producer and Host of ``Tony Dean Outdoors''

        Chairman Costa, and members of the Subcommittee, thank you for the
    opportunity to speak today. It is an honor to address this committee.
    My name is Tony Dean. I'm a sportsman, a conservationist, the producer
    and host of a radio and television talk show on the Great Outdoors, and
    a resident of South Dakota. I am also a member of Sportsmen United for
    Sensible Mining, a campaign led by the Theodore Roosevelt Conservation
    Partnership, Trout Unlimited and the National Wildlife Federation. I am
    here on behalf of the millions of hunters and anglers, fish and
    wildlife professionals and others who recreate on and enjoy our public
    lands to address the urgent need for reform of the General Mining Law
    of 1872.
        The Mining Law of 1872 is an antiquated statute that allows mining
    companies to take valuable hardrock minerals from our public lands
    without paying any royalties to taxpayers--often while degrading water
    quality, destroying fish and wildlife habitat, and limiting recreation
    opportunities. The law also offers up our cherished public lands for
    forced sales to mining companies for as little as $2.50 to $5 per acre.
        The Mining Law of 1872 contains no requirements for protection of
    natural resources, such as water quality and wildlife habitat, and has
    resulted in a monumental legacy of environmental degradation. Many
    current and abandoned hard rock mines are sources of acid mine drainage
    and toxic pollutants such as cyanide, arsenic, mercury and lead.
    According to the EPA, 12,000 miles of streams and 180,000 acres of
    lakes and reservoirs have been polluted by mine waste and at least 40
    percent of the headwaters of western rivers and streams are degraded
    from mineral activities. There are more than 500,000 abandoned hard
    rock mines in the U.S. Many cause extreme environmental degradation and
    are hazardous to public safety. An increasing number of mines will
    require water quality treatment in perpetuity. It is time that Congress
    addressed the enduring legacy of hard rock mining's impacts on our
    nation's fish and wildlife and other natural resources.
        Signed into law by President Ulysses S. Grant, the Mining Law of
    1872 was intended to attract settlers and prospectors to the frontier
    to open the West. Historically, mining played an important role in the
    social and economic well-being of many communities, and it was vital in
    the development and settlement of the western United States. Today, the
    West has been settled and is home to many of the fastest growing cities
    in the country. Mining companies currently enjoy record prices for gold
    of nearly $700 per ounce. Times have changed, and now--after 135
    years--it's time to update this archaic legislation.
        That is why the Theodore Roosevelt Conservation Partnership, Trout
    Unlimited and the National Wildlife Federation launched the Sportsmen
    United for Sensible Mining campaign yesterday. I have a letter with me
    today signed by several national hunting and fishing organizations
    calling for common sense reforms to hard rock mining law. I
    respectfully request that this letter be submitted for the record.
        I had my own experience with a stream damaged by gold mining. I
    moved to South Dakota in 1968, and several years later, traveled to the
    Black Hills to fish trout. I came across Whitewood Creek near Lead and
    Deadwood and was astonished at its appearance. It was ugly, dishwater
    grey, and devoid of fish life. It was only after Homestake closed the
    mine, and the State of South Dakota initiated court action, did they
    accept their stewardship responsibilities and rehabilitate the creek.
    Today, Whitewood Creek runs clean and clear and supports a good
    population of wild brown trout. But why was it necessary to initiate
    court action to get a huge company to accept their stewardship
    responsibilities? I wondered at the time, how many other Whitewood
    Creeks existed across the Western United States. As it turns out, there
    are far too many.
        For many years, Congress has considered reform of the General
    Mining Law of 1872. We urge you to take action on modernizing the 135
    year old mining law this Congress, and we offer our assistance and
    support.
    Keep Public Lands in Public Hands
        One of the most important reasons to reform the Mining Law of 1872
    is to ``Keep Public Lands in Public Hands.'' Public lands managed by
    the Bureau of Land Management (BLM) and the Forest Service harbor some
    of the most important fish and wildlife habitat and provide some of the
    finest hunting and angling opportunities in the country. For example,
    public lands contain well more than 50 percent of the nation's blue-
    ribbon trout streams and are strongholds for imperiled trout and salmon
    in the western United States. More than 80 percent of the most critical
    habitat for elk is found on lands managed by the Forest Service and the
    BLM, alone. Pronghorn, sage grouse, mule deer, salmon, steelhead, and
    countless other fish and wildlife species, as well as the nation's
    hunters and anglers, are similarly dependent on public lands.
        America's hunters and anglers depend upon public lands and waters
    for habitat managed for the sustainability of fish and wildlife
    resources and open access to pursue their tradition of hunting and
    fishing. American families have enjoyed hunting, fishing and other
    forms of recreation on our public lands for generations.
        More than 270 million acres of federal land are open to hardrock
    mining under the 1872 Mining Law, mostly in the Rocky Mountain West and
    Alaska. Because the1872 Mining Law has not been meaningfully reformed,
    many of America's most treasured public lands are at risk--important
    wildlife habitat and hunting areas, valuable fisheries, sensitive
    roadless areas and popular recreation sites.
        Unfortunately more than three million acres of our public lands--
    along with the extraordinary habitat they once provided--have been
    practically given away to mining companies for as little as $2.50 to $5
    per acre under the patenting provisions of the Mining Law of 1872. I
    applaud Chairman Costa and Chairman Rahall for introducing legislation
    in the form of H.R. 2262, the Hardrock Mining and Reclamation Act of
    2007, which would prohibit the continued forced sale or ``patenting''
    of public lands. Title I of this legislation eliminates the issuance of
    patents for vein, lode, placer and mill site claims.
    Protection of Special Places and Crucial Wildlife Habitat
        In addition to ending the forced sale of our public lands, the
    Hardrock Mining and Reclamation Act of 2007 protects special places on
    our public lands by declaring that certain types of lands shall not be
    open to the location of mining claims, subject to valid existing
    rights. Special places protected under Title II of this legislation
    include Wilderness lands, Wilderness Study Areas, Inventoried Roadless
    Areas, National Parks, Wild and Scenic Rivers and National Monuments
    and Areas of Critical Environmental Concern on BLM lands. I recommend
    that these protections be extended to National Wildlife Refuges as
    well, subject to valid existing rights. These special places include
    some of the best fish and wildlife habitats in the U.S. and many of
    them offer spectacular hunting and fishing opportunities. These areas
    are among the crown jewels of our public lands and should be off-limits
    to new mining.
        Sportsmen simply want biologists and resource professionals of the
    BLM and the Forest Service to have the same authority to examine the
    potential impacts of mining in areas that are vital to fish, water, and
    wildlife resources, and to be able to deny a permit if those values
    would be compromised by mining activities. The U.S. Forest Service and
    Bureau of Land Management should have the authority to determine at
    both the site permitting level and during the planning process that
    areas with crucial fish and wildlife values are not compatible with
    mining. Resource professionals who know on the ground conditions the
    best should be able to maintain the status quo on public lands that
    harbor endangered species; crucial calving, lambing and winter range
    used by elk, mule deer, pronghorn, big horn sheep and other game
    species; sage grouse leks and buffers surrounding leks; and waters that
    are strongholds to imperiled native trout and salmon species.
    Environmental Considerations and Multiple Use
        The Mining Law of 1872 does not require protection of natural
    resources. Mining activities and their harmful impacts on water
    quality, wildlife habitat and other natural resources are governed only
    by a vague and weak patchwork of federal and state laws. Sportsmen
    support strengthening protections for fish, wildlife and water
    resources against the adverse impacts of mining activities.
        H.R. 2262 takes vitally important steps to address the
    environmental costs of hardrock mining and return balance to the
    management of our public lands by establishing environmental standards
    for mining activities. Title III ensures that the Secretary of the
    Interior shall require that all mineral activities on mining, millsite
    and tunnel claims shall ``protect the environment, public health and
    public safety from undue environmental degradation.'' Title III also
    requires that the Interior Secretary assure that all mineral activities
    are conducted in a manner that recognizes the value of such lands for
    other uses including recreation, wildlife habitat and water supply.
        H.R. 2262 affirms the critical principal of multiple use management
    of BLM lands that is laid out in the Federal Land Policy and Management
    Act (FLPMA). FLPMA's multiple use provision requires BLM to balance
    competing resource values to ensure that the public lands are managed
    in a manner that will best meet the present and future needs of the
    American people. FLPMA mandates that BLM manage for multiple uses in a
    manner that protects the quality of ecological, environmental, air,
    water and other values.
        Unfortunately, the Mining Law of 1872 doesn't allow for multiple
    use management and protecting ecological, environmental, air, water and
    other values. BLM has insisted that it must approve all mining
    activities on public lands, even when undue environmental degradation
    will result. Title III of H.R. 2262 firmly establishes that BLM must
    manage mineral activities in the context of multiple use and other
    values, including providing wildlife habitat, hunting, fishing and
    other forms of recreation. This much needed authority is not new, it
    simply aligns the 135 year old Mining Law with public land laws passed
    in the 1970s. For example, the Forest Service and BLM routinely deny
    grazing permits or timber sales because those activities could imperil
    water resources or compromise important fish and wildlife habitat. H.R.
    2262 allows those agencies the right to deny a mining permit if mining
    will cause an unacceptable amount of environmental degradation.
        This common-sense provision will allow federal resource
    professionals discretion to deny mining permits in areas of high fish
    and wildlife value such as the Nine Mile Creek watershed about 30 miles
    west of Missoula. The Forest Service, Trout Unlimited and a lot of
    other groups have spent a lot of time and money on mining-related
    restoration in the watershed and are beginning to make some headway.
    Then several months ago, a miner purchased an old claim at the mouth of
    the creek to suction dredge from July to October of this year, in the
    very same stretch of creek that is being restored. Agency geologists
    say there is no chance he can make any money with the venture. But he
    will make a mess, add sediment to the creek, kill some fish and create
    a bunch of big holes in the stream channel--because he can. It happens
    time and time again. But the agency's hands are tied--if he submits a
    valid plan of operations, there is basically nothing they can do to
    stop him.
        H.R. 2262 also requires that any active mining permits contain
    reclamation plans and evidence that companies have adequate financial
    resources to assure that reclamation will take place. It requires that
    lands be restored to a condition capable of supporting their prior
    uses, including providing quality fish and wildlife habitat. The
    environmental framework established by Title III will help to prevent
    the long-lasting water quality contamination and other environmental
    problems that have resulted in a staggering backlog of challenging and
    costly mine cleanups. For example, just north of Boise, Mores Creek, a
    tributary to the Boise River, has been turned upside down by past
    mining activities. The area could and should support a recreation-based
    economy, but because the state and federal government have no resources
    to clean up the past damage and restore the area, the nearby
    communities suffer. The Zortman Landusky mine in Montana will generate
    acid mine drainage for thousands of years, and will likely require tens
    of millions of taxpayer dollars in long term water quality treatment.
        Unfortunately the Zortman Landusky Mine, Whitewood Creek and Mores
    Creek are not isolated examples. Sportsmen across America have
    experienced the tragedy of dead streams and ruined wildlife habitat.
    The Stibnite mine on the Payette National Forest in southern Idaho
    pours lethal arsenic into the Salmon river, the Silver Butte mine in
    Oregon decimated 18 miles of Middle Creek, Rock Creek in Kentucky is a
    blue ribbon trout stream but is devoid of life in stretches due to coal
    mining, the mines in the Coeur D'Alene river basin in Idaho ruined
    thousands of acres of important wildlife habitat and miles of valuable
    fisheries. These examples are just the tip of the proverbial iceberg.
        H.R. 2262 would help to prevent such environmental problems by
    establishing a solid environmental framework to regulate hardrock
    mining under a single, strong federal law.
    Reclamation and Restoration of Fish and Wildlife Habitat
        At least $32 billion is estimated to be needed for clean-up costs
    to address the legacy of hard rock mining stemming from the more than
    one half million abandoned mines in the U.S. Of particular importance
    to sportsmen is the need for a reclamation fund to restore fish and
    wildlife habitats that are adversely affected by past mining
    activities. H.R. 2262 establishes an Abandoned Locatable Minerals Mine
    Reclamation Fund which would be funded by fees and royalties from
    active hardrock mining. Expenditures from this fund would be available
    for the restoration and reclamation of land and water resources.
        Sportsmen support a fair royalty on the mining industry with the
    returns going to states to help restore fish and wildlife habitat and
    improve hunting and angling opportunities. Since 1977, the coal
    industry has contributed more than $7 billion to recover lands affected
    by abandoned coal mines. Hunters and anglers in the West think it's
    time the hard rock mining industry contributed to the recovery of lands
    and waters damaged by mining. Unlike the coal, oil and gas industries,
    the hardrock mining industry currently pays no royalties on the
    taxpayer-owned minerals it mines on federal lands. It is estimated that
    the U.S. government has given away more than $200 billion in mineral
    reserves through royalty-free mining and the give-away of our public
    lands.
        I would recommend to the committee that a set amount from the
    Abandoned Locatable Mine Reclamation Fund be made available each year
    for restoring fish and wildlife resources. These funds should be made
    available to state fish and wildlife departments, conservation
    organizations, and others to implement fish and wildlife habitat
    improvement projects associated with past mining.
        Little restoration of abandoned hardrock mine lands occurs in the
    West today because there is little money available for clean-up, and
    because of liability concerns associated with handling mine waste.
    Sportsmen support ``Good Samaritan'' protections for communities and
    others that wish to conduct restoration activities and that have no
    connection to the abandoned mine waste. Sportsmen groups know how to
    work with local communities and states to clean up abandoned mines, but
    the status quo provides an enormous disincentive for action. For
    example, it took Trout Unlimited two years to secure permits to clean
    up several piles of abandoned mine waste in Utah's American Fork Creek.
    The waste was harming a state-sensitive fish species, the Bonneville
    Cutthroat Trout. After two years of haggling with EPA over permits, it
    took Trout Unlimited about a month to conduct the clean-up. With the
    proper incentives, sportsmen and conservation organizations can provide
    a helping hand to address the much needed reclamation of abandoned
    hardrock mining sites.
    Conclusion
        Thank you, most sincerely, for this opportunity to express my views
    to the Committee. I applaud Chairmen Costa and Rahall for the
    introduction of H.R. 2262, and for addressing the urgent need for
    reforming the Mining Law of 1872. Sportsmen strongly support these
    efforts and we look forward to working with you to ensure that mining
    on public lands is modernized to the benefit of fish, wildlife, and
    water resources.
                                     ______

        Mr. Costa. Thank you, Mr. Dean, and we appreciate your
    testimony, although you did exceed your timeline. Nonetheless,
    we appreciate your being here. Now I would like to recognize
    the following witness, Mr. Marchand, to testify. Mr. Marchand.

    STATEMENT OF MICHAEL MARCHAND, CHAIRMAN, CONFEDERATED TRIBES OF
               THE COLVILLE RESERVATION, WASHINGTON STATE

        Mr. Marchand. Good morning, Chairman Costa, Ranking Member
    Pearce and members of the Subcommittee. My name is Mike
    Marchand, and I am testifying today on behalf of the
    Confederated Tribes of the Colville Reservation in Washington
    State. I am Chairman of the Colville Business Council, the
    governing body for the Tribes. The Tribes appreciate this
    opportunity to testify regarding our experiences in dealing
    with the proposed mineral development on Federal public lands
    under the 1872 law.
        The lands that we have in question today are what we call
    the old ``North Half'' of the Colville Reservation where the
    Colville Tribes have reserved hunting and fishing rights under
    an 1891 agreement with the United States. As a result of our
    experiences, we have learned that the 1872 Mining Law must be
    reformed. We believe the current bill is an excellent beginning
    for that reform but it needs to be modified to include specific
    provisions to protect tribal reserved rights.
        We have submitted detailed written testimony and also
    intend to provide some suggestions for provisions to protect
    tribal reserved rights. I want to focus my points on the
    following. History of the North Half. The Tribes are a
    confederation of 12 original Tribes from the northwest which
    includes such Tribes such as Chief Joseph's Nez Perce people.
    The Colville Reservation is located in north central
    Washington. It was established in 1872 by executive order.
        At that time, it consisted of three million acres. The
    entire area is rich in mineral resources, particularly the
    northern portion. In 1891, the Colville Tribes entered into an
    agreement with the United States to cede the North Half of this
    reservation, roughly 1.5 million acres of the original three
    million. We were paid about $1 per acre under that agreement.
        The Tribes were promised and reserved the hunting and
    fishing rights throughout this North Half that we ceded. The
    agreement was ratified by Congress, and in the 1975 Antoine v.
    Washington case the United States Supreme Court affirmed our
    hunting and fishing rights for the North Half. The North Half
    continues to be a very important cultural and hunting and
    fishing area for my people.
        Many of our Tribal members depend on food for the meat and
    fish under these rights. The Colville Tribes exclusively
    regulates Tribal member hunting and fishing on the North Half
    to ensure sustainability of the wildlife resources. Any
    development in the North Half that could affect our wildlife
    habitats or fish habitats, water resources and native plants is
    a matter of serious concern to our people.
        Recent attempts at mining development on the North Half. In
    the early 1990s, Battle Mountain Gold Company proposed an open
    pit gold mine for Buckhorn Mountain on the North Half. The
    Federal agencies involved were the Forest Service, Bureau of
    Land Management and the law was the 1872 Mining Law. The Tribes
    had very serious concerns about this proposal and repeatedly
    sought Federal agencies to uphold your trust responsibility to
    protect the resources in which we hold reserved rights in the
    wildlife and habitat, stream flows and water quality.
        The Federal agency position was essentially that the
    company had a right to mine under the mining law, and that the
    agency's trust responsibilities consisted only of ensuring that
    general laws were complied with. In other words, the trust
    responsibilities that we were promised apparently meant nothing
    in this case.
        The Colville Tribes and other groups managed to block this
    open pit mine through various lawsuits. Washington State
    Appeals Board concluded that the company's water quality stream
    flow mitigation plans were fundamentally flawed under state
    law. This shows that our concerns about the mine were
    justified. We were unable to show in our Federal litigation
    that the Federal agencies had violated any Federal laws.
        It troubles us that such a flawed project did not raise any
    red flags under Federal law or under the special trust
    responsibility promised to us to protect our rights. An Indian
    Tribe should not have to depend on a state law to protect its
    fundamental rights promised to us by the Federal government.
        Recommendations for H.R. 2262. The bill is commendable and
    a comprehensive effort to reform the mining law but it lacks
    any procedural and substantive safeguards for Tribal reserved
    rights that could be affected by mining development. We will be
    providing suggestions for language to be added to Section 303
    of the bill to provide those Tribal rights safeguards. In
    addition, we will provide some suggestions for clarifying the
    references to the apparent waiver of sovereign immunity in
    Section 504 savings clause.
        So in conclusion I would just like to thank you for this
    opportunity to testify today. Thank you.
        [The prepared statement of Mr. Marchand follows:]

      Statement of The Honorable Michael E. Marchand, Chairman, Colville
    Business Council, on behalf of the Confederated Tribes of the Colville
                                  Reservation

        Good morning Chairman Costa, Ranking Member Pearce, and members of
    the Subcommittee. My name is Mike Marchand, and I am testifying today
    on behalf of the Confederated Tribes of the Colville Reservation
    (``Colville Tribes'' or ``Tribes''). I am the Chairman of the Colville
    Business Council, the federally recognized governing body of the
    Colville Tribes. The Colville Tribes appreciates this opportunity to
    testify regarding our experiences in dealing with proposed mineral
    development on federal public lands in which the Tribe has reserved
    rights, specifically a large portion of the Reservation that was opened
    to the public domain in the late 1800s that we refer to as the ``North
    Half.'' It is this experience that shapes our view of how the General
    Mining Act of 1872 (``1872 Mining Law'') needs to be reformed.
        As explained in more detail below, the Tribes has learned firsthand
    that the 1872 Mining Law does not provide adequate environmental
    safeguards for fish and wildlife habitat, hydro-geologic conditions,
    water quality, and post-mining reclamation. In this regard, H.R. 2262
    represents badly needed reform for most of these problems. However, the
    legislation does not in its current form address another shortcoming of
    the 1872 Mining Law: its failure to provide any consideration of
    special tribal rights and interests in the natural resources of federal
    public lands and the corresponding federal trust duty to safeguard
    those rights.
        A brief legal history of the Colville Tribes and Colville
    Reservation is necessary to set the context for our experiences and
    views on the 1872 Mining Law and H.R. 2262. Under its Constitution,
    which was first approved by the Department of the Interior in 1938, the
    Confederated Tribes of the Colville Reservation is a single tribe and
    tribal government formed by confederating 12 smaller aboriginal tribes
    and bands from all across eastern Washington State. The Colville
    Reservation today encompasses approximately 2,275 square miles (1.4
    million acres) in north-central Washington State. The Colville Tribes
    has nearly 9,300 enrolled citizens, making it one of the largest Indian
    tribes in the Pacific Northwest. About half of the Tribes' citizens
    live on or near the Colville Reservation.
    The North Half and Its Importance to the Colville Tribes
        The Colville Reservation was established in the same year as the
    Mining Law, by the Executive Order of July 2, 1872. At that time, the
    Colville Reservation consisted of all lands within Washington Territory
    bounded by the Columbia and Okanogan Rivers, extending northward to the
    U.S.-Canadian border. As established by the Executive Order, the
    Colville Reservation encompassed approximately 3 million acres.
        During the 1880s, the Colville Tribes came under increasing
    pressure to cede the North Half of the Colville Reservation, in large
    part because it was rich in minerals. A federal delegation was
    dispatched to the Reservation to seek a cession of the Tribes' lands.
    In 1891, many of the various aboriginal Indian tribes and bands of the
    Colville Reservation approved the Agreement of May 9, 1891 (``1891
    Agreement''), under which the Tribes ceded the North Half, which
    consists of roughly 1.5 million acres. The North Half is bounded on the
    north by the U.S.-Canadian border, on the east by the Columbia River,
    on the west by the Okanogan River, and on the south is separated from
    the south half of the Colville Reservation by a line running parallel
    to the U.S.-Canadian border located approximately 35 miles south
    thereof.
        The 1891 Agreement reserved to the Colville Tribes and its citizens
    several important rights to the North Half, including (a) the right of
    individual Indians to take allotments within the ceded territory, which
    allotments would be held in trust for their benefit and excluded from
    the public domain; (b) payment by the United States for the ceded lands
    of $1.5 million (one dollar per acre); and (c) express reservation in
    Article 6 of the Agreement of tribal hunting and fishing rights
    throughout the ceded lands, which rights ``...shall not be taken away
    or in anywise abridged...The reservation of these rights in Article 6,
    in turn, preserved instream and associated water rights for fish and
    wildlife that a federal appeals court decision, in the Walton case
    discussed below, found were secured in the 1872 Executive Order.
        Congress, however, did not immediately ratify the entire 1891
    Agreement or provide the payment promised to the Colville Tribes.
    Instead, in the Act of July 1, 1892, 27 Stat. 62, it restored the North
    Half to the public domain and opened the lands to settlement. Then, in
    the Act of February 20, 1896, 29 Stat. 9, Congress provided that the
    mining laws of the United States, including the 1872 Mining Law, would
    apply throughout the North Half. Thus, Congress opened the North Half
    to the public domain and applied federal mining laws to the North Half
    before it actually paid the Tribes for the ceded lands. Congress did
    not fully ratify the 1891 Agreement to affirm the hunting and fishing
    rights or pay the Colville Tribes for the North Half until it passed a
    series of appropriations acts from 1906 through 1910.
        The history of the ratification of the 1891 Agreement and the
    nature of the tribal rights reserved are set forth in the U.S. Supreme
    Court's decision in Antoine v. Washington, 420 U.S. 194 (1975). The
    specific issue in Antoine was whether the State of Washington could
    regulate hunting and fishing on the North Half by citizens of the
    Colville Tribes. The Court held that the hunting and fishing rights
    reserved by the Colville Tribes in the 1891 Agreement were in full
    force and effect, and that Congress's method of ratification had the
    same Supremacy Clause effect as a treaty to pre-empt State regulation
    of tribal hunting and fishing activities. Also, it is important to note
    that the U.S. Court of Appeals for the Ninth Circuit has examined the
    events leading up to the establishment of the Colville Reservation
    under the 1872 Executive Order, and has emphasized the elements of a
    bargain, analogous to a treaty, between the Indians and the United
    States. Confederated Tribes of the Colville Reservation v. Walton, 647
    F.2d 42, 44, 46-7 (9th Cir. 1981). In Walton, the Court concluded that
    one of the inducements for the Indians to confine themselves to the
    Colville Reservation (and give up valuable tracts of land with
    improvements outside the Reservation) was to secure access to
    traditional salmon fisheries in the Columbia River and its tributaries.
    Accordingly, the Court found that the 1872 Executive Order reserved
    federal water rights to the Tribes for fisheries preservation and
    irrigated agriculture. 647 F.2d at 47-48. As noted above, the Tribes'
    federal water rights for fish and wildlife were preserved for the North
    Half in the 1891 Agreement.
        Today, the North Half remains a critically important subsistence
    and cultural hunting area for Colville tribal citizens. The area is
    remote and mountainous, with substantial forest resources, much of it
    in federal public lands administered by the U.S. Forest Service or the
    Bureau of Land Management. The Colville Tribes exclusively regulates
    North Half hunting by tribal citizens in much the same manner as it
    regulates on-Reservation hunting, and coordinates with the Washington
    Department of Fish and Wildlife for habitat and population surveys.
    Deer, elk, and moose from the North Half continue to be an important
    source of food for tribal families. Although the construction of the
    Grand Coulee Dam in 1940 immediately eliminated salmon from the
    Columbia River on the North Half, salmon are still present in the
    entire length of the Okanogan River and the Tribes is actively working
    to restore their abundance in that river.
        The fish, wildlife, and ground and surface water resources of the
    North Half are of critical cultural and legal importance to the
    Colville Tribes. The federally protected rights in these resources that
    the Tribes has preserved from its original ownership of the North Half,
    together with the potential impact within adjacent Colville Reservation
    watersheds from development activities on the North Half, make the
    Tribes' interests in this area unique. And of course, mineral
    development entails a very high level of environmental impact.
    Mining Development in the North Half in the Last Decade
        During the 1990s and continuing today, the Colville Tribes has been
    very actively involved in responding to attempts to develop a gold
    deposit located on Buckhorn Mountain, near the Canadian border within
    the North Half. In the early 1990s, Battle Mountain Gold Company
    proposed the Crown Jewel project--a huge open-pit, cyanide leach
    process mine for the Buckhorn Mountain and its vicinity. This proposal
    was governed by the 1872 Mining Law.
        The Colville Tribes actively opposed the Crown Jewel proposal
    because it would have caused great disruption to wildlife in an area
    where many tribal members hunt and would have permanently altered the
    geohydrology and water quality in the mine area and adjacent streams.
    It would have created a large, permanent pit lake of dubious water
    quality, and left hundreds of tons of potentially toxic waste rock and
    tailings in the vicinity of the mine. This would have adversely
    affected our hunting, fishing, and water rights under the 1891 North
    Half Agreement, and also seemed in direct conflict with the basic
    cultural values of the Colville Tribes.
        In opposing the Crown Jewel proposal, we filed at least two major
    lawsuits in federal court, a patent protest with the Department of the
    Interior, and two appeals in Washington State administrative and
    judicial tribunals. Ultimately, Washington State law provided the basis
    for defeating the open-pit proposal. A state administrative appeal
    board reversed the 16 water rights permits that had been granted by a
    state agency, on the grounds that the company's mitigation plan in fact
    did not mitigate for streamflow depletions and shifts in groundwater
    behavior. Okanogan Highlands Alliance, Colville Tribes, et al. v. State
    of Washington, Dept. of Ecology et al., Pollution Control Hearings
    Board, State of Washington, No. 97-146 (Final Findings of Fact,
    Conclusions of Law and Order, Jan. 19, 2000). That same appeal tribunal
    also found fundamental flaws in the company's proposed water quality
    protection plans. The company ultimately decided not to pursue all its
    appeal opportunities for the adverse state decisions, and instead
    abandoned the open-pit proposal.
        Despite success under State law, we were very disappointed to
    discover during the course of our efforts against the Crown Jewel
    proposal that federal agencies--including the Bureau of Land
    Management, but in particular, the U.S. Forest Service--took the
    position that the 1872 Mining Law all but gave the company a right to
    mine in whatever manner it deemed necessary to promote its economic
    interests. At best, the Forest Service paid lip service to the concept
    that as the lead federal agency responsible for the Environmental
    Impact Statement, it also had a special trust responsibility to
    safeguard the Colville Tribes' rights and interests in the natural
    resources of the North Half. The Forest Service took the position that
    its special trust responsibility was in fact not special at all, and
    could be entirely satisfied by complying with other federal statutes
    related to natural resources protection. The federal courts essentially
    agreed. Okanogan Highlands Alliance et al. v. Williams, 236 F.3d 468
    (9th Cir. 2000). In other words, a project that was found to be
    fundamentally flawed under state law triggered no red flags or trust
    responsibility concerns under federal law. This remains deeply
    troubling to the Colville Tribes, and serves as an example of why H.R.
    2262 needs to include some provisions specific to the reserved rights
    of tribes.
        More recently, the Kinross Gold Company has been pursuing an
    underground mine proposal for the Buckhorn Mountain gold deposit.
    Although it seems apparent that the underground mine would eliminate
    some of the more grossly adverse environmental impacts (for instance,
    there will be no huge open-pit lake that would fill with water likely
    to violate Washington water quality standards for several heavy
    metals), this proposal still involves potentially serious adverse
    impacts to the Colville Tribes' interests. At this point, we have not
    launched an all-out campaign of appeals and litigation to block this
    project, but that does not mean we actively support the proposal or
    that we are satisfied it can be implemented without potentially serious
    harm. We are attempting to work with Washington State agencies to
    develop acceptable mitigation requirements for certain key permits that
    have not yet been issued. In general, the federal presence on the
    project is minimal compared to the open-pit proposal, in part because
    the lands for the project have been patented in the past few years. If
    H.R. 2262 had been the law governing the underground proposal,
    patenting would not have occurred and federal responsibilities would
    have been greater.
    Mining Development on Tribal Lands
        It should also be noted that since the late 1970s, the Colville
    Tribes has on three occasions formally considered development of its
    own mineral resources (which is governed not by the Mining Law but by
    statutes specific to Indian lands). In each case, however, the Tribes'
    governing body--recognizing the significance of the mining issue--has
    sought the input of tribal citizens. One such proposal involved a
    molybdenum mine at Mt. Tolman on the Colville Reservation. That project
    was initially approved by a referendum vote of tribal members in the
    late 1970s. The Tribes subsequently entered into a lease agreement with
    Amax Mining Co. (now an affiliate of the Phelps Dodge Corporation) to
    proceed with the project. Amax walked away from the project in the
    early 1980s, however, in response to a severe depression in the
    molybdenum market.
        The recent rise in molybdenum prices has prompted renewed interest
    in Mt. Tolman. In 2006, the Tribes conducted another referendum vote of
    Colville tribal citizens for guidance on whether to revive the Mt.
    Tolman project. Despite the need for governmental revenue and jobs, the
    referendum was overwhelmingly rejected, and the Tribes' governing body
    has no plans at this time to consider it further. In addition, in the
    1990s, the Tribes conducted a series of public meetings to ascertain
    the views of its citizens regarding gold development on the
    Reservation, again because of the potential for governmental revenue
    and jobs. The response at that time was also strongly against such
    development.
    Recommendations for H.R. 2262
        If H.R. 2262 had been the governing law for the Crown Jewel open
    pit proposal, there is no question that the federal agencies would have
    had to do more to identify potential impact on the natural resources of
    the North Half in which the Colville Tribes holds reserved rights, and
    to do more to require mitigation for those impacts. So this bill is
    undeniably a good effort at reform.
        H.R. 2262, however, does not have any provisions (a) requiring
    mining applicants to identify potential tribal rights in the area to be
    affected by a proposal; or (b) requiring federal agencies to understand
    the nature of those rights and how they are currently exercised, or to
    ensure that mitigation is required for impacts to those rights.
    Conclusion
        The Colville Tribes has grave concerns about mining on the North
    Half, particularly under the terms of the 1872 Mining Law, and we have
    also been wary of proceeding with any mineral development within the
    Reservation (where the Mining Law does not apply). However, the
    Colville Tribes is not driven by an anti-mining ideology. We cannot
    rule out that the Tribes or its citizens may one day conclude that
    there is a way to have responsible mineral development on the Colville
    Reservation. We are pragmatists, not romantics or ideologues, and we
    appreciate from our experiences in managing our forest resources the
    value of sustainable natural resources development. For us, the key
    concepts are pragmatism and sustainability, consistent with the
    protection of basic tribal rights and values. Mineral development in
    the 21st century under a 19th century Mining Law is neither pragmatic
    nor sustainable.
        The Colville Tribes appreciates the opportunity to testify. We will
    be providing the Subcommittee with our proposed changes to H.R. 2262
    that will address the issues we raise in this testimony, and look
    forward to working with the Subcommittee on these and other issues
    affecting Indian tribes. At this time, I would be happy to answer any
    questions the Subcommittee may have.
                                     ______

             Response to questions submitted for the record by the
                Confederated Tribes of the Colville Reservation

        (Note: the Colville Tribes has submitted in a separate document
    recommendations on how, in its view, H.R. 2262 should be modified)
    (1)  How would the Tribe benefit from the ability of land managers to
            balance mining with other land uses as proposed under H.R.
            2262?
        The balancing of mining with other land uses by federal agencies as
    proposed under H.R. 2262 would generally benefit the Confederated
    Tribes of the Colville Reservation (``Colville Tribe'' or ``Tribe'') by
    providing the Tribe with an opportunity to comment on a claim holder's
    response to the new substantive criteria established by the Act,
    specifically those listed in Section 303(b). Although the criteria in
    Section 303 do not explicitly mention Indian tribes or tribal reserved
    rights, they would provide an opportunity for the Tribe to participate
    in the general public comment process on issues that impact the Tribe's
    interests.
    (2)  What other key issues from the Tribe's perspective should mining
            law reform address?
        As noted in the Tribe's written testimony, H.R. 2262 is a solid
    beginning for much needed comprehensive reform of the General Mining
    Law of 1872, but it does not include any provisions specific to the
    special reserved rights of Indian tribes or the corresponding federal
    trust duty to protect those rights. This is not surprising, as the 1872
    Mining Act applies only to those lands in the public domain. Most
    tribal landholdings are either Indian reservations or other categories
    of land falling within the statutory definition of ``Indian country''
    as set forth at 18 U.S.C. Sec. 1151. These lands are not in the public
    domain and are, therefore, outside the purview of the 1872 Mining Act.
        The Tribe has submitted to the Subcommittee a document with
    specific recommendations on how H.R. 2262 should be modified to more
    specifically address tribal interests. These recommendations are
    therefore only summarized here.
        First, many Indian tribes in many cases possess treaty or reserved
    rights on ceded lands that may no longer be part of the tribes' land
    bases. Such is the case with the area that we refer to as the North
    Half. As noted in our suggested changes to H.R. 2262, the Colville
    Tribe believes that the legislation should be amended to include
    substantive criteria in Section 301(b) that address the reserved rights
    in these instances.
        Also, the Tribe believes that the apparent waiver of tribal
    sovereign immunity in Section 504(e) should be clarified to provide
    that nothing in the Act shall be construed to waive tribal sovereign
    immunity. Finally, the Tribe believes that it is appropriate to include
    tribal-specific provisions in the Reclamation Fund sections of the
    bill.
    (3)  What are your thoughts on Title II, including Section 201(b)(6)?
            Have the tribes had any experience declaring a site sacred
            under Executive Order 13007?
        The Tribe supports title II, which provides that certain lands
    shall not be open to the location of mining claims under the general
    mining laws on or after the date of enactment of the Act. Specifically,
    Section 201(b)(6) excludes lands identified as ``sacred sites'' in
    accordance with Executive Order 13007. EO 13007 generally provides that
    in managing federal lands, each executive branch agency with statutory
    or administrative responsibility for the management of federal lands
    shall, to the extent practicable, (a) accommodate access to and
    ceremonial use of Indian sacred sites by Indian religious practitioners
    and (b) avoid adversely affecting the physical integrity of such sacred
    sites. EO 13007 defines ``sacred sites'' as those sites identified by
    an Indian tribe. The Tribe strongly supports this provision because EO
    13007 acknowledges and reaffirms the government-to-government
    relationship between the United States and Indian tribes.
        The Tribe has not had occasion to formally declare a sacred site
    under EO 13007. Rather, the Tribe has--by tribal resolution and by
    agreements with various federal agencies--assumed responsibility under
    Section 106 of the National Historic Preservation Act (NHPA) for
    administering the pertinent provisions of that Act for all lands within
    the boundaries of the Colville Reservation and all off-reservation
    trust allotments. The NHPA and its implementing regulations provide for
    specific treatment of sacred sites. The Tribe has generally had its
    concerns adequately addressed in the Section 106 process. Hence, the
    Tribe has not had a need to cite the more general EO 13007 provisions
    in connection with the sacred site issues that our technical staff
    generally becomes involved with.
                                     ______

                Confederated Tribes of the Colville Reservation

                      Proposed Modifications to H.R. 2262

                               September 12, 2007

        Consistent with the Confederated Tribes of the Colville
    Reservation's (``Tribe's'') testimony at the July 26, 2007 Energy and
    Minerals Subcommittee hearing, the Tribe submits the following
    recommendations for modifying H.R. 2262. As noted in our written
    testimony, H.R. 2262 is an excellent beginning for much needed
    comprehensive reform of the General Mining Law of 1872. As introduced,
    however, the bill does not include any provisions applicable to the
    special reserved rights of Indian tribes or the corresponding federal
    trust duty to protect those rights. In general, H.R. 2262 treats Indian
    tribes the same as any other member of the general public. In instances
    where mining activity has the potential to affect tribal reserved
    rights, the Tribe believes that those rights should be addressed
    specifically in this bill.
    Section 303. Proposed New Subsections.
        Section 303 includes many new requirements for applicants,
    operators, and the Secretaries of the Interior and Agriculture. There
    are several places where new provisions to safeguard tribal reserved
    rights should be incorporated, as indicated below (language offered
    with subsequent subsections to be renumbered accordingly):
        ``[New Subsection 303(b)(9).] A description of any rights in
    natural or cultural resources reserved by treaty, statute, executive
    order, or other federal law by or on behalf an Indian tribe that may be
    affected by planned mineral activities, and measures planned to
    protect, or mitigate for impacts to, such resources, including how the
    affected tribe is to be involved in the development and implementation
    of such measures.''
        ``[New Subsection 303 (c)(7).] An explanation of how the proposed
    condition of natural or cultural resources in which an Indian tribe
    holds rights reserved by treaty, statute, executive order, or other
    federal law will be adequate to protect the affected tribe's use of
    such resources or to mitigate for impacts to the affected tribe's use
    of such resources.''
        ``[New Subsection 303 (d)(1)(D).] The condition of natural or
    cultural resources in which an Indian tribe holds rights reserved by
    treaty, statute, executive order, or other federal law, after the
    completion of mineral activities and final reclamation, will be
    adequate to protect, or to mitigate for impacts to, the affected
    tribe's use of such resources.''
    Section 402. Proposed New and Modified Subsections.
        Sections 401-405 establish a Reclamation Fund and provide for its
    use, and sections 421-423 establish a Community Impact Assistance Fund
    and provide for its use. Both of these funds represent an innovative
    approach to reclamation and impact assistance derived from proceeds of
    mineral activity. The Colville Tribe acknowledges and appreciates the
    provisions for expending the Reclamation Fund to restore Indian lands
    (Section 403(a)), for making Reclamation Funds available to Indian
    tribes performing reclamation activities (Section 404), and for
    providing Impact Funds to affected tribes (Section 422).
        In addition, consistent with our rationale for adding tribal-
    specific provisions to Section 303, the following tribal-specific
    provisions should be added to Section 402 with respect to uses of the
    Reclamation Fund.
        ``[New Subsection 402(a)(8).] Restoring and enhancing land, water
    resources, fish and wildlife habitat, and cultural resources in which
    an Indian tribe holds reserved rights under a treaty, statute,
    executive order, or other federal law.''
        ``[Modified Subsection 402(b)(3) [New language in italics]. The
    restoration of land, water, fish and wildlife, and cultural resources
    previously degraded by the adverse effects of past mineral activities,
    including, but not limited to, such resources in which an Indian tribe
    holds rights reserved under a treaty, statute, executive order, or
    other federal law.''
    Section 504(e). Waiver of sovereign immunity of Indian tribes, Proposed
            Modification.
        The last sentence of 504(e) currently reads, ``Nothing in this Act
    shall be construed to be a waiver of the sovereign immunity of an
    Indian tribe except as provided in section 303.''
        It should be rewritten to read, ``Nothing in this Act shall be
    construed to be a waiver of the sovereign immunity of an Indian
    tribe.''
    Discussion of Sovereign Immunity Provision.
        The sovereign immunity of an Indian tribe from unconsented suit is
    a very significant, carefully guarded attribute of tribal sovereignty.
    Tribes routinely negotiate voluntary waivers of immunity in a variety
    of contractual instruments, with the scope and nature of the waiver
    tailored to the circumstances of the transaction. Some tribes have
    enacted statutes to specify the circumstances under which immunity is
    waived. Congress has on occasion also waived the immunity of tribes.
    See Blue Legs v. United States Bureau of Indian Affairs, 867 F.2d 1094,
    1096-1097 (8th Cir. 1989) (holding that the Resource Conservation and
    Recovery Act of 1976 authorizes suits against Indian tribes by private
    parties).
        Federal courts have routinely held that a Congressional waiver of
    immunity will not be lightly found, but must be clear, express and
    unequivocal. Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58-59 (1978).
    As drafted, the bill's waiver provision is vague and confusing. In
    addition, for Congress to waive tribal immunity in the context of
    comprehensive reform of the 1872 Mining Law, there should be a clear
    policy rationale for doing so, and none is apparent in the case of H.R.
    2262.
        It seems clear by the plain language that 504(e) intends to waive
    tribal sovereign immunity in certain instances, with reference to
    section 303. But a clear view of the scope of the waiver does not
    emerge from a review of section 303. Section 303 is a long section
    containing a variety of requirements that apply variously to
    ``persons,'' ``applicants,'' ``operators,'' and the Secretaries of the
    Interior and Agriculture. None of the many requirements in section 303
    expressly apply to Indian tribes, and there is no language anywhere in
    section 303 that refers to a waiver of tribal immunity. Accordingly,
    Section 504(e) is either in error when it refers to section 303 (and
    the actual intent is to refer to some other section for the immunity
    waiver), or somehow intends to waive tribal immunity to allow suit
    against a tribe for violating section 303.
        H.R. 2262 could be interpreted to authorize such a broad waiver.
    The Definitions section of the bill, Section 2(a), includes definitions
    of ``Indian tribe,'' ``person,'' ``applicant,'' and ``operator.'' The
    definition of ``person'' includes Indian tribes. ``Applicant'' and
    ``operator'' are both defined with reference to the term ``person,''
    which, as noted, includes ``Indian tribes.'' The citizen suit
    provisions in Section 504 authorize any ``person'' to sue any
    ``person'' (including but not limited to the Secretary of Agriculture
    or Interior) for violation of ``any of the provisions'' of the Act.
    That would include any of the many requirements in Section 303 that
    apply to ``persons,'' ``applicants,'' or ``operators.'' Arguably, then,
    tribal sovereign immunity is waived for a situation where a tribe, or
    perhaps a tribal corporation, is applying for, or has received, a
    permit to carry out mining activities on federal public lands and is
    alleged to be in violation of one of the many provisions of section
    303.
        The Colville Tribe is unaware of any situation where an Indian
    tribe or tribal corporation has ever sought to carry out mining
    activities on federal public lands under the 1872 Mining Law (as
    apparently recognized in Section 2 (a)(10)(B) of the bill, mining
    activities on tribal lands are carried out under other statutes). If
    further review confirms that Indian tribes do not seek to engage in
    mining development on public lands, then the bill's purported waiver of
    tribal sovereign immunity would seem to be a solution in search of a
    problem.
        If a tribe or tribal corporation were to apply to conduct mining
    activities under the Act, it would be more appropriate for the
    Secretary to promulgate regulations that provide how remedies may be
    had under the Act with respect to such tribe or tribal corporation
    under such circumstances. Such remedies could include a negotiated
    waiver of immunity tailored to the circumstances of the transaction or
    permit process that the tribe in question may be involved in. That is
    how remedies are handled for contracts with Indian tribes that are
    subject to 25 U.S.C. Sec. 81, which require the approval of the
    Secretary of the Interior. See 25 U.S.C. Sec. 81(e) (requiring the
    Secretary of the Interior to promulgate regulations identifying the
    types of contracts or agreements subject to Secretarial approval); 25
    C.F.R. Part 84 (regulations implementing 25 U.S.C. Sec. 81).
        The Colville Tribe believes that existing law authorizes the
    Secretary to promulgate such a regulation. The Tribe, however, would
    not object to a provision in H.R. 2262 to make that authority explicit
    with respect to promulgation of a remedies regulation for tribes or
    tribal corporations that engage or intend to engage in mineral
    development activity under the 1872 Mining Act and this bill.
        Finally, the Colville Tribe is concerned that the purported waiver
    of tribal sovereign immunity in the citizen suit provision could be
    abused by organizations or individuals seeking to influence a tribe.
    For example, a citizen group composed of tribal members or non-members,
    or both, could sue or threaten to sue a tribe in order to force that
    tribe to become involved in opposing or supporting a mineral
    development project--even if the tribe desired to remain uninvolved or
    desired to be involved in a manner contrary to the desires of the
    citizen group.
                                     ______

                Confederated Tribes of the Colville Reservation

                 Additional Proposed Modifications to H.R. 2262

                                October 11, 2007

        Consistent with the Confederated Tribes of the Colville
    Reservation's (``Tribe's'') testimony at the July 26, 2007, Energy and
    Minerals Subcommittee hearing, the Tribe submits the following
    recommendations for modifying H.R. 2262. These proposed recommendations
    supplement the recommendations we submitted to the Subcommittee on
    September 12, 2007.
        Section 201(b): Section 201(b) provides that mining claims cannot
    be located on certain categories of lands after enactment of the Act.
    Among other categories of land excluded are ``[l]ands identified as
    ``sacred sites'' in accordance with Executive Order 13007.'' Executive
    Order 13007 defines ``sacred site'' as:
            [A]ny specific, discrete, narrowly delineated location on
            Federal land that is identified by an Indian tribe, or Indian
            individual determined to be an appropriately authoritative
            representative of an Indian religion, as sacred by virtue of
            its established religious significance to, or ceremonial use
            by, an Indian religion; provided that the tribe or
            appropriately authoritative representative of an Indian
            religion has informed the agency of the existence of such a
            site.
    We understand that certain interests have expressed concern that this
    provision could result in a situation where a mining company (or other
    person) expends significant resources in connection with locating a
    mining claim, only to have the site of the claim later be declared a
    sacred site by an Indian tribe or Indian individual.
        Upon further examination of this Section 201(b), and to preserve
    and clarify the government-to-government relationship with Indian
    tribes, we recommend striking the current language in Section 201(b)(6)
    and replacing it with the following, which is a variation on the
    definition of ``sacred sites'' in Executive Order 13007:
            Any delineated location on federal land that is identified by
            an Indian tribe as sacred by virtue of its established
            religious significance to, or ceremonial use by, an Indian
            religion; provided, however, that this subsection shall not
            apply when the identifying Indian tribe consents to the
            location of the mining claims or mineral activities.
        This language would retain some of the definition of ``sacred
    sites'' in Executive Order 13007, but would also include language that
    ensures that Indian tribes may also identify sites that have cultural
    significance. A redline of the changes in the proposed language above
    to the ``sacred sites'' definition in Executive Order 13007 is shown
    below:
            [A]ny specific, discrete, narrowly delineated location on
            Federal land that is identified by an Indian tribe, or Indian
            individual determined to be an appropriately authoritative
            representative of an Indian religion, as having traditional
            religious or cultural importance; provided that the tribe or
            appropriately authoritative representative of an Indian
            religion has informed the agency of the existence of such a
            site. provided, however, that this subsection shall not apply
            when the identifying Indian tribe consents to the location of
            the mining claims.
        The omission of the words ``specific,'' ``discrete,'' and
    ``narrowly'' is intended to allow for Indian tribes to designate areas
    on federal lands within which a sacred site is located without being
    required to specifically identify the sacred site. This is a concern
    for the Tribe, as the Tribe has a policy of not identifying the exact
    locations of sacred sites. Instead, when applicable, the Tribes will
    delineate an area that includes the sacred site but that is large
    enough so as to not reveal the sacred site to outsiders. Many Indian
    tribes, including the Colville Tribes, have experienced instances where
    sacred sites have become known to the general public and, in turn,
    defaced by vandals or plundered by grave-robbers.
        The addition of the language ``as having traditional religious or
    cultural importance'' is taken from Section 101(d)(6)(A) of the
    National Historic Preservation Act of 1966. This language is intended
    to allow Indian tribes to identify sites that also have traditional
    cultural importance, as opposed to just religious significance. Sites
    that have cultural significance may include archaeological sites,
    burial sites, traditional food or plant gathering sites, rock art
    sites, sites associated oral tribal traditions or legends, or any other
    site deemed culturally important by an Indian tribe.
        The omission of the language relating to ``Indian individuals''
    would ensure that any sacred site designation is made by an Indian
    tribal government, not an individual Indian. The government-to-
    government relationship memorialized in executive orders such as
    Executive Order 13007 signifies a special relationship between the
    United States and Indian tribal governments. Such a political
    relationship generally does not exist with an individual Indian acting
    in an individual capacity. Clarifying that only Indian tribal
    governments may designate sacred sites also avoids the need to resolve
    two issues not addressed in Executive Order 13007: (a) whether an
    Indian individual is an ``appropriately authoritative representative''
    of an Indian religion; and (b) which entity should make that
    determination.
        One can envision any number of scenarios where an individual Indian
    could claim to be an authoritative representative of an Indian religion
    for purposes of declaring a sacred site. A declaration of a sacred site
    by such an individual, or the qualifications of the individual making
    the declaration, could then be challenged by a third party (including a
    mining applicant or even perhaps an Indian tribe), and federal agencies
    or courts would be left to sort out the aftermath. Any determination or
    inquiry by a federal agency or a court of whether a person is an
    ``authoritative representative of an Indian religion'' could implicate
    First Amendment considerations. Limiting the designation of sacred
    locations to Indian tribal government avoids these difficult issues.
        The addition of the proviso allows for persons who intend to locate
    mining claims on lands where sacred sites are located to consult with
    the identifying Indian tribe and secure the tribe's consent. As
    introduced, H.R. 2262 could be construed to prohibit the location of
    mining claims on lands where sacred sites may be located--even where an
    Indian tribe and a mining company have agreed to a mitigation plan and
    the tribe has consented to the location of the claim. Allowing Indian
    tribes to consent to such activities, should they so choose, respects
    tribal sovereignty.
        Finally, we recommend the inclusion in an appropriate section of
    the Act a provision that requires the Secretary of the Interior to
    provide Indian tribes with actual notice of any proposed or pending
    mining activities on federal lands over which the tribes may possess
    reserved rights. Such a provision could read:
            The Secretary shall provide actual notice of any valid existing
            rights, mineral activities, or new claims under the general
            mining laws to any Indian tribe where such valid existing
            rights, mineral activities, or new claims are located (a) on
            lands in which the Indian tribe holds rights reserved by
            treaty, statute, executive order, or other federal law; or (b)
            on lands identified by an Indian tribe as having traditional
            religious or cultural importance.
        The addition of this new language would ensure that Indian tribes
    are notified as early as possible of any potential mining claims or
    activity on lands in which they may have an interest. Conversely, this
    provision would also provide third parties with notice as early in the
    process as possible of potential tribal rights and sacred sites on
    areas within which mining claims might be located.
                                     ______

        Mr. Costa. Thank you very much, and we do appreciate your
    coming the long distance that you did. Our next witness to
    testify is Mr. Champion for five minutes. Put the mic close so
    we can hear you.

      STATEMENT OF WILLIAM CHAMPION, PRESIDENT AND CEO, KENNECOTT
                        UTAH COPPER CORPORATION

        Mr. Champion. Thank you very much for the opportunity to
    testify this morning. My name is Bill Champion. I am the
    President and CEO for Kennecott Utah Copper. Kennecott is a
    copper mining, smelting and refining company located in Salt
    Lake City, Utah. I am here today at my capacity as the Vice
    Chairman for the National Mining Association representing many
    of my colleagues in the hardrock mining business. The mining
    industry is committed to work very proactively and productively
    with Congress for the development and the implementation of a
    fair, a predictable and an efficient national minerals policy
    because U.S. mineral resources are vital to the nation's
    economic well-being.
        The cornerstone of NMA's policy objectives is a predictable
    legal and regulatory framework that will provide long-term
    stability that we need to protect existing investments but also
    to attract new investment capital to domestic mining. There are
    several essential elements to mining law reform that we are
    committed to discuss and engage with. We recognize the
    necessity for a reasonable and fair return to the public for
    payment of minerals produced from new mining claims on Federal
    lands.
        We recognize that there are different methodologies by
    which to accomplish that. Chairman Costa, you referenced in
    your opening comments a World Bank royalty study that was
    recently completed that looked at various methodologies to
    return a fair return to the public. If you will, the conclusion
    from that is that mining is particularly sensitive to royalty
    effects because of our cost structure in the industry and also
    the vulnerability that we have based on the dynamics of our
    markets and the price swings that we oftentimes see.
        National Mining is supportive of an approach that looks at
    net income production payments, not one on gross royalties. We
    believe net income is a better approach that will satisfy the
    needs of our entire business cycle. We also recognize and
    support that the production payment should be applied to the
    cleanup and reclamation of many of the abandoned mine sites
    that exist throughout the nation. These sites which are mined
    and left in an unreclaimed state before the advent of modern
    environmental practices can be addressed by using these funds
    to assist in the safe cleanup and reclamation of these historic
    sites.
        Chairman Rahall also discussed in his opening comments the
    necessity for certainty. As an investor, I think all of us
    would appreciate and would require certainty in the investments
    we make, and our industry is no different than that. Having
    security of land tenure or title from the initial exploration
    through the development and operation of our mining sites and
    ultimately through the reclamation and closure is really an
    essential component of a modern mining law to provide certainty
    for private investment in mineral development and ensure the
    integrity of closure and reclaimed operations.
        We need continued access to public lands and Federal
    minerals to ensure that the country's mineral needs continue to
    be met. As has been pointed out by many people previously, we
    are dependent on a number of different imported minerals
    already today. That need and that dependency continues to grow.
    Probably in the neighborhood of 50 percent or more of the
    Federal lands are already excluded from mining. We believe that
    the issue of suitability can best be handled by the existing
    processes that are in place. Legislative processes that review
    suitability of mining appear to be working quite well.
        The final issue has to do with environmental standards. We
    should recognize very clearly the comprehensive framework of
    Federal and state environmental laws that currently exist. In
    1999, Congress convened a panel of experts from the National
    Academy of Sciences to take a look at the effectiveness of
    existing environmental regulations and laws and the results of
    that clearly show that the existing laws and existing
    regulations were more than adequate to protect against mining
    related environmental impacts, and in fact the study suggested
    that new legislation or new regulations or new laws were not
    needed but simply implementing those that were currently
    available would be the best way forward.
        Thank you very much for the opportunity to speak with you
    today. I would be happy to answer any questions that you might
    have. Thank you.
        [The prepared statement of Mr. Champion follows:]

      Statement of William Champion, President and CEO of Kennecott Utah
           Copper Corp., on behalf of the National Mining Association

        My name is William Champion, President and CEO of Kennecott Utah
    Copper Corporation. I am testifying today on behalf of the National
    Mining Association (NMA). NMA appreciates the opportunity to testify
    before the Subcommittee on this issue of great importance to the
    domestic mining industry.
        NMA is the principal representative of the producers of most of
    America's coal, metals, industrial and agricultural minerals; the
    manufacturers of mining and mineral processing machinery, equipment and
    supplies; and the engineering and consulting firms, financial
    institutions and other firms that serve our nation's mining industry.
    Our association and our members, which employ or support 170,000 high-
    wage jobs, have a significant interest in the exploration for, and
    development of, minerals on federal lands. The public lands in the
    Western states are an important source of minerals, metal production
    and reserves for the nation's security and well-being. Mining on
    federal lands provides for high-wage employment, vitality of
    communities, and for the future of this critical industry.
        NMA is committed to the development of a fair, predictable and
    efficient national minerals policy through amendments to the Mining Law
    of 1872. Because the vitality of the modern American economy is firmly
    rooted in the ready availability of metals and minerals that are
    essential to our way of life and our national security, our efforts in
    the end should result in a mining law that:
          Secures a fair return to the government in the form of a
    net income production payment for minerals produced from new mining
    claims on federal lands;
          Establishes an abandoned mine lands clean-up fund
    financed with revenue generated from a net income production payment;
          Provides the certainty needed for private investment in
    mining activities on federal lands by ensuring security of title and
    tenure from the time of claim location through mine reclamation and
    closure;
          Recognizes the existing comprehensive framework of
    federal and state environmental laws regulating all aspects of mining
    from exploration through mine reclamation and closure; and
          Recognizes existing authorities for closing or declaring
    unsuitable for mining those federal lands with unique characteristics
    or of special interest.
        The cornerstone of NMA's policy objectives is a predictable legal
    and regulatory framework to provide the long-term certainty and
    stability needed to protect existing investments and to attract new
    capital necessary to maintain a healthy and sustainable domestic mining
    industry. The importance of the domestic mining industry to our
    economy, our way of life and our national security cannot be ignored.
    Indeed, it is irresponsible for us to ignore the vast mineral resources
    we have within our nation's boundaries when our domestic needs are so
    great.
        The United States has an abundance of natural resources including
    78 metals and minerals that are the foundation of our modern industrial
    economy. Only the combined countries of the former Soviet Union and
    Australia rank higher than the United States in the global distribution
    of 15 metals with critical uses.
    Fair Return
        A progressive and responsible approach to modernizing the Mining
    Law can achieve a fair return to the public and fund the restoration of
    abandoned mine lands, while encouraging the private investment required
    to develop and carry out environmentally and socially responsible
    mining operations.
        The imposition of a production payment or royalty has the potential
    to have significant economic consequences on existing and future mining
    operations, but the impact will vary depending upon the type of
    production payment or royalty imposed. Determining the type of royalty,
    the rate and its application to existing claims are critical. As noted
    in the World Bank royalty study, mining is ``particularly sensitive to
    [royalty] effects because of its cost structure and vulnerability to
    substantial market-driven demand and price swings.'' Otto, James.
    Mining Royalties: A Global Study of Their Impact on Investors,
    Government, and Civil Society. Washington, DC: World Bank, 2006, p.
    xiv.
        A net income production payment produced from new mining claims on
    federal lands would provide the public with a fair return and with
    funds for restoring abandoned mine lands. This type of production
    payment or royalty most appropriately balances the need to both provide
    a fair return to the public and to foster a strong domestic minerals
    industry. Gross royalties, or certain royalties based on a net smelter
    return, on the other hand, may result in significant losses to state
    and federal treasuries, mine closures, job losses and discouragement of
    new mines. The World Bank study appropriately cautions against gross
    royalty approaches as compared to approaches based on ability-to-pay or
    profit-based approaches: ``Nations should carefully weigh the immediate
    fiscal rewards to be gained from...high levels of royalty, against the
    long-term benefits to be gained from a sustainable mining industry that
    will contribute to long-term development, infrastructure, and economic
    diversification.'' Id. at 3. This type of royalty also encourages
    operators to leave lower grade (less profitable) ore in the ground,
    resulting in wasted public resources.
        The net income production payment should only apply to claims
    located after the enactment of the production payment or royalty
    provision. Such an approach protects settled financial expectations and
    sunken investments and prevents ``takings'' litigation.
    Abandoned Mine Lands
        Using revenue generated from net production payments on new claims
    to fund the clean-up or rehabilitation of abandoned mine lands (AML) is
    an essential aspect of amending the Mining Law. AML sites, which were
    mined and left in an unreclaimed state before the advent of modern
    environmental laws and reclamations practices should be addressed by:
    using funds generated through a production payment or royalty to assist
    in clean-ups; coordinating existing federal and state AML funds and
    programs; and Good Samaritan liability protection to promote voluntary
    clean-ups. The funds should be used for the actual clean-up and
    rehabilitation of abandoned mines and not to cover administrative
    overhead costs.
    Certainty/Security of Tenure
        Ensuring long-term security of tenure (or title) is an essential
    component of a modern mining law necessary to encourage the private
    sector to invest in mineral activity on federal lands. In the past,
    such security was provided by the patenting process, which allowed mine
    claimants to obtain ownership of the lands being mined or used for
    mining purposes. While the current congressional moratorium on
    patenting has not brought mining on public lands to a halt, it
    highlights the need for additional security of tenure in the mineral
    and the surface while claims are being held in advance of, as well as
    during, development and operations. Inclusion of language in the Mining
    Law is needed to clarify the rights to use and occupy federal lands for
    mineral prospecting, exploration, development, mining, milling, and
    processing of minerals, reclamation of the claimed lands, and uses
    reasonably incident thereto.
        Furthermore, security of tenure is critical in obtaining the
    financing necessary for mining projects. Investors need to know that a
    mining project in the United States can obtain approval and proceed
    unimpeded as long as the operator complies with all relevant laws and
    regulations. Mining projects--from exploration to extraction to
    reclamation and closure--are time- and capital-intensive undertakings,
    requiring years of development before investors realize positive cash
    flows. Uncertainty in the legal regime applicable to mining projects
    can chill the climate for capital investments in domestic mining
    projects. Potential investors must know their expectations will not be
    turned upside down by fundamental alteration of laws, regulations or
    policies. As the World Bank recently found, to attract such
    investments, governments need to adopt the fundamental principle of
    ``no surprises,'' such as changes in laws, regulations or policies. Id.
    at 73.
        Because mining operations by their very nature require long-term
    and substantial commitments of capital, the stability of the statutory
    and regulatory framework plays a crucial role in decisions to invest in
    a mining project. As a result, the investments critical for bringing a
    mine to fruition tend to migrate toward projects planned in countries
    that offer predictable regulatory climates that correspond to the long-
    term nature of mining operations.
        Despite reserves of 78 important mined minerals, however, the
    United States currently attracts only eight percent of worldwide
    exploration dollars. As a result, our nation is becoming more dependent
    upon foreign sources to meet our metal and minerals requirements, even
    for minerals with adequate domestic resources. The 2007 U.S. Geological
    Survey Minerals Commodity Summaries reported that America now depends
    on imports from other countries for 100 percent of 17 mineral
    commodities and for more than 50 percent of 45 mineral commodities.
    2007, U, 2007, p. 7. This increased import dependency is not in our
    national interest. Increased import dependency causes a multitude of
    negative consequences, including aggravation of the U.S. balance of
    payments, unpredictable price fluctuations, and vulnerability to
    possible supply disruptions due to political or military instability.
        Our over-reliance on foreign supplies is exacerbated by competition
    from the surging economies of countries such as China and India. As
    these countries continue to evolve and emerge into the global economy,
    their consumption rates for mineral resources are ever-increasing; they
    are growing their economies by employing the same mineral resources
    that we used to build and maintain our economy. As a result, there
    exists a much more competitive market for global mineral resources.
    Even now, some mineral resources that we need in our daily lives are no
    longer as readily available to the United States.
    Environmental Standards
        Under current law, a mineral exploration or mining operation on
    federal lands is subject to a comprehensive framework of federal and
    state environmental laws and regulations including: the Clean Water
    Act; the Safe Drinking Water Act; the Clean Air Act; the National
    Environmental Policy Act; Toxic Substances Control Act; the Resource
    Conservation and Recovery Act; the Endangered Species Act; and the
    Bureau of Land Management (BLM) and Forest Service surface management
    regulations for mining. These laws and regulations are ``cradle to
    grave,'' covering virtually every aspect of mining from exploration
    through mine reclamation and closure. According to the 1999 report on
    issued by the National Academy of Sciences (NAS) panel of experts
    convened by Congress, this existing framework for mining is ``generally
    effective'' in protecting the environment. Hardrock Mining on Federal
    Lands, National Academy of Sciences, National Academy Press, 1999, p.
    89.
        That 1999 NAS report also found that ``improvements in the
    implementation of existing regulations present the greatest opportunity
    for improving environmental protection....'' Id. at 90. Notably, the
    Department of the Interior's 2000 and 2001 regulations governing mining
    and reclamation on BLM lands significantly strengthened the standards
    for mining on federal lands, including new provisions on guaranteeing
    reclamation through financial assurances.
        Importantly, the NAS panel of experts cautioned against applying
    inflexible, technically prescriptive environmental standards stating
    that ``simple ``one-size-fits-all'' solutions are impractical because
    mining confronts too great an assortment of site-specific technical,
    environmental, and social conditions.'' Id. Furthermore, recognition of
    the existing comprehensive framework of federal and state environmental
    and cultural laws that already regulate all aspects of mining from
    exploration through mine reclamation and closure avoids unnecessary and
    expensive duplication. Additional standards or enforcement mechanisms
    are not needed to protect the environment.
    Importance of Access
        Access to federal lands for mineral exploration and development is
    critical to maintain a strong domestic mining industry. As stated in
    the 2006 BLM Minerals Policy Statement: (1) except for Congressional
    withdrawals, public lands shall remain open and available for mineral
    exploration and development unless withdrawal or other administrative
    actions are clearly justified in the national interest and (2) with few
    exceptions, mineral exploration and development can occur concurrently
    or sequentially with other resource uses.
        Federal lands account for as much as 86 percent of the land area in
    certain Western states. These same states, rich in minerals, account
    for 75 percent of our nation's metals production. As the 1999 NAS
    report to Congress noted, the ``remaining federal lands in the western
    states, including Alaska, continue to provide a large share of the
    metals and hardrock minerals produced in this country.'' Id. at 17.
        Efforts to amend the Mining Law must recognize existing authorities
    to close certain ``special places'' to mining activity. Congress has
    closed lands to mining for wilderness, national parks, wildlife
    refuges, recreation areas, and wild and scenic rivers. Congress also
    has granted additional authority to the Executive Branch to close
    federal lands to mining. The Antiquities Act authorizes the president
    to create national monuments to protect landmarks and objects of
    historic and scientific interest. Finally, Congress authorized the
    Secretary of the Interior to close federal lands to mining pursuant to
    the land withdrawal authority of the Federal Land Policy and Management
    Act. As a result of these laws and practices, new mining operations are
    either restricted or banned on more than half of all federally owned
    public lands. These existing laws and authorities are adequate to
    protect special areas. New closures of public land, based on vague and
    subjective criteria without congressional oversight, would arbitrarily
    impair mineral and economic development.
    Conclusion
        The United States needs a robust minerals production industry to
    help meet the needs of American consumers. Unfortunately, America is
    ceding to others the responsibility for meeting our minerals needs.
    Increased import dependency created by lack of U.S. mineral development
    is not in our national interest and causes a multitude of negative
    consequences, including aggravation of the U.S. balance of payments,
    unpredictable price fluctuations and vulnerability to possible supply
    disruptions due to political or military instability. The U.S. mining
    industry has fully embraced the responsibility to conduct its
    operations in an environmentally and fiscally sound manner. It hopes
    and expects that Mining Law legislation will recognize and honor both
    this commitment and the industry's contribution to our national well-
    being.
        NMA appreciates the opportunity to provide this testimony.
                                     ______

        Mr. Costa. Thank you, Mr. Champion, and I appreciate your
    testimony. There are a couple of areas that I am interested in
    coming back and getting your thoughts on, but we have one more
    witness and the final witness in this panel is Mr. Wilton. We
    ask you to testify please for five minutes.

      STATEMENT OF TED WILTON, EXECUTIVE VICE PRESIDENT, NEUTRON
                             ENERGY COMPANY

        Mr. Wilton. Thank you, Mr. Chairman and members of the
    Committee. I would like to express my appreciation to this
    committee for the invitation to speak before you today. My name
    is Ted Wilton. I am from Spring Creek, Nevada. I am a minerals
    geologist. I have been one for 39 years. I previously served on
    the Nevada State Board for Multiple Use of the Public Lands,
    and I am a former member of the BLM's Great Basin Resource
    Advisory Council.
        I am not here today to represent any particular
    organization but I am here to speak on behalf of an awful lot
    of men and women, many thousands of men and women who produced
    the minerals that fuel our economy. People who work in mines
    from Missouri to Nevada, from Alaska to New Mexico. Together we
    are the ones who produce the minerals for the American economy.
    We work and live in the areas where mining is carried out, and
    we are the ones who are going to bear the immediate
    consequences of H.R. 2262, and we are affected perhaps more so
    in an immediate term than anybody else by this proposed
    legislation.
        We feel that the bill will have some profound and lasting
    effects on our livelihood, on the industry, and we feel that
    the bill as is currently structured presents a severe and real
    threat to the livelihood of the American mining industry. We
    have concerns about the nature and level of the royalty. We are
    concerned about the permit review and renewal process, and we
    are concerned about the complexities as they relate to the
    environmental processes review and standards that are included
    in this bill.
        In particular, that concern is based on the fact that the
    U.S. mining industry is the most regulated from the perspective
    of health and safety and from environment of any mining
    industry on the planet. Why are we concerned about this? If the
    industry is threatened, as it appears under this bill, our jobs
    go away. That is plain and simple.
        Now you might say that this is a bit of a boy crying wolf.
    Well, I want to say to you that I, for one, am one who had his
    job exported overseas in 1997, and I had the privilege of
    working in such wonderful places as Colombia, Guatemala,
    northern Argentina, the Russian far east. I worked in the
    Solomon Islands on the Island of Guadalcanal and Papua New
    Guinea. I had the privilege of working in essentially every
    continent on the planet, except for Africa during that time. So
    I believe it is a valid thing to say that our jobs can be
    exported overseas because I have seen that happen, and this is
    a concern that is not just Ted Wilton's concern. It is a
    concern that many of my friends and neighbors in northeastern
    Nevada have.
        When I left Elko, Nevada on Tuesday morning to fly over
    here, when I checked in at the airport, the gate agent asked me
    what are you going to Washington for, and I explained to her
    why I was coming, and it was to testify on this bill. Well,
    when I went to the gate and she took my boarding pass, she said
    to me, Ted, make sure that you speak firmly and clearly because
    even though I do not work in mining, if the mines in the Elko
    area are closed, my job goes away as well.
        We live in an area that has got a very vibrant economy. We
    have very good jobs. We are paid more than just a living wage.
    We have health and hospitalization insurance not just for
    ourselves but for all of our family members. The economic
    consequences of this bill are such that it threatens those
    jobs. It threatens the small businesses in rural America in the
    areas of mining, and we are deeply concerned about this.
        We believe that there is a need to look at the Mining Act
    and to refine it to make it more modern but please, as you
    consider your votes on this bill, please consider the
    unintended consequences as well. I would like to thank the
    Committee for the opportunity to make this testimony today, and
    if I can answer any questions I would be happy to do so.
        [The prepared statement of Mr. Wilton follows:]

                 Statement of Ted Wilton, Spring Creek, Nevada

        Mr. Chairman and Members of the Committee ``
        I would like to express my appreciation to the Committee for the
    invitation to speak before you today. My name is Ted Wilton, and I am
    from Spring Creek, Nevada; I am a minerals geologist, and I have been
    one for more than 39 years. I am a member of the Board of Trustees of
    the Northwest Mining Association, one of the nation's largest
    organizations representing the interests of the mining industry. I have
    previously served on the Nevada State Board for Multiple Use of the
    Public Lands under then-Governor Bob Miller, and as a member of the
    U.S. Bureau of Land Management's Northwest Great Basin Resource
    Advisory Council. Today I would like to take this opportunity to convey
    my views and the thoughts of many of thousands of men and women who
    work at mines in such diverse localities as Pilot Knob and Ste.
    Genevieve, Missouri; Fairbanks, Alaska; Republic and Kettle Falls,
    Washington; Douglas, Wyoming; Naturita, Colorado; Challis and Kellogg,
    Idaho; Grants and Silver City, New Mexico; Superior, Arizona; and my
    friends and neighbors throughout rural Nevada. Together, we are the
    ones who produce the minerals that are the raw materials for many of
    America's products and the nation's energy requirements. We work and
    live in the areas that mining is undertaken, and together we will bear
    the consequences of H.R. 2262 more so than any other group in the
    United States.
        H.R. 2262 would, if enacted dictate profound changes in the conduct
    of mineral exploration, mining and processing of ``locatable minerals''
    on the Public's lands, as well as upon State and privately-owned
    properties under certain circumstances. Together, the provisions of
    H.R. 2262 represent profound and sweeping changes to one of the most
    fundamental components of the American economy.
        The inclusion of an 8 percent royalty, on top of a multitude of
    existing State and Federal fees and taxes adds yet another substantial
    cost for doing business to the domestic mining industry. As we all
    know, mining and mineral producers do not set the prices for their
    commodities. Commodity prices, which are highly volatile at the best of
    times, are not set or driven by the American miner who produces them;
    instead they are driven by global forces well beyond the control of
    individual companies. This considerable additional cost to the
    producers of just this royalty will result in closure of mines, and
    many other mines will never open at all. Those few mining operations
    that will have the ability to absorb this additional burden, and remain
    competitive with cheaper foreign minerals producers, will have to raise
    their cut-off grades to maintain a semblance of economic viability with
    the result being that many valuable mineral resources, some of which
    are critical and strategic, will never be mined from a secure domestic
    source. And yet, even if these mines remain competitive in the
    marketplace, the economic and operational lives of these mines will be
    shortened significantly.
        Provisions of the bill requiring periodic review and renewal of
    operating permits (over three to ten year periods), even when the mines
    are complying with, or exceeding the requirements of their approved
    plans of operation, will create a high degree of uncertainty as to the
    sustainability of these operations. For an industry that requires
    significant levels of capital investment from third-parties for
    construction and equipment purchases, these levels of uncertainty
    created by this provision of H.R. 2262 will have a chilling effect
    within the investment community, and this bill will weaken the
    industry's ability to finance project expansions or development of new
    domestic sources of minerals and metals.
        America's mining industry has developed, in concert with State and
    Federal personnel, the most consistently effective environmental
    programs of any country in the world. Together we have developed
    techniques to mitigate the effects mining and mineral processing
    activities have upon surface and groundwater resources, and we continue
    to refine and advance these mitigation methods and reclamation
    procedures. The domestic mining industry has achieved a higher level of
    environmental performance than at any time in our nation's history, and
    the environment is the better for this progress. Successful mine
    reclamation is practiced on a daily basis on a large scale, restoring
    previously mined lands to other productive uses. The United States
    mining industry presently operates within a complex web of State and
    Federal environmental laws, rules, and regulations that set the
    framework for the protection of air, surface and groundwater resources,
    provides for the protection of cultural and historical resources, and
    gives the American public a significant opportunity to work with
    regulators and the mining companies to develop measures to minimize and
    mitigate the impacts of mining activities. Provisions of H.R. 2262 will
    add an additional unnecessary and costly level of complexity to a
    system of rules and regulations that already works very well.
        The bill includes sweeping provisions for placing large blocks of
    the Public's lands ``off-limits'' to mineral exploration and mining
    activities. This method of creating de-facto wilderness is particularly
    troubling, and substantially changes the current procedures for Public
    Land management and access. These provisions eliminate the public's
    rights for input into the decision-making process, a key component of
    our participatory democracy, and the bill places into the hands of a
    select few the decisions that affect many--a concept that violates one
    of America's basic foundations.
        The enforcement provisions of H.R. 2262 are extremely troubling to
    me--collectively, the various elements of the bill that deal with
    record keeping, the ability of the Federal government to examine the
    records of law-abiding companies without formal notice, the presumption
    of guilt of the mining companies until they prove themselves innocent,
    ``stop and search'' powers to determine if locatable minerals are
    contrary to the free society that our nation is.
    Summary:
        It is my opinion, and that of all of us who work in the domestic
    mining industry, that H.R. 2262 would have a profoundly detrimental and
    lasting effect upon the American mining industry. Provisions of this
    bill are so onerous that not only the vitality, but the very existence
    of the American metals mining industry will be in considerable jeopardy
    if the bill is enacted:
        It will force the closure of many, if not most of the mines that
    produce a broad range of mineral commodities necessary to provide the
    goods and services that American society requires;
        America will be placed into a position of nearly 100 percent
    reliance upon foreign sources of minerals, from such distant and
    insecure places as the Democratic Republic of the Congo, Mongolia,
    Bolivia, Zimbabwe, Kazakhstan, Namibia, Peru, and South Africa;
        Domestic sources for the fuel that produces 20 percent of our base-
    load electrical power--uranium for nuclear energy--will be further
    reduced, resulting in an even greater reliance on foreign energy
    sources than before;
        This bill will result in a nearly total closure of metal mines in
    the United States. It will result in the loss of many thousands of high
    paying jobs: jobs that provide far more than a ``living wage'', jobs
    that provide health and hospitalization insurance for not only
    employees, but all members of their families. These jobs provide access
    to financial support for education of our children, and these jobs
    provide participation in retirement plans, which include financial
    contributions by our employers;
        The many small businesses that have grown up in our towns where
    mining is the cornerstone of the local economies--businesses that
    embody the dreams and investments of many Americans who are not
    directly employed by mining companies, will also bear the consequences
    of H.R. 2262, and the likely shut-downs of the mines;
        Our prosperous and friendly towns, most of which are situated in
    rural America, will suffer greatly. Local economies will be
    significantly impacted, and our nation will be worse off for this loss.
        While I do not dispute the notion that some refinement and reform
    of the General Mining Law might be needed, H.R. 2262 does not achieve
    this goal. It is a bill that punishes not only mining companies, it
    punishes the investors in these companies and the communities that
    depend on mineral production for their very existence. It jeopardizes
    national security by creating an otherwise unnecessary and dangerous
    reliance upon foreign sources of metals and minerals.
        The unintended consequences of H.R. 2262 are profound, and they are
    far-reaching. The impacts upon the economy, the nearly total reliance
    on foreign sources for raw materials, the loss of jobs--each is
    significant in its own right, and together these consequences outline a
    situation that is highly unfavorable for America. At the same time,
    H.R. 2262 fails to meet its stated goal--to reform and modernize the
    American mining industry.
                                     ______

        Mr. Costa. Thank you very much for your focused and
    personal view as to the impacts of your experiences and your
    interest as we try to be mindful in our due diligence on
    considering this legislation. Now, we are at the question
    period. Question and answers, and so I get a chance to start
    first. Mr. Dean, you obviously are an outdoor enthusiast and
    have testified to that effect.
        You talk about acid mining drainage being harmful to
    surface and groundwater. Have any of your organizations done an
    inventory as to the impact of the acidity that has been
    impacted throughout the West as it relates to mining?
        Mr. Dean. I do not know the answer to that, Mr. Chairman.
        Mr. Costa. OK. What is the sort of activity that takes
    place in terms of the consideration? I mean among your talk
    show and others is this an issue that really gets much
    discussion among your outdoor enthusiasts?
        Mr. Dean. Well, the show I do is not essentially a talk
    show whereby listeners are invited. I script it out, and then I
    do the show each day, and frequently interview people from all
    walks of life but I would like to shed some light on what some
    hunters and anglers are saying. Last week when I knew I was
    going to be coming to Washington, there was a group of hunters
    and fishermen that I coffee with about once a week at the Ram
    Coda Hotel in Pierce, South Dakota, and I mentioned I was going
    to be in Washington, D.C. to testify on reform of the Mining
    Act of 1872, and someone said----
        Mr. Costa. I bet you got an earful.
        Mr. Dean. Interestingly the majority of them did not know
    anything about the Mining Act of 1872. So I started explaining
    what it did and what it enabled mining companies to do, and
    once they understood it there was a sense of general outrage
    that they could take public lands and do what they did with
    public lands, and in some cases destroy streams with
    irresponsible mining.
        Mr. Costa. All right. But that is anecdotal, and I do
    appreciate your comment.
        Mr. Dean. Thank you.
        Mr. Costa. Let me move on. Mr. Champion, the comments you
    made as related to the World Bank, I am trying to figure out in
    this legislation if we look at oil and gas where royalty fees
    are paid, what would be applicable that would be fair as it
    relates to the issue of trying to provide money?
        I do appreciate your comment that if some agreement is
    reached and enacted into law that it should be dedicated first
    priority to clean up those existing and abandoned mines. I
    concur with that but give me a sense of what you think is the
    best way to approach this. You talked about net income versus
    royalties and fees of anywhere from 8 percent--and some have
    talked as high as 12 percent--the tradeoffs.
        Mr. Champion. I think you need to be cautious with regards
    to comparing oil and gas to hardrock mining. Generally
    speaking, those markets are considerably different. Mostly
    regional in the case of oil and gas. When it comes to hardrock
    mining, our markets and our competition is really global
    competition. So anything that----
        Mr. Costa. Could you not say that is true with oil and gas?
        Mr. Champion. Pretty much I would say that, yes.
        Mr. Costa. What?
        Mr. Champion. Yes, I would.
        Mr. Costa. OK.
        Mr. Champion. With regards to hardrock mining, our
    competitors are really global competitors. So anything that has
    an impact on increasing our cost base disadvantages us
    significantly. So the approach that we have looked at and the
    one which we would support would be a net income approach.
    Recognizing that the cost structure of our business, about 80
    percent of our cost is fixed cost, so even while the price of
    our metals can fluctuate, it is more difficult to remove costs
    from our operations, and so we are overly burdened when prices
    of the metals are at lower----
        Mr. Costa. OK. I have that but how do you monitor the net
    costs? How do you apply that, if in fact that were to be viewed
    acceptable?
        Mr. Champion. Well, you know we do calculations, of course,
    on a monthly basis in terms of what our net income is. So there
    is a very transparent way to be able to----
        Mr. Costa. And that is transparent. The issue of attempting
    to try to deal with outside patenting or selling lands to
    corporations, do you think there are some other ways in which
    we could deal with a tenure issue? As you noted, Senator Craig
    talked about the patent issue and this issue of tenure. Your
    thoughts?
        Mr. Champion. Well, we recognize that that is a key issue
    with regards to this legislation, and I think it deserves some
    attention. It deserves some review. I do not have the answer
    today for that but I think a productive conversation is needed,
    and one that we are certainly welcome to engage with as an
    industry.
        Mr. Costa. Mr. Ellis, if this legislation were enacted and
    became law, what do you think a fair rate of return would be,
    and do you have any comment on the net income versus a royalty?
        Mr. Ellis. Sure. Well, first we certainly have looked at
    oil and gas, and oil and gas is really the original global
    commodity. I mean the prices are set on a worldwide market. It
    is a price that is dictated to.
        It is not necessarily a local competition, and certainly we
    looked at comparing it to the royalty rate for onshore
    production rather than offshore production on the outer
    continental shelf which is more than 16 percent but then also
    part of when you set the royalty rate--and there are a variety
    of different ways of calculating the royalty--it is clear that
    it makes it easier to be transparent if it is the net smelter
    rate that was envisioned in the bill rather than having one
    where you have certain allowances, you deduct certain costs,
    you look at just the profits.
        I mean those are all going to be much more difficult to
    calculate, and it is certainly something that was brought up in
    the World Bank study that those are more difficult to calculate
    as well.
        Mr. Costa. All right. My time has expired. I will defer to
    the gentleman from New Mexico.
        Mr. Pearce. Thank you, Mr. Chairman. Large panel. I hope we
    have two rounds at least. A lot of questions coming up. Mr.
    Dean, you had made a quote about a Congressional group that had
    signed on to your letter. Who was that that signed that?
        Mr. Dean. The Congressional Sportsmen's Caucus.
        Mr. Pearce. That is the reason my staff came running up
    here. I am the Vice Chairman of the Congressional Sportsmen's
    Caucus, and they were wondering if I had signed something
    without their knowledge. I would question whether or not the
    Congressional Sportsmen's Caucus has signed your letter, sir.
        Mr. Dean. I believe the Congressional Sportsmen's
    Foundation has.
        Mr. Pearce. If you would like to change that officially in
    the record, I would appreciate that.
        Mr. Dean. I would be happy to.
        Mr. Costa. We will for the record clarify.
        Mr. Pearce. Thank you.
        Mr. Costa. And submit the correction.
        Mr. Pearce. Thank you. Mr. Ellis, the gold for free. Where
    does that line form? I would like to head out there as soon as
    we get through. Where does the line form for free gold?
        Mr. Ellis. Well, it has been forming since 1872 as far as
    what you extract from the earth.
        Mr. Pearce. OK. So now $9,765----
        Mr. Costa. You have just got to find it first.
        Mr. Pearce. It is just finding the line. Nine thousand
    seven hundred and sixty-five dollars and you get $10 billion in
    free gold. Did you ever kind of in the middle of the night
    think about trying to get $10,000 of your own money and
    throwing this career behind you that you are pursuing now and
    get $10 billion free? Is that an accurate representation of the
    real situation?
        I mean $10 billion of gold for free. Gold and other
    valuable minerals for free. I am reading your testimony here on
    page--it is not numbered but the second page. And I just
    wonder, is that an accurate reflection of what is actually
    going on? Did not the company that----
        Mr. Ellis. Well, you are talking about American Barrack in
    Nevada. Is that the one you are talking about, sir?
        Mr. Pearce. It does not ever enter your mind that maybe
    your mother-in-law could go out and apply for you? I do not
    know. That is a billion free.
        Mr. Ellis. My mother-in-law is a physician.
        Mr. Pearce. It seems like that we would have----
        Mr. Ellis. I think she is doing all right.
        Mr. Pearce. Thank you. It seems like that we would have
    lines of people stacked up to get this free gold. It seems like
    that maybe----
        Mr. Ellis. Sir, I am not suggesting that mining is not a
    difficult industry, and I certainly recognize that, that it is
    not----
        Mr. Pearce. How much did----
        Mr. Ellis. The----
        Mr. Pearce. If I could reclaim my time, sir. How much did
    American Barrack have to invest before they could even start
    the mining process to harvest that $10 billion in gold?
        Mr. Ellis. I do not have that information.
        Mr. Pearce. Let me give it to you. It is $1 billion. Are
    you familiar with returns on investment? Anything like that?
    Are you familiar with----
        Mr. Ellis. Of course I am, sir.
        Mr. Pearce. OK. So basically the mining industry, let us
    say, 20 percent return on investment. So you get $10 billion.
    You get 20 percent rate of return. That is $2 billion, if I am
    doing the math right. Two billion to cover $1 billion
    speculative cost, and if the price of minerals dropped just
    incrementally your fixed costs in a mine remain very high, and
    when I read your testimony, sir, I think it is very, very
    uncharacteristic of what is going on. We are driving these
    mines out of our midst, and you are testifying that we are
    giving away minerals for free.
        Mr. Horwitt, do you believe that we should not have mines
    on public lands or are you thinking that we did not get the
    final gist and final point that you are making?
        Mr. Horwitt. Not at all. We are not opposed to mining on
    Federal land.
        Mr. Pearce. You just think that we should do it more
    responsibly?
        Mr. Horwitt. That is correct.
        Mr. Pearce. OK. Mr. Champion. Sorry. Mr. Wilton, thank you
    for your testimony, and again we hear lots of people up here
    and to hear someone actually take it down to the field level
    and talk about the people and when you talk about the jobs that
    have been outsourced, careers that you are in, I think I share
    your fears that we are outsourcing a lot.
        Mr. Champion, you have worked all over the world. You have
    heard the claims earlier by Mr. Leshy that this country does
    pretty bad compared to the scale. I mean we did not get any
    percentages but he said there are a lot of countries that do
    better. Which countries? You have worked all over the world.
    Which countries do better or are there any countries that do
    better in environmental stewardship?
        Mr. Champion. Well, I am not aware of any countries that do
    a better job than the United States with regards to
    environmental stewardship, and certainly as you travel around
    the world one of the things that does disadvantage us is----
        Mr. Pearce. Let me pull the poster up over here. That one
    from Russia. I like to do this because I really think it is
    critical because we have a lot of people who are critical of
    industry, and they say that we do a bad environmental job. This
    is in Russia where they have a high government stake. They have
    a high government take, and I agree with you that I think the
    U.S., as bad as it might be when we complain among ourselves,
    that this is what we see in the countries that have high
    government takes. Thank you, Mr. Chairman. I would look for a
    second round if we get it.
        Mr. Costa. The eye is in the beholder and as was once said
    a picture is worth a thousand words. I would suggest that that
    was a case where government had no concern about the outcome of
    the resource except getting it but either way you slice and
    dice it, it is not good. My question to a couple of the folks,
    Mr. Wilton, the current testimony was that the overlapping law
    with the Clean Water Act and other issues is suffice to cover
    the job.
        There was a scientific study that I will find here if you
    need the quote but said that three out of four major mining
    operations in the U.S. failed to meet water quality standards
    according to current law and regulations. What do you think the
    problem is?
        Mr. Wilton. I am not an environmental specialist, Mr.
    Chairman. However, I would first raise the question of are
    these historical issues that date back to the pre-dating of the
    Clean Water Act? Are these issues that deal with the EPA Gold
    Book standards? I do not know the answer to your question.
        Mr. Costa. We will submit you the information, and you can
    respond in written testimony. How does that sound?
        Mr. Wilton. I would be pleased to do that, sir.
        Mr. Costa. Mr. Ellis, you talked and I had asked the
    question earlier about net income versus a royalty payment, and
    then there was the comment that was made--I am not sure if it
    was by you or the gentleman from Kennecott, Mr. Champion--about
    net smelter versus other royalty types. Could you in more
    detail give your thoughts on the pros and cons?
        Mr. Ellis. Well, certainly. I mean net smelter as indicated
    is relatively simple to calculate in the fact that you are
    looking at what is the actual cost as you are seeding it into
    smelter, and what is the amount of money that is there, whereas
    the net revenue is going to adjust for some of the costs that
    are incurred by the company bringing that mineral to market.
    And so you are essentially figuring out some of the deductions
    as you go along for the net income which according to the World
    Bank study is one where there is more room for manipulation or
    where it is much less transparent to the taxpayer that they are
    actually getting the money that they were promised.
        Mr. Costa. So in essence you would prefer the net smelter?
        Mr. Ellis. Yes, sir.
        Mr. Costa. OK. Mr. Horwitt, I appreciated your maps, and
    you know for a lot of us you know when it kind of becomes local
    it comes home. Yosemite National Park I used to represent and
    for all of my colleagues who are within the area we all
    consider it our own backyard so to speak, even though it is the
    trust of the people of the United States but it is obviously a
    very special place. The map that you showed talked about 50
    staked claims since January 2003. I must say that I am somewhat
    surprised or very surprised. What is the nature of those
    claims? What kind first?
        Mr. Horwitt. Well, the Bureau of Land Management does not
    record generally the type of metal the claims are staked for.
    Wyoming is the one state that requires claimants to declare the
    type of metal they are going after. So you know I can only
    speculate. I know that California has historically been a gold
    mining region, and the prices of gold are high so they could be
    for gold. But essentially that information is not included in
    the Bureau of Land Management records.
        Mr. Costa. We have seen a lot of increase, as you noted in
    your testimony, of those various mining claims. It has
    increased actually I believe 80 percent in the last four years.
    Do you think this is historically--if you have done the
    research, if you have not just tell me--a high rate of claims
    that have been made or is it average or is it below average in
    terms of other times within the 20th Century?
        Mr. Horwitt. Certainly the highest rates we have seen in
    recent years since the Federal government began charging an
    annual fee from claim holders. There were many, many more
    claims staked before I believe it was 1993 when the Federal
    government required claim holders to pay an annual fee to hold
    their claims, and at that point many claims dropped off. So the
    numbers that we see now are the highest in many, many years.
        Mr. Costa. OK. My time is expiring here but I want to know
    about the notion of foreign companies that are staking many of
    these claims. There have been issues of outsourcing jobs
    abroad. Do you think there is a distinction when foreign
    companies come to the United States and make these claims, and
    do you think H.R. 2262 would make any difference?
        Mr. Horwitt. The short answer is yes. I think the foreign
    claim staking raises two issues. One, it clearly shows with so
    many foreign and multinational companies operating on Federal
    land that this is not the 1800s anymore. It is not people going
    out with picks and shovels. It is you know sophisticated
    companies with huge earthmoving equipment staking these claims,
    and we need our law to be updated accordingly.
        Also it raises the potential that if a mine were to be
    established by a foreign company and that mine were to go
    bankrupt which is a fairly common occurrence in the industry,
    the Federal government would have more difficulty tracking down
    the assets of that company if there were a shortfall between
    what the company put up and the cleanup costs.
        Mr. Costa. OK. My time has expired. Mr. Heller.
        Mr. Heller. Thank you, Mr. Chairman, and again thanks to
    the panelists, everybody that is here. I really appreciate your
    time and efforts to get here and personally I want to welcome
    Mr. Wilton here from Spring Creek, from my district. I have a
    couple of questions. I am kind of listening to this whole
    process over the last couple of hours, and though I may
    disagree I certainly do not want to make it such that it is
    challenging anybody.
        But we continually hear about record profits. I have heard
    panelists talk about record profits. Some of us up here have
    talked about record profits. I think gold prices right now are
    trading at about $686 an ounce right now. I do not know what it
    was five or six years ago. It was half that much.
        I think at that time, if I recall visiting eastern Nevada,
    very little research and development going on at that time
    because they could not afford it because of the price of gold
    at that time. Would it be fair to say, Mr. Wilton, that the
    economy of Spring Creek, Nevada, the economy has a lot to do
    with the price of gold?
        Mr. Wilton. Yes, sir. That is as true a statement as you
    will be able to make about that today.
        Mr. Heller. You know unlike oil and gas where they have a
    governing body that sets prices, we do not set gold prices
    worldwide. I think there is quite the difference between trying
    to compare those two resources. Let us move just quickly to
    environmentally sensitive. I have heard too many panelists talk
    about whether or not the industry here beats some of these
    environmental responsibilities, and going through a short list
    these are the following Acts that they have to follow, and this
    is just a partial list.
        Hardrock mines must comply with the National Historic
    Preservation Act, the Air Quality Act, National Environmental
    Policy Act, Clean Air Act, Federal Water Pollution Control Act,
    Clean Water Act, Endangered Species Act, Federal Land Policy
    and Management Act, Resource Conservation Act, the Toxic
    Substance Control Act, the Clean Water Act Amendments of 1977,
    Archeological Resource Protection Act. I mean we can go on and
    on. Super fund Amendments Reauthorization Act. Clean Air Act
    Amendments of 1990.
        I want to hear it again, Mr. Champion. Is there any other
    country that does a better job environmentally as this industry
    here in America?
        Mr. Champion. None that I am aware of, sir.
        Mr. Heller. Let us move to economic return. A prior
    panelist said that mining law has no direct financial return to
    the public. The senator, good Senator Craig from Idaho,
    mentioned that the average salary for a member employed in the
    industry was $42,000. I think that was a few years ago because
    I think in Nevada it is around $60,000.
        As I mentioned in my opening statement, they pay income
    taxes. I think that has a financial return to the public. They
    do shop at local stores. They eat at local restaurants. I think
    that in itself also has direct financial return to the public.
    I think these wages are critical to many as we mentioned
    earlier, to the local economies here in Nevada.
        They also pay net proceeds to the State of Nevada. They are
    taxed in Nevada. So it just raises the question if there is any
    economic benefit mining has. If there is any financial return.
    I have to disagree with the comments of previous panelists.
        Finally, estimated acreage. It was said by one of the
    panelists--I think it is the free gold guy sitting over here--
    that there is a compiled chart showing the number of mining
    claims in my state with the estimated acreage. My district I
    think was on the top of that list with over three million acres
    of mining claims, and that does seem like a lot of lands, and I
    think actually it was Mr. Dean. I think you were mentioning
    that.
        However, I do not know if that is real accurate. If you do
    the math, you break it down, that is 5,736 square miles, three
    million acres. My district is 110,000 square miles. I would
    think that 100,000 square miles is enough space for wildlife
    habitat to flourish. As a hunter and fisherman myself, I would
    mention that those that apply for hunting licenses in the State
    of Nevada we get three times as many applicants as we actually
    have tags. I do not think anybody is complaining about the
    100,000 square miles not being enough space for wildlife
    habitat. So is there anything that I have said that is
    inaccurate, Mr. Champion, at this point?
        Mr. Champion. Not that I am aware of, sir.
        Mr. Heller. Anybody else on the panel? Thank you. I will
    yield.
        Mr. Costa. Thank you. The gentleman from New Mexico and I
    have made a Solomon-like decision, and that is that we are
    going to share this last round of five minutes. I am going to
    take 2 minutes and 30 seconds, and the balance, and then we
    will bring the hearing to a close. As I said, we are going to
    have a follow-up hearing in Nevada at Elko during the week of
    August 21, and we will obviously continue the discussion. We
    are looking at the past hearings and the oversight, but we do
    have a busy schedule on the Floor with appropriations measures
    and also the Reauthorization of the 2007 Farm Bill. So we do
    have a lot of items on our plate today and tomorrow and the
    rest of this month.
        So let me begin. Mr. Marchand, we have not intended to
    neglect you. You talked about the challenges facing the
    Confederated Tribes of Colville Reservation in trying to assert
    your rights on the crown jewel proposal. How would you suggest
    that the Tribe would benefit from the land managers to balance
    the mining with land uses if in fact this proposed legislation
    were to become law?
        Mr. Marchand. We have a lot of experience with other
    developments such as hydropower and we have worked out
    mitigation of things on the river system, and I think similar
    things could be applied to mining, and I think mining is
    probably you know a reality but we just would like to see it be
    more responsible and give some consideration to our interests
    and issues for our Tribe.
        Mr. Costa. All right. But is this on sovereign land? I am
    not familiar with the actual site and proposal.
        Mr. Marchand. It is----
        Mr. Costa. It is adjacent to sovereign land?
        Mr. Marchand. It is debatable. We have reserved rights to
    hunt and fish affirmed by the Supreme Court on these lands.
        Mr. Costa. All right. OK.
        Mr. Marchand. We will buy it back for a dollar an acre if
    you want to give it back to us.
        Mr. Costa. All right. We will take that under
    consideration. Mr. Horwitt, you identified hundreds of claims
    that have been within five miles of national parks beyond
    Yosemite. What do you think land managers can do to address
    these claims?
        Mr. Horwitt. I think they are in a difficult situation.
    There are several options that are not that great. One, they
    could buy out the claims but that tends to be very expensive.
        Mr. Costa. Very expensive.
        Mr. Horwitt. I mentioned that happened at Yellowstone, and
    it was $65 million.
        Mr. Costa. Right.
        Mr. Horwitt. Also they could challenge the validity of
    these claims. That also tends to be expensive and time-
    consuming. There is a case in Oregon right now that has gone on
    for several years, and it is still not over. Or they can you
    know operate in the current system which has proven to be
    inadequate to address the impacts of mining.
        Mr. Costa. Thank you very much. My time has expired. The
    gentleman from New Mexico. Holly, he has 2 minutes and 30
    seconds.
        Mr. Pearce. I thank the gentleman for that, and I would--
    just not to be contentious--but I would lobby on behalf of not
    cutting the baby in half. I would lobby for the full five
    minutes. So the Solomon deal you were talking about. Mr. Dean,
    again the same question I had for Mr. Horwitt. Do you feel like
    there is too much activity, too much mining activity on public
    lands--too much mining activity on Federal lands? You are
    talking constantly and your letters say that we like the open
    spaces.
        Mr. Dean. I do not recall saying that.
        Mr. Pearce. OK. So you do not have an objection to mining
    occurring? OK. Real fine. Mr. Champion, the law itself, up or
    down, do you believe that this would facilitate more jobs or
    fewer jobs in the country?
        Mr. Champion. As written, it would result in fewer jobs.
        Mr. Pearce. Fewer jobs and a healthier or weaker industry?
        Mr. Champion. Significantly weaker industry.
        Mr. Pearce. Mr. Wilton, you have been in the industry
    almost all your life. The bill in front of us is 2262. Is it
    going to improve the industry? Is it going to make the jobs of
    the people you know on a first name basis stronger or weaker?
        Mr. Wilton. It will make it weaker, Congressman.
        Mr. Pearce. Mr. Ellis?
        Mr. Wilton. It will make the industry weaker. It will make
    jobs go away.
        Mr. Pearce. And the royalty provision itself is a key
    concern to both of you? Yes or no?
        Mr. Wilton. Yes.
        Mr. Pearce. Yes. Mr. Ellis, these are guys who live in the
    industry. This does not concern you? In other words, does not
    worry you that you are hearing from the people who make the
    jobs that it is going to make the industry weaker is not a big
    concern to you?
        Mr. Ellis. Sir, I am certain that it is going to have some
    effect on the industry. I mean they have not had to pay a
    royalty for the 135 years of existence but that does not mean
    that industries cannot grow stronger and modify and adapt in
    these different situations, and so I mean to me this is
    something that taxpayers have been left out of the loop for
    awhile, where they have not been getting any return from the
    gold as we were talking about before, and so certainly I think
    that this is a legitimate step forward on behalf of taxpayers,
    and that the mining industry will adapt and go forward, and I
    mean that happens to companies and industries across this
    country.
        Mr. Pearce. I would refine that all down to be you do not
    see a concern if they report that companies would be weaker
    that you in fact believe that by some method they will just
    simply get stronger, and I would appreciate that observation.
    Thank you, Mr. Chairman. I appreciate it. We have a few
    questions to submit in writing.
        Mr. Costa. Very good. And I want to thank you, and I want
    to thank all of the members of the Subcommittee for your
    participation this morning. I want to thank the witnesses.
        Mr. Pearce. I have a couple of UC requests I forgot to do.
    One of the local county commissions has submitted a resolution,
    and then also the Uranium Producers of America have a document
    they would like submitted.
        Mr. Costa. OK. Yes. And we really did not get a chance. I
    am very interested in how uranium is treated on this issue, and
    I suspect we will get more into that detail at the subsequent
    hearing. But again I want to thank you, and I want to thank the
    members of the Subcommittee, and those witnesses who were
    patient and testified and who answered the questions to the
    best of their ability, and we will look forward to continuing
    this dialogue.
        I know the Chairman is very interested, as he said in his
    opening statement, on taking input from everyone. So at this
    time this concludes the Subcommittee hearing on Energy and
    Mineral Resources dealing with the Hardrock Mining and
    Reclamation Act of 2007. This committee is adjourned.
        [Whereupon, at 12:55 p.m., the Subcommittee was adjourned.]

        [Additional material submitted for the record follows:]

        [The prepared statement of Mrs. McMorris Rodgers follows:]

    Statement of The Honorable Cathy McMorris Rodgers, a Representative in
                     Congress from the State of Washington

        The 1849 California Gold Rush found Okanogan County and the Methow
    Valley in the middle of a chain of prospectors that stretched from
    California to Alaska. From 1896 until the great depression, gold
    business boomed in the towns of Ruby, Conconully, Barron, and Loomis.
    Today there are some tailings and a few old buildings that survive.
    Thousands of claims remain from Pateros to Hart's Pass, but almost none
    are being worked, yet it was gold that helped bring some of the first
    people to Northeastern Washington.
        Today the mining industry in Washington state is vital to our
    economy. The combined direct and indirect economic impact was $2.5
    billion dollars in 2005. Across the United States, hardrock mining
    employs or supports 170,000 high paying jobs and has an output valued
    at more than $40 billion.
        The United States is one of the world's largest producers and
    consumers of minerals and metals. We use them in our everyday life--
    they are essential to our economic and national security. However, I am
    concerned that we are becoming increasingly dependent upon foreign
    countries to provide critical minerals that are needed to make Boeing
    airplanes, superconductors, or military equipment. In fact, according
    to the U.S. Geological Survey, reliance on mineral imports has nearly
    doubled in the past decade. And it may not even be necessary. The
    United States possesses vast undeveloped minerals that far exceed many
    of our industrial competitors. For example, according to the National
    Mining Association, the U.S. possesses 550 million tons in identified
    and undiscovered reserves of copper. Yet, the U.S. produces only half
    the copper it consumers despite the fact that the price of copper is at
    record levels. And with the demand for hybrid cars increasing, the need
    for copper will continue since hybrid cars use four times the amount of
    copper of a conventional car.
        One reason for declining development of mineral resources in this
    country is an increasingly burdensome regulatory structure. There are
    more than 15 federal environmental laws that apply to any major mining
    project. Yet this bill contains additional environmental requirements
    that are duplicative and sometimes conflict with existing state and
    federal environmental law. In 2005, I was appointed to chair a task
    force on updating and strengthening the National Environmental Policy
    Act (NEPA). NEPA was hailed as visionary when it was signed into law in
    1970, yet has since become a process that is too often used to delay,
    if not halt projects, and has produced unintended consequences.
        I can't say I ran for Congress on a platform to update and improve
    NEPA. However, whether it is important transportation and public works
    projects, oil and gas development, healthy forests, mining, grazing or
    any other federal project, NEPA is required and oftentimes the tool to
    delay or to shutdown projects.
        Battle Mountain's Crown Jewel project is located in Okanogan
    County. It has undergone an excruciating seven year permitting process,
    received more than 53 state and federal permits, and was issued a
    favorable Record of Decision (ROD) in January 1997. The project has
    withstood administrative challenges to every permit and the ROD as well
    as several legal challenges. In December 1998, a federal district court
    upheld the EIS and ROD. After spending more than $85 million on the
    project, Battle Mountain Gold was on the verge of receiving its
    operating permit when it was taken hostage by the Department of the
    Interior and its Solicitor, who has attempted to change 127 years of
    law with the stroke of his bureaucratic pen. Fortunately, through the
    efforts of Senator Gorton, Representatives Nethercutt and Hastings, and
    many others, Congress rightfully intervened and set the project back on
    track.
        This is one of many examples that point to the need to reform the
    NEPA process to provide firm time guidelines and deadlines, to provide
    sideboards and bring accountability to the process, and to require the
    losing party to pay all costs and attorney fees if they challenge
    agency decisions in court. Without these reforms, the mining industry
    will continue to seek opportunities outside the U.S.
        This is simply unacceptable. We live in a resource rich country and
    we should not be strangling ourselves economically by not utilizing the
    resources we have been given or by putting them off limits. We need to
    work together to support common sense solutions to establish and
    maintain regulatory certainty and predictability for the mining
    industry and reduce excessive, duplicative and expensive permitting
    delays.
                                     ______

        [The statement submitted for the record by the Uranium
    Producers of America follows:]

     Statement submitted for the record by the Uranium Producers of America

        The Uranium Producers of America (``UPA'') was founded in 1985 to
    promote the viability of the domestic uranium industry. Current members
    include Energy Metals Corp., Power Tech Uranium Corp., UR-Energy USA,
    Inc., Uranium Energy Corp, UREX Energy Corp., Denison Mines Corp.,
    Laramide Resources Ltd., Mestena Uranium LLC, Power Resources, Inc.,
    Strathmore Minerals Corp., Uranium Resources Inc., Neutron Energy,
    Inc., Western Uranium Corp., and U.S. Energy Corp. UPA member companies
    are actively pursuing exploration, development and production of
    domestic uranium resources in Wyoming, Colorado, Texas, South Dakota,
    Arizona, Nebraska, Nevada, Utah and New Mexico. We appreciate the
    opportunity to provide a statement concerning H.R. 2262. The UPA
    strongly urges that any changes to the existing Mining Act be made only
    after careful consideration of the devastating impacts such changes
    could have on our nation's ability to become more energy independent.
    UPA's position is that domestic uranium production is vital to the
    national security and energy independence of the United States and
    will, once again, play a key and sustaining role in the front end of
    the nuclear fuel cycle.
        Today in America, and indeed worldwide, there is truly a nuclear
    power renaissance. And this renaissance requires as its foundation the
    essential fuel--uranium. Policymakers are recognizing the vital role
    that nuclear energy must play to meet our nation's electricity demands
    in an inexpensive, clean manner. UPA believes the following facts must
    be considered as the United States embraces the role that uranium must
    play to ensure our country's secure energy future:
          The country needs an energy independence policy that
    includes nuclear power as a centerpiece of implementation. Legislation
    such as H.R. 2262 is counterproductive to that goal;
          70% of the American public is in support of nuclear
    energy \1\ essentially because of their concern over rising gasoline
    and natural gas prices and the growing concern over CO2
    gases and global warming. Legislation such as H.R. 2262 is not at all
    responsive to these public concerns;
    ---------------------------------------------------------------------------
        \1\ Nuclear Energy Institute Survey 2005.
    ---------------------------------------------------------------------------
          20% of America's electricity is currently generated by
    clean nuclear power, and this amount must grow in order for us to reach
    energy independence. H.R. 2262 will stifle this growth;
          In order to even simply maintain the current 20% level of
    America's baseload electricity generation that comes from nuclear
    power, more uranium must be produced, both domestically and worldwide,
    and H.R. 2262 will certainly unduly impede such production in America;
          Some of the most ardent environmentalists, such as
    Patrick Moore, Norris McDonald and James Lovelock, urge that nuclear
    energy is the most efficient means of addressing their greenhouse gas
    concerns because nuclear energy production is free.
        The United States currently derives 20% of its electricity from
    nuclear power. In order to generate this electricity, domestic nuclear
    utilities consume approximately 56 million pounds of uranium in the 104
    commercial reactors that they operate. In order to break our nation's
    addiction on foreign oil and substantially reduce greenhouse gas
    emissions, nuclear power generation must play an increasingly larger
    role in generating base-load electricity in our country. Since
    worldwide demand for uranium is rapidly increasing and has far
    outstripped supply for many years, it is imperative that the rebounding
    domestic uranium mining industry discover and produce new sources of
    uranium from within the United States. Much of the resources that have
    been discovered in the past and that will be found and mined in the
    future are on U.S. public lands. The Department of Energy recently
    noted in its Environmental Assessment to open DOE controlled lands for
    uranium leasing, that expansion of its leasing program in Colorado
    would be supportive of the goals of the Energy Policy Act of 2005.
    (Public Law 109-58). The Act emphasizes the reestablishment of nuclear
    power as a major source of energy.
        Our nation's energy demands must be fulfilled to keep our economy
    growing. On May 8, 2006, the House Committee on Government Reform
    produced findings on a committee study on securing America's energy
    future. Finding 8 from this report stated ``[n]uclear energy must
    become the primary generator of baseload electricity, thereby relieving
    the pressure on natural gas prices and dramatically improving
    atmospheric conditions.''\2\ This finding is based on the fact that
    electricity generated from nuclear power is inexpensive and clean.
    ---------------------------------------------------------------------------
        \2\ Seeking America's Energy Future, Majority Staff Report to Comm.
    on Government Reform, Chairman Tom Davis, and Subcommittee on Energy
    and Resources, Chairman Barrell E. Issa, Comm. on Government Reform,
    U.S. House of Rep., May 2006.
    ---------------------------------------------------------------------------
        In order to grow the nuclear power industry in the United States,
    as it is growing in the rest of the world, we must provide for a
    significant portion of the basic fuel for our reactors to come from
    within our borders. The uranium resources are available. At today's
    prices, domestic uranium producers can compete with foreign producers
    to supply a meaningful portion of domestic nuclear utilities needs. At
    this time, government policy makers should be doing everything
    reasonably possible to encourage new production, not put up barriers to
    this production. Foreign nations such as Kazakhstan and Russia are
    spending millions to encourage the production of nuclear fuel. In the
    United States, private industry and investment will fund the effort to
    reestablish domestic uranium production. However, until mines can be
    permitted and new processing plants licensed and constructed, it is
    critical that additional impediments to this industry be minimized.
    H.R. 2262 contains such impediments.
        Dating back to the early days of the Atomic Energy Commission, the
    Federal Government has played a leading role in the development of the
    domestic uranium producing industry. The Federal Government partnered
    with private companies to create this industry. Unfortunately, the
    Federal Government also played a leading role in the demise of the
    industry. Early enrichment contract practices and liquidation of
    massive quantities of government uranium stockpiles created
    circumstances in which the market price of uranium had little to do
    with the cost of producing uranium. The result was to decimate the
    domestic uranium production industry over a period spanning a quarter
    of a century. We are deeply concerned that H.R. 2262 will turn back the
    clock on the uranium industry and thwart its success just as it
    recovers from over twenty-five years of critical struggles.
        An industry which in the 1970's provided over 18,000 jobs and
    operated over 300 mines and 26 mills in the U.S., had shrunk by 2001 to
    less than 400 jobs, three mines and only one operating mill. Further,
    44 million pounds of uranium was produced annually from mines in the
    U.S. the 1970's, and only about 5 million pounds will be produced in
    2007. This level of production meets less than 10% of the current
    demands on our country's nuclear power industry. With today's great
    geopolitical uncertainty, production of such a small fraction of U.S.
    nuclear utility demand from domestic sources should become a matter of
    significant concern. The UPA urges Congress to spur increased
    production and not place impediments on the domestic uranium production
    industry that will prevent it from providing domestic fuel supply to
    what Congress has urged to become a growing U.S. nuclear power fleet.
        Much of our annual domestic uranium resources currently come from
    fast-depleting inventories that U.S. utilities purchased in past
    decades or from uranium imported from foreign sources. The majority of
    the fuel for domestic reactors currently comes from blended down
    uranium from Russia's nuclear arsenal. This program ends in 2013.
    However, renewed interest in nuclear power, coupled with the
    recognition that there is simply not enough existing uranium production
    to meet reactor requirements has created a demand for new domestic
    uranium production, and UPA is poised to meet a substantial portion of
    this demand. This critical contribution of fuel from within our
    national borders is a vital component of national energy security.
        The Energy Information Administration and the International Atomic
    Energy Agency have projected that there will be a significant
    difference between known supply and demand for uranium worldwide for at
    least the next ten years. The gap between 2007's worldwide production
    of about 106 million pounds and current worldwide demand of an
    estimated 185 million pounds is not likely to shrink. Indeed, it is
    likely to grow and rapidly. The number of new reactors currently
    planned or under construction is estimated at over 140, adding nearly
    one-third to the current total of 440 reactors worldwide. In the near
    future, current and newly constructed reactors will require 275 million
    pounds of uranium annually. Uranium production must grow both
    domestically and worldwide to meet the increased demand.
        Even assuming the current ``best case scenario'' for anticipated
    production, the worldwide market (and by extension the U.S. market)
    will still be ``short'' 100 million pounds over the next decade. New
    production could fill a significant portion of this gap, perhaps as
    much as 20% of total western and U.S. demand.
        New exploration and production, however, is already subject to many
    barriers, such as increased prices for equipment, the cost of
    chemicals, fuel and labor, and a shortage of drill rigs, as the oil and
    gas industry is keeping these rigs and their crews busy around the
    clock as that vital industry works to do its part to provide U.S.
    energy security. Regulatory standards are much more stringent than in
    the past, and several of the western states have enacted mining laws
    that provide for closure plans and bonding that will assure operations
    that will protect workers, the public and the environment. This fact
    was recently recognized by the Department of Energy Environment
    Assessment for uranium leases. DOE found that concerns about past
    uranium production practices were not relevant to future mining because
    current regulations and standards would adequately protect workers, the
    public and the environment.\3\ New technologies and a modern
    understanding of the impacts associated with uranium production are in
    place to assure that permitted and licensed operations will benefit the
    communities in which they operate.
    ---------------------------------------------------------------------------
        \3\ Finding of No Significant Impact for the Uranium Leasing
    Program, U.S. Department of Energy, Office of Legacy Management, July
    2007.
    ---------------------------------------------------------------------------
        Today, as prices of uranium rebound in response to this supply gap,
    they still remain below the inflation-adjusted prices of the 1970's.
    Still, a renaissance of the domestic production industry has begun.
    Today's higher prices have enabled new companies to enter into
    exploration and will, in turn, stimulate competition as they work to
    provide U.S. utilities with greater variety of secure domestic supply
    for their nuclear fuel. Previous exploration in New Mexico alone has
    been established by geologists at over 600 million pounds of unmined
    uranium resources, much of this on public lands, and it is certain that
    future exploration and mining will expand on this number.\4\ The
    resources in other public lands states are significant, and these
    resources can be produced in an environmentally responsible manner
    following today's existing standards and regulations for mining.
    Extremely conservative estimates by the Energy Information
    Administration (2004 show uranium resources by state based on $50 per
    pound prices to be:
    ---------------------------------------------------------------------------
        \4\  See McLemore and Chenoweth, Uranium Resources in the San Juan
    Basin, New Mexico, New Mexico Geologic Society, 2003.

            Wyoming                      363 million lbs.
            New Mexico                   341 million lbs.
            Arizona, Colorado, Utah      123 million lbs.
            Nebraska, South Dakota       40 million lbs.
            Texas                        23 million lbs.

        UPA believes EIA estimates will be greatly exceeded as exploration
    and development proceeds.
        The renewed exploration of uranium has energized rural communities
    in the western United States. These former mining communities are
    welcoming the domestic uranium mining as they anticipate many high-wage
    jobs and significant economic development investments in their towns
    and counties, as well as increased tax revenues to support
    infrastructure, educational and social needs.
        Uranium also fills an important role in the reduction of greenhouse
    gases that cannot be replicated by base-load power generation. The 104
    U.S. nuclear power plants produce no CO2 emissions, nor do
    they produce emissions of other greenhouse gases. Nuclear energy is the
    only large-scale and cost-effective energy source that can reduce
    greenhouse gas emissions, while continuing to satisfy the growing
    demand for reliable base-load generated electricity in the U.S. Many in
    the environmental community have embraced nuclear power as the only
    source of electricity to meet our growing energy demands while
    diminishing the greenhouse effect. To increase the number of nuclear
    power plants, we must increase the fuel to power these reactors.
    Domestic sources, many of which are known from past exploration on
    public lands, are plentiful and can be exploited to produce much of the
    necessary fuel.
        H.R. 2262, if enacted in its present form, presents formidable
    regulatory hurdles to the uranium industry. For example, the
    legislation as proposed would limit permits for a maximum of ten years.
    Thus, a producing operation that met permit requirements would face the
    uncertainties of renewal if it had the capacity to produce beyond ten
    years. This barrier would dramatically decrease investment in
    exploration and mining. Operators would have great difficulty in
    obtaining project financing when the longevity of the permit is subject
    to the vagaries of subjective renewal. This provision would stifle
    mining industry investments in public lands for many commodity sectors,
    not just uranium.
        Ironically, H.R. 2262, as drafted, would actually foster uranium
    production in other countries. For instance, the proposed 8% royalty
    alone would certainly render millions of pounds of otherwise
    recoverable lower grade uranium deposits in the U.S. to be uneconomic
    and, therefore, unmineable and would likely prevent many mines from
    ever opening.
        On July 10, 2007, the lead story in The Financial Times of London
    was the latest report from the International Energy Agency. The article
    quoted the IEA reported as saying, ``Oil looks extremely tight in five
    years' time,'' and noted ``the prospects of even tighter natural gas
    markets at the turn of the decade.'' Uranium faces similar, perhaps
    much tighter, supply issues. As these resource supplies tighten,
    America must endeavor to expand its resource base.
        It is ironic that today's hearing on H.R. 2262 is being held only
    eight days following Federal Reserve Board Chairman Ben Bernanke's
    testimony before the House Banking Committee. On July 18 Chairman
    Bernanke stated that today's high energy and commodity prices, plus a
    ``bloated trade deficit,'' present one of the greatest risks to the
    U.S. economy. H.R. 2262 represents legislation that will make
    domestically produced energy and commodities even more costly, or even
    not available, and the unnecessary importation of needed uranium to
    fuel America's nuclear power industry will only add further to the
    trade deficit.
        Commodity prices and supply are being driven by emerging Asian
    markets. China has tied up major uranium supplies in Australia to meet
    its expanding nuclear generation requirements. Forward thinking energy
    policy in the United States demands that we recreate the extensive
    uranium production capacity our country once enjoyed as a result of the
    Atomic Energy Commission's Uranium Procurement Program in the 1950's
    and 1960's. The use of public lands to assist in making America less
    dependent on foreign uranium should be encouraged, not hamstrung, as
    would be the case if Mining Act reform is adopted without fully
    considering the consequences of ill-conceived legislation. Today's
    domestic uranium industry stands ready, willing and capable to help
    America achieve its goal of energy independence and national energy
    security. The industry cannot do so if H.R. 2262 is enacted.
        The domestic uranium industry has located claims on public lands,
    because significant uranium deposits are located there. The domestic
    industry is also securing rights to private and state lands across the
    West as well, because these lands have uranium potential also. The
    extent of uranium reserves in the America West may be staggering, but
    its full extent may never be known without the freedom to explore and
    then mine these lands.
                                     ______

        [The Washington Times article submitted for the record by
    Mr. Pearce follows:]

                        ``China powering world economy''

              [Published in the Washington Times on July 26, 2007]

        By Patrice Hill--China, this year for the first time, has dislodged
    the United States from its long reign as the main engine of global
    economic growth, with its more than 11 percent growth eclipsing
    sputtering U.S. growth of about 2 percent, according to the
    International Monetary Fund's 2007 projections released yesterday.
        China's growth, which has been fueled by booming domestic building
    and commercial development, as well as soaring exports, has accelerated
    even as U.S. growth dropped to 0.7 percent in the first quarter under
    the weight of a profound housing recession. China is expected to drive
    a hearty 5.2 percent expansion of the global economy this year, the IMF
    said.
        The United States, with one-quarter of the world's economy and the
    richest consumer markets in the world, has dominated global growth for
    decades. But China's emergence has been foreshadowed for years by its
    pull on world commodity markets, where it has driven up the price of
    raw materials to record levels, from oil to copper, in its race to
    build and export goods around the world.
        ``This year for the very first time--with its very strong growth
    expected, and with the growth slowdown in the United States--China will
    be contributing the largest part to the increase in the global growth
    measured at market exchange rates,'' said Charles Collyns, the IMF's
    deputy director of research.
        China will provide one-quarter of the annual growth rate of the
    world economy, and, Mr. Collyns said, ``if you add together Russia and
    India as well, you get over half of global growth coming from the
    emerging-market countries.''
        Although the IMF expects U.S. growth to rise back above 3 percent
    in the second quarter, it predicts that spreading housing and credit
    problems will push it back into the 2 percent range by year's end. In a
    reversal from previous years, economists expect exports to fast-growing
    global markets to be an important contributor to U.S. growth this year
    while consumer spending on imports fades, a trend that promises to help
    tame the nation's huge trade deficits with China and other countries.
        China's seemingly insatiable appetite for raw materials with its
    huge footprint in world export markets has given it the key role of
    locomotive for other economies as diverse and far away as New Zealand
    and Saudi Arabia. The spigot of revenues that resource-rich countries
    such as Russia have earned, in turn, has fueled booming domestic
    markets for building and consumption.
        Better growth in Europe and Japan also is contributing to a healthy
    world economy this year. Many economists attribute the improvement
    there as well as in emerging countries such as Russia and Brazil to the
    successful adoption of U.S.-style economic policies--among them, lower
    taxes, less-regulated labor markets and stable monetary regimes. China
    also is benefiting from the imposition of economic reforms through its
    entry into the World Trade Organization.
        ``This is a good global economy. It's remarkable,'' said John
    Taylor, a scholar at Stanford University's Hoover Institution and
    former Treasury official. ``In the 1990s, there was one global crisis
    after another, but we haven't seen one since 2002.''
        The adoption of stable, low-inflation monetary policies in Brazil,
    Mexico, South Africa and Turkey and the enactment of low, flat taxes in
    Russia and some Eastern European countries during the 1990s are paying
    major dividends with strong growth that is helping to pull the U.S. out
    of an economic slumber, he said.
        After years of preaching by the U.S. and IMF about the benefits of
    good economic policies, ``countries are following better policies all
    over the world,'' he said, resulting in lower inflation and interest
    rates and healthy growth.
        Most impressive is the way soundly managed Latin American economies
    such as Brazil, Mexico and Chile have resisted calls from Venezuelan
    President Hugo Chavez for a return to the popular socialist policies
    that held back Latin growth and spurred hyperinflation in previous
    eras, he said.
        ``I don't see any enthusiasm for him from other Latin American
    countries,'' other than a few small economies like Bolivia, he said,
    despite the oil subsidies that Mr. Chavez has been lavishing on the
    region in an effort to gain allies.
        ``The change you're seeing began in the U.S. during the 1980s and
    spread to other countries in the 1990s,'' he said. ``We have more
    balanced growth, and globalization is causing more interconnectedness.
    It spreads the riches around.''
        While China has adopted some economic and financial reforms, it has
    resisted calls from the IMF and U.S. for reforming its fixed-currency
    regime, which economists think is keeping the yuan artificially low
    against the dollar. The result has been unprecedented U.S. trade
    deficits. Mr. Collyns said the exchange-rate distortion also has had
    the effect of making China's economy appear smaller than it really is,
    masking the influence that the Asian giant has been exerting on the
    world economy for years.
        With better economic regimes in place, countries like China and
    India, with populations of more than 1 billion apiece, have the
    potential for explosive growth that can quickly outstrip the U.S., with
    its 300 million population.
        Even though large parts of China's economy remain poor and
    underdeveloped, it is on course to exceed the overall size of the U.S.
    economy within a few years, and the emergence of rapidly growing middle
    classes in countries such as India and Russia put them not far behind.
        The baton of global consumption is being passed from the developed
    nations in general, and the United States in particular, to the
    developing nations,'' said Joseph P. Quinlan, chief investment
    strategist at Bank of America.
        ``Consumption is no longer the domain of the U.S. Going to the mall
    on Saturday afternoon is just as popular in Bangkok and Sao Paulo as it
    is in Boston and San Antonio.''
                                     ______

        [A resolution submitted for the record by Cibola County,
    New Mexico, follows:]

    [GRAPHIC] [TIFF OMITTED] 37014.010

    [GRAPHIC] [TIFF OMITTED] 37014.011