[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



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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

                                
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