[Congressional Record Volume 141, Number 43 (Wednesday, March 8, 1995)]
[Senate]
[Pages S3667-S3669]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


            REBUTTAL OF BABBITT CRITICISM OF MINING LAW BILL

  Mr. MURKOWSKI. Finally, Mr. President, I would like to enter into the 
Record a response to the Secretary of the Interior with regard to his 
comments regarding the Craig-Murkowski bill.
  He indicates a criticism, stating:

       This law would do nothing to resolve the most glaring 
     shortcomings of existing 1872 mining law.

  As a rebuttal, I say the Secretary's position is either based on lack 
of knowledge or it is simply a falsehood, because the Secretary ignores 
the fact that the bill requires paying a fair market value for the 
surface estate of patented lands and using patented lands for good 
faith mining purposes. If a miner uses the patented land for non-mining 
purposes the land transfers to the State in which the patented land is 
located or reverts to the Federal Government. In addition, the bill 
imposes a 3-percent net proceeds royalty on minerals produced and 
prevents unnecessary or undue degradation of surface lands. This is not 
a do-nothing approach, Mr. President.
  Further criticism, he states:

       [[Page S3668]] It continues the giveaway of valuable 
     public-owned hardrock minerals like gold, silver and platinum 
     for peanuts.

  Again, the Secretary is wrong, Mr. President. The bill requires a 
payment of fair market value determined by the Bureau of Land 
Management appraisal methods for the surface of estate patented land. 
The bill requires a payment of 3-percent net proceeds royalty on the 
production of minerals from public lands. The bill also requires a one-
time payment fee of $25 per claim and a $100 annual maintenance fee per 
claim. The amount of money generated by the fair market value net 
royalty and location and maintenance fees is not peanuts.
  Mr. President, another criticism from the Secretary:

       It is actually a step backward from existing law on a 
     number of points such as the level of environmental 
     protection that is now possible, and the amount of holding 
     fee claimants would pay per acre.

  That is absolutely incorrect, Mr. President. The Craig-Murkowski bill 
does not diminish environmental protection in any respect whatever. In 
fact, the legislation assures compliance with all major Federal 
environmental laws--including those governing air, water, solid and 
hazardous waste, endangered species, historic preservation, safety and 
health, toxic substances and others--and applicable State reclamation 
laws.
  The environmental standard set by the Federal Land Policy and 
Management Act of 1976--prevention of unnecessary or undue degradation 
of public lands--is the standard adopted to the Craig-Murkowski bill, 
and the one against which mining performance will be measured under our 
bill.
  The bill also contains $100 per claim maintenance fee for the first 5 
years following enactment, but thereafter requires the payment of $100 
fee for assessment work.
  The last criticism, Mr. President:

       It has a royalty that is likely to be a net loser to the 
     taxpayers. Given the low royalty rate and the fact it is on 
     net rather than gross proceeds, we believe it will cost more 
     to administer than the Federal Treasury will receive.

  Another falsehood. It is totally absurd. A 3-percent net royalty, 
which is patterned after Nevada net proceeds on mine tax, is likely to 
generate more revenue to the Federal Treasury in the long run than a 
gross royalty of the same amount. Why? Because a gross royalty forces 
companies to mine the high-grade, low-production cost mineral ores 
first to recover the costs of mining. Once the reserves are mined the 
companies would be forced to prematurely abandon low-grade, high-cost 
reserves. Is this what we want?
  Second, the criticism of cost to administer the 3-percent net royalty 
is more of an indictment of Secretary Babbitt's own department than it 
is of the legislation. In 1993, the State of Nevada generated 
approximately $34 million in revenues from the net proceeds tax, at 
administrative cost of less than two-tenths of 1 percent. A study by 
Secretary Babbitt's own department indicates an 8-percent gross royalty 
would cost $11 million to administer in the first year alone, and 
result in a loss of 1,100 jobs in 3 years.
  The problem is not with the Craig-Murkowski bill. The problem is with 
Secretary Babbitt's bloated bean-counting bureaucracy at the Department 
of the Interior.
  Finally in conclusion, there is not one criticism of our bill levied 
by the Secretary that has any merit. The facts contradict all the 
charges made by Secretary Babbitt and his supporters in the House, and 
for me to even have to respond to these half truths, absurdities and 
distortions in order to ensure that the mining law reform process 
begins properly is simply an outrage. I resent having to take the time 
of my colleagues to set the record straight, but it is necessary to set 
the record straight.
  Finally, Mr. President, we have a criticism from our good friend, 
George Miller, on the House side. His criticism is that the mining 
industry will become rich, the taxpayers will receive virtually nothing 
for their riches, and the environment will be desecrated. This is the 
type of the-sky-is-falling exaggeration we have heard from the House 
under the leadership of George Miller for so long and it is absolutely 
an exaggeration.
  What Miller forgets is this: The mining companies will pay fair 
market value, royalties, maintenance fees and location fees and they 
also pay corporate income tax, and their employees will pay State and 
Federal income taxes. Materials, supplies, and equipment that their 
mines will use will cost millions of dollars and have to be made 
payable as a consequence of the prosperity of the people here in the 
United States. All this means is more economic activity.
  Second, the entire Nation will benefit from mineral production and 
from the stimulation mining gives the economy, and finally the 
environment will remain protected by every single conceivable 
environmental law that Mr. Miller and his colleagues could think to 
impose on an industry to make public land use more difficult and put 
the U.S. mining industry more at disadvantage in competing in global 
markets.
  As a consequence, Mr. President, I think it is fair to let my 
colleagues reflect on not only is this administration critical of the 
mining industry as it exists in this Nation today, they are critical of 
the timber industry as it exists today, critical of the oil and gas 
industry, the grazing industry. It is hard to find one single natural 
resource industry that this administration supports.
  As a consequence, we are exporting our dollars and losing our jobs. 
As chairman of the Energy Committee, I intend to hold hearings on these 
matters to try and reduce our dependence on imports by stimulating our 
own resource industry. I thank the President for the time allocated to 
me.
                   the mining law reform act of 1995

  Mr. DOMENICI. Mr. President, I rise today to join Senators Craig and 
Murkowski by cosponsoring reasonable and responsible legislation to 
reform the mining law of 1872. Our goal in revising this act is 
twofold, to maintain mining and mining jobs, and to provide for a 
healthy environment.
  First, I would like to deal with the environmental components of this 
legislation. This legislation affirms that mining activities are 
subject to at least 15 Federal laws designed to protect the 
environment, as well as any State regulations that have been adopted 
since the original mining law was passed in 1872. A partial list of 
Federal laws includes: the Clean Water Act, the Clean Air Act, the 
Endangered Species Act, the Federal Mine Safety and Health Act of 1977, 
the Solid Waste Disposal Act, the Federal Land Policy and Management 
Act, the National Historic Preservation Act, the Forest and Rangeland 
Renewable Resources Planning Act of 1974, and the Toxic Substances 
Control Act of 1990. Although this list is not complete, I believe that 
it illustrates that modern miners operate far differently than the old 
image of the prospectors from the unregulated days of the industry. 
This legislation will ensure that this is the case.
  The reclamation of mining sites is an important part of this 
legislative proposal, as well as the provision for requiring financial 
assurance that the work will be accomplished. The filing and approval 
of the plan of operation with the land management agency has been an 
important component in mining of public lands. This legislation 
promotes its importance and requires that environmentally sensitive 
reclamation is included in the plan.
  It is important that mining be planned through the entire operation 
until reclamation is completed. With the highly speculative nature of 
the industry, even well intentioned operations may falter before 
completion. With this bill, financial assurance will be provided in 
advance of operations to assure the mined lands will be reclaimed.
  Providing a reclamation program for abandoned mine sites is another 
feature of this legislation. The program will greatly improve those 
sites that have been long overdue for restoration. The costs of 
environmental repair will be derived from funds generated through 
royalty payments by the mining industry.
  While several fees are set in the body of this bill, let me focus on 
the major new economic item, the royalty. I am concerned about the 
imposition of a royalty on hardrock mining, knowing that it will be an 
added cost in jobs to an industry that often faces difficult economic 
times.
  [[Page S3669]] Consequently, I support the imposition of a royalty 
allowing for some specific costs of production to be deducted prior to 
the royalty being assessed. This has been demonstrated in several 
studies to be the most reasonable method of assuring that the taxpayers 
will receive a return from the production of minerals on Federal lands. 
In addition, a similar provision adopted by the State of Nevada has 
proved to be relatively simple to administer, and it provides a 
substantial return to the taxpayers of that State, while allowing for 
the continuation of mining jobs that are vitally important to the 
economy of that State.
  One-third of the revenues from the royalties will be distributed to 
the States from which the mining was conducted to assist these States 
in offsetting the costs of infrastructure that support the mining 
industry. These funds will also be available to the States to offset 
the costs of enforcement of both State and Federal regulations.
  The second third of royalty revenues will be held on deposit and 
dedicated to programs for the reclamation and restoration of abandoned 
mine, mill, and processing areas. Not all States have reclamation funds 
established to assure financing for such activities. It is unquestioned 
that we are faced with abandoned sites throughout the Nation that need 
attention. With this legislation, we will provide a source of funding 
for the reclamation programs on lands where the mining practices of the 
distant past have resulted in well publicized environmental problems.
  The final third of revenues collected from the royalty established in 
this legislation will go directly into the Federal Treasury for deficit 
reduction.
  The Mining Law Reform Act of 1995 is a sensible and significant 
reform of the general mining laws. It provides the needed assurances to 
allow mining to continue to provide needed jobs and resources in this 
country, as well as requirements that the environment will be 
protected. The provisions for access and patenting are included in this 
legislation because of the importance for these to make mining viable 
and workable. Added to the law are adequate bonding to assure that the 
reclamation envisioned will actually occur on every operation, a 
royalty that provides support for abandoned mine reclamation and a 
return to the Federal Treasury, and assurances that lands patented for 
mineral activities will be used for that purpose, and that purpose 
only.


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