[Congressional Record Volume 143, Number 155 (Friday, November 7, 1997)]
[Senate]
[Pages S11921-S11922]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
OVERSIGHT OF THE HEADWATERS FOREST AND NEW WORLD MINE ACQUISITIONS
Mr. MURKOWSKI. Mr. President, I would like to share with my
colleagues a little oversight on an issue that will be coming before
this body again, and it covers the Headwaters Forest and New World Mine
acquisitions taking place in both California and Montana. I have the
obligation as chairman of the Energy and Natural Resources Committee to
initiate authorization of these matters. I have had an active interest
in the decisions of the Clinton administration to acquire the
Headwaters Forest in northern California, and the New World Mine Site
in Montana.
These decisions were made by the administration with little
congressional involvement and the administration has now gone out of
its way to, in my opinion, limit the role of Congress in how these
properties actually are acquired.
Originally, the administration proposed acquiring both of these
properties through land exchanges. When that proved to be very
difficult and impossible to do without going through Congress, the idea
of land exchanges was abandoned. So clearly the objective was to
circumvent Congress.
The Clinton administration then proposed using $315 million from the
Land and Water Conservation Fund to purchase both of these properties.
The administration then insisted, contrary to the provisions of the
Land and Water Conservation Fund Act, that such money could be spent
without specific congressional authorization, clearly intending to go
around Congress.
Ultimately, that argument failed. While I would have preferred to
enact separate authorizing legislation, authorizations were contained
within the 1998 Interior Appropriations bill.
However, the authorizations do not take effect and the money cannot
be spent until a minimum of 180 days after enactment, and then only if
no separate authorizing legislation is enacted.
During the 180-day review period, as chairman of the Energy and
Natural Resources Committee, I intend to conduct a series of oversight
hearings to examine the Headwaters Forest and New World Mine
acquisitions. One focus of these oversight hearings will be the
appraised value of the properties. To date the Clinton administration
has refused to conduct appraisals to determine fair market values. This
failure is in direct contradiction of existing law, which requires the
appraisals be conducted for any Federal land acquisition. The
appropriators had the foresight, of course, to recognize this
hypocrisy.
Fair market value appraisals for both properties must be submitted to
Congress within 120 days of enactment. The appraisals also must be
reviewed, and independently analyzed by the Comptroller General of the
United States.
Once these appraisals are completed, I intend to closely examine
them. I plan to look at the methodology and data used in the
appraisals. Among the specific questions, I will ask:
Do the appraisals comply with the Department of Justice's Uniform
Appraisal Standards for Federal Land Acquisitions?
What criteria were employed to determine fair market value?
What assumptions were made about the property and the use of the
property?
What was the scope of the appraisal?
It is important to remember that neither the Headwaters Forest nor
New World Mine acquisitions can proceed, absent these appraisals. So
these appraisals must be done.
Further, Congress will have, at a minimum, 60 days to examine the
appraisals. For every day, after 120 days, that appraisals are not
submitted to Congress, the 180 day period will be extended by 1 day.
I also intend to examine during the 180 day review period, the true
cost to the American taxpayer of the Headwaters Forest acquisition. A
condition to the Headwaters Forest acquisition is that the current
owner of the property can take on his Federal taxes, as a business
loss, the difference between what he contends is the property's fair
market value and the price the Federal Government and California are
paying for the property. That differential is $700 million.
In the event the owner receives such a ruling from the IRS, there
will be a lost of tax revenue to the Federal treasury. This lost tax
revenue could amount to $100 million or more. It is inaccurate to say
that the Headwaters Forest is costing the American taxpayer $250
million. It could well cost the American taxpayer not only the $250
million cash purchase price but also this lost tax revenue. Under no
circumstances should this total cost exceed the appraised value of the
Headwaters Forest.
As to the New World Mine acquisition, I intend to examine exactly
what land or interests in the land the Federal Government is acquiring
for $65 million from the mining company. This issue needs to be
examined because the agreement, committing the United States to buy
this property, incredibly does not answer this question.
The mining company, which agreed to sell, owns or has under lease,
interests in nearly 6,000 acres. However, the mining company has fee
title to only 1,700 acres. The remainder is unpatented mining claims.
The ownership situation is further complicated by the fact that most of
the interests in the 6,000 acres are owned by a third party not a
signatory to the agreement with the Federal Government. Congress, and
the American taxpayer, have
[[Page S11922]]
a right to know, what we are getting for $65 million.
There are many other issues that my committee will examine about
these acquisitions including:
What is the status of the Habitat Conservation Plan for the land
surrounding the Headwaters Forest?
What impact will that Habitat Conservation Plan have on other
property owners in the western United States and Pacific Northwest?
Has California come up with its $130 million share of the purchase
price for the Headwaters Forest?
Do both acquisitions comply with the terms of the National
Environmental Policy Act?
How will the properties be managed?
By whom?
At what cost?
How will the public access the Headwaters Forest?
Is it good public policy to settle constitutional takings cases
against the United States in this manner?
Is it good public policy to settle environmental litigation in this
manner?
How does the Clinton administration interpret the phrase ``priority
Federal land acquisitions?''
Are the Headwaters Forest and New World Mine acquisitions consistent
with the Federal land management policy on Federal land acquisitions?
While this may seem like an exhaustive list of issue, I only have
skimmed the surface of the numerous unanswered questions about the
acquisitions.
I want all of these questions answered before the acquisitions occur.
It is in the interest of the taxpayers. It is the responsibility of
this body.
My goal is to ensure, despite the uncommon circumstances which have
led us to this point, that Congress and the American people can have
confidence in the decisions to acquire the Headwaters Forest and the
New World Mine in the interest of the taxpayers.
Mr. President, I yield the floor. I see several Senators seeking
recognition, including the majority leader.
The PRESIDING OFFICER. The majority leader.
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