[Congressional Record Volume 145, Number 9 (Wednesday, January 20, 1999)]
[Extensions of Remarks]
[Pages E85-E86]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              OVERDUE FOR OVERALL--THE MINING LAW OF 1872

                                 ______
                                 

                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                       Tuesday, January 19, 1999

  Mr. GEORGE MILLER of California. Mr. Speaker, later this year, on May 
10, the General Mining Law will be 127 years old--yet, it remains on 
the books without change in regard to gold, silver and other ``hard 
rock'' minerals. Lack of Congressional action to reform this archaic 
law is indefensible--albeit a testament to the strength of the mining 
industry's influence on certain key Members who have consistently 
blocked any attempt to amend or replace the law during the past two 
Congresses. Written to encourage settlement of the West during the last 
century, the Mining Law of 1872 provides an automatic legal right to 
our Nation's hard rock mineral wealth to those interested in developing 
it. The law is long overdue for a major overhaul to save taxpayers and 
the environment from further losses.
  This antiquated relic allows mining operators nearly unlimited access 
to our Nation's hard rock minerals, no matter what other values (such 
as fish and wildlife habitat) may also be present. The law lets mining 
companies extract the minerals without paying a royalty or other 
production fee to the Federal Government. Finally, the lucky prospector 
who discovers gold or another hard rock mineral has the right to 
``patent'' (purchase) the land and the minerals without paying fair 
market value.
  Since Ulysses S. Grant signed the law in 1872, American taxpayers 
have lost about 3.2 million acres of public land containing more than 
$231 billion in gold, silver and valuable minerals without benefit of 
royalties or other fees. This is corporate welfare that subsidizes both 
foreign and domestic mining companies and should be stopped.
  Under the 1872 mining law, the U.S. cannot collect a royalty or fee 
on the production value of hard rock minerals extracted from public 
lands. This differs from Federal policy toward coal, oil and gas 
industries operating on public lands, the laws and regulations of state 
governments, and leasing arrangements in the private sector. The U.S. 
collects a 12.5 percent royalty on coal, oil and gas (and an even 
higher royalty is collected from offshore petroleum development). The 
Federal Government collects production royalties on ``leasable 
minerals'' such as phosphate, potassium, sodium and sulphur. We also 
require a royalty on all minerals extracted from ``acquired lands,'' 
which are lands that the federal government has purchased, condemned or 
received as a gift.
  All western States collect a royalty or production fee from minerals 
removed from State lands, collecting between 2 percent and 10 percent 
on the gross income from mineral production. Besides a royalty, 10 
western States also collect a severance tax on certain minerals 
extracted from any land in the States, whether it is Federal, State or 
privately-owned. On private lands, royalties are usually similar to 
those imposed on federal and state lands and are usually set at 2 
percent to 8 percent of gross income.
  As Stuart Udall, former Secretary of the Interior, has noted, hard 
rock mining has made many men wealthy, built great corporations and 
caused cities to spring up in the wilderness. But this prosperity has 
come with a price. Over the past century, irresponsible and unwise 
mining operators have devastated over half a million acres of land--by 
acting without thought for the future or by simply walking away from 
played-out mines. According to the U.S. Environmental Protection Agency 
(EPA), mine wastes have polluted more than 12,000 miles of our Nation's 
waterways and 180,000 acres of lakes and reservoirs. Abandoned mines 
threaten public safety and health while creating long-lasting 
environmental hazards. Toxic mine wastes endanger people, destroy 
aquatic habitat, and contaminate vital ground water resources. The 
Mineral Policy Center

[[Page E86]]

estimates that clean-up will cost between $32 billion and $72 billion.
  The only mining law reform bill Congress has sent to the President in 
recent years was part of the fiscal year 1995 budget reconciliation 
bill that President Clinton properly vetoed in December 1995, for 
reasons well beyond the scope of the 1872 mining law. That reform 
proposal, which all of the longtime mining reform advocates opposed, 
would have reserved a 5 percent ``net proceeds'' royalty on future 
mining operations on public lands. But, it also provided so many 
exorbitant and absurd loopholes that most mines could have avoided 
paying the royalty. Therefore, the Congressional Budget Office (CBO) 
scored the royalty at just $12 million over seven years as compared to 
nearly $420 million attributed to the royalty provision passed on a 3-1 
margin by the House in 1993.
  Today, I am introducing three bills, in addition to Rep. Nick 
Rahall's (D-WVA) comprehensive bill to reform the Mining Law of 1872. 
These three bills, identical to ones that former Senator Dale Bumpers 
(D-AR) and I introduced in the 105th Congress would:
  (1) Impose a 5 percent net smelter return royalty on all hard rock 
minerals mined from public lands, eliminate patents, and permanently 
extend the rental fee,
  (2) Impose a sliding scale net proceeds reclamation fee on all hard 
rock minerals mined from lands that have been removed from the public 
domain under the 1872 Mining Law, and
  (3) Close the depletion allowance loophole on all lands subject to 
the 1872 Mining Law. Reservation of a royalty would mean that Americans 
would receive a fair return on the extraction of hard rock minerals 
from public lands.
  Imposition of a reclamation fee on lands removed from the public 
domain under the 1872 law would give the public a fair return on the 
value of hard rock minerals mined from those lands. All these revenues 
would be used to clean up the environment disaster we inherited from 
past mining operators.
  The majority refused to even hold hearings on these bills during the 
last Congress, instead focusing on crushing Clinton administration 
policies that would have made miners accountable for their actions and 
decreased the level of environmental destruction that accompanies 
mining activities. I therefore call on Chairman Young to allow these 
bills a fair and open hearing this year.
  Now is the time to act. The Federal royalty base is already small and 
is rapidly diminishing as mining operations go to patent. The GAO 
believes that nearly $65 billion worth of gold, silver, copper, and 
certain other hard rock minerals still exist in economically 
recoverable reserves on western Federal lands. But, the longer Congress 
delays, the smaller the royalty base will become as ever more mining 
conglomerates push through the patent process.
  Mining reform is long overdue. The effort to update the 1872 law has 
enjoyed vigorous, bipartisan support in the House of Representatives 
for many years. Public opinion--even in Western states with large 
mining activities--is strongly in favor of mining reform that includes 
a royalty that raises substantial revenues to be used for abandoned 
mine clean-up. Four out of five Americans support mining reform, 
according to a 1994 nationwide bipartisan survey. In 1994, the House 
and Senate came close during a Conference to crafting an acceptable 
agreement only to be derailed by the threat of a filibuster during the 
last days of the session. The mining industry and a few Senators have 
repeatedly blocked reform from enactment during the last decade.
  The 106th Congress should impose a reasonable net smelter royalty on 
hard rock minerals extracted from public lands, dedicating the revenues 
to cleaning up abandoned mine sites, permanently extend the $100 rental 
fee, and close the depletion allowance loophole.

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