[Congressional Record (Bound Edition), Volume 151 (2005), Part 3]
[Extensions of Remarks]
[Pages 4420-4421]
[From the U.S. Government Publishing Office, www.gpo.gov]




          BILLS TO ASSIST ABANDONED HARDROCK MINES RECLAMATION

                                 ______
                                 

                            HON. MARK UDALL

                              of colorado

                    in the house of representatives

                        Thursday, March 10, 2005

  Mr. UDALL of Colorado. Mr. Speaker, today I am again introducing 
legislation designed to help promote the cleanup of abandoned and 
inactive hardrock mines that are a menace to the environment and public 
health throughout the country, but especially in the west. I introduced 
a bill aimed at that result in the 107th Congress, and in the 108th 
introduced a revised version that incorporated a number of changes 
developed in consultation with interested parties, including 
representatives of the Western Governors' Association, the hardrock 
mining industry, and environmental groups.
  Today, I am introducing two separate but complementary bills that 
together include the provisions of the bill I introduced in the 108th 
Congress. This two-bill approach reflects the fact that while the 
Resources Committee has jurisdiction over the proposed funding 
legislation, the provisions dealing with liability fall within the 
responsibility of the Transportation and Infrastructure Committee. In 
other words, while the one-bill approach had the virtue of being 
comprehensive, the two-bill approach may facilitate Congressional 
action. But it remains the fact that both bills are equally necessary 
for a complete response to the problem.
  The background: For over one hundred years, miners and prospectors 
have searched for and developed valuable ``hardrock'' minerals--gold, 
silver, copper, molybdenum, and others. Hardrock mining has played a 
key role in the history of Colorado and other states, and the resulting 
mineral wealth has been an important aspect of our economy and the 
development of essential products. However, as all westerners know, 
this history has too often been marked by a series of ``boom'' times 
followed by a ``bust'' when mines were no longer profitable. When these 
busts came, too often the miners would abandon their workings and move 
on, seeking riches over the next mountain. The resulting legacy of 
unsafe open mine shafts and acid mine drainages can be seen throughout 
the country and especially on the western public lands where mineral 
development was encouraged to help settle our region.
  The problems: The problems caused by abandoned and inactive mines are 
very real and very large--including acidic water draining from old 
tunnels, heavy metals leaching into streams killing fish and tainting 
water supplies, open vertical mine shafts, dangerous highwalls, large 
open pits, waste rock piles that are unsightly and dangerous, and 
hazardous dilapidated structures.
  And, unfortunately, many of our current environmental laws, designed 
to mitigate the impact from operating hardrock mines, are of limited 
effectiveness when applied to abandoned and inactive mines. As a 
result, many of these old mines go on polluting streams and rivers and 
potentially risking the health of people who live nearby or downstream.
  Obstacles to cleanups: Right now there are two serious obstacles to 
progress. One is a serious lack of funds for cleaning up sites for 
which no private person or entity can be held liable. The other 
obstacle is legal. While the Clean Water Act is one of the most 
effective and important of our environmental laws, as applied it can 
mean that someone undertaking to clean up an abandoned or inactive mine 
will be exposed to the same liability that would apply to a party 
responsible for creating the site's problems in the first place. As a 
result, would-be ``good Samaritans'' understandably have been unwilling 
to volunteer their services to clean up abandoned and inactive mines.
  Unless these fiscal and legal obstacles are overcome, often the only 
route to clean up abandoned mines will be to place them on the nation's 
Superfund list. Colorado has experience with that approach, so 
Coloradans know that while it can be effective it also has 
shortcomings. For one thing, just being placed on the Superfund list 
does not guarantee prompt cleanup. The site will have to get in line 
behind other listed sites and await the availability of financial 
resources. In addition, as many communities within or near Superfund 
sites know, listing an area on the Superfund list can create concerns 
about stigmatizing an area and potentially harming nearby property 
values.
  We need to develop an alternative approach that will mean we are not 
left only with the options of doing nothing or creating additional 
Superfund sites--because while in some cases the Superfund approach may 
make the most sense, in many others there could be a more direct and 
effective way to remedy the problem.
  Western Governors want action: The Governors of our western States 
have recognized the need for action to address this serious problem. 
The Western Governors' Association has several times adopted 
resolutions on the subject, such as the one of June, 2004 entitled 
``Cleaning Up Abandoned Mines'' sponsored by Governor Bill Owens of 
Colorado along with Governor Bill Richardson of New Mexico and Governor 
Kenny Guinn of Nevada.
  Outline of the two bills: My two bills are based directly on those 
recommendations by the Western Governors. One addresses the lack of 
resources, while the other deals with the liability risks to those 
doing cleanups.
  Bill to provide funds for cleanups: To help fund cleanup projects, 
one bill--entitled the ``Abandoned Hardrock Mines Reclamation Funding 
Act''--would create a reclamation fund paid for by a modest fee applied 
to existing hardrock mining operations. The fund would be used by the 
Secretary of the Interior to assist projects to reclaim and restore 
lands and waters adversely affected by abandoned or inactive hardrock 
mines.
  A similar method already exists to fund cleanup of abandoned coal 
mines. The Surface Mining Control and Reclamation Act of 1977 (SMCRA) 
provides for fees on coal production. Those fees are deposited into the 
Abandoned Mine Reclamation Fund and used to fund reclamation of sites 
that had been mined for coal and then abandoned before enactment of 
SMCRA. Similarly, my bill provides for fees on mineral production from 
producing hardrock mines.
  In developing this bill, I have followed the lead of a 1999 
resolution of the Western Governors Association. That resolution notes 
that ``While society has benefited broadly from the metal mining 
industry, problems created by some abandoned mine lands [are] a 
significant national concern. . . [and] industry can play an important 
role in the resolution of these problems through funding mechanisms'' 
as well as in other ways.
  In accord with that suggestion, the bill provides for fees on 
producing hardrock mines on federal lands or lands that were federal 
before issuance of a mining-law patent. Fees would be paid to the 
Secretary of the Interior and would be deposited in a new Abandoned 
Minerals Mine Reclamation Fund in the U.S. Treasury. Money in that fund 
would earn interest and would be available for reclamation of abandoned 
hardrock mines and associated sites.
  In developing the bill, I decided that a one-fee-fits-all approach 
would not be fair. Instead, the bill provides for only modest fees and 
a sliding scale based on the ability of mines to pay.
  Mines Exempt From Fees--To begin with, the bill would entirely exempt 
mines with gross proceeds of less than $500,000 per year. That means 
many--probably most--small operations, such as Alaskan prospectors 
working individual placer claims, will not be liable for any fees.
  Calculation of Fees--For more lucrative mines, fees would be based on 
the ratio of net proceeds to gross proceeds. If a mine's net

[[Page 4421]]

proceeds were under 10% of gross proceeds, the fee would be 2 percent 
of the net proceeds. For mines with net proceeds of at least 10 percent 
but less than 18 percent of gross proceeds, the fee would be 2.5 
percent of net proceeds. Mines where the net proceeds were at least 18 
percent but less than 26 percent of gross proceeds would pay a fee of 3 
percent of net proceeds. If the net proceeds were at least 26 percent 
but less than 34 percent of gross proceeds, the fee would be 3.5 
percent of net proceeds. Where the net proceeds were at least 34 
percent but less than 42 percent of gross proceeds the fee would be 4 
percent of net proceeds. Mines with net proceeds equal to at least 42 
percent but less than 50 percent of gross proceeds would pay a fee of 
4.5 percent of net proceeds. And mines whose net proceeds were 50 
percent or more of the gross proceeds would pay a fee of 5 percent of 
the net proceeds.
  For the purpose of calculating these fees, the bill defines gross 
proceeds as the value of any extracted hardrock minerals that are sold, 
exchanged for good or services, exported ready for use or sale, or 
initially used in manufacture or service. Net proceeds are defined as 
how much of the gross proceeds remain after deducting the costs of mine 
development; mineral extraction; transporting minerals for smelting or 
similar processing; mineral processing; marketing and delivery to 
customers; maintenance and repairs of machinery and facilities; 
depreciation; insurance on mine facilities and equipment; insurance for 
employees; and royalties and taxes.
  Based on Nevada Model--This way of calculating fees resembles one 
used by Nevada, which collects similar production-based fees from mines 
in that state. However, the fees in my bill are more moderate than 
those set by the Nevada law in one important respect--Nevada imposes 
its maximum fee rate on all mines with net proceeds of $5 million or 
more, regardless of the ratio between those net proceeds and the gross 
proceeds. My bill does not do that--instead, all of its fees are based 
on the ratio. In other words, under my bill a mine with earnings (i.e., 
net proceeds) of more than $5 million per year still might pay the 
minimum fee if those earnings were less than 10 percent of the gross 
proceeds.
  Offset Provision--Under current law, the United States does not 
receive royalties from production of hardrock minerals from federal 
lands. Over the years, there have been frequent proposals to establish 
royalties for hardrock production, in order to provide a greater return 
to the American people. I think there are strong arguments in favor of 
such an approach. Accordingly, this bill would require the Secretary of 
the Interior to reduce payments under this title so as to offset any 
royalties hardrock producers may pay in the future pursuant to changes 
in current law. This is intended to avoid the chance that 
implementation of a royalty would result in inequitable treatment of a 
producer covered by both the royalty and Title I of this bill.
  Estimated Proceeds From Fees and Use of Fund--There are not 
sufficient data available to say exactly how much money the fees would 
bring into the new reclamation fund each year. However, the United 
States Geological Survey does have information about the number of 
operating copper and gold mines and the State of Nevada has data about 
the money raised by their similar fee system. By extrapolating from 
those data, it is possible to estimate that the fees provided for in my 
bill would generate about $40 million annually for the Abandoned 
Minerals Mine Reclamation Fund.
  Funds in the new reclamation fund would be available for 
appropriation for grants to States to complete inventories of abandoned 
hardrock mine sites, as mentioned above. A state with sites covered by 
the bill could receive a grant of up to $2 million annually for this 
purpose. In addition, money from the fund would be available for 
cleanup work at eligible sites.
  To be eligible, a site would have to be within a state subject to 
operation of the general mining laws that has completed its statewide 
inventory. Within those states, eligible sites would be those--(1) 
where former hardrock-mining activities had permanently ceased as of 
the date of the bill's enactment; (2) that are not on the National 
Priorities List under the Superfund law; (3) for which there are no 
identifiable owners or operators; and (4) that lack sufficient minerals 
to make further mining, remining, or reprocessing of minerals 
economically feasible. Sites designated for remedial action under the 
Uranium Mill Tailings Radiation Control Act of 1978 or subject to 
planned or ongoing response or natural resource damage action under the 
Superfund law would not be eligible for cleanup funding from the new 
reclamation fund.
  The Interior Department could use money from the fund to do cleanup 
work itself or could authorize use of the money for cleanup work by a 
holder of one of the new ``good Samaritan'' permits provided for in the 
other bill I am introducing today. Among eligible sites, priorities for 
funding would be based on the presence and severity of threats to 
public health, safety, general welfare, or property from the effects of 
past mining and the improvement that cleanup work could make in 
restoration of degraded water and other resources. The first priority 
would be for sites where effects of past mining pose an extreme danger. 
After that, priorities would be sites where past mining has resulted in 
adverse effects (but not extreme danger) and then those where past 
mining has not led to equally serious consequences but where cleanup 
work would have a beneficial effect.
  Further, the bill recognizes that in Colorado and other states there 
are often concentrations of abandoned mining sites that vary in the 
severity of their threat to the public health and the environment but 
that can and should be dealt with in a comprehensive manner. Therefore, 
it provides that sites of varying priority should be dealt with at the 
same time when feasible and appropriate.
  Bill to provide protection for ``Good Samaritans'': To help encourage 
the efforts of ``good Samaritans,'' the second bill--entitled the 
``Abandoned Hardrock Mines Reclamation Facilitation Act''--would create 
a new program under the Clean Water Act under which qualifying 
individuals and entities could obtain permits to conduct cleanups of 
abandoned or inactive hardrock mines.
  These permits would give some liability protection to those 
volunteering to clean up these sites, while also requiring the permit 
holders to meet certain requirements.
  The bill specifies who can secure these permits, what would be 
required by way of a cleanup plan, and the extent of liability 
exposure. Notably, unlike regular Clean Water Act point-source 
(``NPDES'') permits, these new permits would not require meeting 
specific standards for specific pollutants and would not impose 
liabilities for monitoring or long-term maintenance and operations. 
These permits would terminate upon completion of cleanup, if a regular 
Clean Water Act permit is issued for the same site, or if a permit 
holder encounters unforeseen conditions beyond the holder's control. I 
think this would encourage efforts to fix problems like those at the 
Pennsylvania Mine.
  Together, these two bills can help address problems that have 
frustrated federal and state agencies throughout the country. As 
population growth continues near these old mines, more and more risks 
to public health and safety are likely to occur. We simply must begin 
to address this issue--not only to improve the environment, but also to 
ensure that our water supplies are safe and usable.

                          ____________________