[House Report 104-115]
[From the U.S. Government Publishing Office]



                                                                       
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-115
_______________________________________________________________________


 
                 GREENS CREEK LAND EXCHANGE ACT OF 1995

_______________________________________________________________________


  May 9, 1995.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1266]

      [Including cost estimate of the Congressional Budget Office]
  The Committee on Resources, to whom was referred the bill 
(H.R. 1266) to provide for the exchange of lands within 
Admiralty Island National Monument, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:
SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Greens Creek Land Exchange Act of 
1995''.

SEC. 2. FINDINGS.

  The Congress makes the following findings:
          (1) The Alaska National Interest Lands Conservation Act 
        established the Admiralty Island National Monument and sections 
        503 and 504 of that Act provided special provisions under which 
        the Greens Creek Claims would be developed. The provisions 
        supplemented the general mining laws under which these claims 
        were staked.
          (2) The Kennecott Greens Creek Mining Company, Inc., 
        currently holds title to the Greens Creek Claims, and the area 
        surrounding these claims has further mineral potential which is 
        yet unexplored.
          (3) Negotiations between the United States Forest Service and 
        the Kennecott Greens Creek Mining Company, Inc., have resulted 
        in an agreement by which the area surrounding the Greens Creek 
        Claims could be explored and developed under terms and 
        conditions consistent with the protection of the values of the 
        Admiralty Island National Monument.
          (4) The full effectuation of the Agreement, by its terms, 
        requires the approval and ratification by Congress.

SEC. 3. DEFINITIONS.

  As used in this Act--
          (1) the term ``Agreement'' means the document entitled the 
        ``Greens Creek Land Exchange Agreement'' executed on December 
        14, 1994, by the Under Secretary of Agriculture for Natural 
        Resources and Environment on behalf of the United States and 
        the Kennecott Greens Creek Mining Company and Kennecott 
        Corporation;
          (2) the term ``ANILCA'' means the Alaska National Interest 
        Lands Conservation Act, Public Law 96-487 (94 Stat. 2371);
          (3) the term ``conservation system unit'' has the same 
        meaning as defined in section 102(4) of ANILCA;
          (4) the term ``Greens Creek Claims'' means those patented 
        mining claims of Kennecott Greens Creek Mining Company within 
        the Monument recognized pursuant to section 504 of ANILCA;
          (5) the term ``KGCMC'' means the Kennecott Greens Creek 
        Mining Company, Inc., a Delaware corporation;
          (6) the term ``Monument'' means the Admiralty Island National 
        Monument in the State of Alaska established by section 503 of 
        ANILCA;
          (7) the term ``Royalty'' means Net Island Receipts Royalty as 
        that latter term is defined in Exhibit C to the Agreement; and
          (8) the term ``Secretary'' means the Secretary of 
        Agriculture.

SEC. 4. RATIFICATION OF THE AGREEMENT.

  The Agreement is hereby ratified and confirmed as to the duties and 
obligations of the United States and its agencies, and KGCMC and 
Kennecott Corporation, as a matter of Federal law. The agreement may be 
modified or amended, without further action by the Congress, upon 
written agreement of all parties thereto and with notification in 
writing being made to the appropriate committees of the Congress.

SEC. 5. IMPLEMENTATION OF THE AGREEMENT.

  (a) Land Acquisition.--Without diminishment of any other land 
acquisition authority of the Secretary in Alaska and in furtherance of 
the purposes of the Agreement, the Secretary is authorized to acquire 
lands and interests in land within conservation system units in the 
Tongass National Forest, and any land or interest in land so acquired 
shall be administered by the Secretary as part of the National Forest 
System and any conservation system unit in which it is located. 
Priority shall be given to acquisition of non-Federal lands within the 
Monument.
  (b) Acquisition Funding.--There is hereby established in the Treasury 
of the United States an account entitled the ``Greens Creek Land 
Exchange Account'' into which shall be deposited the first $5,000,000 
in royalties received by the United States under part 6 of the 
Agreement after the distribution of the amounts pursuant to subsection 
(c) of this section. Such moneys in the special account in the Treasury 
may, to the extent provided in appropriations Acts, be used for land 
acquisition pursuant to subsection (a) of this section.
  (c) Twenty-Five Percent Fund.--All royalties paid to the United 
States under the Agreement shall be subject to the 25 percent 
distribution provisions of the Act of May 23, 1908, as amended (16 
U.S.C. 500) relating to payments for roads and schools.
  (d) Mineral Development.--Notwithstanding any provision of ANILCA to 
the contrary, the lands and interests in lands being conveyed to KGCMC 
pursuant to the Agreement shall be available for mining and related 
activities subject to and in accordance with the terms of the Agreement 
and conveyances made thereunder.
  (e) Administration.--The Secretary of Agriculture is authorized to 
implement and administer the rights and obligations of the Federal 
Government under the Agreement, including monitoring the Government's 
interests relating to extralateral rights, collecting royalties, and 
conducting audits. The Secretary may enter into cooperative 
arrangements with other Federal agencies for the performance of any 
Federal rights or obligations under the Agreement or this Act.
  (f) Reversions.--Before reversion to the United States of KGCMC 
properties located on Admiralty Island, KGCMC shall reclaim the surface 
disturbed in accordance with an approved plan of operations and 
applicable laws and regulations. Upon reversion to the United States of 
KGCMC properties located on Admiralty, those properties located within 
the Monument shall become part of the Monument and those properties 
lying outside the Monument shall be managed as part of the Tongass 
National Forest.
  (g) Savings Provisions.--Implementation of the Agreement in 
accordance with this Act shall not be deemed a major Federal action 
significantly affecting the quality of the human environment, nor shall 
implementation require further consideration pursuant to the National 
Historic Preservation Act, title VIII of ANILCA, or any other law.

SEC. 6. RECISION RIGHTS.

  Within 60 days of the enactment of this Act, KGCMC and Kennecott 
Corporation shall have a right to rescind all rights under the 
Agreement and this Act. Recision shall be effected by a duly authorized 
resolution of the Board of Directors of either KGCMC or Kennecott 
Corporation and delivered to the Chief of the Forest Service at the 
Chief's principal office in Washington, District of Columbia. In the 
event of a recision, the status quo ante provisions of the Agreement 
shall apply.
                          purpose of the bill

    H.R. 1266 provides for the exchange of lands within 
Admiralty Island National Monument in Southeast Alaska.

                  background and need for legislation

    H.R. 1266, the ``Greens Creek Land Exchange Act of 1995'', 
approves an agreement between the U.S. Forest Service and the 
Kennecott Greens Creek Mining Company (KGCMC) providing for an 
exchange of 7,500 acres of land within the Admiralty Island 
National Monument in Southeast Alaska. These lands are adjacent 
to the Greens Creek Mine, located about 20 miles south-
southwest of Juneau. The U.S. Department of Agriculture and 
KGCMC are seeking Congressional approval of the agreement 
because the lands involved in the exchange are located in the 
Admiralty Island National Monument which is located within the 
Tongass National Forest.
    The Greens Creek Mine is an underground lead-zinc-silver-
gold mine which began production in early 1989. Mining 
operations were suspended in April 1993 due to low metal 
prices. During 1992, the last full year of operation, Greens 
Creek produced 31,200 tons of zinc, 12,650 tons of lead, 23,700 
troy ounces of gold, and six million ounces of silver. When 
operating the mine is one of the nation's largest producers of 
silver. The mine has been a major employer in Juneau and 
Southeast Alaska, employing approximately 250 workers during 
its peak operation.
    The Greens Creek Land Exchange Agreement is an innovative 
approach which allows for limited development of mineral 
resources while providing for both short- and long-term 
environmental protection of Admiralty Island National Monument. 
In addition, the U.S. Forest Service will receive funds for 
acquisition of inholdings and the Federal Government will 
receive royalty revenues on any production from the exchanged 
lands.
    The mining area at Greens Creek encompasses 17 patented 
Federal mining claims (about 340 acres) located within the 
Admiralty Island National Monument. The Greens Creek Mine is 
operated under a special regulatory regime provided for in the 
Alaska National Interest Lands Conservation Act of 1980 
(ANILCA). The area surrounding the present mining area has high 
mineral potential but remains unexplored because it was closed 
to mineral exploration and development under ANILCA. This land 
exchange will permit KGCMC to explore and develop an area for 
mining located within the non-wilderness portion of the 
National Monument. Any mining resulting would utilize the 
infrastructure constructed for the existing mine and be subject 
to the same stringent regulatory regime currently governing the 
existing mine. As is the present case, surface activity would 
be limited primarily to activities such as exploratory drilling 
and necessary access to active exploration areas.
    Ratification of this land exchange is not necessary to 
ensure reopening of the Greens Creek Mine, but the agreement 
will increase the potential resource base of the mine. As a 
result, the chances of a successful discovery which 
significantly extends the mine's operational life would be much 
improved.
    In exchange for the right to explore and develop a 7,500-
acre area surrounding the existing Greens Creek Mine, KGCMC has 
agreed to:
          Provide $1 million for acquisition of inholdings 
        located within Admiralty Island National Monument from 
        willing sellers. Any remaining funds from these 
        acquisitions would be used to purchase inholdings in 
        other conservation units within the Tongass National 
        Forest.
          Pay a royalty to the Federal Government on the 
        production from the exchange area. This royalty is 
        based on the value received from this production after 
        deduction of shipping, smelting and refining charges. 
        The royalty, referred to in the agreement as the ``Net 
        Island Receipts'' royalty, has two tiers based on the 
        value of the ore mined. When metal prices are average 
        or better, the royalty will be three percent, and at 
        low metal prices, the royalty will be three quarters of 
        one percent. This two-tier royalty will encourage the 
        Greens Creek Mine to continue operation in times of 
        lower metal prices.
          To operate in the entire exchange area under the 
        strict regulatory regime originally provided for in 
        ANILCA. This regime limits the surface activity to the 
        minimum necessary for operations because the mine is 
        located within a National Monument.
    Only the subsurface mineral estate of the 7,400 acre 
exchange area will be conveyed to KGCMC. This will revert to 
the United States following cessation of mining activity. 
Additionally, the fee interest in the existing patented Federal 
mining claims will revert to the United States when mining is 
concluded.

                            committee action

    H.R. 1266 was introduced on March 16, 1995, by Chairman Don 
Young of Alaska and cosponsored by Ranking Minority Member 
George Miller of California. The bill was referred to the 
Committee on Resources. On March 30, 1995, the Committee held a 
hearing on H.R. 1266, where witnesses from the U.S. Agriculture 
Department and KGCMC testified in support of the bill. The 
Committee also received a letter of support from the Southeast 
Alaska Conservation Council. On April 5, 1995, the Committee 
met to mark up H.R. 1266. En bloc amendments were offered by 
Congressman Saxton for Chairman Young to resolve pay-as-you-go 
implications of a proposed special Treasury fund and clarify 
the reclamation responsibilities of KGCMC. These amendments 
were adopted by voice vote. The bill as amended was then 
ordered favorably reported to the House of Representatives, in 
the presence of a quorum.

                      section-by-section analysis
Section 1. Short title

    This section states that the bill may be cited as the 
``Greens Creek Land Exchange Act of 1995''.

Section 2. Findings

    Section 2 makes four findings which state that the U.S. 
Forest Service and KGCMC have negotiated an agreement allowing 
the area surrounding the Greens Creek mine to be explored and 
developed under terms and conditions consistent with the 
protection of the values of the Admiralty Island National 
Monument and that this Agreement requires approval and 
ratification by Congress.

Section 3. Definitions

    Section 3 defines the following terms used in the Act: 
Agreement, ANILCA, conservation system unit, Greens Creek 
Claims, KGCMC, Monument, Royalty and Secretary.

Section 4. Ratification of the agreement

    Section 4 approves the U.S. Forest Service-KGCMC agreement 
and provides for future modification or amendment of the 
agreement, without further action by Congress, upon written 
consent of all parties and notice in writing to the appropriate 
committees of Congress.

Section 5. Implementation of the agreement

    This section: (1) gives the Secretary of Agriculture the 
authority to make the land acquisitions provided for in H.R. 
1266 and incorporates these lands into the National Forest 
System; (2) creates a special account in the U.S. Treasury, the 
``Greens Creek Land Exchange Account,'' to receive up to $5 
million of the Federal Government's royalty share and 
authorizes the expenditures of monies in the escrow account for 
acquisition of inholdings on Admiralty Island; (3) makes 
royalty payments under the Act subject to the 25 percent 
distribution requirements paid to the State of Alaska and local 
governments under provisions of the Act of May 23, 1908; (4) 
provides that this Act will take precedence over any 
conflicting provisions in ANILCA; (5) authorizes the Secretary 
of Agriculture to implement and administer the rights and 
obligations of the Federal Government under the Agreement; (6) 
provides for the reclamation of KGCMC surface lands and the 
administrative deposition of KGCMC lands upon reversion to the 
United States; and (7) exempts implementation of H.R. 1266 from 
the National Environmental Policy Act, the National Historic 
Preservation Act, title VIII of ANILCA, and other laws.

Section 6. Recision rights
    Section 6 gives KGCMC a right of recision for a 60-day 
period, beginning on the date H.R. 1266 becomes law. The 
recision must be made by a duly authorized resolution of the 
Board of Directors of KGCMC.

            committee oversight findings and recommendations

    With respect to the requirements of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives, and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee on Resources' oversight findings and 
recommendations are reflected in the body of this report.

                     inflationary impact statement

    Pursuant to clause 21(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that the 
enactment of H.R. 1266 will have no significant inflationary 
impact on prices and costs in the operation of the national 
economy.

                        cost of the legislation

    Clause 7(a) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs which would be incurred in carrying out 
H.R. 1266. However, clause 7(d) of the rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act of 1974.

                     compliance with house rule xi

    1. With respect to the requirement of clause 2(l)(3)(B) of 
rules of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974, H.R. 1266 does not contain 
any new budget authority, spending authority, credit authority, 
or an increase or decrease in revenues or tax expenditures.
    2. With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 1266.
    3. With respect to the requirement of clause 2(l)(3)(C) of 
rule XI of the Rule of the House of Representatives and section 
403 of the Congressional Budget Act of 1974, the Committee has 
received the following cost estimate for H.R. 1266 from the 
Director of the Congressional Budget Office.

               congressional budget office cost estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                        Washington, DC, May 4, 1995
Hon. Don Young,
Chairman, Committee on Resources,
U.S. House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 1266, the Greens Creek Land Exchange Act of 1995, 
as ordered reported by the House Committee on Resources on 
April 5, 1995. CBO estimates that enacting this bill would not 
have a significant impact on the federal budget or on the 
budgets of state or local governments. Because enactment would 
not affect direct spending or receipts through 1998, pay-as-
you-go provisions would not apply to the bill.
    H.R. 1266 would ratify a land exchange agreement between 
the Forest Service (FS) and Kennecott Greens Creek Mining 
Company (KGCMC). Under the terms of the agreement, KGCMC would 
acquire the right to explore for and develop minerals found on 
about 7,500 acres of federal land in the Tongass National 
Forest. Under current law, these lands are not available for 
mineral exploration or development. The federal government 
would receive a royalty based on the value of any minerals 
mined on these lands. In exchange for these rights, KGCMC would 
give the federal government private land in the Tongass 
National Forest.
    The bill also would establish as special fund in the United 
States Treasury into which the first $5 million of any 
royalties collected from KGCMC (net of a 25 percent payment to 
the affected counties) would be deposited. When appropriated, 
any such funds would be used for additional land acquisition in 
the area. Based on information provided to us by the FS, we 
estimate that the provisions of H.R. 1266 and the agreement 
could be implemented at no significant additional cost to the 
federal government. But because the agency has no information 
as to what minerals might be found on the lands to be acquired 
by KGCMC, or their value, we have no basis for estimating the 
future royalty income that may result from enactment of this 
bill. We do not expect any such income to be realized for at 
least the next five years.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Theresa 
Gullo.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

                        changes in existing law

    If enacted, H.R. 1266 would make no changes in existing 
law.

                          departmental reports

    The Committee has received no departmental reports on H.R. 
1266.