Senate Report 111-264 - SURFACE MINING CONTROL AND RECLAMATION ACT

[Senate Report 111-264]
[From the U.S. Government Publishing Office]

Calendar No. 534
111th Congress Report
SENATE
2d Session 111-264

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SURFACE MINING CONTROL AND RECLAMATION ACT

_______

August 5, 2010.--Ordered to be printed

_______

Mr. Bingaman, from the Committee on Energy and Natural Resources,
submitted the following

R E P O R T

[To accompany S. 2830]

The Committee on Energy and Natural Resources, to which was
referred the bill (S. 2830) to amend the Surface Mining Control
and Reclamation Act of 1977 to clarify that uncertified States
and Indian tribes have the authority to use certain payments
for certain noncoal reclamation projects, having considered the
same, reports favorably thereon with an amendment and
recommends 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. ABANDONED MINE RECLAMATION.

(a) Reclamation Fee.--Section 402(g)(6)(A) of the Surface Mining
Control and Reclamation Act of 1977 (30 U.S.C. 1232(g)(6)(A)) is
amended by inserting ``and section 411(h)(1)'' after ``paragraphs (1)
and (5)''.
(b) Filling Voids and Sealing Tunnels.--Section 409(b) of the
Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1239(b))
is amended by inserting ``and section 411(h)(1)'' after ``section
402(g)''.
(c) Use of Funds.--Section 411(h)(1)(D)(ii) of the Surface Mining
Control and Reclamation Act of 1977 (30 U.S.C. 1240a(h)(1)(D)(ii)) is
amended by striking ``section 403'' and inserting ``section 402(g)(6),
403, or 409''.

Purpose

The purpose of S. 2830 is to amend the Surface Mining
Control and Reclamation Act of 1977 to clarify that uncertified
States and Indian tribes have the authority to use certain
payments for certain noncoal reclamation projects.

Background and Need

The Surface Mining Control and Reclamation Act of 1977
(SMCRA) was enacted, among other things, to promote the
reclamation of abandoned mines that endanger public health and
safety and degrade the environment. It created a reclamation
program, which is administered by the Office of Surface Mining
Reclamation and Enforcement of the Department of the Interior,
and is funded by an Abandoned Mine Land (AML) fee assessed on
each ton of coal produced. Funds collected under the program
are used to reclaim abandoned mine lands, with top priority for
protecting public health, safety, general welfare, and
property, and restoration of land and water resources adversely
affected by past mining practices. The program is largely
directed to abandoned coal mine reclamation, but under section
409 of SMCRA (30 U.S.C. 1239), funds have historically been
available to address noncoal mine sites. Several western
states, including New Mexico, Colorado, and Utah, have
traditionally relied on AML funds to reclaim noncoal sites.
The Surface Mining Control and Reclamation Act Amendments
of 2006, which was enacted as part of the Tax Relief and Health
Care Act of 2006 (Pub. L. No. 109-432), reauthorized collection
of the AML fee, which would otherwise have expired. In
addition, the 2006 amendments added a provision to section 411
of SMCRA that requires the Secretary of the Interior to pay
states and Indian tribes the so-called ``unappropriated balance
amounts,'' which were previously allocated, but had not been
paid, to the states and tribes. The Department of the Interior,
pursuant to a Memorandum Opinion (M-37014) issued by the
Solicitor on December 5, 2007, has interpreted the amendment to
section 411 to prohibit ``uncertified'' States and Indian
tribes (i.e., States and tribes that have not certified
completion of their abandoned coal reclamation work pursuant to
section 411(a) of SMCRA with the Secretary's concurrence) to
use their ``unappropriated balance amounts'' provided to them
under the AML program to address problems relating to noncoal
abandoned mines. This same Memorandum Opinion also limits the
ability of uncertified States and Indian tribes to use
unappropriated balance amounts under the AML program for
deposit into an acid mine drainage abatement and treatment
fund.
As previously noted, prior to the enactment of the 2006
amendments, AML funds were available to uncertified States and
Indian tribes to reclaim both coal and noncoal sites and
western states such as New Mexico, Colorado, and Utah were able
to prioritize the use of their AML funds to undertake the most
pressing reclamation work on both coal and noncoal mine sites.
While activities on noncoal sites have consumed a relatively
insignificant portion of the funding provided for the overall
AML program, the results in terms of public health and safety
at these sites is considerable, and there is significant work
yet to be done. Similarly, acid mine drainage continues to pose
a significant problem particularly in the Appalachian States
where coal mining is prevalent. The 2006 amendment to section
411, as interpreted by the Solicitor, prevents states from
allocating their AML funds to address their most pressing
needs.
S. 2830 would address this problem by giving uncertified
States and Indian tribes flexibility to use unappropriated
balance amounts paid to them pursuant to the 2006 amendments
for noncoal reclamation. In addition, uncertified States and
Indian tribes would have the flexibility to use such funds for
deposit in an acid mine drainage abatement and treatment fund
without respect to certain time limitations. The bill addresses
those unexpended and unappropriated balance amounts already
paid to the States and Indian tribes pursuant to the 2006
amendments, as well as those to be paid pursuant to the 2006
amendments.

Legislative History

S. 2830 was introduced by Senator Bingaman on December 3,
2009, with five original co-sponsors, Senators Bennet, Bennett,
Hatch, Mark Udall, and Tom Udall. The Subcommittee on Public
Lands and Forests held a hearing on the bill on April 21, 2010.
The Committee on Energy and Natural Resources considered the
bill and adopted an amendment in the nature of a substitute at
its business meeting on June 16, 2010. The Committee ordered S.
2830, as amended, favorably reported at its business meeting on
June 21, 2010.

Committee Recommendation

The Committee on Energy and Natural Resources, in open
business session on June 21, 2010, by a voice vote of a quorum
present, recommends that the Senate pass S. 2830, if amended as
described herein.

Committee Amendment

During its consideration of S. 2830, the Committee adopted
an amendment in the nature of a substitute. The amendment
provides that unappropriated balance amounts paid to
uncertified States and Indian tribes under the Abandoned Mine
Land Program pursuant to the Surface Mining Control and
Reclamation Act can be used for acid mine drainage set-aside
programs and for noncoal abandoned mine land reclamation.

Section-by-Section Analysis

Section 1(a) amends section 402(g)(6)(A) of the Surface
Mining Control and Reclamation Act by adding a reference to
provide that certain funds made available pursuant to section
411(h)(1) may be received and retained for acid mine drainage
abatement in accordance with the subparagraph.
Section 1(b) amends section 409(b) of the Surface Mining
Control and Reclamation Act by adding a reference to provide
that certain funds made available pursuant to section 411(h)
may be used by States and Indian tribes for the purposes of
section 409, including noncoal reclamation.
Section 1(c) amends section 411(h)(1)(D)(ii) to provide
references to sections 402(g)(6) and 409 to provide that
uncertified States and Indian tribes may use funds received
under the subparagraph in accordance with those sections.

Cost and Budgetary Considerations

The following estimate of costs of this measure has been
provided by the Congressional Budget Office:

S. 2830--A bill to amend the Surface Mining Control and Reclamation Act
of 1977 to clarify that uncertified States and Indian tribes
have the authority to use certain payments for certain noncoal
reclamation projects

CBO estimates that enacting S. 2830 would reduce direct
spending by about $5 million over the 2011-2020 period;
therefore, pay-as-you-go procedures would apply. Enacting the
legislation would not affect revenues. S. 2830 contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act and would impose no costs on
state, local, or tribal governments.
Each year, the Office of Surface Mining (OSM) provides more
than $300 million in grants and payments to states and Indian
tribes to reclaim land and water resources that have been
degraded by past mining practices. Because such grants and
payments are not subject to annual appropriation, they are
considered direct spending. States and tribes that currently
have backlogs of coal reclamation projects--so-called
noncertified states--are obligated, under current law, to use
those grants exclusively for those specific coal projects.
S. 2830 would allow those noncertified states and tribes to
use those funds for other types of reclamation projects not
related to coal mining. CBO expects this change would increase
direct spending in the near term by accelerating spending of
reclamation grants. However, that short-term increase would be
more than offset by reduced spending in later years because
enacting the bill would prolong the certification process for
some states. On balance CBO expects that this change would
reduce the amount of direct spending by the federal government
over the next 10 years.
Under current law, once states and tribes certify that they
have completed all outstanding coal reclamation projects, they
become eligible for additional payments from OSM. Under S.
2830, if some states and tribes substitute noncoal projects for
coal projects in the near term and delay their certification
status by at least one year, total direct spending over the
next 10 years would be less than anticipated under current law.
The number of states and tribes that would be affected and the
extent to which they would delay certification are uncertain.
However, based on information from OSM and some of the affected
states and tribes, CBO estimates that enacting the legislation
would reduce direct spending by about $5 million over the 2011-
2020 period. Under current law direct spending for these grants
and payments is expected to total about $4 billion over that
period.
The Statutory Pay-As-You-Go Act of 2010 establishes budget
reporting and enforcement procedures for legislation affecting
direct spending or revenues. S. 2830 would reduce direct
spending from certain payments to states and tribes to reclaim
abandoned mines. The changes in the deficit that are subject to
those pay-as-you-go procedures are shown in the following
table.

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 2830, A BILL TO AMEND THE SURFACE MINING CONTROL AND RECLAMATION ACT OF 1977 TO CLARIFY THAT UNCERTIFIED
STATES AND INDIAN TRIBES HAVE THE AUTHORITY TO USE CERTAIN PAYMENTS FOR CERTAIN NONCOAL RECLAMATION PROJECTS, AS REPORTED BY THE SENATE COMMITTEE ON
ENERGY AND NATURAL RESOURCES ON JUNE 21, 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-------------------------------------------------------------------------------------------------------------
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010-2015 2010-2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go................... 0 1 2 2 -2 -2 -2 -1 -1 -1 -1 1 -5
--------------------------------------------------------------------------------------------------------------------------------------------------------

The CBO staff contact for this estimate is Jeff LaFave. The
estimate was approved by Theresa Gullo, Deputy Assistant
Director for Budget Analysis.

Regulatory Impact Evaluation

In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
evaluation of the regulatory impact which would be incurred in
carrying out S. 2830.
The bill is not a regulatory measure in the sense of
imposing Government-established standards or significant
economic responsibilities on private individuals and
businesses.
No personal information would be collected in administering
the program. Therefore, there would be no impact on personal
privacy.
Little, if any, additional paperwork would result from the
enactment of S. 2830, as ordered reported.

Congressionally Directed Spending

S. 2830, as reported, does not contain any congressionally
directed spending items, limited tax benefits, or limited
tariff benefits as defined in rule XLIV of the Standing Rules
of the Senate.

Executive Communications

The views of the Administration were included in testimony
received by the Committee at a hearing on S. 2830 on April 21,
2010, which is provided below.

Statement of Glenda Owens, Deputy Director, Office of Surface Mining
Reclamation and Enforcement Department of the Interior

Mister Chairman and Members of the Subcommittee, thank you
for the invitation to testify on behalf of the Office of
Surface Mining Reclamation and Enforcement (OSM) regarding S.
2830. I look forward to working with you on matters relating to
the Surface Mining Control and Reclamation Act of 1977 (SMCRA).
S. 2830 would allow noncertified states and tribes to use
certain SMCRA payments for non-coal reclamation. While we
recognize the importance of addressing hardrock mine hazards,
we cannot support this bill because it is inconsistent with the
President's FY 2011 Budget proposal to limit SMCRA payments to
high priority coal sites.
The FY 2011 President's Budget includes a proposal to focus
AML funds on the high priority coal reclamation sites in order
to ensure that the most hazardous issues can be addressed
before the AML fee expires. In addition to terminating
unrestricted payments to certified states and tribes, the
proposal will require all noncertified states to use their
funding only for high priority coal reclamation projects.

background

Through SMCRA, Congress established OSM for two basic
purposes. First, to ensure that the Nation's coal mines operate
in a manner that protects citizens and the environment during
mining operations and to restore the land to beneficial use
following mining. Second, to implement an Abandoned Mine Land
(AML) program to address the hazards and environmental
degradation created by two centuries of weakly regulated coal
mining that occurred before SMCRA's enactment.
Title IV of SMCRA created an AML reclamation program funded
by a reclamation fee assessed on each ton of coal produced. The
fees collected have been placed in the Abandoned Mine
Reclamation Fund (Fund). OSM, either directly or through grants
to States and Indian tribes with approved AML reclamation plans
under SMCRA, has been using the Fund primarily to reclaim lands
and waters adversely impacted by coal mining conducted before
the enactment of SMCRA and to mitigate the adverse impacts of
mining on individuals and communities. Also, since FY1996, an
amount equal to the interest earned by and paid to the Fund has
been available for direct transfer to the United Mine Workers
of America Combined Benefit Fund to defray the cost of
providing health care benefits for certain retired coal miners
and their dependents. Section 402(a) of SMCRA fixed the
reclamation fee for the period before September 30, 2007, at 35
cents per ton (or 10 percent of the value of the coal,
whichever is less) for surface-mined coal other than lignite,
15 cents per ton (or 10 percent of the value of the coal,
whichever is less) for coal from underground mines, and 10
cents per ton (or 2 percent of the value of the coal, whichever
is less) for lignite. As originally enacted, section 402(b) of
SMCRA authorized collection of reclamation fees for 15 years
following the date of enactment (August 3, 1977); thus, OSM's
fee collection authority would have expired August 3, 1992.
However, Congress extended the fees and fee collection
authority through September 30, 1995, in the Omnibus Budget
Reconciliation Act of 1990. The Energy Policy Act of 1992
extended the fees through September 30, 2004. A series of short
interim extensions in appropriations and other acts extended
the fees through September 30, 2007.
The AML reclamation program was established in response to
concern over extensive environmental damage caused by past coal
mining activities. Before the 2006 amendments, the AML program
reclaimed eligible lands and waters using the Fund, which came
from the reclamation fees collected from the coal mining
industry. Eligible lands and waters were those which were mined
for coal or affected by coal mining or coal processing, were
abandoned or left inadequately reclaimed prior to the enactment
of SMCRA on August 3, 1977, and for which there was no
continuing reclamation responsibility under State or other
Federal laws.
SMCRA established a priority system for reclaiming coal
problems. Before the 2006 amendments, the AML program had five
priority levels, but reclamation was focused on eligible lands
and waters that reflected the top three priorities. The first
priority was ``the protection of public health, safety, general
welfare, and property from extreme danger of adverse effects of
coal mining practices.'' The second priority was ``the
protection of public health, safety, and general welfare from
adverse effects of coal mining practices.'' The third priority
was ``the restoration of land and water resources and the
environment previously degraded by adverse effects of coal
mining practices.''
As originally established, the Fund was divided into State
or Tribal and Federal shares. Each State or tribe with a
Federally approved reclamation plan was entitled to receive 50
percent of the reclamation fees collected annually from coal
operations conducted within its borders. The ``Secretary's
share'' of the Fund consisted of the remaining 50 percent of
the reclamation fees collected annually and all other receipts
to the Fund, and was allocated into three shares as required by
the 1990 amendments to SMCRA. First, OSM allocated 40% of the
Secretary's share to ``historic coal'' funds to increase
reclamation grants to States and Indian tribes for coal
reclamation. However, all the funds which were allocated may
not have been appropriated. Second, OSM allocated 20% to the
Rural Abandoned Mine Program (RAMP), operated by the Department
of Agriculture. However, that program has not been appropriated
AML funds since the mid-1990s.
Last, SMCRA required OSM to allocate 40% to ``Federal
expense'' funds to provide grants to States for emergency
programs that abate sudden dangers to public health or safety
needing immediate attention, to increase reclamation grants in
order to provide a minimum level of funding to State and Indian
tribal programs with unreclaimed coal sites, to conduct
reclamation of emergency and high-priority coal sites in areas
not covered by State and Indian tribal programs, and to fund
OSM operations that administer Title IV of SMCRA.
States with an approved State coal regulatory program under
Title V of SMCRA and with eligible coal mined lands may develop
a State program for reclamation of abandoned mines. The
Secretary may approve the State reclamation program and fund
it. At the time the 2006 amendments were enacted, 23 States
received annual AML grants to operate their approved
reclamation programs. Three Indian tribes (the Navajo, Hopi and
Crow Tribes) without approved regulatory programs have received
grants for their approved reclamation programs as authorized by
section 405(k) of SMCRA.
Before the 2006 amendments, States and Indian tribes that
had not certified completion of reclamation of their abandoned
coal lands could use AML grant funds on noncoal projects only
to abate extreme dangers to public health, safety, general
welfare, and property that arose from the adverse effects of
mineral mining and processing and only at the request of the
Governor or the governing body of the Indian tribe.
The Surface Mining Control and Reclamation Act Amendments
of 2006 were signed into law as part of the Tax Relief and
Health Care Act of 2006, on December 20, 2006 (Public Law 109-
432). The 2006 amendments revised Title IV of SMCRA to make
significant changes to the reclamation fee and the AML program.
One change extended OSM's reclamation fee collection authority
through September 30, 2021. The statutory fee rates were
reduced by 10 percent from the current levels for the period
from October 1, 2007, through September 30, 2012, and an
additional 10 percent from the original levels for the period
from October 1, 2012, through September 30, 2021.
The Fund allocation formula was also changed. Beginning
October 1, 2007, certified States are no longer eligible to
receive State share funds. Instead, amounts that would have
been distributed as State share for fee collections for
certified States are distributed as historic coal funds. The
RAMP share was eliminated, and the historic coal allocation is
further increased by the amount that previously was allocated
to RAMP.
Since 2006, the Department has interpreted the language of
SMCRA section 411(h) to require that OSM use grants to provide
funds to eligible States and Indian tribes and to preclude
noncertified states and Indian tribes from using funds that
they receive under that section for noncoal reclamation.

s. 2830

Under SMCRA, states can use some of the AML funds they
receive for non-coal reclamation. S. 2830 would amend SMCRA to
allow noncertified states and tribes to use their mandatory
funds received under Section 411(h)(1) from their
unappropriated AML Fund balance for reclamation activities on
non-coal mine sites. Noncertified states and tribes can already
use the funds they receive from the ``state share'' and
``historic coal'' formulas for non-coal reclamation.
When Secretary Salazar appeared before the Committee on
Energy and Natural Resources to testify about the FY 2011
President's Budget for the Department of the Interior, he noted
that in developing a balanced budget request for FY 2011, tough
choices had to be made. The budget, in addition to eliminating
unrestricted payments to certified states, also proposes
limiting the use of AML payments to priority coal reclamation
projects. The Department cannot support S. 2830 because it is
inconsistent with the Fiscal Year 2011 budget.
In an effort to focus the AML program on coal reclamation
before the reclamation fee terminates, the President's FY 2011
budget proposes to restrict the use of AML funds by
noncertified states to high priority coal reclamation. Because
S. 2830 is inconsistent with the Administration's goal of
ensuring expeditious coal reclamation, we cannot support this
bill.
While we recognize the dangers that abandoned hard rock
mines can pose, AML funding needs to be focused on the highest
priority problems Congress originally identified in 1977. The
challenging economic conditions, coupled with this
Administration's commitment to fiscal responsibility, only
heighten the need for AML funds to be devoted to the highest
priority coal problems. We note that the administration has
continued to invest in AML, both through the Bureau of Land
Management and National Park Service American Recovery and
Reinvestment Act of 2009 funding and the FY 2011 President's
Budget to address hardrock mine reclamation on Federal Lands.
We share your concern about non-coal abandoned mine sites
and would be happy to share the expertise gained administering
SMCRA and work with the Congress and this committee as we seek
to address abandoned non-coal mine problems.
Thank you for the opportunity to appear before the
Subcommittee today and testify on this bill. I look forward to
working with the Subcommittee to ensure that the Nation's
abandoned mine lands are adequately reclaimed.

Changes in Existing Law

In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill, as ordered reported, are shown as follows (existing
law proposed to be omitted is enclosed in black brackets, new
material is printed in italic, existing law in which no change
is proposed is shown in roman):

SURFACE MINING CONTROL AND RECLAMATION ACT OF 1977

Public Law 95-87, as amended

AN ACT TO provide for the cooperation between the Secretary of the
Interior and the States with respect to the regulation of surface coal
mining operations, and the acquisition and reclamation of abandoned
mines, and for other purposes.

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That this
Act may be cited as the ``Surface Mining Control and
Reclamation Act of 1977''.

* * * * * * *

RECLAMATION FEE

Sec. 402. (a) * * *
(g) Allocation of Funds.--(1) * * *
(6)(A) Any State with an approved abandoned mine
reclamation program pursuant to section 405 may receive and
retain, without regard to the 3-year limitation referred to in
paragraph (1)(D), up to 30 percent of the total of the grants
made annually to the State under paragraphs (1) and (5) and
section 411(h)(1) if those amounts are deposited into an acid
mine drainage abatement and treatment fund established under
State law, from which amounts (together with all interest
earned on the amounts) are expended by the State for the
abatement of the causes and the treatment of the effects of
acid mine drainage in a comprehensive manner within qualified
hydrologic units affected by coal mining practices.

* * * * * * *

FILLING VOIDS AND SEALING TUNNELS

Sec. 409. (a) * * *
(b) Funds available for use in carrying out the purpose of
this section shall be limited to those funds which must be
allocated to the respective States or Indian tribes under the
provisions of paragraphs (1) and (5) of section 402(g) and
section 411(h)(1).

* * * * * * *

SEC. 411. CERTIFICATION.

* * * * * * *

(h) Payments to States and Indian Tribes.--
(1) In general.--
(D) Use of funds.--

* * * * * * *

(ii) Uncertified states and indian
tribes.--A State or Indian tribe that
has not made a certification under
subsection (a) in which the Secretary
has concurred shall use any amounts
provided under this paragraph for the
purposes described in [section 403]
section 402(g)(6), 403, or 409.

* * * * * * *