[Senate Report 113-147]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 353
113th Congress                                                   Report
                                 SENATE
 2d Session                                                     113-147

======================================================================



 
                      THREE KIDS MINE REMEDIATION 
                          AND RECLAMATION ACT

                                _______
                                

                 April 8, 2014.--Ordered to be printed

                                _______
                                

        Ms. Landrieu, from the Committee on Energy and Natural 
                   Resources, submitted the following

                              R E P O R T

                        [To accompany H.R. 697]

    The Committee on Energy and Natural Resources, to which was 
referred the Act (H.R. 697) to provide for the conveyance of 
certain Federal land in Clark County, Nevada, for the 
environmental remediation and reclamation of the Three Kids 
Mine Project Site, and for other purposes, having considered 
the same, reports favorably thereon without amendment and 
recommends that the Act do pass.

                                PURPOSE

    The purpose of H.R. 697 is to provide for the conveyance of 
certain Federal land in Clark County, Nevada, for the 
environmental remediation and reclamation of the Three Kids 
Mine Project Site.

                          BACKGROUND AND NEED

    The Three Kids Mine site is a 1,262-acre abandoned 
manganese mine and mill site located in Henderson, Nevada. The 
mine operated from 1917 until 1961, and was originally 
developed during World War I for steel production for U.S. 
military use. At one time the Three Kids Mine was the largest 
manganese mine in Nevada. It was effectively abandoned in 1961, 
but did continue to serve as a storage site for U.S. manganese 
reserves until 2003. Approximately 314 acres of private land 
and 948 acres of land managed by the Bureau of Land Management 
(BLM) and the Bureau of Reclamation (BOR) comprise the site. 
The site is a public health and safety hazard, with three 
massive open mine pits, ruins from the milling facility, and 
toxic manganese tailings containing arsenic, lead, and diesel 
fuel. Because of the complicated pattern of land ownership and 
the large cost of cleaning up the site, the Federal government 
has been unable to initiate remediation and reclamation of the 
Three Kids Mine site.
    H.R. 697 would address this situation by requiring the 
Federal government to convey its portions of the site to the 
Henderson Redevelopment Agency for fair market value, after 
taking into consideration the costs of clean-up for the entire 
site. Upon conveyance, the United States would be released from 
liability for the contamination at the site. Conveyance of the 
land is contingent on the Secretary of the Interior receiving 
notification from the State of Nevada that a mine remediation 
and reclamation agreement has been executed by the State and 
the party to undertake the remediation and reclamation, 
including financial assurances to ensure completion of the 
remediation and reclamation. The legislation anticipates that a 
private developer will finance and complete the remediation of 
the site, subject to an agreement administered by the State of 
Nevada.

                          LEGISLATIVE HISTORY

    H.R. 697, sponsored by Representative Heck, passed the 
House of Representatives by voice vote on July 22, 2013. 
Senators Reid and Heller introduced similar legislation, S. 
343, on February 14, 2013. The Subcommittee on Public Lands, 
Forests, and Mining held a hearing on S. 343 on July 30, 2013 
(S. Hrg. 113-85). The Committee on Energy and Natural Resources 
ordered H.R. 697 favorably reported at its business meeting on 
November 21, 2013.
    In the 112th Congress, Senators Reid and Heller introduced 
similar legislation, S. 1492, on August 2, 2011. The 
Subcommittee on Public Lands and Forests held a hearing on S. 
1492 on March 22, 2012 (S. Hrg. 112-642).

                        COMMITTEE RECOMMENDATION

    The Senate Committee on Energy and Natural Resources, in 
open business session on November 21, 2013, by a voice vote of 
a quorum present, recommended that the Senate pass H.R. 697.

                      SECTION-BY-SECTION ANALYSIS

    Section 1 provides the short title, ``Three Kids Mine 
Remediation and Reclamation Act.''
    Section 2 provides key terms used in the bill and provides 
the location and scope of the Three Kids Mine Project Site.
    Section 3 (a) authorizes the Secretary of the Interior to 
convey all right, title, and interest of the approximately 948 
acres at the Three Kids Mine Project Site that are held by the 
United States government to the Henderson Redevelopment Agency.
    Subsection (b) sets the conditions of the conveyance 
between the U.S. government and the Henderson Redevelopment 
Agency.
    Paragraph (1) requires the Henderson Redevelopment Agency 
to pay fair market value for the Federal land and requires the 
BLM to determine this value by appraising the land and then 
reducing the appraised value by a reasonable estimate of 
remediation costs. Remediation costs are expected to exceed the 
appraised fair market value.
    Paragraph (2) requires the Secretary to receive 
notification that the State of Nevada has entered into an 
agreement with a private entity, and that agreement obligates 
the entity to complete the remediation and reclamation work 
necessary at the Three Kids Mine Project Site.
    Paragraph (3) establishes a 90-day window, after the State 
of Nevada enters into its remediation agreement, for the 
Henderson Redevelopment Agency to notify the Secretary of the 
Interior that it is prepared to accept the conveyance of the 
Federal land.
    Section 4 withdraws the Federal land from mining, leasing, 
and disposal upon the date of enactment of the Act.
    Section 5 adjusts the boundary of the River Mountains Area 
of Critical Environmental Concern to exclude the Three Kids 
Mine Project Site.
    Section 6 preserves the responsibilities for the 
remediation of the Three Kids Mine Project Site with the 
Secretary of the Interior--upon conveyance, and authorizes the 
Secretary of the Interior to enforce the remediation agreement 
between the State of Nevada and its contractor.
    Section 7 excludes the conveyance of the Federal land at 
the Three Kids Mine Project Site from the revenue distribution 
and sale procedures required under the Southern Nevada Public 
Land Management Act.

                   COST AND BUDGETARY CONSIDERATIONS

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

H.R. 697--Three Kids Mine Remediation and Reclamation Act

    H.R. 697 would require the Bureau of Land Management (BLM) 
to sell 950 acres of federal land, some of which are 
contaminated by hazardous waste, to the city of Henderson, 
Nevada. Under the act, the agency would determine the sale 
price by estimating the fair market value of the land and 
reducing that amount by the estimated cost of any necessary 
environmental remediation and mining reclamation activities at 
the site. The city of Henderson would be responsible for those 
costs following the sale. Based on information from BLM, CBO 
estimates that implementing the legislation would have no 
significant impact on the federal budget. Enacting H.R. 697 
would not affect direct spending or revenues; therefore, pay-
as-you-go procedures do not apply.
    Roughly 15 percent of the lands that would be sold under 
the act are contaminated and will require mine reclamation and 
environmental remediation. Based on information provided by BLM 
and the city of Henderson, CBO estimates that the agency is 
unlikely to receive any financial compensation for any of the 
land because remediation and reclamation costs would exceed the 
land's fair market value. Because CBO expects that the affected 
lands would not generate any receipts under current law over 
the next 10 years, we estimate that conveying the lands under 
the act would have no significant impact on the federal budget.
    H.R. 697 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    On June 20, 2013, CBO transmitted a cost estimate for H.R. 
697 as ordered reported by the House Committee on Natural 
Resources on June 12, 2013. The two versions of the legislation 
are similar, and the CBO cost estimates are the same.
    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 H.R. 697.
    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 H.R. 697, as ordered reported.

                   CONGRESSIONALLY DIRECTED SPENDING

    H.R. 697, 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 testimony provided by the Department of the Interior, 
on behalf of the Bureau of Land Management, on S. 343, the 
Senate companion measure to H.R. 697, at the July 30, 2013, 
Subcommittee on Public Lands, Forests, and Mining hearing 
follows:

    Statement of Ned Farquhar, Deputy Assistant Secretary, Land and 
            Minerals Management, Department of the Interior

    Thank you for the opportunity to testify on S. 343, the 
Three Kids Mine Remediation and Reclamation Act. Over the past 
several years, the Bureau of Land Management (BLM) has worked 
with the City of Henderson, Nevada, and other Nevada 
governmental entities in search of administrative remedies to 
redevelopment challenges at the abandoned Three Kids Mine. The 
Department of the Interior (Department) supports the goals of 
S. 343, which aims to provide legislated solutions to the 
issues surrounding the Three Kids Mine area and clears the way 
for its eventual redevelopment. However, the BLM would prefer 
that the Committee consider H.R. 697 as introduced, which the 
Department supported in testimony on March 21, 2013.


                               background


    The Three Kids Mine is an abandoned manganese mine and mill 
site on 314 acres of private land located along the south side 
of Lake Mead Drive, across the highway from Lake Las Vegas, in 
Henderson, Nevada. The mine and mill operated from 1917 through 
1961, in part providing steel-strengthening manganese to the 
defense industry and contributing to the United States' efforts 
in World War I and II. Federal manganese reserves were stored 
in the area from the late 1950s through 2003. Approximately 
five years ago, the City of Henderson and Lakemoor Canyon, LLC, 
approached the BLM with a plan for redevelopment of the area if 
the site could be remediated.
    S. 343 directs that 948 acres of public lands adjacent to 
the private site be conveyed to the Henderson Redevelopment 
Agency, bringing the total size of the redevelopment project 
area to 1,262 acres. Of the 948 acres of public lands, 146 
acres are contaminated and will require mine reclamation and 
environmental remediation. The most severe contamination 
appears to be on the 314 private acres where the mine and mill 
were located. No viable former operator or responsible party 
has been identified to remediate and reclaim the abandoned mine 
and mill site. Today, the site's deep open pits, large volumes 
of mine overburden and tailings, mill facility ruins, and solid 
waste disposal areas pose risks to public safety and to human 
health and the environment. The Nevada Division of 
Environmental Protection (NDEP) identified the Three Kids Mine 
site as a high priority for the implementation of a 
comprehensive environmental investigation, remediation, and 
reclamation program. Representatives of the BLM, the Bureau of 
Reclamation, and the Department of the Interior Solicitor's 
Office have worked with the City of Henderson and 
representatives of developer Lakemoor Canyon to find solutions 
to the complex challenges of remediating this site.


                                 s. 343


    S. 343 designates the combined 314 acres of private land 
and 948 acres of public land as the 1,262-acre ``Three Kids 
Mine Project Site'' and provides for the conveyance of the 
public lands to the Henderson Redevelopment Agency. The 
legislation provides that fair market value for the Federal 
lands to be conveyed should be determined through standard 
appraisal practices, and that, subsequent to the determination, 
the Secretary of the Interior (Secretary) should determine the 
``reasonable approximate estimation of the costs to assess, 
remediate, and reclaim the Three Kids Mine Project Site.'' The 
fair market value would be adjusted by deducting the cost 
estimate prepared by the Secretary. The Henderson Redevelopment 
Agency would pay the adjusted fair market value of the conveyed 
land to the United States, if any.
    The bill makes the conveyance of the land conditional upon 
the State of Nevada executing a mine remediation and 
reclamation agreement that obligates a party to perform the 
cleanup and which must be backed up by financial assurances. 
While the BLM has not established a range for the cost of 
cleanup, a proponent of the transaction estimated the cost of 
remediating the public and private lands at between $300 
million and $1.3 billion. While it is possible that the cost of 
remediating and reclaiming the entire project area might exceed 
the fair market value of the Federal land to be conveyed, the 
cost of the transaction will be known only after the Secretary 
completes the appraisal and remediation cost estimate process 
as outlined in the legislation.
    The Department supports innovative proposals to address the 
cleanup of the Three Kids Mine. We support the goals of S. 343, 
and prefer that the Committee consider H.R. 697 as introduced, 
which the Department supported in testimony on March 21, 2013.


                               conclusion


    Thank you for the opportunity to present testimony on S. 
343.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by H.R. 697, as ordered 
reported.

                                  
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