**Statement of**

**Michael Nedd, Assistant Director**

**Minerals, Realty and Resource Protection**

**Bureau of Land Management**

**Senate Committee on Energy and Natural Resources**

**Subcommittee on Public Lands and Forests**

**S. 2443, H.R. 2246, Reno ReTrac, Release of Reversionary Interest**

**July 9, 2008**

Thank you for inviting me to testify on S. 2443, a bill to release any
reversionary interest of the United States in and to certain lands
located in Reno, Nevada. During consideration of similar legislation on
October 23, 2007 before the House Natural Resources Committee,
Subcommittee on National Parks, Forests and Public Lands, we testified
that we believed the goals of the House bill could be accomplished in a
more simplified manner. The House-passed bill, H.R. 2246 and S.2443 are
identical bills that partially address our recommendations. The BLM
appreciates the work of the sponsors in crafting these bills and we
support S.2443 with a minor modification.

**[Background]{.underline}**

In the mid-19^th^ century, the Congress sought to encourage the
development of the West by providing incentives for transcontinental
railroads. Among those incentives was the Act of July 1, 1862,
authorizing a transcontinental railroad to be built by the Union Pacific
Railroad and Telegraph Company. As part of that authorization, the
railroad was granted a right-of-way across public lands. One small piece
of that right-of-way is addressed in S. 2443.

A portion of the Union Pacific rail line authorized under the 1862 Act
runs through downtown Reno, Nevada. As an active rail line, there was
increasing concern about safety and traffic flow issues. The city of
Reno found a creative solution in the form of the ReTrac (Reno
Transportation Rail Access Corridor) project, and in late 2005, the
first trains began to run on a 2-mile long, 54-foot wide, 33-foot deep,
train trench through downtown Reno. Unfortunately, there have been some
questions raised about whether the right-of-way given to the railroad
under the 1862 Act is affected by the subsurface nature of these two
miles of line. In addition, it is unclear whether the Federal government
retains a reversionary interest in the corridor.

**[S.2443]{.underline}**

S. 2443 would resolve these questions by releasing any reversionary
interest of the Federal government to lands granted to Union Pacific
under the Act of 1862 within the subsurface corridor. We would like the
opportunity to work with the sponsor and the committee on minor
modifications to the map so that the reversionary clause would only be
released on those lands within the subsurface corridor. We believe this
bill applies the correct approach to clarifying any potential land title
questions to this 2 mile subsurface railroad corridor.

Thank you for the opportunity to testify. I would be happy to answer any
questions.

**Statement of**

**Michael Nedd**

**Assistant Director, Minerals & Realty Management**

**Bureau of Land Management**

**S. 2875, Gray Wolf Livestock Loss Mitigation Act**

**Senate Committee on Energy & Natural Resources**

**Subcommittee on Public Lands and Forests**

**July 9, 2008**

Thank you for the opportunity to present the Administration's views on
S. 2875, the "Gray Wolf Livestock Loss Mitigation Act of 2008". For the
reasons outlined below, the Administration opposes this legislation.

**Background**

On February 27, 2008, the U.S. Fish and Wildlife Service (Service)
published a final rule to remove the gray wolf population in the
northern Rocky Mountains from the Federal list of threatened and
endangered species. In doing so, the Service announced that the wolf had
exceeded its numerical, distributional, and temporal recovery goals
every year since 2002, and that the States of Montana, Idaho, and
Wyoming had made strong commitments to maintain wolf populations well
above minimum recovery levels. The delisting was effective March 28,
2008.

Since the time of its reintroduction, wolf depredation of livestock has
been a concern among some landowners and grazing permittees. The
Service, Tribes, State fish and wildlife agencies in Montana, Idaho, and
Wyoming, and USDA Wildlife Services currently work together to
investigate and respond to reports of suspected wolf damage to
livestock. The States and Tribes have signed cooperative management
agreements with USDA Wildlife Services to assist them with wolf
management. The States also have laws to protect private property from
damage caused by wildlife that are similar to the Federal experimental
population regulations that were in effect while wolves were listed.
Under those laws, landowners and grazing permittees will be able to
shoot wolves attacking or molesting their domestic animals, just as they
now can shoot resident black bears or mountain lions that are seen
attacking or harassing their livestock.

Since 1987, a private group, the Defenders of Wildlife, has paid nearly
\$900,000 for livestock and herding and guarding animals killed by
wolves in the northern Rocky Mountains. However, it is uncertain if that
private compensation program will continue now that wolves are delisted.
Therefore, the States of Montana, Idaho, and Wyoming, as well as
adjacent states, anticipate that State-administered compensation
programs for wolf damage will complement or take the place of the
Defenders program after delisting.

**S. 2875**

The "Gray Wolf Livestock Loss Mitigation Act" authorizes the Secretary
of the Interior to provide grants to states and Indian tribes to pay a
share of the cost of programs to compensate livestock producers for
actions to reduce the risk of predation and for losses due to predation.
The bill sets out eligibility requirements, provisions for allocation of
funding, and provides for a maximum Federal cost share of 50 percent.

In our view, for predator compensation and damage mitigation to be
effective components of wildlife conservation strategies, such programs
must seek to accomplish specific goals that contribute to the overall
strategy. Further, incentives to private landowners must operate on
clear bases of fact and performance so as to maintain the credibility
and fairness of expenditures. The program proposed in S. 2875 falls
short of both these requirements and, because of its broad scope, it
could also be unacceptably expensive and difficult to implement. As wolf
management is now a matter for the State governments, whether and how to
use compensation programs to advance State management goals is most
appropriately for State governments to decide. We are concerned,
however, that the proposed program would privilege for Federal
cost-sharing purposes a particular approach, financial compensation for
damage, to a specific conservation issue, human-predator conflict,
regardless of the conservation priorities identified by the States.

Another of the Administration's major concerns with the legislation is
its broad scope, which would cover a wide range of predatory species and
livestock losses. The bill defines a "predatory species" as "gray
wolves, grizzly bear, and other predatory species, as determined by the
Secretary." Other predators that cause livestock damage could include
mountain lion, golden eagle, black bear, coyote, fox, and many types of
predatory birds. In the Northern Rocky Mountains of Montana, Wyoming,
and Idaho alone, the Service estimates that there are over 1,000 grizzly
bears, several thousand mountain lions and golden eagles, and tens of
thousands of black bear, coyotes, fox, and raptors. All of these animals
are capable of causing livestock losses due to predation, or
necessitating some type of preventative measure that reduces the risk of
livestock loss.

Because compensation programs generally require a rapid on-site
inspection and physical confirmation of the purported damage by
professional independent observers, such a broad program would result in
a significant workload for the agency administering the program. In
addition, the program would require Federal oversight and management of
some predatory species that are currently under state management, such
as mountain lions, black bear, and coyotes. In regard to its geographic
application, the bill refers specifically to Montana, Wyoming, and
Idaho, but indicates that it also applies to "other States and Indian
tribes as the Secretary determines." Because nearly every state contains
predators that cause livestock damage, the program outlined in S. 2875
would potentially have nationwide application.

Existing programs to compensate and mitigate for damage caused by
wildlife are varied and exceedingly complex. Although the Federal
government has worked with states, tribes, and non-governmental
organizations in order to conduct agency management activities to reduce
and mitigate the risk of damage to agriculture by wildlife, including
livestock loss due to wolf predation, it has never provided monetary
compensation for losses caused by wildlife.

Numerous state and private compensation and mitigation programs for
other types of wildlife damage (*i.e.,* in addition to wolves) already
exist in the United States. Damage caused by other predators such as
black bears, grizzly bears, mountain lions and wild ungulates is paid in
Wyoming and Idaho by State-run compensation programs. Other compensation
programs pay for agricultural damage caused by wildlife such as elk and
deer (the amount of damage by predators is typically much lower than
that caused by ungulates or migratory birds). Consideration should also
be given to whether creating additional programs to pay the public for
predator damage might increase expectations for compensation for damage
done by non-predatory wildlife as well, or might create incentives to
raise livestock in areas with predators. In addition, depending on the
scope of this bill, wildlife agencies in other states may have concerns
that a Federal compensation program for wildlife damage may compete for
limited state match funding and may negatively impact funding for higher
priority state wildlife conservation programs. It is our belief that
most states will not have the resources to participate in such a
program.

Finally, we note that the program contemplated by S. 2875 would support
activities that are within the authority of another Federal agency
rather than within the Service's core mission to work with others to
conserve, protect, and enhance fish, wildlife, and plants and their
habitats for the continuing benefit of the American people. Such a
program could duplicate activities and overlap with other Federal agency
programs.

Thank you for the opportunity to testify today. We would be happy to
answer any questions you might have.

**Statement of\
Michael Nedd, Assistant Director**

**Minerals, Realty and Resource Protection**

**Bureau of Land Management**

**Senate Committee on Energy and Natural Resources**

**Subcommittee on Public Lands and Forests**

**S. 2898, H.R. 816, Orchard Detention Basin Flood Control Act**

**July 9, 2008\
**

Mr. Chairman and members of the Subcommittee, thank you for the
opportunity to testify on S. 2898, the Orchard Detention Basin Flood
Control Act. S. 2898, which is substantively the same as the
House-passed bill, H.R. 816, would release approximately 65 acres of
public land within the Sunrise Mountain Instant Study Area (ISA) \[now
referred to as a wilderness study area under Section 603 of the Federal
Land Policy and Management Act (FLPMA)\]. The Sunrise Mountain ISA is
located on the east side of the Las Vegas Valley and within proximity to
Las Vegas. The BLM supports S. 2898, but would like to work with the
Committee on an amendment to the bill.

The Orchard Basin Detention Project would provide much-needed flood
control for the eastern portion of the Las Vegas Valley. The project is
intended to protect the fast-growing Las Vegas area from flooding due in
part to stormwater drainage. The BLM understands the needs of this
growing area and supports efforts to protect both the expansion of the
city and the natural surroundings of the Las Vegas area.

The Sunrise Mountain ISA includes 10,240 acres of BLM-managed land. The
ISA lacks wilderness characteristics; it is in a clearly unnatural
condition and does not offer outstanding opportunities for solitude or
primitive recreation. Sections of the ISA are affected by numerous
off-highway-vehicle routes and illegal trash dumping, and there are
remnants of a copper mining operation from the early 1900s. Furthermore,
a portion of the ISA's western section is adjacent to expanding land
development that increases the likelihood of further disturbances and
unauthorized uses of the lands. Releasing the ISA from wilderness study
status would provide the BLM with additional management tools for
managing human activities, such as mechanically removing litter and
fencing off areas to protect sensitive resource values. It would also
allow the BLM to address other vital management issues associated with
the long-standing human uses affecting this area. Among these issues is
the need for an additional storm water detention basin that is an
essential component of a remediation project for the Sunrise Landfill, a
hazardous waste site on the ISA's southeastern boundary. The proposed
detention basin would encroach several acres into the ISA.

The BLM recommends that S. 2898 be amended to release the entire ISA
(10,240 acres) from interim management of its wilderness values so that
the lands can be managed for other multiple uses and under existing
conservation agreements for the area.

Thank you for the opportunity to testify on S. 2898. We look forward to
working with the sponsors and the Committee on this piece of
legislation.

**Statement of**

**Michael Nedd**

**Assistant Director, Minerals & Realty Management**

**Bureau of Land Management**

**S. 3088, Oregon Badlands Wilderness Act of 2008**

**S. 3089, Spring Basin Wilderness Act of 2008**

**Senate Committee on Energy & Natural Resources**

**Subcommittee on Public Lands and Forests**

**July 9, 2008**

Thank you for inviting me to testify on S. 3088, the Oregon Badlands
Wilderness Act, and S. 3089, the Spring Basin Wilderness Act. Both of
these bills designate public lands in Oregon as wilderness and provide
for related land exchanges. The Bureau of Land Management (BLM)
generally supports the wilderness designations. We also support most of
the land exchanges, in principle, however we have several concerns. We
would like the opportunity to modify the lands identified for exchange.
We would also like the opportunity to work with the sponsor and the
Committee to make management and technical improvements to both bills.

In general, the Department of the Interior supports the efforts of
Congressional delegations to resolve wilderness issues in their states.
Congress has the sole authority to designate lands to be managed as
wilderness and we have repeatedly urged that these issues be addressed
legislatively.

The Department is concerned about ensuring that consideration is given
to energy potential when any legislative proposal for special
designation is considered. The BLM has reviewed the traditional and
renewable energy values of the areas proposed for designation, and has
determined that there is low or no potential for energy development in
the areas being designated. It is our understanding that there is
substantial local support for both of these proposed wilderness
designations. We support efforts to work together in the spirit of
cooperative conservation to solve local land use issues.

**[S. 3088, Oregon Badlands Wilderness Act]{.underline}**

The proposed Oregon Badlands Wilderness lies just 15 minutes east of the
outdoor recreation-oriented community of Bend, Oregon. A trip into the
Badlands area is an experience of ancient junipers and volcanic vistas.
Visitors can explore ribbons of volcanic pressure ridges or walk narrow
moat-like cracks in the ground. Windblown volcanic ash and eroded lava
make up the sandy, light-colored soil that contrasts sharply with fields
of lava. A variety of wildlife species inhabit the area including
yellow-bellied marmots, bobcat, mule deer, elk, and pronghorn. The
southern portion of the Badlands includes important winter range for
mule deer. Avian species of local interest include prairie falcons and
golden eagles.

S. 3088 proposes to designate nearly 30,000 acres of BLM-managed land as
wilderness, release approximately 100 acres from Wilderness Study Area
(WSA) status, and provide for two land exchanges which will add
additional high resource value private lands to the public land estate.

The Department generally supports the wilderness designation and release
in S. 3088 and would like to work with the sponsor and the Committee on
minor boundary adjustments and management language modifications as is
routine in such proposed designations. Among the boundary modifications
we would recommend are minor alterations to protect adjacent landowner
access and the exclusion of trailhead parking areas and trailheads from
the proposed wilderness.

We have serious concerns with section 5 of the bill which excludes from
the wilderness area a 25 feet corridor to accommodate the existing use
of the route for purposes relating to the training of sled dogs by
Rachael Scdoris. We applaud the efforts of Ms. Rachael Scdoris, a
visually-impaired sled dog musher living outside of Bend, Oregon, to
continue to train her sled dogs. It is our understanding that the
techniques she uses to train her dogs involve both motorized and
mechanized transport. The Wilderness Act of 1964 specifically prohibits
the use of both motorized and mechanized transport in designated
wilderness. If an exclusion from wilderness designation is going to be
made by Congress in this single case for Ms. Scdoris, we would like the
opportunity to work with the sponsor and the Committee to modify the
language of Section 5. We believe that greater specificity is necessary.

Section 7 provides for land exchanges between the BLM, a private party,
and the Central Oregon Irrigation District (COID). Section 206 of the
Federal Land Policy Management Act (FLPMA) provides the BLM with the
authority to undertake land exchanges that are in the public interest.
Exchanges allow the BLM to acquire environmentally-sensitive lands while
transferring public lands into private ownership for local needs and the
consolidation of scattered tracts. In principle, we generally support
the land exchanges envisioned by S. 3088, and we would like the
opportunity to work with the sponsor and the Committee to address
specific concerns.

The BLM supports the acquisition of the lands described in section 7(a)
(the land exchange with Ray Clarno of Redmond, Oregon) and 7(b) (the
land exchange with COID). Some of the lands to be acquired are within
the area proposed for designation of wilderness and others are within a
Wildlife Connectivity Corridor designated by the BLM in its 2005 Upper
Deschutes Resource Management Plan. The wildlife corridor provides
important connectivity habitat for pronghorn and other wildlife in the
area.

While the BLM could support the exchange out of Federal ownership of
some of the parcels identified by the legislation, many of these lands
provide important resource values, including wildlife and recreation
connectivity. There are alternative public lands within the general area
that the BLM has identified for disposal which may be more appropriate
for exchange. We would like the opportunity to work with the sponsor to
modify the land exchanges envisioned by the bill to address these
issues.

We would also like to work with the sponsor and the Committee to address
more technical issues related to the proposed exchanges, including an
extension of the current timeframe. Given the nature of the work to be
accomplished on the proposed exchanges, we anticipate that it would take
at least three years to complete the exchanges as they are currently
contemplated. We note that the legislation does provide for an equal
value exchange and standard appraisal provisions consistent with section
206 of FLPMA. We strongly support these provisions.

**[S. 3089, Spring Basin Wilderness Act]{.underline}**

The proposed Spring Basin wilderness area lies just to the east of the
Congressionally-designated John Day Wild & Scenic River in north central
Oregon. Numerous vista points give visitors sweeping views of the
beautiful John Day river valley. Rugged cliffs, remote canyons and
colorful geologic features give the area a unique beauty. Wildlife
species in the area include mule deer, golden eagles, prairie falcons,
bobcats, California quail, meadowlarks, and mountain bluebirds. A
destination for hunters, hikers, and nature lovers, the proposed Spring
Basin Wilderness would comprise nearly 8,700 acres if the exchanges
envisioned in the bill were completed.

S. 3089 would designate a total of approximately 8,661 acres as the
Spring Basin Wilderness, including the current 5,982-acre Spring Basin
WSA. It would also provide for a series of four land exchanges with
private landowners and the Confederated Tribes of the Warm Springs
Indian Reservation (CTWSIR). The proposed land exchanges include lands
that would be included within the proposed wilderness boundary. These
exchanges would add high resource value lands to Federal ownership along
the John Day Wild & Scenic River as well as other environmentally
sensitive lands.

The Department of the Interior generally supports the wilderness
designation in S. 3089 and would like to work with the sponsor and the
Committee on minor boundary adjustments and management language
modifications as is routine in such proposed designations. Among the
boundary modifications we would recommend are alterations to protect
public access to the wilderness area as well as traditional hunting
camps, current and future trailhead facilities and to provide for
manageable boundaries. In addition, a possible modification to the
CTWSIR exchange discussed below would result in further additions to the
wilderness.

One of the land exchanges provided for in the bill includes the exchange
of a small parcel of land out of Federal ownership that is currently
within the WSA. The legislation should be modified to include WSA
release language prior to exchange of these lands.

Section 4 provides for four land exchanges between the BLM, three
private parties, and the CTWSIR. Section 206 of the FLPMA provides the
BLM with the authority to undertake land exchanges that are in the
public interest. Exchanges allow the BLM to acquire
environmentally-sensitive lands while transferring public lands into
private ownership for local needs and the consolidation of scattered
tracts. In principle, we support the land exchanges envisioned by S.
3089; however we would like the opportunity to work with the sponsor and
the Committee to address specific concerns. We would note that there may
potentially be ongoing title issues regarding lands within the bed and
banks of the John Day River. These issues will need to be resolved
during the land exchange process.

Section 4(a) provides for the largest of the four exchanges, between the
CTWSIR and the BLM. This exchange would bring into Federal ownership a
large block of land proposed for inclusion within the wilderness as well
as additional tracts a few miles south of the proposed wilderness within
and adjacent to the John Day Wild & Scenic River boundary. Bringing
these additional parcels into public ownership would increase public
access to BLM-managed lands along the river for hunting and hiking
purposes and help to resolve ongoing inadvertent trespass issues on
CTWSIR lands. The exchange would also transfer out of Federal ownership
a number of parcels of BLM-managed land. These parcels are largely
scattered inholdings and the exchange would provide for improved
manageability for both the BLM and the CTWSIR.

The BLM in Oregon has been in discussions with the CTWSIR regarding land
exchange opportunities in this area which are more extensive than those
reflected in the legislation. We would like to work with the sponsor and
the Committee to more accurately reflect those discussions.

Section 4(b) provides for an exchange between H. Kelly McGreer of
Antelope, Oregon, and the BLM (McGreer Exchange). The lands proposed for
acquisition by the Federal government include Wild & Scenic river
frontage and a portion of Clarno East (a popular river access area with
continuing trespass issues), and we support bringing these lands into
Federal ownership.

The BLM supports the proposed exchange of lands out of Federal ownership
which are agricultural lands adjacent to lands owned by Mr. McGreer.
While we have not undertaken appraisals of the lands proposed for
exchange, we are concerned that the values of the lands proposed for
exchange under section 4(b) may not be relatively equal in value (as
required both by FLPMA and this legislation). We believe this exchange
may require substantial modification.

The proposed exchange under section 4(c) between the BLM and Bob Keys of
Portland (Keys exchange) provides for additions to the proposed
wilderness area and river frontage along the John Day Wild & Scenic
River, and we support their acquisition. We also largely support
exchanging out the Federal lands identified in this exchange except that
we would like to modify the proposal to insure continued non-motorized
public access to the Spring Basin Canyon trailhead in the southwestern
portion of the proposed wilderness. In addition, many of the lands
proposed for exchange out of Federal ownership are along roads that
would form the wilderness boundary. We wish to insure that the land
underlying the boundary roads remain in Federal ownership in order to
protect administrative access to the proposed wilderness.

Finally, section 4(d) provides for an exchange between the BLM and the
Bowerman Family Trust (Bowerman Land Exchange). The lands proposed for
acquisition by the Federal government include a small parcel within the
wilderness boundary and the remainder of the Clarno East launch point.
The parcel proposed for transfer out of Federal ownership is adjacent to
a large agricultural field owned by Bowerman. We support this exchange.

We would also like to work with the Committee and the sponsor to address
more technical issues related to the proposed exchanges including an
extension of the current timeframe. Given the nature of the work to be
accomplished on the proposed exchanges, we anticipate that it would take
at least three years to complete the exchanges as they are currently
contemplated. We note that the legislation does provide for an equal
value exchange and that the exchanges be carried out consistent with
section 206 of the FLPMA and we strongly support these provisions.

**[Conclusion]{.underline}**

While we believe that the land exchanges in both S. 3088 and S. 3089 are
generally in the public interest, work needs to be done to clarify
boundaries and appropriate parcels for exchange, and we would like the
opportunity to work with the Committee and the sponsor on these
exchanges before the bill moves to markup.

Thank you for the opportunity to testify. I will be happy to answer any
questions.

**Statement of**

**Michael Nedd**

**Assistant Director, Minerals & Realty Management**

**Bureau of Land Management**

**Senate Energy &Natural Resources Committee**

**Subcommittee on Public Lands and Forests**

**S. 3157, Southeast Arizona Land Exchange and Conservation Act**

**July 9, 2008**

Thank you for the opportunity to testify on S. 3157, the Southeast
Arizona Land Exchange and Conservation Act. The legislation provides for
the exchange of a 3,025-acre parcel of Forest Service-managed land in
exchange for a number of private parcels and funds to acquire additional
lands in the State of Arizona for management by the Forest Service and
the Bureau of Land Management. Three of the private parcels are
identified for transfer to the Secretary of the Interior. In general, we
defer to the United States Forest Service on those issues directly
related to Forest Service lands and associated valuation issues. We
support the principal goals of S. 3157, and we appreciate that a number
of changes have been made to the legislation in response to concerns
raised in previous testimony. However, we would like the opportunity to
continue to work with the sponsor and the Committee on a number of
additional modifications to the legislation.

It is our understanding that the intent of the legislation is to
facilitate an exchange of land with Resolution Copper Mining. Resolution
Copper has indicated its intention to explore the possibility of a very
deep copper mine near Superior, Arizona, and wishes to acquire the
3,025-acre Forest Service parcel overlying the copper deposit as well as
the subsurface rights.

The legislation provides for the exchange of a number of parcels of
private land to the Federal government. We note that while the bill
states that three of these parcels are to be conveyed to the Secretary
of the Interior, it is our understanding that the intention of the
sponsors is for the parcels to be under the administrative jurisdiction
of the Bureau of Land Management (BLM). The parcels identified are:

-   3,073 acres along the Lower San Pedro River near Mammoth, Arizona;

-   160 acres within the Dripping Springs area near Kearny, Arizona;
    and,

-   The 956 acre Appleton Ranch parcel adjacent to the Las Cienegas
    National Conservation Area near Sonoita, Arizona.

The lower San Pedro parcel is east of the town of Mammoth, Arizona, and
straddles the San Pedro River. The acquisition of these lands would
enhance a key migratory bird habitat along the San Pedro River, and we
would welcome them into BLM management. S. 3157 directs the BLM to
manage the lower San Pedro parcel as part of the existing San Pedro
Riparian National Conservation Area (NCA) designated by Public Law
100-696. The lower San Pedro parcel lies along the same riparian
corridor as the San Pedro NCA, but is at least 60 miles downstream
(north) of the existing NCA, and has substantially different resource
issues and needs. The BLM intends to manage these lands as a separate
unit of the existing NCA with its own management guidance. We understand
there is a collaborative effort of stakeholders currently underway with
which we would like to work in developing the direction for the
management of this area.

The legislation proposes to transfer 160 acres in the Dripping Springs
area northeast of Hayden to the BLM We would welcome the Dripping
Springs parcel into federal management. The parcel has important
resource values including sensitive Desert Tortoise habitat and allows
the BLM to acquire this small private inholding within a larger block of
federal lands. The BLM does not intend to manage these lands intensively
for rock climbing as envisioned by earlier versions of the legislation.

Finally, the bill provides for the transfer to the BLM of the 956 acre
Appleton Ranch parcel on the southern end of the Las Cienegas NCA. These
lands lie within the "Sonoita Valley Acquisition Planning District"
established by Public Law 106-538, which designated the Las Cienegas
NCA. That law directs the Department of the Interior to acquire lands
from willing sellers within the planning district for inclusion in the
NCA to further protect the important resource values for which the NCA
was designated. These lands enable wildlife to travel north through the
NCA and beyond, and federal management will seek to maintain this
function. We support this acquisition and would recommend that the
legislation be amended to make clear that these lands would become part
of the Las Cienegas NCA upon acquisition and managed under the
provisions of that Act.

Other issues requiring clarification include: timing of the exchange;
appraisal-related provisions; and, the equalization of values
provisions. Section 4(d) of the legislation requires that the exchange
be completed within one year. Based on our experience with exchanges, we
do not believe that this is sufficient time for the completion and
review of a mineral report, completion and review of the appraisals, and
final verification and preparation of title documents. Preparation of a
mineral report is a crucial first step toward an appraisal of the
Federal parcel because the report provides the foundation for an
appraisal where the land is underlain by a mineral deposit. Accordingly,
adequate information for the mineral report is essential. We recommend
adding a provision requiring Resolution Copper to provide confidential
access to the Secretaries of Agriculture and the Interior (and their
representatives) to all exploration and development data and company
analyses on the mineral deposits underlying the Federal land in order to
ensure an accurate appraisal.

We are concerned about the provisions of section 5(a)(3) regarding the
failure of the parties to agree on the value of any parcel. As written,
the bill would require that a dispute would be resolved through binding
arbitration procedures pursuant to section 206(d) of FLPMA. However,
section 206(d) is intended for discretionary exchanges. Accordingly, we
believe section 5(a)(3) of the bill should be amended to more
specifically address those options in section 206(d) of FLPMA that would
be applicable to this exchange. We would like to work with the
subcommittee and the bill's sponsor to amend section 5(a)(3)
accordingly.

S. 3157 includes a provision in Section 10 that would require a payment
to the United States should the cumulative production of locatable
minerals exceed the projected production used in the appraisal required
by section 5(a)(4)(B). This provision recognizes that an accurate
projection of future production will be difficult to develop, and
provides a mechanism for additional payments to the United States should
actual production exceed the projected production. The Administration
generally supports this approach but would like to work with the
committee to clarify the specific intent and implementation procedures,
as well as the disposition of receipts.

We object to the language in Section 10(b)(2) that makes funds from
potential mineral revenue payments available for expenditure without
further appropriation. This provision is meant to ensure that the
government is fairly compensated in the event that the valuation process
underestimates the amount of mineral resource that is ultimately
recovered, and we support this objective. However, the legislation
addresses the exchange of lands with mineral interests, the value of
which may not be fully realized until long after the exchange has taken
place. We would like to work with the committee to ensure that the bill
deposits the receipts into the Treasury, subject to future
appropriation.

Finally, we would like the opportunity to work with the sponsor and the
Committee on miscellaneous technical items including maps for the areas
to be exchanged, as well as clarifying several references within the
bill text. In the case of lands to be transferred to or from the
Secretary of the Interior, the maps should be completed by the BLM.

Thank you for the opportunity to testify. I will be happy to answer any
questions.

STATEMENT OF

BRENT WAHLQUIST, DIRECTOR

OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. DEPARTMENT OF THE INTERIOR

BEFORE THE

SENATE COMMITTEE ON ENERGY AND NATURAL RESOURCES

SUBCOMMITTEE ON PUBLIC LANDS AND FORESTS

ON S. 2779

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

JULY 9, 2008

Mr. Chairman and Distinguished Members of the Committee, thank you for
the opportunity to submit testimony on S. 2779, a bill to amend the
Surface Mining Control and Reclamation Act of 1977 (SMCRA), as amended.
This bill would authorize States and Indian tribes that have not
certified completion of their coal related abandoned mine land (AML)
problems to expend funds received under section 411(h)(1) on non-coal
related AML problems.

While this legislation would apply to all uncertified states, it is of
particular importance to three States (New Mexico, Colorado, and Utah)
that have traditionally spent a substantial portion of their AML funds
to address hazardous non-coal AML problems.

We recognize that many states have used AML funds to support a variety
of worthwhile goals in addition to reclamation of coal related health
and safety issues. One of SMCRA's objectives is to provide funding to
address these coal related issues. Accordingly, we are concerned that
the bill would ultimately delay coal-related health and safety
reclamation work that is a priority to ensuring the health and safety of
people who live in or near our Nation's historic coalfields. Therefore
the Administration cannot support the bill.

[Background]{.underline}

There are 21 uncertified States receiving grants under the abandoned
mine land (AML) program. Together, they have a recorded inventory of
over \$3.1 billion of high-priority, coal-related AML problems (those
representing health and safety hazards to the public) remaining to be
addressed. Each of these uncertified States is now receiving grants from
at least three sources. Two of these sources, State share funds (SMCRA
402(g)(1)) and historic coal share funds (SMCRA 402(g)(5)), have been
allocated to uncertified States since 1990. Historic coal share funds
are allocated only to those States that have remaining high-priority
coal problems in their inventory, while state share funds are allocated
to any state that has not certified completion of all remaining coal AML
problems even if it no longer has an inventory of high priority
problems.

Also, since 1990, funds from these two sources are the only funds that
may be used for non-coal reclamation by uncertified states. The 2006
amendments added Treasury payments (SMCRA 411(h)(1)), a third source,
for repayment of unappropriated State share balances (prior balance
replacement funds). However, these funds, which are paid out over seven
years beginning in FY 2008, must be used for coal-related AML problems.

In some cases, a fourth funding source is available. Before the 2006
amendments were passed, SMCRA authorized all uncertified States with
high-priority coal problems remaining to receive at least \$2 million
annually. The 2006 amendments raised that level to \$3 million over a
four year phase in period. When the sources of funding outlined above
total less than the minimum funding level, an amount necessary to reach
that threshold is granted from funds otherwise designated for the
Secretary of the Interior's (Secretary) use. Use of these funds is also
limited to addressing high priority coal AML problems.

Historically, New Mexico, Colorado, and Utah have spent about half of
their AML grants on non-coal problems. These three States received
approximately two-thirds of their fiscal year 2008 funding in prior
balance replacement funds.

It is important to note that the 2006 amendments provide enough State
share and historic coal share to allow each of these three States to
maintain their current non-coal programs at historic levels. As
mandatory funding under the 2006 amendments is fully phased in, these
states will have substantially more funding available for non-coal AML
work than they were spending on non-coal prior to the 2006 amendments.

[S. 2779]{.underline}

As introduced, S. 2779 would amend SMCRA to enable uncertified States to
use prior balance replacement funds to reclaim non-coal problems. Since
prior balance replacement funds are a major source of AML funding for
uncertified states through FY 2014, this will substantially increase
funds available for non-coal. However, since S. 2779 does not increase
overall funding available, any increase in expenditures by a State on
non-coal problems will mean a corresponding decrease in funds spent to
address coal related problems, thus delaying completion of high priority
coal AML work shown in that State's

inventory. This, in turn, would delay certification of completion of all
coal problems for States that would increase spending on non-coal as a
result of this bill.

[Certification of Completion of Coal Reclamation]{.underline}

Once a State certifies completion of its coal AML problems, it is no
longer eligible for AML funds. Instead, it receives payments from the
Treasury in an amount equal to what the State share would have been (as
well as any remaining prior balance replacement funds if certification
occurs prior to 2014). This foregone State share, along with the
historic share that state had been receiving, will be distributed as
historic coal share funds to the remaining uncertified States to clean
up high priority coal problems. Thus, the funding to states with
remaining high priority problems is increased each time another state
certifies. On the other hand, certified states have broad discretion and
very little accountability to OSM for how they use their grants, which
can certainly all be used for non-coal AML work.

In summary, while S.2779 will increase the funding available for
non-coal AML problems for uncertified states, it will cause a
corresponding delay in the completion of high priority coal AML problems
in those states which spend more on non-coal problems as a result of
this bill. Further, as states delay certification of completing their
remaining coal problems, it limits funding that would otherwise be
available to remaining uncertified states.