prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.

Report 1: Section 420 of the Robert T  Stafford Disaster Relief and Emergency Assistance Act ( P L  93-288 , hereinafter the Stafford Act) authorizes the President to "declare" a Fire Management Assistance Grant (FMAG)  The current FMAG system was established by regulation in October of 2001  These grants provide federal assistance for fire suppression activities  This authority has been delegated to the Federal Emergency Management Agency's (FEMA's) Regional Administrators  Once issued, the FMAG declaration authorizes various forms of federal assistance such as the provision of equipment, personnel, and grants to state, local, and tribal governments for the control, management, and mitigation of any fire on certain public or private forest land or grassland that might become a major disaster  This federal assistance requires a cost-sharing component such that state, local, and tribal governments are responsible for 25% of the expenses  This report discusses the most frequently asked questions received by the Congressional Research Service on FMAGs  It addresses questions regarding how FMAGs are requested, how requests are evaluated using thresholds, and the types of assistance provided under an FMAG declaration  FMAGs can be requested by a state when the governor determines that a fire is burning out of control and threatens to become a major disaster  At that point, a request for assistance can be submitted to FEMA  Typically, requests are submitted to the FEMA Regional Administrator  Requests can be submitted any time—day or night—and can be submitted by telephone to expedite the process  Telephone requests must be followed by written confirmation within 14 days of the phone request  Under the Sandy Recovery Improvement Act of 2013 (SRIA, Division B of P L  113-2 ), tribes are equivalent to states in their ability to request a major disaster declaration, an emergency declaration, or a request for an FMAG declaration  Note that some tribal land holdings are administered by the federal government and, therefore, receive fire suppression support through the National Interagency Fire Center (NIFC)  The NIFC supports interagency "wildland" firefighting efforts on federal lands by the U S  Forest Service, National Weather Service, National Park Service, Bureau of Indian Affairs (BIA), U S  Fish and Wildlife Service and FEMA's U S  Fire Administration  Unlike FMAGs, such support generally does not require tribes to reimburse firefighting costs (FMAGs require the state to pay a 25% cost-share)  In addition, tribes with their own fire suppression resources may receive reimbursement from BIA for their costs related to fire suppression on tribal lands  The FMAG request should include cost estimates to support the request as well as information about the fire including the size of the fire(s) in acres or square miles, the population of the community (or communities) threatened, the number of persons evacuated (if applicable), weather conditions, and the degree to which state and local resources are committed to this fire and other fires in federal, state, and/or local jurisdictions  The verbal request must be followed up with a completed "Request for Fire Management Assistance Declaration" (FEMA form 078-0-1) and the "Principal Advisor's Report" (FEMA form 078-0-2)  The following criteria are used to evaluate wildfires and make a determination whether to issue an FMAG: the threat to lives and property including critical facilities, infrastructures, and watershed areas; the availability of state and local fire resources; high fire danger conditions based on nationally accepted indices such as the National Fire Danger Ratings System; and the potential economic impacts of the fire  In addition, FEMA has developed fire cost thresholds that are typically updated on an annual basis  There are two types of fire cost thresholds used to help determine if a state or tribal nation is eligible for fire assistance: (1) individual thresholds for a single fire, and (2) cumulative thresholds for multiple fires  Cumulative thresholds are applied to multiple fires burning simultaneously, or the accumulation of multiple fires in a single fire season  Threshold amounts vary by state (see Table 1 )  Taking Pennsylvania as an example, generally, a single fire would need to meet or exceed $927,274 in damages for Pennsylvania to be eligible for an FMAG declaration  In contrast, the formula for the cumulative fire threshold for a given state is one of two amounts—$500,000 or the amount of that state's individual fire threshold multiplied by three, whichever is greater  Returning to the Pennsylvania example, the sum of three individual fire thresholds equals $2,781,822  Since that amount is larger than $500,000, cumulative fire damages in Pennsylvania must meet or exceed $2,781,822 to be eligible for assistance  In contrast, the individual fire threshold for Alaska is $100,000, but the cumulative threshold is $500,000, not the sum of three individual fire thresholds ($300,000)  If FEMA denies the request for assistance, the state has one opportunity to appeal the denial  The appeal must be submitted in writing to the Regional Administrator no later than 30 days from the date of the denial letter  The appeal should contain any additional information that strengthens the original request for assistance  The Regional Administrator will review the appeal, prepare a recommendation, and forward the appeal package to the FEMA Headquarters Office  The FEMA Headquarters Office will notify the state of its determination in writing within 90 days of receipt of the appeal (or receipt of additional requested information)  The state may request a time extension to submit the appeal  The request for an extension must be submitted in writing to the Regional Administrator no later than 30 days from the date of the denial letter  The request for an extension must include a justification for the need for an extension  The FEMA Headquarters Office will notify the state in writing whether the extension request is granted or denied  No, an emergency or major disaster can be declared after an FMAG declaration has been issued  However, the emergency or major disaster declaration must be initiated by a separate request for assistance by the state or tribal government  FMAGs are funded through FEMA's Disaster Relief Fund (DRF), the main account FEMA uses to provide disaster assistance  The DRF is a no-year account—unused funds from the previous fiscal year are carried over to the next fiscal year  Funds in the DRF fall into two categories  The first category is for disaster relief costs associated with major disasters under the Stafford Act  This category reflects the impact of the Budget Control Act ( P L  112-25 , BCA), which allows appropriations to cover the costs incurred as a result of major disasters to be paid through an "allowable adjustment" to the discretionary spending limits  The second category is colloquially known as "base funding " Base funding includes activities not tied to major disasters under the Stafford Act  Base funding is scored as discretionary spending that counts against the discretionary spending limits, whereas FMAGs are funded through the DRF's base funding category  The decision to issue a FMAG declaration is not contingent on the DRF balance  Similarly, FMAGs do not reduce the amount of funding available for major disasters  When the DRF balance was low in the past, FEMA used its "immediate needs funding" (INF) policy until supplemental appropriations were passed to replenish the DRF  Under INF, long-term projects (such as mitigation work) are put on hold and only activities deemed urgent are funded  FMAGs would most likely fall into the category of events with an "urgent" need  Under the INF policy, FEMA also delays interagency reimbursements, and recovers funds from previous years in order to stretch its available funds  As with many other Stafford Act disaster assistance grant programs (Public Assistance, Hazard Mitigation Grant assistance, Other Needs Assistance) the cost-share for FMAGs is based on a federal share of 75% of eligible expenses  The grantee (the state) and subgrantees (local communities) assume the remaining 25% of eligible costs  Under the FMAG process, FEMA reimburses grantees for eligible activities they have undertaken  The state application for specific grant funds must be submitted within 90 days after the FMAG is granted  That time frame permits the state to gather all information and supporting data on potentially eligible spending to include in their grant application package  The package must also stipulate that the fire cost threshold was met  Following submission of the grant application FEMA has 45 days to approve or deny the application  FMAG assistance is similar in some basic respects to other FEMA assistance  For example, FMAGs will not replicate or displace the work of other federal agencies, nor will FEMA pay straight-time salaries for public safety forces, though it will reimburse overtime expenses for the event  Other eligible expenses can include costs for equipment and supplies (less insurance proceeds); mobilization and demobilization; emergency work (evacuations and sheltering, police barricading and traffic control, arson investigation); prepositioning federal, out-of-state, and international resources for up to 21 days when approved by the FEMA Regional Administrator; personal comfort and safety items for firefighter health and safety; field camps and meals in lieu of per diem; and/or the mitigation, management, and control of declared fires burning on comingled federal land, when such costs are not reimbursable by another federal agency  Until recently, only major disaster declarations made statewide hazard mitigation grants available  Division D of P L  115-254 (Disaster Recovery Reform Act, hereinafter DRRA) amended the Stafford Act to make hazard mitigation available for FMAG declarations as well  Under Section 404 of the Stafford Act as amended by DRRA, mitigation grants from the Hazard Mitigation Grant Program (HMGP) are provided to states and tribes on a sliding scale based on the percentage of funds spent for FMAG assistance  For states and federally recognized tribes with a FEMA-approved Standard State or Tribal Mitigation Plan, the formula provides for up to 15% of the first $2 billion of estimated aggregate amounts of disaster assistance, up to 10% for amounts between $2 billion and $10 billion, and 7 5% for amounts between $10 billion and $35 333 billion  FEMA assistance through FMAGs is a direct relationship with the states to assist the state in fighting the fire on state lands  FMAGs are employed so a disaster declaration may not be necessary  The Forest Service and other federal agencies do provide other types of assistance related to wildfire management, such as postfire recovery assistance, or assistance planning and mitigating the potential risk from future wildfires  Most of these programs provide financial and technical assistance to state partners  In addition, other USDA agencies administer various other programs to provide disaster recovery assistance to nonfederal forest landowners, including the Emergency Forest Restoration Program and the Emergency Watershed Program  This depends on the type of assistance being provided by the Forest Service  FMAG assistance is not generally available in conjunction with emergency suppression assistance from the Forest Service, or any other federal agency engaged in suppression operations  FMAGs provide assistance for suppression operations on nonfederal lands, whereas suppression operations on federal lands are the responsibility of the federal agency with jurisdiction  Limited exceptions may occur for declared fires on lands in which the ownership is comingled federal and nonfederal, and the costs incurred by the eligible entity are not entitled to any other type of federal reimbursement  However, FMAGs may be provided in conjunction with other Forest Service assistance programs, such as any technical and financial assistance provided through the agency's state and volunteer fire assistance programs or state and private forestry office  FMAG and other federal assistance may potentially occur in conjunction when there is a cooperative agreement between federal, state, and other governmental or tribal partners to coordinate emergency wildfire protection and response activities  The cooperative agreement often delineates different geographic areas where the state government is responsible for initial suppression operations, regardless of land ownership, and vice versa, where the federal government may be responsible for providing suppression operations in lands under nonfederal ownership  The cooperative agreements (sometimes referred to as "fire compacts") specify how costs are to be apportioned among the partners, including provisions allowing for reimbursement, in accordance with applicable federal and state statutes  In the circumstance where a state (or other eligible entity) conducted suppression operations on federal land and the costs were not reimbursable, an FMAG may potentially be applied for and used to cover eligible costs  No, most fires that begin on federal land are the responsibility of the federal agency that owns or manages the land, and are not eligible to receive FMAG assistance  There are some exceptions, however  For example, FMAGs may be available to assist with declared fires that occur in areas with a mix of federal and nonfederal land, if the state has a responsibility for suppression activities under a cooperative agreement with the applicable federal agency, and those costs are not reimbursable under another federal statute 


Report 2: Coal accounted for 17 percent of energy production (30 percent of electricity production) in the United States in 2016  To generate this energy, approximately 730 million tons of coal were mined domestically in 2016, according to the U S  Energy Information Administration, approximately 40 percent of which was produced on federal lands  As of 2016, state regulatory authorities and OSMRE had received financial assurances associated with coal mines that had been permitted to disturb approximately 2 3 million acres, according to OSMRE data  Coal is mined in two different ways: surface mining and underground mining  In surface coal mining, before the underlying coal can be extracted, the land is cleared of forests and other vegetation and topsoil is removed and stored for later use  Explosives or other techniques are then used to break up the overlying solid rock, creating dislodged earth, rock, and other materials known as spoil  Surface coal mines can cover an area of many square miles  In underground coal mining, tunnels are dug to access coal that is too deep for surface mining methods  In some cases, underground coal mines are designed to leave sufficient coal in the mine to support the overlying surface, and in other cases, they are designed to extract higher quantities of coal that results in subsidence of the overlying surface as mining progresses  In addition to disturbing the land surface, coal mining can affect water quality, according to the Environmental Protection Agency, the National Academies, and others  For example, mining can increase sediments in rivers or streams, which may negatively affect aquatic species  Moreover, mining can expose minerals and heavy metals to air and water, leading to a condition known as acid mine drainage, which can lead to long-term water pollution and harm some fish and wildlife species  Mining can also lower the water table or change surface drainage patterns  The surface effects of coal mining in the United States are regulated under SMCRA, which also created OSMRE to administer the act  SMCRA allows an individual state or Indian tribe to develop its own program to implement the act if the Secretary of the Interior finds that the program is in accordance with federal law  A state with an approved program is said to have “primacy” for that program  To obtain primacy, a state or Indian tribe submits to the Secretary of the Interior for approval a program that demonstrates that the state or tribe has the capability of carrying out the requirements of SMCRA  The program must demonstrate that the state or Indian tribe has, among other things, a law that provides for the regulation of the surface effects of coal mining and reclamation in accordance with the requirements of SMCRA, and a regulatory authority with sufficient personnel and funding to do so  Of the 25 states and four Indian tribes that OSMRE identified as having active coal mining in 2017, 23 states had primacy, and OSMRE manages the coal program in 2 states and for the four Indian tribes  SMCRA requires a mine operator to obtain a permit before starting to mine  The permit process requires operators to submit plans describing the extent of proposed mining operations and how and on what timeline the mine sites will be reclaimed  In general, an operator must reclaim the land to a use it was capable of supporting before mining or to an alternative postmining land use that OSMRE or the state regulatory authority deems higher or better than the premining land use  In reclaiming the mine site, operators must comply with regulatory standards that govern, among other things, how the reclaimed area is regraded, replanting of the site, and the quality of water flowing from the site  Specifically: Operators are generally required to return mine sites to their approximate original contour unless the operator receives a variance from the regulatory authority  To return to this contour, the surface configuration achieved by backfilling and grading of the mined area must closely resemble the general surface configuration of the land before mining and blend into and complement the drainage pattern of the surrounding terrain, with all highwalls and spoil piles eliminated  Operators are required to demonstrate successful revegetation of the mine site for 5 years (in locations that receive more than 26 inches of rain annually) or 10 years (in drier areas)  States have requirements for what vegetation may be planted depending on the approved postmining land use  For example, West Virginia’s regulations call for sites with a postmining land use of forest land to be planted with at least 500 woody plants per acre  The state specifies that at least five species of trees be used, including at least three of the species being higher value hardwoods, such as oak, ash, or maple  SMCRA requires that financial assurances be sufficient to ensure reclamation compliant with water quality standards, including those established by the Environmental Protection Agency or the states under the Clean Water Act  SMCRA’s implementing regulations also contain additional water protection requirements  For example, the regulations require that all surface mining and reclamation activities be conducted to minimize disturbance of the hydrologic balance within the permit and adjacent areas and to prevent material damage to the hydrologic balance outside the permit area  The federal government also enacted SMCRA, in part, to implement an abandoned mine land program to promote the reclamation of mined areas left without adequate reclamation prior to 1977, when SMCRA was enacted, and that continue to substantially degrade the quality of the environment, prevent or damage the beneficial use of land or water resources, or endanger the health or safety of the public  Specifically, Congress found that a substantial number of acres of land throughout the United States had been disturbed by surface and underground coal mining on which little or no reclamation was conducted  Further, it found that the impacts from these unreclaimed lands imposed social and economic costs on residents in nearby areas as well as impaired environmental quality  Since the abandoned mine land program was created, approximately $3 9 billion has been spent to reclaim abandoned mine lands, and there is at least $10 2 billion in remaining reclamation costs for coal mines abandoned prior to 1977, as of September 30, 2017, according to OSMRE  SMCRA generally requires operators to submit a financial assurance in an amount sufficient to ensure that adequate funds will be available for OSMRE or the state regulatory authority to complete the reclamation if the operator does not do so  The amount of financial assurance required is determined by the regulatory authority—OSMRE or the state—and is based on its calculation of the estimated cost to complete the reclamation plan it approved as part of the mining permit  Financial assurance amounts can be adjusted as the size of the permit area or the projected cost of reclamation changes  SMCRA also authorizes states to enact an OSMRE-approved alternative bonding system as long as the alternative achieves the same objectives  One kind of alternative bonding system is known as a bond pool  Under this type of system, the operator may post a financial assurance for an amount determined by multiplying the number of acres in the permit area by a per-acre assessment  The per-acre assessment may vary depending on the site-specific characteristics of the planned mining operation and the operator’s history of compliance with state regulations  However, the per-acre bond amount may be less than the estimated cost of reclamation  To supplement the per-acre bond, the operator generally must pay a fee for each ton of mined coal and may also be required to pay other types of fees  These funds are pooled and can be used to reclaim sites that participants in the alternative bonding system do not reclaim  Under OSMRE regulations, all alternative bonding systems must provide a substantial economic incentive for the operator to comply with reclamation requirements and must ensure that the regulatory authority has adequate resources to complete the reclamation plan for any sites that may be in default at any time  OSMRE regulations implementing SMCRA recognize three major types of financial assurances: surety bonds, collateral bonds, and self-bonds  A surety bond is a bond in which the operator pays a surety company to guarantee the operator’s obligation to reclaim the mine site  If the operator does not reclaim the site, the surety company must pay the bond amount to the regulatory authority, or the regulatory authority may allow the surety company to perform the reclamation instead of paying the bond amount  Collateral bonds include cash; certificates of deposit; liens on real estate; letters of credit; federal, state, or municipal bonds; and investment-grade rated securities deposited directly with the regulatory authority  A self-bond is a bond in which the operator promises to pay reclamation costs itself  Self-bonds are available only to operators with a history of financial solvency and continuous operation  To remain qualified for self-bonding, operators must, among other requirements, do one of the following: have an “A” or higher bond rating, maintain a net worth of at least $10 million, or possess fixed assets in the United States of at least $20 million  In addition, the total amount of self-bonds any single operator can provide shall not exceed 25 percent of its tangible net worth in the United States  Primacy states have the discretion on whether to accept self-bonds  State regulatory authorities and OSMRE reported holding a total of approximately $10 2 billion in surety bonds, collateral bonds, and self- bonds as financial assurances for coal mine reclamation in 2017  Of the total amount of financial assurances, approximately 76 percent ($7 8 billion) were in the form of surety bonds, 12 percent ($1 2 billion) in collateral bonds, and 12 percent ($1 2 billion) in self-bonds (see fig  1)  Twenty-four states reported holding surety bonds, 20 states reported holding collateral bonds, and 8 states reported holding self-bonds (see table 1)  In addition, OSMRE officials identified 6 states—Indiana, Kentucky, Maryland, Ohio, Virginia, and West Virginia—that have also established alternative bonding systems, such as bond pools  In a state with a bond pool, the operator may generally post a financial assurance for less than the full estimated cost of reclamation; in addition, the operator must pay into a bond pool  The pooled funds can be used to supplement forfeited financial assurances to reclaim sites that operators participating in the bond pool do not reclaim  States and OSMRE reported that operators forfeited more than 450 financial assurances for reclaiming coal mines between July 2007 and June 2016, with 13 of the 25 states reporting at least one forfeiture  States and OSMRE reported that the amount of financial assurance forfeited was sufficient to cover the cost of required reclamation in about 52 percent of the cases and did not cover the cost of required reclamation in about 22 percent of the cases  In the remainder of the cases (26 percent), the state or OSMRE reported that it had not yet determined if the financial assurance amount covered the reclamation costs that it was intended to cover  State and OSMRE officials said that it can take many years to fully reclaim a site and that it may take time for them to identify the extent of reclamation needed and to determine if the amount of financial assurance forfeited was sufficient to cover reclamation costs  State and OSMRE officials said there were several reasons why the amount of financial assurance obtained might not be sufficient to cover reclamation costs  For example, officials said the amount of financial assurance might not be sufficient if an operator mined in a manner inconsistent with the approved mining plan upon which the amount of financial assurance was calculated or if mining activity resulted in water pollution that was not considered when the amount of financial assurance was calculated  In cases where the amount of financial assurance does not cover the cost of reclamation, the operator remains responsible for reclaiming the mine site  However, OSMRE officials said that in those cases where the operator may be experiencing financial difficulties, it might be difficult for the states or OSMRE to compel the operator to complete the reclamation or provide additional funds to do so without having the operator go out of business or into bankruptcy  If the operator does not reclaim the site, the regulatory authority must use the forfeited financial assurance to do so  If the forfeited funds are not adequate, the site may not be fully reclaimed unless the regulatory authority either successfully sues the operator for more funds or provides any additional funds needed for reclamation  One other source of funds states can use to reclaim forfeited mines is civil penalties that the United States government collects from operators that violate conditions of their mining permits  OSMRE obligated approximately $2 8 million in civil penalties from fiscal years 2012 through 2017 for states to use to perform reclamation in cases where the financial assurance was not sufficient, according to agency officials  OSMRE has taken steps—including periodically reviewing financial assurance amounts, inspecting mine sites, and reviewing state programs that implement SMCRA—to oversee financial assurances and aspects of the mining and reclamation process that can affect whether the amount of financial assurances obtained will cover the cost of required reclamation  SMCRA requires OSMRE or the primacy state regulatory authority to calculate the amount of financial assurance required for each mine and to adjust the amount when the area requiring bond coverage increases or decreases or when the cost of future reclamation changes  OSMRE officials and state regulatory authority officials from four of the six states we interviewed said they generally review the amount of financial assurance at least every 2 1/2 years or when the mining plan has been modified in a way that may affect the amount of financial assurance required  Such periodic reviews are in part to help ensure that OSMRE and state regulatory authorities continue to hold an amount sufficient to complete required reclamation as conditions change  These reviews can lead to OSMRE or the state regulatory authority changing the amount of financial assurance required for a mine  For example: A state regulatory authority official in Utah said that the regulatory authority reviewed an existing mine permit in 2014, which led to it recalculating the estimated cost of reclamation on the basis of current costs  The state regulatory authority requested that the operator provide a financial assurance to cover the difference (approximately $195,000), in addition to the $445,000 financial assurance already in place  However, the official said that the operator—which had stopped mining the site in 2012 and filed for bankruptcy in 2013—did not provide the additional financial assurance amount  As a result, in 2017 the state regulatory authority collected the financial assurance that was in place (i e , the operator forfeited its assurance)  The official said in December 2017 that the state regulatory authority is determining the steps it will take to reclaim the site and expects that the forfeited amount will be sufficient to cover reclamation costs  OSMRE officials said that the agency reviewed a permit for a mine on Navajo tribal lands and determined that it needed to ask the operator to provide an additional financial assurance in the amount of $5 7 million  The increase was due to inflation and to include certain costs, such as the cost of mobilizing equipment needed for reclamation, that had inadvertently been excluded from the earlier calculation of the financial assurance required  The officials said that the operator provided the additional financial assurance amount  State regulatory authority officials in Wyoming said they review financial assurance amounts annually, and in 2017 they reduced the financial assurance for one mine by almost $35 million because of a substantial decline in fuel costs and the mine’s ability to share the cost of needed reclamation equipment with a neighboring mine  SMCRA requires OSMRE to make an average of at least one complete inspection per calendar quarter and one partial inspection per month for each active permit for which it is the regulatory authority to ensure that mines are in compliance with SMCRA and federal regulations  Complete inspections cover all inspection elements in OSMRE’s directive, while partial inspections may instead focus on issues that most frequently result in violations or a specific topic identified for oversight, according to OSMRE officials  In addition, OSMRE’s directive instructs the agency to inspect a sample of mines annually in states that have primacy to monitor and evaluate approved state programs’ compliance with SMCRA  The total number of inspections OSMRE is directed to conduct in primacy states is based on the number of inspectable units in each state  Complete inspections are to be done on 33 percent of those sites selected for inspection  Overall, OSMRE completed more inspections in primacy states than directed each year for evaluation years 2013 through 2016, according to agency data  For example, in evaluation year 2016, OSMRE’s directive called for it to conduct 1,225 inspections and OSMRE completed 1,388  As part of a complete inspection, OSMRE confirms that the operator is following the mining and reclamation plans to assure that the amount of financial assurance in place is adequate, according to OSMRE officials  If a violation is identified during an inspection, SMCRA requires OSMRE to issue a ten-day notice to the state regulatory authority or an immediate cessation order to the operator  If the violation increases the estimated cost of reclamation (e g , if the operator disturbed more land than it was approved for) or an adequate financial assurance had not been collected, OSMRE or the state regulatory authority can request that the operator provide an additional financial assurance  For example: OSMRE issued a ten-day notice to the Pennsylvania regulatory authority in 2015 because a water treatment system for a mine in that state did not have a financial assurance  According to OSMRE officials, the state regulatory authority took appropriate action to resolve the situation by issuing an order for the operator to post a financial assurance within 7 days

ground_truth: Section 420 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-288, hereinafter the Stafford Act) authorizes the President to "declare" a Fire Management Assistance Grant (FMAG). In the interest of saving time, the authority to make the declaration has been delegated to the Federal Emergency Management Agency's (FEMA's) Regional Administrators. Once issued, the FMAG declaration authorizes various forms of federal fire suppression assistance such as the provision of equipment, personnel, and grants to state, local, and tribal governments for the control, management, and mitigation of any fire on certain public or private forest land or grassland that might become a major disaster. This federal assistance requires a cost-sharing component such that state, local, and tribal governments are responsible for 25% of the expenses. This report answers frequently asked questions about FMAGs. This report will be updated as events warrant.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.



Report 2:  During an inspection of a mine in Tennessee, a nonprimacy state, OSMRE determined that the operator had not correctly reclaimed a portion of the mine because the slope of the regraded area was too steep, according to an OSMRE official  For the reclamation work that would be needed to regrade that area, OSMRE determined that the operator needed to provide an additional financial assurance of $272,000  Under SMCRA, OSMRE is required to evaluate each primacy state’s coal program annually to ensure that it complies with SMCRA  SMCRA includes a requirement that the regulatory authority secure necessary financial assurances to assure the reclamation of each permitted mine site  While OSMRE’s directive on oversight of state and tribal regulatory programs does not instruct the agency to review state regulatory authority calculations of financial assurance amounts, it instructs OSMRE to focus on the state programs’ success in achieving the overall purposes of SMCRA  For example, OSMRE, in conducting its oversight, is to evaluate the states’ effectiveness in successfully reclaiming lands affected by mining and in avoiding negative effects outside of areas authorized for mining activities  If OSMRE’s review of a state program identifies an issue that could result in the state not effectively implementing, administering, enforcing, or maintaining all or any portion of its approved coal program, OSMRE can work with the state regulatory authority to develop an action plan to correct the issue  If a state regulatory authority does not take the necessary corrective action, OSMRE may begin the process of withdrawing approval for a part or all of the state’s primacy  In addition to annually evaluating state programs, OSMRE can conduct national or regional reviews on specific topics  For example, OSMRE conducted a national review in 2010 that examined how state regulatory authorities calculated the required amount of financial assurances for coal mine reclamation  The review examined financial assurance practices in 23 states and reported that on the basis of the sample of mining permits reviewed, OSMRE was unable to determine if the amount of financial assurances was adequate for at least one of the permits it reviewed in 10 of the 23 states  Among the potential issues OSMRE identified were errors in the methods state regulatory authorities used to calculate financial assurance amounts and insufficient information in the reclamation plan upon which to calculate reclamation costs  OSMRE has worked with the 10 state regulatory authorities to address the financial assurance issues identified in the 2010 review  For example, OSMRE’s review found that the regulatory authority in Pennsylvania did not secure sufficient financial assurances to complete reclamation plans, in part because amounts were not calculated based on the actual sizes of the areas excavated for mining  In August 2014, OSMRE and Pennsylvania’s regulatory authority agreed to an action plan to ensure that the financial assurances for all active and new permits would be calculated using the actual sizes of the excavated areas  According to an OSMRE official, as of February 2017, the state regulatory authority had recalculated the financial assurance amount for all mines and had secured the additional financial assurances needed from operators of all but two of the mines  State officials said in October 2017 that they were continuing to work to obtain the assurances required for the two mines  OSMRE’s 2010 review also found that financial assurances in Kentucky were not always sufficient to cover required reclamation costs, in part because the method Kentucky’s regulatory authority used to calculate financial assurance amounts did not factor in all costs, such as the cost of moving equipment to and from the reclamation site  In February 2011, OSMRE and Kentucky’s regulatory authority signed an action plan identifying steps needed to address the issues OSMRE had identified  However, in May 2012, OSMRE determined that the state regulatory authority’s proposed changes to its method for calculating financial assurance amounts was an improvement but would not result in the authority obtaining sufficient funds to cover required reclamation  As a result, OSMRE initiated the process of revoking Kentucky’s primacy for this aspect of its program  In response, Kentucky implemented regulations to increase the minimum financial assurance required  The regulations also required the state regulatory authority to evaluate financial assurance amounts every 2 years to determine whether they need to be increased, among other things  The state regulatory authority sent a set of program amendments to OSMRE designed to address the identified deficiencies, some of which OSMRE is currently reviewing  OSMRE and state regulatory authorities face a number of challenges in managing financial assurances for coal mine reclamation—including those related to self-bonding, unanticipated reclamation costs, and the financial stability of surety companies—according to federal and selected state regulatory authority officials, representatives from organizations associated with the mining and financial assurance industries, and representatives from environmental nongovernmental organizations whom we interviewed  Challenges facing OSMRE and state regulatory authorities related to self- bonding include the following: Not knowing the complete financial health of an operator  The information federal regulations require operators to provide to regulatory authorities may provide an incomplete picture of the financial health of an operator, according to some parties we interviewed  For example, the financial information that operators provide reflects their past financial health, which may not reflect the operators’ current financial position, according to OSMRE’s response to the 2016 petition seeking revisions to its self-bonding regulations  In addition, if an operator applying for a self-bond is a subsidiary of another company, the operator is not required by regulation to submit information on the financial health of its parent company  While the operator applying may have sufficient financial assets to qualify for self-bonding, if its parent company experiences financial difficulties, the operator’s assets may be drawn on to meet the parent’s obligations, which could worsen the financial health of the self-bonded operator  In addition, according to OSMRE officials, even if OSMRE or a state regulatory authority were to become aware that an operator’s parent company was at financial risk, it would be difficult for the agency to deny the operator’s request for a self-bond because eligibility is specific to the entity applying for the self-bond, according to regulations  OSMRE could change its self-bonding regulations to require more information, according to OSMRE officials  However, the financial relationships between parent and subsidiary companies have become increasingly complex, making it difficult to ascertain an operator’s financial health on the basis of information reported in company financial and accounting documents, according to officials  When OSMRE first approved its self-bonding regulations in 1983, it noted that it was attempting to provide rules that would allow self-bonding without necessitating regulatory authorities to employ financial experts to determine which companies should be allowed to self-bond  However, according to OSMRE officials, financial expertise is now often needed to evaluate the current complex financial structures of large coal companies, which was not envisioned when the regulations were developed  Difficulty in determining whether an operator qualifies for self- bonding  The regulatory authority in a given state may not be aware that an operator had self-bonded in other states, making it difficult for the agency to determine whether the operator qualifies for self- bonding, according to some parties we interviewed  Operators are only allowed to self-bond for up to 25 percent of their net worth in the United States, according to regulations  Regulatory authority decisions on accepting self-bonds generally focus on assessing activities occurring in a specific state, not nationwide, according to the Interstate Mining Compact Commission  As a result, the state regulatory authority or OSMRE may know whether an operator has applied for self-bonds in other states that if approved would exceed 25 percent of its net worth in total  Difficulty in replacing existing self-bonds with other assurances if needed  OSMRE and state regulatory authorities may find it difficult to get operators to replace existing self-bonds with another type of financial assurance when needed, according to some parties we interviewed  If an operator no longer qualifies for self-bonding (e g , if it has declared bankruptcy), federal regulations require it to either replace self-bonds with other types of financial assurances or stop mining and reclaim the site  In either case, however, some parties noted that such actions could lead to a worsening of the operator’s financial condition, which could make it less likely that the operator will successfully reclaim the site  Some parties we interviewed have noted that regulatory authorities may be reluctant to direct the operator to replace a self-bond with another type of financial assurance and may instead allow the operator to keep mining so that any generated revenue could help the operator reclaim the site  For example, in 2015 the Wyoming regulatory authority determined that an operator no longer qualified for self-bonding and ordered it to replace a $411 million self-bond  However, the operator entered into bankruptcy without having replaced the self-bond  In this case, the state regulatory authority determined that reclamation was more likely to occur if the operator continued mining and allowed the operator to do so without a valid financial assurance  The operator replaced its self-bond as a part of its bankruptcy settlement approximately 17 months after the state regulatory authority’s order to replace the self-bond, according to OSMRE officials  However, if a self-bonded operator were to enter bankruptcy and did not secure a financial assurance to replace the self-bond or complete the required reclamation, the state regulatory authority would have to work through the bankruptcy proceedings to obtain funds for reclamation, according to OSMRE’s preamble to its 1983 self-bonding regulations  As a result, the state may recover only some, or possibly none, of the funds promised through the self- bond, and the cost of reclamation could fall on taxpayers  Difficulty in managing the risk associated with self-bonding  The risk associated with self-bonding is greater now than when the practice was first authorized under SMCRA, according to some parties we interviewed  According to SMCRA, the purpose of financial assurances is to ensure that regulatory authorities have sufficient funds to complete required reclamation if the operator does not do so  While SMCRA allows self-bonding in certain circumstances, when OSMRE first approved its self-bonding regulations, the agency did so noting that at the time there were companies financially sound enough that the probability of bankruptcy was small  Furthermore, the regulations stated that the intent was to avoid, to the extent reasonably possible, the acceptance of a self-bond from a company that would enter bankruptcy  However, as previously mentioned, three of the largest coal companies in the United States declared bankruptcy in 2015 and 2016, and these companies held approximately $2 billion in self-bonds at the time, according to an OSMRE August 2016 policy advisory, making it a very different risk landscape than originally envisioned  Following these bankruptcies—and recognizing that the coal industry was likely to continue to face economic challenges for several more years— OSMRE initiated steps in 2016 to reexamine the role of self-bonding for coal mine reclamation  Specifically, as previously mentioned, OSMRE issued a policy advisory in August 2016 noting that given these circumstances, state regulatory authorities should exercise their discretion under SMCRA and not accept new or additional self-bonds for any permit until coal production and consumption market conditions reach equilibrium  OSMRE has reported that it is not likely for that to occur until at least 2021  OSMRE also announced in September 2016 that the agency planned to examine changes to its bonding regulations that would, among other things, help ensure that reclamation is completed if a self-bonded operator does not do so  However, following a review of department actions that could affect domestic energy production, Interior announced in October 2017 that it was reconsidering the need for and scope of potential changes to its bonding regulations  OSMRE officials said that they did not have a timeline for finalizing a decision on potential changes in its bonding regulations  In addition, OSMRE rescinded its August 2016 policy advisory that states take steps to assess whether operators currently using self-bonds can still quality to do so and that states not accept any new self-bonds  Similar issues involving bankruptcies of hardrock mining operators led the Bureau of Land Management to implement regulations in 2001 eliminating the use of self-bonding for hardrock mining  In doing so, the Bureau of Land Management determined that a self-bond is less secure than other types of financial assurances, especially in cases where commodity prices fluctuate  The agency also noted that operators that would otherwise be eligible to self-bond should not have a significant problem obtaining another type of financial assurance  In our previous work examining other types of environmental cleanup, we found that the financial risk to the government and the amount of oversight needed for self-bonds are relatively high compared to other forms of financial assurances  Furthermore, we also previously reviewed federal financial assurance requirements for coal mining, hardrock mining, onshore oil and gas extraction, and wind and solar energy production and found that of these activities coal mining is the only one where self-bonding was allowed  Because SMCRA explicitly allows states to decide whether to accept self-bonds, eliminating the risk that self-bonding poses to the federal government and states would require that SMCRA be amended  Unanticipated reclamation costs, such as those related to long-term treatment for water pollution, may arise late in a mine’s projected lifespan, and the operator may not have the financial means to cover the additional costs, according to OSMRE officials  Under SMCRA, OSMRE and state regulatory authorities are not to approve a permit for a coal mine if the regulatory authority expects the mine to result in long-term water pollution  As a result, since long-term water pollution is not anticipated to occur, the cost of addressing it would not be included in the initial financial assurance that the operator provides  If the regulatory authority later determines that long-term water treatment is needed, the regulatory authority must adjust the amount of financial assurance that the operator is required to provide  Some parties we interviewed have also noted that the costs and duration of long-term water treatment are not well defined and that surety bonds are not well-suited to provide assurance for such indefinite long-term costs  For example, according to the Interstate Mining Compact Commission, surety bonds are designed for shorter-term, defined obligations that have a high certainty for bond release following the completion of reclamation  To help address this challenge, some states have established, or allowed operators to establish, trust funds to help cover such unanticipated reclamation costs  For example, West Virginia established a fund, primarily supported through a tax on the amount of coal mined, to operate water treatment systems on forfeited sites  West Virginia’s regulatory authority is also working to evaluate permits for sites with water pollution to estimate water treatment costs within the state more precisely  Similarly, Pennsylvania allows operators to establish trust funds that are maintained by foundations and monitored by the state regulatory authority and are intended to ensure that there are sufficient funds to cover the costs of long-term water treatment, according to state regulatory authority officials  In addition, the OSMRE-run coal program in Tennessee allows trust funds for water treatment, in part because an assurance system that provides an income stream may be better suited to ensuring the treatment of long-term water pollution than conventional financial assurances, according to an OSMRE notice in the Federal Register  The utility of surety bonds in providing a financial assurance depends on the surety company’s ability to pay the amount pledged if the operator forfeits  OSMRE regulations require that a surety company be licensed to do business in the state where a mine is located  Some parties we interviewed noted that surety companies have declared bankruptcy or experienced financial difficulties in the past and could experience similar difficulties in the future  In addition, two states reported recent issues related to surety companies  For example, state regulatory authority officials in Alabama said that a surety company that had provided surety bonds totaling $760,000 for four mines in that state had gone bankrupt or was insolvent  As of May 2017, the state had collected only $127,000  Similarly, state regulatory authority officials in Alaska said that as of August 2017, the state had not collected any part of a forfeited $150,000 surety bond because the surety company had gone bankrupt  In our previous work examining other types of environmental cleanup, we have found that the financial risk to the government and the amount of oversight needed for surety bonds are relatively low to moderate compared to other forms of financial assurances  Billions have been spent to reclaim mines abandoned prior to the financial assurance requirements SMCRA put in place, and billions more remain  Under SMCRA, self-bonding is allowed for coal mine operators with a history of financial solvency and continuous operation—the only type of energy production or mineral extraction activity we have reviewed for which this is allowed  Bankruptcies of coal mine operators in 2015 and 2016 have highlighted risks that OSMRE and state regulatory authorities face in managing self-bonding—a risk that may be greater today than when self-bonding was first authorized under SMCRA  If a self-bonded operator were to enter bankruptcy and does not provide a different type of financial assurance or complete the required reclamation, the regulatory authority and the taxpayer potentially assume the risk of paying for the reclamation  Although OSMRE said it would examine changes to its self- bonding regulations following recent bankruptcies, Interior recently said that it is reconsidering the need to do so  Because SMCRA explicitly allows states to decide whether to accept self-bonds, eliminating the risk that self-bonding poses would require amending SMCRA  Until such a change is made, the government will remain potentially at financial risk for future reclamation costs resulting from coal mines with unsecured financial assurances  Congress should consider amending SMCRA to eliminate the use of self- bonding as a type of financial assurance for coal mine reclamation  (Matter for Consideration 1) We provided a draft of this report to the Department of the Interior for review and comment  Interior did not provide written comments on our findings and matter for congressional consideration  OSMRE provided technical comments in an e-mail, which we incorporated as appropriate  As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date  At that time, we will send copies to the appropriate congressional committees, the Secretary of the Interior, the Acting Director of OSMRE, and other interested parties  In addition, the report will be available at no charge on the GAO website at http://www gao gov  If you or your staff have any questions, please contact Anne-Marie Fennell at (202) 512-3841 or fennella@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  Major contributors to this report are listed in appendix II  We selected a nonprobability sample of states to examine the Office of Surface Mining Reclamation and Enforcement’s (OSMRE) oversight activities in more detail  We generally selected states that produced the most coal in 2015 but also selected states in order to achieve some variation in factors such as geographic location, the dominant type of coal mining conducted (e g , surface or underground mining), whether the state had primacy, and whether the state allowed self-bonding (see table 2)  In addition to the contact named above, Elizabeth Erdmann (Assistant Director), Antoinette Capaccio, Jonathan Dent, Cynthia Grant, Marya Link, Anne Rhodes-Kline, Sheryl Stein, Guiovany Venegas, and Jack Wang made key contributions to this report 
Report 2: 8%) more than projected for FY2018, again setting aside FY2018 supplemental appropriations  H R  6776 would have provided $2 59 billion (6 7%) more than S  3019 , largely due to the House Appropriations Committee recommending $3 35 billion more than its Senate counterpart for CBP's Border Security Assets and Infrastructure activity  P L  116-6 included $40 00 billion in net discretionary funding for the components funded in this title  The enacted annual appropriations were $1 59 billion (4 1%) more than requested, and $486 million (1 2%) more than the amount provided in FY2018  Setting aside FY2018 supplemental funding, FY2019 enacted net discretionary funding exceeded FY2018 levels by $1 55 billion (4 0%)  The total budgetary resources projected for components funded in this title were $47 82 billion, $704 million (1 5%) more than was formally requested by the Administration, and $1 75 billion (3 8%) more than was provided in FY2018, setting aside the FY2018 supplemental funding  Table 2 shows these comparisons in greater detail  Title III, Protection, Preparedness, Response, and Recovery, contains appropriations for the Cybersecurity and Infrastructure Security Agency (CISA), the Office of Health Affairs (OHA), and the Federal Emergency Management Agency (FEMA)  It is the second largest of the component-specific titles  For FY2018, these components received $7 22 billion in net discretionary appropriations and $7 37 billion in specially designated funding for disaster relief through the annual appropriations process  In addition to that annual funding, $58 23 billion was provided for FEMA in emergency supplemental appropriations in FY2018  Incorporating all these elements, the total net discretionary funding level for all Title III components was $72 61 billion for FY2018  The Trump Administration requested $6 19 billion in FY2019 net discretionary appropriations for components included in this title, and $6 65 billion in specially designated funding for disaster relief as part of a total net discretionary funding level for these components of $12 84 billion for FY2019  Setting aside the $58 23 billion in FY2018 supplemental appropriations, the appropriations request was $1 54 billion (10 7%) less than the amount provided for FY2018 in net discretionary funding  Senate Appropriations Committee-reported S  3109 included $13 54 billion in FY2019 net discretionary funding for the components funded in this title  This was $694 million (5 4%) more than requested by the Trump Administration and $847 million (5 9%) less than the amount provided for FY2018, setting aside supplemental funding  The total budgetary resources projected would be $718 million (3 8%) more than the Administration's request, but $1 29 billion (6 2%) less than projected for FY2018, setting aside supplemental funding  The Senate committee-reported bill included within these totals the requested disaster relief funding of $6 65 billion, and offset $228 million in its Federal Assistance appropriation from unobligated DRF balances  House Appropriations Committee-reported H R  6776 included $13 70 billion in FY2019 net discretionary funding for the components funded in this title  This was $861 million (6 7%) more than requested by the Trump Administration and $681 million (4 7%) less than the amount provided for FY2018, setting aside supplemental funding  The total budgetary resources projected would be $885 million (4 7%) more than the Administration's request, but $1 13 billion (5 4%) less than projected for FY2018, setting aside supplemental funding  The House committee-reported bill included within these totals the requested disaster relief funding of $6 65 billion  P L  116-6 included $18 27 billion in FY2019 net discretionary funding for the components funded in this title  The enacted discretionary funding level was $5 43 billion (42 3%) more than requested, and $3 89 billion (27 1%) more than the amount provided for FY2018, setting aside the historically high level of supplemental appropriations  The total budgetary resources projected for FY2019 was $5 46 billion (29 0%) more than was requested, and $3 44 billion (16 5%) more than was projected for FY2018, setting aside FY2018 supplemental funding  Table 3 shows these comparisons in greater detail  As some annually appropriated resources were provided for FEMA from outside Title III in FY2018, a separate line is included for FEMA showing a total for what is provided solely within Title III, then the non-Title III appropriation, followed by the total annual appropriation for FEMA  Title IV, Research and Development, Training, and Services, the second smallest of the component-specific titles, contains appropriations for the U S  Citizenship and Immigration Services (USCIS), the Federal Law Enforcement Training Center (FLETC), the Science and Technology Directorate (S&T), and the Domestic Nuclear Detection Office (DNDO)  In FY2018, these components received $1 57 billion in net discretionary funding, as part of a projected total budget of $5 92 billion  This included $10 million in supplemental appropriations for FLETC  The Trump Administration requested $1 53 billion in FY2019 net discretionary funding for components included in this title, as part of a total budget for these components of $6 11 billion for FY2018  The funding request was $36 million (2 3%) less than the amount provided for FY2018, setting aside supplemental appropriations, although the overall budget request was $201 million (3 3%) higher than the annual budget projected for FY2018 (again, setting aside supplemental funding)  This is due to changes in anticipated fee collections for USCIS and reorganization of most of the Office of Health Affairs and DNDO into the new CWMD component reflected in the request  Senate Appropriations Committee-reported S  3109 included $1 53 billion in net discretionary funding for components included in this title, as part of a projected total budget of $6 23 billion  This was $115 million (7 5%) more than requested, and $79 million (5 0%) less than the amount provided for FY2018, not including supplemental funding  The total budgetary resources projected under S  3109 would have been $115 million (1 9%) more than the Administration's request, and $316 million (5 3%) more than projected for FY2018, setting aside supplemental funding  House Appropriations Committee-reported H R  6776 included $1 64 billion in net discretionary funding for components included in this title, as part of a projected total budget of $6 21 billion  This was $97 million (6 3%) more than requested, and $60 million (3 9%) more than the amount provided for FY2018, not including supplemental funding  The total budgetary resources projected under H R  6776 would have been $97 million (1 6%) more than the Administration's request, and $297 million (5 0%) more than projected for FY2018, setting aside supplemental funding  P L  116-6 included $1 62 billion in FY2019 net discretionary funding for the components funded in this title  Enacted FY2019 appropriations were $199 million (3 3%) more than was requested by the Administration, and $163 million (10 4%) more than was provided in FY2018, setting aside FY2018 supplemental funding  Total budgetary resources projected for FY2019 are $199 million (3 3%) more than were requested by the Administration, and $400 million (6 8%) more than was projected for FY2018, setting aside FY2018 supplemental funding  Table 4 shows these comparisons in greater detail  As noted above, the fifth title of the FY2019 DHS appropriations act contains general provisions, the impact of which may reach across the entire department, affect multiple components, or focus on a single activity  Rescissions of prior-year appropriations—cancellations of budget authority that reduce the net funding level in the bill—are found in this title  For FY2018, Division F of P L  115-141 included $489 million in rescissions  For FY2019, the Administration proposed rescinding $300 million in prior-year funding from the DRF  S  3109 included $137 million in rescissions from other appropriations, but specifically directed the $300 million the Administration had proposed rescinding from the DRF to other activities within DHS  H R  6776 did not include any rescissions, although an amendment from Representative Palazzo was passed in full committee markup on a voice vote redirecting unobligated balances from the Science and Technology Directorate to the Coast Guard  Division A of P L  116-6 included $303 million in rescissions, and a provision directing that $300 million of DRF unobligated balances be used to offset new DRF appropriations  In FY2018, funding was also included in Title V for the Financial Systems Modernization initiative and a grant program for Presidential Residence Protection costs, which are reflected in the tables for Title I and Title III, respectively, as those titles fund the components that manage these resources  For FY2019, Title V of S  3109 only funded the Financial Systems Modernization initiative, and Title V of H R  6776 only funded Presidential Residence Protection costs  Title V of P L  116-6 , Division A, included funding for both the Financial Systems Modernization initiative and Presidential Residence Protection costs  The detail table in the back of H Rept  115-948 also notes the discretionary cost of several policy changes in H R  6776   Four amendments adopted in House Appropriations Committee markup resulted in a net $13 million increase in the score of the bill, which is reflected in the detail table, but not in the tables of this report  No such costs are reflected in the detail table of H Rept  116-9   For additional perspectives on FY2019 DHS appropriations, see the following: CRS Report R44604, Trends in the Timing and Size of DHS Appropriations: In Brief ; CRS Report R44052, DHS Budget v  DHS Appropriations: Fact Sheet ; and CRS Report R45262, Comparing DHS Component Funding, FY2019: In Brief   Congressional clients also may wish to consult CRS's experts directly  The following table lists CRS analysts and specialists who have expertise in policy areas linked to DHS appropriations  Budget Authority, Obligations, and Outlays Federal government spending involves a multistep process that begins with the enactment of budget authority by Congress  Federal agencies then obligate funds from enacted budget authority to pay for their activities  Finally, payments are made to liquidate those obligations; the actual payment amounts are reflected in the budget as outlays  Budget authority is established through appropriations acts or direct spending legislation and determines the amounts that are available for federal agencies to spend  The Antideficiency Act prohibits federal agencies from obligating more funds than the budget authority enacted by Congress  Budget authority also may be indefinite in amount, as when Congress enacts language providing "such sums as may be necessary" to complete a project or purpose  Budget authority may be available on a one-year, multiyear, or no-year basis  One-year budget authority is available for obligation only during a specific fiscal year; any unobligated funds at the end of that year are no longer available for spending  Multiyear budget authority specifies a range of time during which funds may be obligated for spending, and no-year budget authority is available for obligation for an indefinite period of time  Obligations are incurred when federal agencies employ personnel, enter into contracts, receive services, and engage in similar transactions in a given fiscal year—which create a legal requirement for the government to pay  Outlays are the funds that are actually spent during the fiscal year  Because multiyear and no-year budget authorities may be obligated over a number of years, outlays do not always match the budget authority enacted in a given year  Additionally, budget authority may be obligated in one fiscal year but spent in a future fiscal year, especially with certain contracts  In sum, budget authority allows federal agencies to incur obligations and authorizes payments, or outlays, to be made from the Treasury  Discretionary funded agencies and programs, and appropriated entitlement programs, are funded each year in appropriations acts  Discretionary and Mandatory Spending Gross budget authority , or the total funds available for spending by a federal agency, may be composed of discretionary and mandatory spending  Discretionary spending is not mandated by existing law and is thus appropriated yearly by Congress through appropriations acts  The Budget Enforcement Act of 1990 defines discretionary appropriations as budget authority provided in annual appropriations acts and the outlays derived from that authority, but it excludes appropriations for entitlements  Mandatory spending , also known as direct spending , consists of budget authority and resulting outlays provided in laws other than appropriations acts and is typically not appropriated each year  Some mandatory entitlement programs, however, must be appropriated each year and are included in appropriations acts  Within DHS, Coast Guard retirement pay is an example of appropriated mandatory spending  Offsetting Collections Offsetting funds are collected by the federal government, either from government accounts or the public, as part of a business-type transaction such as collection of a fee  These funds are not considered federal revenue  Instead, they are counted as negative outlays  DHS net discretionary budget authority , or the total funds appropriated by Congress each year, is composed of discretionary spending minus any fee or fund collections that offset discretionary spending  Some collections offset a portion of an agency's discretionary budget authority  Other collections offset an agency's mandatory spending  These mandatory spending elements are typically entitlement programs under which individuals, businesses, or units of government that meet the requirements or qualifications established by law are entitled to receive certain payments if they establish eligibility  The DHS budget features two mandatory entitlement programs: the Secret Service and the Coast Guard retired pay accounts (pensions)  Some entitlements are funded by permanent appropriations, and others are funded by annual appropriations  Secret Service retirement pay is a permanent appropriation and, as such, is not annually appropriated  In contrast, Coast Guard retirement pay is annually appropriated  In addition to these entitlements, the DHS budget contains offsetting Trust and Public Enterprise Funds  These funds are not appropriated by Congress  They are available for obligation and included in the President's budget to calculate the gross budget authority  302(a) and 302(b) Allocations In general practice, the maximum budget authority for annual appropriations (including DHS) is determined through a two-stage congressional budget process  In the first stage, Congress sets overall spending totals in the annual concurrent resolution on the budget  Subsequently, these totals are allocated among the appropriations committees, usually through the statement of managers for the conference report on the budget resolution  These amounts are known as the 302(a) allocations   They include discretionary totals available to the House and Senate Committees on Appropriations for enactment in annual appropriations bills through the subcommittees responsible for the development of the bills  In the second stage of the process, the appropriations committees allocate the 302(a) discretionary funds among their subcommittees for each of the appropriations bills  These amounts are known as the 302(b) allocations   These allocations must add up to no more than the 302(a) discretionary allocation and form the basis for enforcing budget discipline, since any bill reported with a total above the ceiling is subject to a point of order  The 302(b) allocations may be adjusted during the year by the respective appropriations committee issuing a report delineating the revised suballocations as the various appropriations bills progress toward final enactment  No subcommittee allocations are developed for conference reports or enacted appropriations bills  Table A-1 shows comparable figures for the 302(b) allocation for FY2018, based on the adjusted net discretionary budget authority included in Division F of P L  115-141 , the President's request for FY2019, and the House and Senate subcommittee allocations for the Homeland Security appropriations bills for FY2019  The Budget Control Act, Discretionary Spending Caps, and Adjustments The Budget Control Act established enforceable discretionary limits, or caps, for defense and nondefense spending for each fiscal year from FY2012 through FY2021  Subsequent legislation, including the Bipartisan Budget Act of 2013, amended those caps  Most of the budget for DHS is considered nondefense spending  In addition, the Budget Control Act allows for adjustments that would raise the statutory caps to cover funding for overseas contingency operations/Global War on Terror, emergency spending, and, to a limited extent, disaster relief and appropriations for continuing disability reviews and control of health care fraud and abuse  Three of the four justifications outlined in the Budget Control Act for adjusting the caps on discretionary budget authority have played a role in DHS's appropriations process  Two of these—emergency spending and overseas contingency operations/Global War on Terror—are not limited  The third justification—disaster relief—is limited  Under the Budget Control Act, the allowable adjustment for disaster relief was determined by the Office of Management and Budget (OMB), using the following formula until FY2019: Limit on disaster relief cap adjustment for the fiscal year = Rolling average of the disaster relief spending over the last ten fiscal years (throwing out the high and low years) + the unused amount of the potential adjustment for disaster relief from the previous fiscal year  The Bipartisan Budget Act of 2018 amended the above formula, increasing the allowable size of the adjustment by adding 5% of the amount of emergency-designated funding for major disasters under the Stafford Act, calculated by OMB as $6 296 billion  The act also extended the availability of unused adjustment capacity  In August 2018, OMB released a sequestration update report for FY2019 that provided a preview estimate of the allowable adjustment for FY2019 of $14 965 billion —the second-largest allowable adjustment for disaster relief in the history of the mechanism  $12 billion of that adjustment was exercised in P L  116-6 , Division A, in appropriations for the Disaster Relief Fund  No other annual appropriations used the disaster relief adjustment for FY2019  

ground_truth: Coal accounts for 17 percent of domestic energy production. SMCRA requires coal mine operators to reclaim lands that were disturbed during mining and to submit a financial assurance in an amount sufficient to ensure that adequate funds will be available to complete reclamation if the operator does not do so. Recent coal company bankruptcies have drawn attention to whether financial assurances obtained by OSMRE and state agencies will be adequate to reclaim land once coal mining operations have ceased. GAO was asked to review management of financial assurances for coal mine reclamation. This report describes, among other things, the amounts and types of financial assurances held for coal mine reclamation in 2017 and the challenges that OSMRE and state agencies face in managing these financial assurances. GAO collected and analyzed data from OSMRE and 23 state agencies; reviewed federal laws, regulations, and directives; and interviewed OSMRE and state agency officials and representatives from organizations associated with the mining and financial assurance industries and environmental organizations. State agencies and the Department of the Interior's Office of Surface Mining Reclamation and Enforcement (OSMRE) reported holding approximately $10.2 billion in surety bonds (guaranteed by a third party), collateral bonds (guaranteed by a tangible asset, such as a certificate of deposit), and self-bonds (guaranteed on the basis of a coal operator's own finances) as financial assurances for coal mine reclamation. OSMRE and state agencies face several challenges in managing financial assurances, according to the stakeholders GAO interviewed. Specifically, Obtaining additional financial assurances from operators for unanticipated reclamation costs, such as long-term treatment for water pollution, can be difficult. Determining the financial stability of surety companies has been challenging in certain instances. Self-bonding presents a risk to the government because it is difficult to (1) ascertain the financial health of an operator, (2) determine whether the operator qualifies for self-bonding, and (3) obtain a replacement for existing self-bonds when an operator no longer qualifies. In addition, some stakeholders said that the risk from self-bonding is greater now than when the practice was first authorized under the Surface Mining Control and Reclamation Act (SMCRA). GAO's previous work examining environmental cleanup found that the financial risk to government and the amount of oversight needed for self-bonds are relatively high compared to other forms of financial assurances. GAO also previously reviewed federal financial assurance requirements for various energy and mineral extraction sectors and found that coal mining is the only one where self-bonding was allowed. However, because SMCRA explicitly allows states to decide whether to accept self-bonds, eliminating the risk that self-bonds pose to the federal government and states would require SMCRA be amended. GAO recommends that Congress consider amending SMCRA to eliminate self-bonding. Interior neither agreed nor disagreed with GAO's recommendation.