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[Senate Report 112-63]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 143
112th Congress                                                   Report
                                 SENATE
 1st Session                                                     112-63

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

 
                       ABANDONED MINE RECLAMATION

                                _______
                                

   August 30 (legislative day August 2), 2011.--Ordered to be printed

   Filed under authority of the order of the Senate of August 2, 2011

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 897]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 897) to amend the Mining Control and 
Reclamation Act of 1997 to clarify that uncertified States and 
Indian tribes have the authority to use certain payments for 
certain noncoal reclamation projects and acid mine remediation 
programs, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.

                                Purpose

    The purpose of S. 897 is to amend the Surface Mining 
Control and Reclamation Act of 1977 to clarify that uncertified 
States and Indian tribes have the authority to use certain 
payments for certain noncoal reclamation projects and for acid 
mine drainage set-aside programs.

                          Background and Need

    The Tax Relief and Health Care Act of 2006 (Pub. L. No. 
109-432) contained amendments to the Surface Mining Control and 
Reclamation Act (SMCRA; 30 U.S.C. 1201, et seq.) reauthorizing 
collection of an Abandoned Mine Land (AML) fee on coal produced 
in the United States and making certain modifications to the 
AML program. Under this program, which is administered by 
Office of Surface Mining Reclamation and Enforcement of the 
Department of the Interior, funds are expended to reclaim 
abandoned mine lands, with top priority for protecting public 
health, safety, general welfare, and property, and restoration 
of land and water resources adversely affected by past mining 
practices.
    The program is largely directed to abandoned coal mine 
reclamation, but under section 409 of SMCRA (30 U.S.C. 1239), 
funds have been available to address noncoal mine sites. A 
review of the legislative history of this provision and the 
long-standing administrative interpretation of section 409 
reveals that the section is intended to address ``noncoal mine 
reclamation'' on abandoned mine lands.
    In addition, section 402(g)(6) of SMCRA (30 U.S.C. 
1232(g)(6)) provides that States with approved abandoned mine 
land programs may receive and retain funds for deposit into an 
acid mine drainage and treatment fund for use in accordance 
with the paragraph without regard to a 3-year time limitation 
required by the Act. Section 405(k) makes this provision 
applicable to Indian tribes as well as to States.
    Pursuant to a Memorandum Opinion (M-37014), issued by the 
Department of the Interior's Solicitor on December 5, 2007, the 
Department has interpreted the amendments in a manner that 
limits the ability of States and Indian tribes to use certain 
funds (``unappropriated balance amounts'') provided to them 
under the AML program to address problems relating to noncoal 
abandoned mines. This same Memorandum Opinion limits the 
ability of States and Indian tribes to use unappropriated 
balance amounts under the AML program for deposit into an acid 
mine drainage abatement and treatment fund without respect to 
the time limitation on the use of the funds. Funds had been 
available for both of these purposes prior to the 2006 
amendments. In accordance with section 409 of SMCRA, western 
states such as New Mexico, Colorado, and Utah, have prioritized 
the use of AML funds to undertake the most pressing reclamation 
work on both coal and noncoal mine sites. While activities on 
noncoal sites have consumed a relatively insignificant portion 
of the funding provided for the overall AML program, the 
results in terms of public health and safety in these states is 
considerable and there is significant work yet to be done. 
Similarly, acid mine drainage continues to pose a significant 
problem, particularly in the Appalachian States where coal 
mining is prevalent.
    S. 897 would address this problem by giving uncertified 
States and Indian tribes flexibility to use unappropriated 
balance amounts paid to them pursuant to the 2006 amendments 
for noncoal reclamation. In addition, uncertified States and 
Indian tribes would have the flexibility to use such funds for 
deposit in an acid mine drainage abatement and treatment fund 
without respect to certain time limitations. The bill addresses 
those unexpended unappropriated balance amounts already paid to 
the States and Indian tribes pursuant to the 2006 amendments, 
as well as those to be paid pursuant to the 2006 amendments.

                          Legislative History

    S. 897 was introduced by Senator Bingaman on May 5, 2011, 
with four original co-sponsors, Senators Bennet, Lee, Udall of 
Colorado, and Udall of New Mexico. The bill is identical to S. 
2830, as ordered reported by the Committee during the 111th 
Congress (S. Rept. 111-264). That bill was not considered by 
the full Senate.
    The Subcommittee on Public Lands and Forests held a hearing 
on S. 897 on May 18, 2011 (S. Hg. 112-39). At its business 
meeting on July 14, 2011, the Committee on Energy and Natural 
Resources ordered S. 897 to be reported favorably without 
amendment. A companion measure, H.R. 785 was introduced in the 
House of Representatives on February 24, 2011, and referred to 
the Subcommittee on Energy and Mineral Resources of the House 
Natural Resources Committee.

                        Committee Recommendation

    The Committee on Energy and Natural Resources, in open 
business session on July 14, 2011, by a voice vote of a quorum 
present, recommends that the Senate pass S. 897.

                      Section-by-Section Analysis

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

                   Cost and Budgetary Considerations

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

S. 897--A bill to amend the Surface Mining Control and Reclamation Act 
        of 1977 to clarify that uncertified States and Indian tribes 
        have the authority to use certain payments for certain noncoal 
        reclamation projects and acid mine remediation programs

    CBO estimates that enacting S. 897 would have no net impact 
on the federal budget over the 2012-2021 period. Because 
enacting S. 897 could affect direct spending (increasing it in 
some years and decreasing it in others), pay-as-you-go 
procedures apply. Enacting the bill would not affect revenues. 
S. 897 contains no intergovernmental or private-sector mandates 
as defined in the Unfunded Mandates Reform Act and would impose 
no costs on state, local, or tribal governments.
    Each year, the Office of Surface Mining (OSM) provides more 
than $300 million in grants and payments to states and Indian 
tribes to reclaim land and water resources that have been 
degraded by past mining activities. Because such grants and 
payments are not subject to annual appropriations, they are 
considered direct spending. States and tribes that currently 
have backlogs of coal reclamation projects--so-called 
uncertified states--are obligated under current law to use a 
portion of those grants exclusively for certain coal projects.
    S. 897 would allow uncertified states and tribes to use 
those funds for other types of reclamation projects not related 
to coal mining. CBO expects that this change would increase 
direct spending--by up to $2 million a year--in the near term 
by accelerating spending of reclamation grants. However, that 
short-term increase would be offset by reduced spending in 
later years. On balance, CBO expects that implementing the 
legislation would result in no net change in direct spending 
over the 2012-2021 period.
    Under current law, once states and tribes certify that they 
have completed all outstanding coal reclamation projects, they 
become eligible for additional payments from OSM. Under S. 897, 
some states and tribes may substitute noncoal projects for coal 
projects in the near term and delay their certification status, 
which would delay certain payments that would increase direct 
spending under current law. Based on information from OSM and 
some of the affected states and tribes, CBO expects that no 
uncertified states will become certified over the next 10 
years, and CBO estimates that any delay in making payments to 
states that become certified would not affect direct spending 
over the 2012-2021 period.
    The Statutory Pay-As-You-Go Act of 2010 establishes budget-
reporting and enforcement procedures for legislation affecting 
direct spending or revenues. S. 897 would have no net effect on 
direct spending over the 2012-2021 period. The bill would 
increase direct spending from certain payments to states and 
tribes to reclaim abandoned mines in the near term, but those 
increases would be offset by decreased direct spending for 
those activities in later years. The changes in the deficit 
that are subject to pay-as-you-go procedures are shown in the 
following table.

  CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 897, A BILL TO AMEND THE SURFACE MINING CONTROL AND RECLAMATION ACT OF 1977 TO CLARIFY THAT UNCERTIFIED
   STATES AND INDIAN TRIBES HAVE THE AUTHORITY TO USE CERTAIN PAYMENTS FOR CERTAIN NONCOAL RECLAMATION PROJECTS AND ACID MINE REMEDIATION PROGRAMS, AS
                                    REPORTED BY THE SENATE COMMITTEE ON ENERGY AND NATURAL RESOURCES ON JULY 14, 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                             2011    2012     2013   2014    2015    2016    2017    2018    2019    2020    2021   2011-2016  2011-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT

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

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

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 897.
    The bill is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 897, as ordered reported.

                   Congressionally Directed Spending

    S. 897, as reported, does not contain any congressionally 
directed spending items, limited tax benefits, or limited 
tariff benefits as defined in rule XLIV of the Standing Rules 
of the Senate.

                        Executive Communications

    The views of the Administration were included in testimony 
received by the Committee at a hearing on S. 897 on May 18, 
2011, which is provided below.

Statement for the Office of Surface Mining Reclamation and Enforcement 
                       Department of the Interior

    Mister Chairman and Members of the Subcommittee, thank you 
for the invitation to testify on behalf of the Office of 
Surface Mining Reclamation and Enforcement (OSM) regarding S. 
897, a bill to amend the Surface Mining Control and Reclamation 
Act of 1977 (SMCRA). The OSM looks forward to working with you 
on matters relating to the Surface Mining Control and 
Reclamation Act of 1977 (SMCRA).
    S. 897 would allow noncertified states and tribes to use 
certain SMCRA payments for non-coal reclamation. While we 
recognize the importance of addressing hardrock mine hazards, 
we cannot support this bill because it is inconsistent with the 
President's FY 2012 Budget proposal to limit funding derived 
from the abandoned mine lands fee on coal production to the 
reclamation of coal sites that pose the most danger to public 
health and safety and/or damage to the environment.
    The FY 2012 President's Budget includes a proposal to focus 
AML funds on the critical coal reclamation sites in order to 
ensure that the most dangerous and environmentally damaging 
coal sites can be addressed before the AML fee expires in ten 
years. In addition to terminating unrestricted payments to 
certified states and tribes that have already cleaned up their 
abandoned coal mines, the proposal will competitively allocate 
funding for use on these hazardous and environmentally damaging 
coal reclamation projects. Recognizing the importance of 
addressing abandoned hardrock mines nationwide, additionally, 
the President's FY 2012 budget would build off these reforms to 
the coal AML program and create a parallel program for hardrock 
AML reclamation in order to address those sites. This proposal 
would ensure that the industries whose historic practices 
created abandoned mines bear the costs of addressing these 
hazards by paying a reclamation fee on production.

                               background

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

                                 s. 897

    Under SMCRA, noncertified states can use ``State share'' 
and ``historic coal'' funds for noncoal reclamation and deposit 
into state acid mine drainage set aside accounts, which are 
considered lower priority hazards associated with AML sites. S. 
897 would amend SMCRA to allow these states to also use their 
prior balance funds, which they receive under Section 
411(h)(1), for noncoal reclamation and for deposit into state 
acid mine drainage set-aside accounts. In other words, S. 897 
would allow prior balance replacement funds, which are now 
focused on the reclamation of coal sites in noncertified 
States, to be used for other purposes: namely, noncoal 
reclamation and deposit into State acid mine drainage set aside 
accounts.
    In an effort to focus the OSM's AML program on coal 
reclamation, the President's FY 2012 budget proposes to revise 
SMCRA to competitively allocate AML funds to ensure that the 
most dangerous and environmentally damaging coal AML sites are 
reclaimed before the reclamation fee terminates. Because S. 897 
is inconsistent with the Administration's goal of ensuring 
expeditious coal reclamation through the existing AML Fund, we 
cannot support this bill.
    We share this Subcommittee's interest in ensuring that 
abandoned hardrock mines also are addressed. In order to 
accomplish this goal, we support the creation of a parallel 
hardrock AML program, funded through a fee on hardrock 
production to fund the reclamation of hardrock mine sites 
nationwide, which the FY 2012 President's budget proposes.
    Currently, there is no hardrock reclamation fee similar to 
the one established by SMCRA to reclaim abandoned coal mine 
sites. This leaves States, Tribes, and Federal land managers to 
address these sites within their budgets or using other sources 
of funding, such as SMCRA's reclamation funds when possible. To 
hold each industry responsible for the actions of its 
predecessors, the President's FY 2012 budget proposes a new 
reclamation fee on hardrock production. Once the fee is 
established, OSM would be responsible for collecting this fee, 
based on its expertise in collecting the coal reclamation fee. 
The Department of the Interior's Bureau of Land Management 
would be responsible for allocating and distributing the 
receipts, using the proposed competitive allocation program.
    Thank you for the opportunity to appear before the 
Subcommittee today and testify on this bill. I look forward to 
working with the Subcommittee to ensure that the Nation's 
abandoned mine lands are adequately reclaimed.

                        Changes in Existing Law

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

           SURFACE MINING CONTROL AND RECLAMATION ACT OF 1977

                      Public Law 95-87, as amended

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

           *       *       *       *       *       *       *

TITLE IV--ABANDONED MINE RECLAMATION

           *       *       *       *       *       *       *

                            RECLAMATION FEE

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

           *       *       *       *       *       *       *

                   FILLING VOIDS AND SEALING TUNNELS

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

           *       *       *       *       *       *       *

    Sec. 411. Certification.

           *       *       *       *       *       *       *

    (h) Payments to States and Indian Tribes.--
          (1) In general.--

           *       *       *       *       *       *       *

                  (D) Use of funds.--

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

                                  
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