May 15, 1995 CONGRESSIONAL RECORD — HOUSE H 4919

which was in the Star Ledger, New Jersey’s largest circulation daily, on

Thursday, May 11. It says:

The Republicans have offered a budget resolution that does it all, reduces the deficit,

balances the budget, and saves Medicare

from bankruptcy—a piece of work crafted of

smoke and mirrors. The only thing they do

not tell you is how to cut $256 billion from

Medicare and $175 from Medicaid, or who is

going to get hurt if and when the cuts are

made.

You cannot make up that kind of money

by switching everybody in Medicare and

Medicaid to managed care insurance.

You cannot make it up by cutting fees to

doctors and hospitals, unless you want to see

the old and the poor turned away.

Medicare is getting all the attention because it is the program for the elderly, a

stronger political lobby than people on Medicaid, the program for the poor.

No one bothers to mention that Medicaid

clients are mainly women and their children,

or that the biggest bite from that budget

provides the only hope most of us will have

of keeping our mothers and fathers in nursing homes without our families going bankrupt.

Many of the same Republicans who ranted

last year that a national health care program would result in health care rationing

are among the crowd now calling for the

kind of budget cuts which could very well

mean rationing for the elderly and the poor.

Shows what a difference a year and an election can make.

Mr. Speaker, I include this whole editorial for the RECORD:

[From the Star-Ledger, May 11, 1995]

MEDICARE’S CUTTING EDGE

Why did Willie Sutton rob banks? Because

that’s where the money is, he said.

Why are Medicare and Medicaid scheduled

to take the biggest blow in the budget cutting proposed by congressional Republicans?

Same reason. Same crime.

The Republicans have offered a budget resolution that does it all, reduces the deficit,

balances the budget and saves Medicare from

bankruptcy—a piece of work crafted of

smoke and mirrors. All you have to do is

trim a bit from this, a bit from that and a

whole bunch from Medicare and Medicaid

over the next few years and voila!

The only thing they don’t tell you is how

to cut $256 billion from Medicare and $175 billion from Medicaid or who is going to get

hurt if and when the cuts are made.

You cannot make up that kind of money

by switching everybody in Medicare and

Medicaid to managed care insurance. The

best managed care plans are not holding

health care increases down to the point that

would have to be matched in order to reap

the savings the Republican budget resolution

promises.

You cannot make it up by cutting fees to

doctors and hospitals, unless you want to see

the old and the poor turned away.

Medicare is getting all the attention because it is the program for the elderly, a

stronger political lobby than people on Medicaid, the program for the poor.

No one bothers to mention that Medicaid

clients are mainly women and their children

or that the biggest bite from that budget

provides the only hope most of us will have

of keeping our mothers and fathers in nursing homes without our families going bankrupt.

Many of the same Republicans who ranted

last year that a national health care program would result in health care rationing

are among the crowd now calling for the

kind of budget cuts which could very well

mean rationing for the elderly and the poor.

Shows what a difference a year and an election can make.

ANNOUNCEMENT BY THE SPEAKER

PRO TEMPORE

fThe SPEAKER pro tempore (Mr.

FUNDERBURK). Pursuant to the provisions of clause 5 of rule I, the Chair announces that he will postpone further

proceedings today on each motion to

suspend the rules on which a recorded

vote or the yeas and neas are ordered,

or on which the vote is objected to

under clause 4 of rule XV.

Such rollcall votes, if postponed will

be taken after debate is concluded on

all motions to suspend the rules, but

not before 5 p.m. today.

GREENS CREEK LAND EXCHANGE

fACT OF 1995

Mr. YOUNG of Alaska. Mr. Speaker, I

move to suspend the rules and pass the

bill (H.R. 1266) to provide for the exchange of lands within Admiralty Island National Monument, and for other

purposes, as amended.

The Clerk read as follows:

H.R. 1266

Be it enacted by the Senate and House of Representatives of the United States of America in

Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Greens

Creek Land Exchange Act of 1995’’.

SEC. 2. FINDINGS.

The Congress makes the following findings:

(1) The Alaska National Interest Lands

Conservation act established the Admiralty

Island National Monument and sections 503

and 504 of that Act provided special provisions under which the Greens Creek Claims

would be developed. The provisions supplemented the general mining laws under which

these claims were staked.

(2) The Kennecott Greens Creek Mining

Company, Inc., currently holds title to the

Greens Creek Claims, and the area surrounding these claims has further mineral potential which is yet unexplored.

(3) Negotiations between the United States

Forest Service and the Kennecott Greens

Creek Mining Company, Inc., have resulted

in an agreement by which the area surrounding the Greens Creek Claims could be explored and developed under terms and conditions consistent with the protection of the

values of the Admiralty Island National

Monument.

(4) The full effectuation of the Agreement,

by its terms, requires the approval and ratification by Congress.

SEC. 3. DEFINITIONS.

As used in this Act—

(1) the term ‘‘Agreement’’ means the document entitled the ‘‘Greens Creek Land Exchange Agreement’’ executed on December

14, 1994, by the Under Secretary of Agriculture for Natural Resources and Environment on behalf of the United States and the

Kennecott Greens Creek Mining Company

and Kennecott Corporation;

(2) the term ‘‘ANILCA’’ means the Alaska

National Interest Lands Conservation Act,

Public Law 96–487 (94 Stat. 2371);

(3) the term ‘‘conservation system unit’’

has the same meaning as defined in section

102(4) of ANILCA;

(4) the term ‘‘Green Creek Claims’’ means

those patented mining claims of Kennecott

Greens Creek Mining Company within the

Monument recognized pursuant to section

504 of ANILCA;

(5) the term ‘‘KGCMC’’ means the

Kennecott Greens Creek Mining Company,

Inc., a Delaware corporation;

(6) the term ‘‘Monument’’ means the Admiralty Island National Monument in the State

of Alaska established by section 503 of

ANILCA;

(7) the term ‘‘Royalty’’ means Net Island

Receipts Royalty as that latter term in defined in Exhibit C to the Agreement; and

(8) the term ‘‘Secretary’’ means the Secretary of Agriculture.

SEC. 4. RATIFICATION OF THE AGREEMENT.

The Agreement is hereby ratified and confirmed as to the duties and obligations of the

United States and its agencies, and KGCMC

and Kennecott Corporation, as a matter of

Federal law. The agreement may be modified

or amended, without further action by the

Congress, upon written agreement of all parties thereto and with notification in writing

being made to the appropriate committees of

the Congress.

SEC. 5. IMPLEMENTATION OF THE AGREEMENT.

(a) LAND ACQUISITION.—Without diminishment of any other land acquisition authority

of the Secretary in Alaska and in furtherance of the purposes of the Agreement, the

Secretary is authorized to acquire lands and

interests in land within conservation system

units in the Tongass National Forest, and

any land or interest in land so acquired shall

be administered by the Secretary as part of

the National Forest System and any conservation system unit in which it is located.

Priority shall be given to acquisition of nonFederal lands within the Monument.

(b) ACQUISITION FUNDING.—There is hereby

established in the Treasury of the United

States an account entitled the ‘‘Greens

Creek Land Exchange Account’’ into which

shall be deposited the first $5,000,000 in royalties received by the United States under part

6 of the Agreement after the distribution of

the amounts pursuant to subsection (c) of

this section. Such moneys in the special account in the Treasury may, to the extent

provided in appropriations Acts, be used for

land acquisition pursuant to subsection (a)

of this section.

(c) TWENTY-FIVE PERCENT FUND.—All royalties paid to the United States under the

Agreement shall be subject to the 25 percent

distribution provisions of the Act of May 23,

1908, as amended (16 U.S.C. 500) relating to

payments for roads and schools.

(d) MINERAL DEVELOPMENT.—Notwithstanding any provision of ANILCA to the contrary, the lands and interests in lands being

conveyed to KGCMC pursuant to the Agreement shall be available for mining and related activities subject to and in accordance

with the terms of the Agreement and conveyances made thereunder.

(e) ADMINISTRATION.—The Secretary of Agriculture is authorized to implement and administer the rights and obligations of the

Federal Government under the Agreement,

including monitoring the Government’s interests relating to extralateral rights, collecting royalties, and conducting audits. The

Secretary may enter into cooperative arrangements with other Federal agencies for

the performance of any Federal rights or obligations under the Agreement or this Act.

(f) REVERSIONS.—Before reversion to the

United States of KGCMC properties located

on Admiralty Island, KGCMC shall reclaim

the surface disturbed in accordance with an

approved plan of operations and applicable

laws and regulations. Upon reversion to the

United States of KGCMC properties located

on Admiralty, those properties located within the Monument shall become part of the
H 4920 CONGRESSIONAL RECORD — HOUSE May 15, 1995

Monument and those properties lying outside the Monument shall be managed as part

of the Tongass National Forest.

(g) SAVINGS PROVISIONS.—Implementation

of the Agreement in accordance with this

Act shall not be deemed a major Federal action significantly affecting the quality of the

human environment, nor shall implementation require further consideration pursuant

to the National Historic Preservation Act,

title VIII of ANILCA, or any other law.

SEC. 6. RECISION RIGHTS.

Within 60 days of the enactment of this

Act, KGCMC and Kennecott Corporation

shall have a right to rescind all rights under

the Agreement and this Act. Recision shall

be effected by a duly authorized resolution of

the Board of Directors of either KGCMC or

Kennecott Corporation and delivered to the

Chief of the Forest Service at the Chief’s

principal office in Washington, District of

Columbia. In the event of a recision, the status quo ante provisions of the Agreement

shall apply.

The SPEAKER pro tempore. Pursuant to the rule, the gentleman from

Alaska [Mr. YOUNG] will be recognized

for 20 minutes, and the gentleman from

Hawaii [Mr. ABERCROMBIE] will be recognized for 20 minutes.

The Chair recognizes the gentleman

from Alaska [Mr. YOUNG].

Mr. YOUNG of Alaska. Mr. Speaker, I

yield myself such time as I may

consume.

(Mr. YOUNG of Alaska asked and was

given permission to revise and extend

his remarks and to include extraneous

matter.)

Mr. YOUNG of Alaska. First of all,

Mr. Speaker, let me thank the gentleman from Hawaii [Mr. ABERCROMBIE]

for his work and cooperation on this

bill.

Mr. Speaker, I am pleased to rise in

support of the Greens Creek Land Exchange Act of 1995.

This act will approve a land exchange

agreement between the U.S. Forest

Service and Kennecott Greens Creek

Mining Co. (‘‘Kennecott’’). These lands

surround the Greens Creek Mine, a

zinc-lead-silver-gold mine, located on

Admiralty Island in southeast Alaska.

The land exchange agreement is the

product of a nearly 10-year-long negotiation between the two parties.

Under the Greens Creek Land Exchange Agreement, Kennecott receives

the right to mine mineral deposits on

about 7,500 acres of land, located in Admiralty Island National Monument. In

return, Kennecott will: First, pay a

royalty to the Federal Government on

any production from these lands, and

second, purchase and donate to the

U.S. Forest Service 1 million dollars’

worth of inholdings located within the

Admiralty National Monument—an

amount of land equal in value to the

land received under the agreement.

The royalty is based on the value received from 1 sales after deduction of

shipping, smelting, and refining

charges. The royalty has two tiers depending on the value of the ore. When

metal prices are average or better, the

royalty will be 3 percent, and at low

metal prices, the royalty will be threequarters of 1 percent. This two-tier

royalty will encourage the Greens

Creek Mine to continue operation in

times of low metal prices.

This land exchange will help promote

sound economic and environmentally

responsible resource development, support land consolidation in conservation

system units within the Tongass National Forest, and raise revenues for

the Federal Government.

Mr. Speaker, I urge an ‘‘aye’’ vote on

H.R. 1266 and thank GEORGE MILLER for

his leadership in the effort to approve

this land exchange agreement. I look

forward to the successful completion of

the Greens Creek land exchange and

hope that it will help provide new economic opportunities for those who live

in southeast Alaska.

Mr. Speaker, I include for the

RECORD the text of the Greens Creek

Land Exchange Agreement:

AGREEMENT

This Agreement, by and between

Kennecott Greens Creek Mining Company,

Inc., a Delaware corporation (‘‘KGCMC’’) and

The United States of America, by and

through the U.S.D.A. Forest Service

(‘‘USFS’’), dated , 1994.

Whereas, on December 2, 1980, Congress established the Admiralty Island National

Monument (the ‘‘Monument’’) by enactment

of the Alaska National Interest Lands Conservation Act (‘‘ANILCA’’) (P.L. 96–487):

Whereas, the Monument was established as

part of the Tongass National Forest for the

purpose of protecting objects of ecological,

cultural, geological, historical, prehistorical

and scientific interest, in particular its wildlife and supporting habitats;

Whereas, Congress designated approximately nine hundred thousand acres of the

Monument as wilderness under ANILCA;

Whereas approximately 17,000 acres of the

Monument was designated as non-wilderness

to permit the development of a silver, lead,

zinc and gold deposit;

Whereas, KGCMC, as manager of the

Greens Creek Joint Venture (‘‘GCJV’’) has

developed the Greens Creek Mine (the

‘‘Mine’’) on 17 claims which were located

prior to the establishment of the Monument

(the ‘‘Existing Claims’’);

Whereas, operation of the Greens Creek

Mine, which is located approximately 15

miles from Juneau, Alaska, can produce

450,000 tons of ore per year and contribute

over 265 jobs to the local economy of Southeast Alaska;

Whereas, KGCMC hopes that the life of the

Mine and the jobs it provides can be extended by further exploration and development of subsurface lands within the non-wilderness portion of the Monument adjacent to

the Existing Claims;

Whereas, such development can occur

without significant adverse environmental

effects by utilizing existing facilities of the

mine for the most part and minimizing surface disturbance on Monument lands;

Whereas, further exploration and potential

development of the Mine can be accomplished without significant impact to the

Monument and its purposes;

Whereas, KGCMC has proposed a land exchange to acquire rights to explore and mine

adjacent subsurface lands in return for conveyance to the United States, through the

USFS, of important private inholdings located within the Monument and/or other

Conservation System Units within the

Tongass National Forest, the assignment to

the United States of a royalty interest in the

returns from any future development from

mining the lands acquired by KGCMC

through the exchange, and a restrictive covenant and future interest in the Existing

Claims, Mill Site #1 (MS 2514), and other

lands held by KGCMC located on Admiralty

Island;

Whereas, the result of such land exchange

would include consolidation of Federal land

ownership in the Monument Wilderness in

return for the right through title to explore

and mine the subsurface lands adjacent to

the Mine within the existing non-wilderness

area of the Monument, in an environmentally sound manner.

Whereas, the accomplishment of such land

exchange for the purposes of Conservation

System Unit consolidation and for the purpose of permitting further exploration and

development of the Greens Creek Mine is in

the pubic interest under the terms of Section

1302(h) of ANILCA; and

Whereas, this land exchange is being accomplished under the land exchange authority of Section 1302(h) of ANILCA:

Now, therefore, the parties to this Agreement agree as follows:

1. General Description of the Exchange. The

USFS agrees to exchange the mineral estate,

subject to a future interest and other provisions of this Agreement, in 7500 acres, more

of less, of subsurface public land (the ‘‘Exchange Properties’’) delineated on a map and

description title ‘‘KGCMC Exchange Properties’’ dated March 26, 1993, designated Exhibit A of this Agreement. KGCMC agrees to

exchange in return: i) title, or alternatively,

funds to acquire title, to private inholdings

(‘‘Exchange Inholdings’’) totalling no less

than $1,000,000 in fair market value from

lands located within Admiralty Island National Monument and, if necessary, other

Conservation System Units within the

Tongass National Forest, from a list titled

‘‘KGCMC Exchange Inholdings’’ dated November 6, 1993, designated Exhibit B hereto;

ii) a royalty interest in ‘‘Net Island Receipts’’ realized from the sale of minerals

that may be mined from the Exchange Properties, (excluding those minerals which are

property of KGCMC by operation of

extralateral rights); and iii) a restrictive

covenant and future interest in the Existing

Claims, Millsite #1 (MS 2514), and any other

lands held by KGCMC located on Admiralty

Island. The specific interests to be exchanged and terms and conditions thereto

are described elsewhere in this Agreement.

2. Effective Date. This Agreement shall become effective upon its execution by both

parties and approval by Act of Congress. The

effective date of this Agreement shall be the

date of enactment of Federal legislation approving this exchange.

3. Termination. In the event the exchange

closing described in Section 4.A is not completed within seven years from the effective

date of this Agreement, this Agreement shall

terminate and become null and void upon expiration of seven years from the effective

date. The terms of this Agreement shall otherwise be incorporated in the conveyances

completed pursuant to this Agreement. Both

parties state their intent to exert reasonable

best efforts to complete the exchange closing

as soon as practicable in advance of seven

years from the effective date.

4. Exchange Details.

A. there shall be a single exchange closing.

At the closing, the following conveyance

shall occur:

(i)(a) the United States shall receive fee

title via general warranty deeds to the surface and subsurface estate of Exchange

Inholdings totalling no less than $1,000,000 in

fair market value, subject only to any reservations, exceptions, or conditions approved

prior to closing by the USFS. Upon conveyance, each Exchange Inholding shall become
May 15, 1995 CONGRESSIONAL RECORD — HOUSE H 4921

and be managed by the USFS as part of the

Conservation System Unit having exterior

boundaries within which the Inholding is located.

(b) In the event that the Congress enacts

legislation establishing a special fund in the

Treasury for the deposit of monies to be

available until expended, without further appropriation, for the acquisition by the Forest

Service of lands and interests in lands within

the exterior boundaries of Admiralty Island

National Monument or other Conservation

System Units within the Tongass National

Forest, KGCMC shall, in lieu of the conveyances described in (i)(a), pay to the United

States the sum of $1,100,000 at the closing,

for deposit in said fund. Monies from said

fund shall be available for the purchase of

lands and interests in lands and related administrative costs.

(ii) KGCMC shall receive title to the entire

interest of the United States in the form of

a patent upon completion, at KGCMC expense, of a survey meeting Bureau of Land

Management standards, to the Exchange

Properties, comprising the subsurface mineral estate of the lands described in Exhibit

A, along with rights appurtenant to such estate identical to those provided for an

‘‘unperfected claim’’ as defined in section 504

of ANILCA (16 U.S.C. 432 note) once patent to

the minerals of such claim is conveyed by

the United States. Provided, the Exchange

Properties conveyance shall specifically reserve the restrictive covenant and future interest in the United States as described in

Section 8, and shall specifically except

extralateral rights as described in Section

4.B;

The Exchange Properties conveyance shall

furthermore be specifically subject to:

a. valid existing rights;

b. the covenants described in Sections 4.C.

and 4.D;

c. the Net Island Receipts interest described in Section 6 and Exhibit C hereto; including but not limited to the right of USFS

to enter and inspect the Exchange Properties

as provided in Exhibit C hereto;

d. a coextensive right of USFS to enter and

inspect the Exchange Properties to monitor

compliance with Sections 4.B and 4.C;

The Exchange Properties conveyance shall

be furthermore subject only to any other exceptions, reservations, or conditions approved prior to closing by KGCMC.

B. The parties expressly agree that no

extralateral rights for the Exchange Properties shall be conveyed under the terms of

this Agreement. This Agreement shall not

enlarge nor diminish any extralateral rights

which KGCMC may now have or in the future

establish with respect to its existing claims.

C. The parties expressly agree that no minerals extracted from the Exchange Properties other than hardrock and metalliferous

minerals available for location and patent

under the general mining laws of the United

States (30 U.S.C. 21–53 et seq.) may be sold for

commercial purposes. Any other mineral or

mineral material on the Exchange Properties may be extracted and utilized by

KGCMC in the exploration, development,

mining and beneficiation process of Existing

Claims and Exchange Properties for hard

rock and metalliferous minerals, without

payment to the United States.

D. Use and occupancy by KGCMC, its successors, or assigns of the surface overlying

the Exchange Properties shall be limited as

follows:

(1) Use and occupancy of the surface estate

overlying the Exchange Properties shall be

minimized to the maximum extent practicable, including but not limited to consolidating facilities and operations to the maximum extent practicable with facilities and

operations related to the existing Greens

Creek Mine, and reclamation in accordance

with applicable law and regulation.

(2) There shall be no use or occupancy of

the surface estate overlying the Exchange

Properties until the operator, as defined in

the regulations referenced herein, has applied for and received approval of a plan of

operations, including reclamation, in accordance with the provisions of 36 CFR 228.80 and

36 CFR 228, Subpart A in effect on the effective date of this Agreement.

(3) There shall be no use or occupancy of

the surface estate overlying the Exchange

Properties for purposes of open pit, hydraulic, or other surface mining, or smelting operations.

(4) Neither the existence of privately

owned minerals nor any provision of this

Agreement shall be construed to preclude

the United States and its assigns, including

the general public, from occupancy or use of

the surface estate overlying the Exchange

Properties. The USFS shall as appropriate

impose reasonable restrictions upon public

occupancy and use for purposes of avoiding

conflict with KGCMC operations, to protect

public safety, or for other purposes. This provisions shall not be construed to alter respective tort liability, if any, between USFS

and KGCMC or other entities under applicable law.

E. Evidence of title to Exchange Inholdings

shall be in a form acceptable to and in conformance with standards of the Attorney

General of the United States.

F. USFS shall bear its own attorney fees,

costs of document preparation for conveyance of the Exchange Properties to KGCMC,

and costs of recording documents conveying

Exchange Inholdings and other property interests to the United States. KGCMC shall

bear all other closing costs, including abstract of title or title insurance, transfer

taxes, brokerage fees, its attorney fees and

recording costs. KGCMC shall also bear the

cost of survey required for issuance of patent

to the Exchange Properties and any survey

required by the United States to complete

conveyance of any Exchange Inholdings to

the United States. Provided, if USFS completes the acquisition of Exchange

Inholdings pursuant to Section 4.A(i)(b), the

USFS shall bear all closing costs for the Exchange Inholdings. All costs borne by

KGCMC pursuant to this paragraph shall not

be credited against the $1,000,000, Net Island

Receipts interest, or other consideration

owing to the United States under this Agreement. The provisions of Public Law No. 91–

646 shall not apply to this Agreement.

KGCMC shall not be construed as an agent of

the United States in acquiring Exchange

Inholdings or otherwise under this Agreement.

G. The USFS agrees to cooperate with

KGCMC in attempting to effect the transactions contemplated herein as tax free exchanges pursuant to Section 1031 of the

I.R.C. (26 U.S.C. 1031 et seq.), but expressly

disclaims any jurisdiction to determine or

influence Internal Revenue Service determinations of the tax consequences of any

transactions.

5. Valuation of Exchange Inholdings

A. Attached as Exhibit B of this Agreement is a list of the properties which the

USFS lists as qualified for conveyance as Exchange Inholdings. KGCMC shall be permitted to acquire and designate any such

properties as Exchange Inholdings and convey or cause to be conveyed to the USFS

such properties as is necessary to effect the

Exchange. No particular lands are required

to be conveyed, and there is no priority for

these potential Exchange Inholdings except

as described in Section C below.

B. The fair market value of each Exchange

Inholding shall be the lesser of the actual

amount paid for the Inholding by KGCMC,

excluding closing costs borne by KGCMC described in Section 4.E above, or the fair market value adjusted to the effective date of

this Agreement, determined by an appraisal.

The appraisal for each Exchange Inholding

shall be completed by KGCMC at its own expense and the appraisal report provided to

USFS no sooner than 1 year and no later

than 60 days in advance of closing for the

Inholding concerned, for review and approval. Said appraisal shall be completed according to the then current Uniform Appraisal Standards for Federal Land Acquisitions. In the event KGCMC is not able to acquire Exchange Inholdings totalling exactly

$1,000,000 in fair market value, KGCMC shall

be obligated without further consideration

to convey and bear the expense of acquiring

any additional Exchange Inholding required

to bring the total fair market value of the

Exchange Inholdings conveyed to at least

$1,000,000.

C. Exhibit B is divided into two parts: Part

A lists lands located within Admiralty Island

National Monument. Part B lists lands located within other Conservation System

Units within the Tongass National Forest.

KGCMC shall use reasonable efforts to acquire lands from the Part A list when available at fair market value and only acquire

lands from the Part B list upon a determination by the USFS that lands from the Part A

list are not available at fair market value

after such reasonable efforts. KGCMC shall

otherwise consult and cooperate with USFS

in identifying opportunities of acquisition at

fair market value of particular lands listed

in Exhibit B, and use reasonable efforts to

acquire such lands.

6. Net Island Receipts Royalty Interest—The

Parties agree that the United States shall

receive a percentage of the Net Island Receipts from mineral production from the Exchange Properties as described in Exhibit C

of this Agreement. The United States shall

be provided reasonable access by KGCMC to

the Exchange Properties and any books,

records, documents, and mineral samples, to

audit the payment of the Net Island Receipts

interest as provided in Exhibit C.

7. Existing Extralateral Rights—This Agreement, including the grant of the Net Island

Receipts interest described in paragraph 6

and Exhibit C shall not enlarge or diminish

any rights KGCMC may now have or in the

future establish to minerals lying with the

Exchange Properties through application of

extralateral rights extending from KGCMC’s

Existing Claims. The Net Island Receipts interest to be granted to the United States

under this agreement shall not burden, nor

entitle the United States to any monies realized by KGCMC from the sale of concentrates

or other mineral products from ores, the

title to which belongs to KGCMC by operation of extralateral rights extending from

KGCMC’s existing claims and property interests.

8. Restrictive Covenant and Future Interest in

the United States.

A. KGCMC shall grant the United States a

restrictive covenant and future interest in (i)

the Existing Claims; (ii) Millsite #1 (MS

2514); and (iii) the Exchange Properties, and

the right to a future interest in (iv) the ‘‘Future Acquired Lands,’’ defined as follows:

any lands on Admiralty Island to which

KGCMC, its successors, or assigns acquires

title after the effective date of this agreement and prior to the vesting of title in the

United States as defined in Section 8.B. occurs, excepting Exchange Inholdings conveyed to the United States pursuant to this

Agreement. The grant shall be effected by:

(1) a conveyance by deed regarding the Existing Claims and Millsite; (ii) a reservation

and/or exception in the conveyance from the
H 4922 CONGRESSIONAL RECORD — HOUSE May 15, 1995

United States regarding the Exchange Properties; and (iii) a contractual right to conveyance by deed upon KGCMC acquiring

title, regarding the Future Acquired Lands.

KGCMC shall grant the restrictive covenant

and future interest and rights thereto described herein at the exchange closing.

B. The terms of the restrictive covenant

and future interest to be granted to the United States in Section 8.A. are as follows:

(1) Restrictive Covenant: Use of the subject

lands by KGCMC, its successors, and assigns

shall be limited solely to bona fide good

faith mineral exploration, development, and

production activities, including reclamation

work. This covenant shall run with the land

until such time as the vesting of title to the

United States occurs.

(2) Future interest: Right of Reentry: The

United States shall have a right to reenter

and take title and possession to all right,

title, and interest in the subject lands upon

the following, whichever occurs earlier:

(a) abandonment by KGCMC, its successors, or assigns, of all bona fide good faith

mineral exploration, development, and production activities, including reclamation

work, on each and all of i) the Existing

Claims; ii) Millsite #1 (MS 2514); iii) the Exchange Properties; and iv) the Future Acquired Lands. Complete cessation for ten

consecutive years of all bona fide good faith

mineral exploration, development, and production activities, including reclamation

work, on all the lands listed in i) through iv)

herein, shall be conclusively deemed to constitute abandonment, without prejudice to

abandonment occurring otherwise.

(b) January 1, 2045; if as of December 1,

2044, KGCMC, its successors, or assigns are

not engaged in bona fide good faith mineral

exploration, production, or production activities, including reclamation work, on any

of the lands listed in (i) through (iv) in (a)

above.

(c) January 1, 2095, irrespective of any ongoing activities and subject to the right of

reentry occurring sooner based upon abandonment as described in (a) above.

The right of reentry and all other terms

herein shall not in any way relieve KGCMC,

its successors, or assigns of obligations described in Section 9 [indemnity] of other obligation otherwise applicable.

9. Hazardous Waste and other Indemnity.

KGCMC, Kennecott Corporation, and their

successors and assigns shall indemnify, defend and hold harmless the United States, its

various agencies and employees, from any

damage, loss, claim, fines, penalties, and

costs whatsoever arising in any way and at

any time from any use, occupancy or activities, past, present or future (provided said

use, occupancy, or activities occur no later

than the time at which title reverts to the

United States), by any entity, on the Exchange Inholdings, Existing Claims, Millsite

#1 (MS 2514) and other property in which a

restrictive covenant and future interest is

granted to the United States under this

Agreement, specifically including, but not

limited to: (a) those activities by which hazardous substances, hazardous materials, or

wastes of any kind were generated, released,

stored, used, or otherwise disposed on the described property or facility thereon, and (b)

any response or natural resource damage actions conducted pursuant to any federal,

state, or local environmental law, regulation, or rule, and related in any manner to

said hazardous substances, hazardous materials, or wastes.

10. Disclaimer of Value Warranty. The parties expressly disclaim any warranty of

value for any of the lands or interests exchanged under this Agreement. It is expressly recognized by the parties that potential revenues or proceeds from any of the

lands or interests exchanged herein are purely speculative.

11. Loss or Damage Prior to Conveyance.

Both parties agree not to do, or suffer others

to do, any act prior to the conveyance described in this Agreement by which the value

of the real property herein identified for exchange may be diminished or further encumbered. In the event any such loss or damage

occurs from any cause, including acts of God,

to the real property herein identified for exchange before execution of deed, the party

who is grantee under this Agreement as to

that property shall not be obligated to accept title to said property, and an equitable

adjustment in the consideration shall be

made at the option of said party. Information obtained from exploratory drilling or

other acts otherwise authorized shall not be

construed as diminishing or further encumbering the identified property, for purposes

of this Agreement.

12. Status Quo Ante. In the event this

Agreement becomes null and void prior to

the completion of the exchange closing by

operation of its terms or by order of a court

of competent jurisdiction, the parties shall

return to their status and rights prior to execution of the Agreement.

13. Notices—Notices required to be delivered

under this Agreement shall be delivered in

writing by U.S. mail, hand delivery with return receipt, or fax with confirmation as follows:

KGCMC

lllllllllllllll

General Manager

Kennecott Greens Creek Mining Co.

3000 Vintage Park Road

Juneau, Alaska 99801

lllllllllllllll

General Counsel

Kennecott Corporation

10 East South Temple

Salt Lake City, Utah 84113

U.S. Forest Service

lllllllllllllll

Regional Forester

Region 10

P.O. Box 21628

Juneau, Alaska 99802–1628

14. Signatures for Execution. The signers

shall be: (i) for Kennecott Corporation and

Kennecott Greens Creek Mining Company,

respectively, the authorized officer for the

Corporation and for the Company; and (ii)

for the United States of America, Department of Agriculture, Forest Service, the

USDA Assistant Secretary for Natural Resources and Environment.

15. Counterparts. This Agreement may be

signed in separate counterparts by the parties which, when each have so signed, shall

be deemed a single Agreement.

16. Entirety of Agreement. This instrument

and attachments embody the whole Agreement of the parties. The Exhibits referenced

herein are attached hereto and incorporated

by reference as part of this Agreement.

There are no promises, terms, conditions, or

obligations other that those contained herein. This Agreement shall supersede all previous communications, representations, or

agreements, either verbal or written, between the parties.

17. Modification. This Agreement may be

modified only upon written Agreement of the

parties thereto and after notification in

writing to the appropriate committees of the

U.S. Congress.

18. Clerical and Typographical Errors. Clerical and typographical errors contained herein may be corrected upon notice to the Parties. Unless such errors are deemed substantive by either party within ten (10) days

notice, corrections may be made without formal ratification by the Parties. In the event

the delineation of a boundary upon a map included in an exhibit to this Agreement conflicts with a textual description of the

boundary included in the exhibit, the map

boundary shall control, subject to correction

of errors in map boundaries under this section.

19. Covenant Not to Sue. The parties to this

Agreement mutually covenant not to sue

each other challenging the legal authority of

either to enter into their Agreement or to effectuate any terms herein. Either party may

enforce the covenants, terms, and conditions

of this Agreement in a court of competent

jurisdiction.

20. Officials Not to Benefit. No Member of

Congress or Resident Commissioner shall be

admitted to any share or part of this Agreement or to any benefit that may arise therefrom unless it is made with a corporation for

its general benefit (18 U.S.C. 431, 433).

Third Party Beneficiaries. This agreement is

not intended, and shall not be construed, to

create any third party beneficiary. Nothing

in this Agreement shall be construed as creating any rights of enforcement by any person or entity that is not a party to this

Agreement.

Successors and Assigns.

A. This Agreement shall be effective and

binding upon each party and any successors

or assigns thereto. The parties shall have the

right to assign, transfer, convey, lease, sell

or alienate any of their rights under this

Agreement. The Parties further acknowledge

that a transfer from KGCMC to Greens Creek

Joint Venture, operating as a joint venture,

is expressly permissible upon written notice

to the USFS. An assignment, transfer conveyance, lease, sale or other alienation of

rights, however, shall not release a party

from its duties under this Agreement, except

that an agency of the United States shall be

released from its duties if the transfer is to

a successor agency.

B. An assignment, transfer, conveyance,

lease, sale or alienation shall not release any

of the covenants or conditions which run

with the land imposed by this Agreement.

The covenants and conditions contained in

this Agreement shall be construed as running with the land unless they are clearly intended as personal to a party to this Agreement. The parties may contract for the disposition or utilization of any rights granted

by this Agreement.

23. Equal Value and Public Interest Determination. The Parties recognize the impossibility of precisely valuing the respective

considerations flowing between the United

States and GCJV pursuant to this Agreement. In accordance with Section 1302(h) of

ANILCA, the USFS Regional Forester, Region 10, pursuant to authority delegated by

the Secretary of Agriculture, has determined

that although the mutual consideration

flowing between the Parties may be unequal,

it is in the public interest to consummate

this exchange. This paragraph shall be construed as a finding by the Secretary that the

public interest values of the interests in land

exchanged pursuant hereto are equal.

In Witness Whereof, Kennecott Corporation, Kennecott Greens Creek Mining Company, and the USDA Assistant Secretary for

Natural Resources and Environment, acting

for and on behalf of the United States Department of Agriculture, has executed this

Agreement.

United States Department of Agriculture

By: llllllllll

Assistant Secretary for Natural Resources

and Environment

Date: llllllllll

Kennecott Greens Creek Mining Company

By: llllllllll
May 15, 1995 CONGRESSIONAL RECORD — HOUSE H 4923

Its: llllllllll

Date: llllllllll

Kennecott Corporation

By: llllllllll

Its: llllllllll

Date: llllllllll

EXHIBIT B—PART A

KGCMC EXCHANGE INHOLDINGS—ADMIRALTY ISLAND NATIONAL MONUMENT

Tract Acres Location Legal description USGS

quad

USS 796 ......................................................................................................................................................................................................................................................................... 7.88 Wheeler Creek . T44S, R65E, CRM JUN A–3. (406906)

USS 1058 ....................................................................................................................................................................................................................................................................... 54.04 Hood Bay ......... T52S, R68E, CRM SIT B–2. USS 1159 ....................................................................................................................................................................................................................................................................... 71.47 Wheeler Creek . T44S, R65E, CRM JUN A–3. (938822) (Homestead Entry No. 85)

Fraction of HES 85 totaling approx. 22 acres subdivided as: Tract A ...................................................................................................................................................................................................................................................................... 4.965 Tract B ...................................................................................................................................................................................................................................................................... 4.965 Tract C ...................................................................................................................................................................................................................................................................... 4.965 Tract D east part ...................................................................................................................................................................................................................................................... 0.366 Tract D west part ..................................................................................................................................................................................................................................................... 1.5 Tract E Lot 1 ............................................................................................................................................................................................................................................................. 2.48 Tract E Lot 2 ............................................................................................................................................................................................................................................................. 2.48 Fraction of HES 85 totaling approx. 16 acres

Fraction of HES 85 totaling approx. 33 acres

USS 1351 ....................................................................................................................................................................................................................................................................... 134.53 Mole Harbor ..... T49S, R70E, CRM SIT C–1. Tract A ...................................................................................................................................................................................................................................................................... 3.44 Tract B ...................................................................................................................................................................................................................................................................... 131.09 USS 1480 ....................................................................................................................................................................................................................................................................... 10.24 Hood Bay ......... T52S, R69E, Sec7 SIT B–2. (T&M Pat. 1027446)

USS 1575 ....................................................................................................................................................................................................................................................................... 14.63 Gambier Bay ... T51S, R71E, CRM SUM B–6. Tract A ...................................................................................................................................................................................................................................................................... 3.905 Tract B ...................................................................................................................................................................................................................................................................... 4.069 Tract C ...................................................................................................................................................................................................................................................................... 2.544 Tract D ...................................................................................................................................................................................................................................................................... 2.239 Tract E ...................................................................................................................................................................................................................................................................... 1.875 USS 1984 ....................................................................................................................................................................................................................................................................... 32.59 Pybus Bay ....... T53S, R71E, CRM. SIT B–1. (1061484) Parcel 1&2 ................................................................................................................................................................................................................................................................ 21.50 Parcel 3 ..................................................................................................................................................................................................................................................................... 11.09 USS 2412: Lot 16 ........................................................................................................................................................................................................................................................................ 3.51 Hood Bay ......... T52S, R68E, Sec12.

SIT B–2.

Tract A ...................................................................................................................................................................................................................................................................... 1.981 Tract B & C .............................................................................................................................................................................................................................................................. 1.528 USS 2412: Lot 21 ........................................................................................................................................................................................................................................................................ 4.55 Hood Bay ......... T52S, R68E, Sec12.

SIT B–2.

(Homesite Pat. 1126506)

Lot 23 ........................................................................................................................................................................................................................................................................ 5.00 Hood Bay ......... T52S, R68E, Sec12.SIT B–2.

(Homesite Pat. 1130390) USS 2413: Lot 28 ........................................................................................................................................................................................................................................................................ 3.90 Hood Bay ......... T52S, R69E, CRM SIT B–2. Lots 30–37 ................................................................................................................................................................................................................................................................ 23.1 Hood Bay ......... T52S, R69E, CRM SIT B–2. (PLO 774)

PLO’s 593, 774, 5156 & 5188 totaling: 612.63 Hood Bay ......... T52S, R68E, CRM

T52S, R69E,

Sec 7.

SIT B–2.

USS 10438: Lot 1 .......................................................................................................................................................................................................................................................................... 3.98 Hood Bay ......... T52S, R68E, CRM SIT B–2. Lot 2 .......................................................................................................................................................................................................................................................................... 22.59 Hood Bay ......... T52S, R68E, CRM SIT B–2. USS 10444 ..................................................................................................................................................................................................................................................................... 100.0 Hood Bay ......... T52S, R68E, CRM SIT B–2. USS 10459 ..................................................................................................................................................................................................................................................................... 60.0 Chaik Bay ........ T52S, R69E, CRM SIT B–2. MS 312 .......................................................................................................................................................................................................................................................................... 132.67 Kanalku Bay .... T50S, R68E, CRM SIT B–2. MS 1032 ........................................................................................................................................................................................................................................................................ 82.28 Greens Creek ... T43S, R66E, CRM JUN A–2. Sec. 31 & 32 ....... JUN A–3. 1152018 ........................................................................................................................................................................................................................................................................ 18.00 Murder Cove .... T56S, R68E, CRM SIT A–2. Fraction ..................................................................................................................................................................................................................................................................... 16.00 Fraction ..................................................................................................................................................................................................................................................................... 2.00 AA–7741 ........................................................................................................................................................................................................................................................................ 158.04 Mitchell Bay .... T50S, R68E, SEC 12.

SIT C–2.

Native Allot.

Patent No. 50–93–0148

Native Allot. ................................................................................................................................................................................................................................................................... 104.48 Favorite Bay .... T51S, R68E .......... SIT B–2.

The above list of private holdings within

Admiralty Island National Monument are

considered desirable for acquisition. Data is

from the USDA Forest Service, R–10 data

files and State of Alaska, Juneau District

Recorders Office. The listing is considered to

be approximately 95% complete as of the

date of this agreement. Parcels to be considered under this exchange shall also include

holdings conveyed into private ownership

subsequent to the date of this agreement.

The parcels are listed in numerical order

without any regard as to priority or availability for acquisition.

EXHIBIT B—PART B

KGCMC EXCHANGE INHOLDINGS—OTHER CONSERVATION

SYSTEM UNITS

Tract Acres

Misty Fiords National Monument/Wilderness: MS 2267 .................... 647.12 USS 1663 .................. 10.08 USS 1980 .................. 14.00 USS 287 .................... 34.53 USS 1342 .................. 5.00 USS 2975 .................. 79.87 USS 2662 .................. 4.96 USS 2667 .................. 84.07 USS 1445 .................. 65.25

KGCMC EXCHANGE INHOLDINGS—OTHER CONSERVATION

SYSTEM UNITS—Continued

Tract Acres

USS 2629 .................. 28.13

USS 2320 .................. 116.77

USS 2740 .................. 124.19

IC 1072 ..................... 12.75

IC 1424 ..................... 11.40

IC 1188 ..................... 19.20

IC 929 ....................... 4.65

Subtotal ................ 1,261.87

South Prince of Wales Wilderness:

USS 310 .................... 13.75

IC 1107 ..................... 33.20

IC 1115 ..................... 3.10

Subtotal ................ 50.05

Peterson Creek/Duncan Salt Chuck Wilderness:

MS 652 ...................... 78.16

USS 310 .................... 7.75

Subtotal ................ 85.91

Stikine-LaConte Wilderness:

USS 1023 .................. 160.00

USS 2358 .................. 4.93

Pat’d Land ................. 159.63 Lot 172, W1/2NW, N1/2NWSE, S–26,

T60S, R82E.

Pat’d Land ................. 151.35 S1/2/2NWSE, W1/2SWSE, Lots 374,

S–26; N1/2NENW, S–35, T60S,

R82E.

Pat’d Land ................. 141.65 Lots 1 & 3, S1/2SENE, S–31; Lot 4,

S1/2SWNW, S–32, T60S, R82E.

Pat’d Land ................. 135.39 Section 11, T61S, R83E.

KGCMC EXCHANGE INHOLDINGS—OTHER CONSERVATION

SYSTEM UNITS—Continued

Tract Acres

Pat’d Land ................. 114.38 Section 14, T61S, R83E. Pat’d Land ................. 157.76 Section 2, T61S, R83E; Section 31,

T60S, R83E.

Subtotal ................ 1,025.09

West-Chichagof/Yakobi Wilderness: MS 2257 .................... 15.00 MS 1574 .................... 201.64 MS 965A .................... 39.96 MS 1587 .................... 32.84 MS 1046 & 1453 ...... 35.79 MS 1046 .................... 7.35 MS 1460 .................... 33.53 MS 936 ...................... 23.56 MS 1047 .................... 13.75 MS 864 ...................... 42.82 MS 1576 .................... 12.34 MS 1575 .................... 12.62 MS 1461 .................... 4.77 MS 1594 .................... 35.39 MS 1498 .................... 16.66 MS 1502 A & B ........ 162.42 MS 1504 .................... 19.81 MS 957A .................... 13.38 MS 1497 .................... 1.17 USS 1476 .................. 12.70

Subtotal ................ 737.50 Chuck River Wilderness: MS 791 ...................... 35.43 MS 964 ...................... 55.02 MS 42 ........................ 9.87
H 4924 CONGRESSIONAL RECORD — HOUSE May 15, 1995

KGCMC EXCHANGE INHOLDINGS—OTHER CONSERVATION

SYSTEM UNITS—Continued

Tract Acres

MS 1085 .................... 62.47

MS 577 ...................... 154.46

MS 37, 38 & 39 ........ 55.45

USS 1509 .................. 40.22

USS 1940 .................. 37.66

USS 3082 .................. 4.51

MS 424 ...................... 12.96

MS 525A .................... 25.55

MS 267 A & B; 268 A

& B; 269; 270.

63.98

MS 579 A & B .......... 111.85

MS 40 & 41 .............. 28.00

USS 2845 .................. 3.78

Subtotal ................ 701.21

The above list of private holdings within

Conservation System Units on the Tongass

National Forest are considered desirable for

acquisition. Data is from the USDA Forest

Service, R–10 data files and State of Alaska,

Juneau District Recorders Office. The listing

is considered to be approximately 95% complete as of the date of this agreement. Parcels to be considered under this exchange

shall also include holdings conveyed into private ownership subsequent to the date of

this agreement. The parcels are listed in random order without any regard as to priority

or availability for acquisition.

EXHIBIT C—NET ISLAND RECEIPTS ROYALTY

A. DEFINITION OF NET ISLAND RECEIPTS

‘‘Net Island Receipts (NIR)’’ shall be any

excess of ‘‘Revenues Received (RR)’’ over

‘‘Allowable Deductions (AD)’’ for any calendar year. Net Island Receipts shall be calculated using the following formula: NIR =

RR ¥ AD.

Where:

NIR = Net Island Receipts for the calendar

year (in dollars);

RR = Revenues received during the calendar year, as defined in Section D. below (in

dollars);

AD = Allowable deductions incurred during

the calendar year, as defined in Section D.

below (in dollars);

B. ROYALTY CALCULATION

The dollar amount of the royalty payable

to the Interest Holder shall be calculated

using the following formula: Royalty = (X)

(NIR).

Where (X) = three percent (3%) of NIR

when NIR exceeds $120/ton, and three-fourths

of one percent (0.75%) when NIR is equal to

or less than $120/ton. Provided, the $120/ton

threshold shall be adjusted annually according to the Gross Domestic Product Implicit

Price Deflator, until the sooner of the following dates, whichever occurs earlier:

(1) the date 20 years subsequent to the date

upon which mining operations commence at

the Greens Creek Mine, whether or not operations include the Exchange Properties; or

(2) the date 30 years subsequent to the effective date of the Agreement.

C. PAYMENTS OF ROYALTY

The payor shall deliver to the Interest

Holder a payment equal to the percentage, as

set forth in section B. above, of all NIR realized by the Payor during any calendar year

(January 1–December 31), within thirty days

after the end of said calendar year, together

with a copy of the accounting made in connection with such payment. All payments of

royalty to the Interest Holder shall be subject to adjustment, including interest on any

such adjustment at the rate provided by 31

U.S.C. 3717, on March 31.

D. OTHER DEFINITIONS

1. ‘‘Exchange Properties’’ shall mean the

‘‘Exchange Properties’’ described by Exhibit

A of the Agreement.

2. ‘‘Payor’’ shall mean KGCMC, its successors and assigns.

3. ‘‘Interest Holder’’ shall mean United

States of America, pursuant to the terms of

the Agreement.

4. ‘‘Revenues Received (RR)’’ shall mean

the payments received or credited from the

sale of ores or products produced from ores

mined from the Exchange Properties at the

point of sale before subtracting the Allowable Deductions (AD). Sales to affiliates of

KGCMC shall be valued at the fair market

value of the products sold. Any credits or

payments received from a buyer by KGCMC

shall be credited as RR.

5. ‘‘Allowable Deductions’’ shall mean the

following actual costs incurred by Payor:

costs of all transportation and insurance for

ores or products produced from ores mined

from the Exchange Properties, between

KGCMC Admiralty Island loading facilities

and the point of delivery of said ores or products, smelting and/or refining charges, treatment charges, penalties, umpire charges,

independent representative charges and all

charges by purchasers of said ores or products.

E. ACCOUNTING MATTERS

All Revenues Received (RR) and Allowable

Deductions (AD) shall be determined in accordance with generally accepted accounting

principles and practices consistently applied.

RR and AD shall be determined by the accrual method.

F. COSTS OF COMMON FACILITIES

Where any AD are incurred in conjunction

with like costs for mineral products from

other Properties controlled by the Payor,

such costs shall be fairly allocated and apportioned in accordance with generally accepted practices in the mining industry.

G. AUDIT AND DISPUTES

1. The Interest Holder, upon written notice, shall have the right to have an independent firm of certified public accountants

or utilize its own personnel at its own cost to

audit the records that relate to the calculation of the NIR royalty within 24 months

after receipt of a payment described in Section C of this Exhibit.

2. The Interest Holder shall be deemed to

have waived any right it may have had to object to a payment made for any calender

year, unless it provides notice in writing of

such objection within 25 months after receipt

of final payment for the calendar year. The

parties may elect to submit the dispute to a

mutually acceptable certified public accountant, or firm of certified public accountants, for a binding resolution thereof.

H. GENERAL

1. Unless otherwise specified, capitalized

terms used herein shall have the same meaning as given to them in the Agreement.

2. Accurate records of tonnage, volume of

products, analyses of products, weight, moisture, assays of pay metal content and other

records related to the computation of the

NIR royalty hereunder shall be kept by the

Payor.

3. Up to four times per year, the Interest

Holder or its authorized representative on

not less than five (5) business days written

notice to the Payor, may enter upon all portions of the Exchange Properties for the purpose of inspecting the Exchange Properties,

all improvements thereto and operations

thereon, and may inspect and copy all

records and data pertaining to the computation of the NIR royalty, including without

limitation such records and data which are

maintained electronically. The Interest

Holder or its authorized representative in exercising entry and inspection rights may not

unreasonably hinder operations on or pertaining to the Exchange Properties. This

provision does not diminish any other independent right which the Interest Holder may

have to enter and inspect Payor’s properties,

records or data.

4. All notices or communications hereunder shall be made and effective in accordance with the provisions of the Agreement.

5. The NIR royalty interest shall be a real

property interest that runs with the Exchange Properties and shall be applicable to

any person who processes and sells products

from the Exchange Properties.

6. All information and data provided to the

Interest holder shall be treated as confidential by the USFS and disclosed to other parties only to the extent, if any, required by

law.

7. The Payor shall have the right to commingle ore and minerals from the Exchange

Properties with ore from other lands and

properties; provided, however, that the

Payor shall calculate from representative

samples the average grade of the ore and

shall weigh (or calculate by volume) the ore

before commingling. If concentrates are produced from the commingled ores by the

Payor, the Payor shall also calculate from

representative samples the average recovery

percentage for all concentrates produced

during the calendar year. In obtaining representative samples, calculating the average

grade of the ore, and calculating average recovery percentages the Payor shall use procedures accepted in the mining and metallurgical industry suitable for the type of

mining and processing activity being conducted.

Mr. Speaker, I reserve the balance of

my time.

Mr. ABERCROMBIE. Mr. Speaker, I

yield myself such time as I may

consume.

(Mr. ABERCOMBIE asked and was

given permission to revise and extend

his remarks.)

Mr. ABERCROMBIE. Mr. Speaker,

good morning and aloha, and good

morning and aloha to my good friend

and most excellent chairman, the gentleman from Alaska [Mr. YOUNG].

Both the chairman, the gentleman

from Alaska [Mr. YOUNG], and the

ranking member, the gentleman from

California [Mr. MILLER], introduced

this bill, a hallmark of bipartisan cooperation dearly to be cherished and

assiduously sought afdter in legislation

to come. In my view, Mr. Speaker, and

in the view of the gentleman from California [Mr. MILLER], H.R. 1266 provides

for a beneficial resolution, both for the

economy and the environment of

southeast Alaska.

Mr. Speaker, the Committee on Resources has a long history of concern

for the management of Admiralty Island National Monument.

b 1230

While the wilderness and wildlife values of Admiralty Island are very special, responsible operation of the

Greens Creek Mine is not necessarily

compatible with the conservation purposes for which the monument was established. This legislation would allow

Greens Creek to explore 7,500 acres of

nonwilderness lands adjacent to the existing mine, allowing mine operations

to expand with relatively little surface

disturbance.

By virtue of the agreement negotiated between the Forest Service and

Kennecott, the environment will benefit both in the short term through $1.1
May 15, 1995 CONGRESSIONAL RECORD — HOUSE H 4925

million of land acquisition from willing

sellers, and in the long term when mining operations cease and the lands revert back to the Forest Service.

In addition, the bill creates a land acquisition account to be funded by the

first $5 million of royalties collected

for further land purchases in the

Tongass National Forest, with priority

to non-Federal lands within the national monument.

Pursuant to the terms of the agreement, if Greens Creek fails to purchase

and deliver title to $1.1 million worth

of lands acceptable to the Forest Service, the land exchange will not be consummated.

Mr. Speaker, it is important to consider this agreement in the context of

efforts to reform the mining law of

1872. The notion that those of us who

favor modernizing the mining laws are

opposed to the mining industry in this

country is simply false. My support of

this legislation, which is likely to significantly enhance the economics and

life of the Greens Creek Mine, should

put that falsehood to rest.

This legislation does set an important precedent that the Government

should receive a royalty share for the

development of public lands. At the

same time, I do not consider the 3-percent net royalty negotiated in this

agreement as universally applicable for

purposes of mining reform.

I recognize there were concessions

from both sides in the negotiating

process and I am reluctant to rewrite

the deal. On balance, however, I applaud both Kennecott and the Forest

Service for their efforts, and I ask

Members to support the bill.

May I add personally, Mr. Speaker,

again my congratulations to the gentleman from Alaska [Mr. YOUNG]. the

chairman, and the appreciation of all

the members on the minority side for

his openness and, as always, his willingness to be cooperative with us.

With that, Mr. Speaker, I reserve the

balance of my time.

Mr. YOUNG of Alaska. Mr. Speaker, I

yield myself such time as I may

consume.

Mr. Speaker, I could only echo what

the gentleman just said. There is a way

we can work on many of these issues

and solve the problem if we seek to do

so.

The gentleman from Hawaii has always been able to work with me on his

issues especially in his great State. We

have a great deal in common. We hope

to solve some of his problems with the

Hawaiian natives which we have also

solved in Alaska. I do compliment him.

I may suggest to the gentleman from

California [Mr. MILLER], the ranking

member, we ought to let the gentleman

from Hawaii [Mr. ABERCROMBIE] manage these bills more often.

Mr. Speaker, I have no further requests for time, and I yield back the

balance of my time.

Mr. ABERCROMBIE. Mr. Speaker, I

have no further requests for time, and

I yield back the balance of my time.

The SPEAKER pro tempore (Mr.

FUNDERBURK). The question is on the

motion offered by the gentleman from

Alaska [Mr. YOUNG] that the House

suspend the rules and pass the bill,

H.R. 1266, as amended.

The question was taken; and (twothirds having voted in favor thereof)

the rules were suspended and the bill,

as amended, was passed.

A motion to reconsider was laid on

the table.

Mr. YOUNG of Alaska. Mr. Speaker, I

GENERAL LEAVE

fask unanimous consent that all Members may have 5 legislative days within

which to revise and extend their remarks, and include extraneous material, on H.R. 1266, the bill just passed.

The SPEAKER pro tempore. Is there

objection to the request of the gentleman from Alaska?

REPUBLICAN BUDGET PROPOSAL

There was no objection.

CRONYISM INVOLVED IN

f(Ms. FURSE asked and was given permission to address the House for 1

minute and to revise and extend her remarks and include extraneous material.)

Ms. FURSE. Mr. Speaker, can this

really be true? The 1996 budget before

us cuts school lunches, makes Medicare

more expensive, guts environmental

protection, all in the name of balancing the budget, but the biggest item

of all is not touched. In fact, it is increased. The millions of Americans

who thought that the end of the cold

war meant the end of huge Pentagon

budgets will be sadly disappointed.

For years, when thoughtful people

said that the waste in the Pentagon

was enormous, we were criticized for

not being strong on defense. But, of

course, we were right all along.

An article in Sunday’s Washington

Post states, ‘‘Each year the Department of Defense inadvertently pays

contractors millions of dollars that it

does not owe.’’

‘‘In addition,’’ the article says, ‘‘the

department has spent $15 billion’’—and

I repeat, $15 billion—‘‘it cannot account for over the last decade.’’

Why are we cutting education, nutrition, health care, and environmental

protection, but increasing Pentagon

spending? Could it possibly be that defense contractors make huge contributions? But children, seniors, endangered species, they do not.

This is not an issue of security. This

is an issue of cronoyism.

Mr. Speaker, the article referred to is

as follows:

[From the Washington Post, May 14, 1995]

LOSING CONTROL—DEFENSE DEPARTMENT—

BILLIONS GO ASTRAY, OFTEN WITHOUT A

TRACE

(By Dana Priest)

Each year, the Defense Department inadvertently pays contractors hundreds of millions of dollars that it does not owe them,

and much of the money is never returned.

In addition, the department has spent $15

billion it cannot account for over the past

decade.

And Pentagon purchasing agents appear to

have overdrawn government checking accounts by at least $7 billion in payment for

goods and services since the mid-1980s, with

little or no accountability.

Unlike the infamous $7,600 coffee pot and

$600 toilet seat pricing scandals of years

past, these problems, and many more, are

the result of poor recordkeeping and lax accounting practices that for years have characterized the way the Defense Department

keeps track of the money—$260 billion this

year—that it receives from Congress.

According to a series of investigations by

the Department’s inspector general and the

General Accounting Office, and ongoing

work by Pentagon Comptroller John J.

Hamre, the department’s systems of paying

contractors and employees are so antiquated

and error-prone that it sometimes is difficult

to tell whether a payment has been made,

whether it is correct, or even what it paid

for.

Just how much money does the poor accounting waste?

Former deputy defense secretary and new

CIA Director John M. Deutch wouldn’t hazard a guess. ‘‘Lots,’’ he scribbled recently on

a reporter’s notebook in response to a question.

For months after he took the job as chairman of the Joint Chiefs of Staff in late 1993,

Gen. John Shalikashvili received paychecks

for the wrong amount. In the last year and a

half, Comptroller Hamre counted six problems with his own pay.

A paper-based system in which items frequently are misplaced or lost and computers

that often cannot talk to each other are part

of the problem. But there are other major

systemic weaknesses. A lack of basic accounting procedures—such as matching invoices and payment records, or keeping

track of money spent on a given piece of

equipment from one year to the next—has

made it impossible to determine how billions

of dollars have been spent by each of the

service branches.

In addition, Hamre explained, tracking the

money has been nearly impossible because

300 different program directors—the Air

Force F–16 fighter program director, the

commanding officer of an aircraft carrier,

the head of a maintenance depot, for example—have had separate checkbooks, each one

free to write checks without regard to the

balance in the Pentagon’s central registry.

The U.S. Treasury has always paid the

bills, even when there was no money in a

given project’s account, because it assumes

any error was unintentional and someday

would be corrected, said Pentagon officials

and inspector general investigators.

‘‘There’s this huge pot of money over there

in the Treasury that you can keep drawing

down,’’ said the Deputy Inspector General

Derek J. Vander Schaaf. ‘‘As long as your

[overall] checkbook’s good,’’ he said, meaning the Treasury, ‘‘nobody screams.’’

The problems were created over several

decades and made worse during the 1980s

Reagan administration defense buildup during the latter days of the Cold War, when

there was little political will to scrutinize

the record sums being spent.

Today, however, even ardent defense

hawks have become disturbed over the mismanaged flow of funds. Some Republicans

who looked deeply into the matter are suggesting a freeze on military spending until

the Pentagon’s corroded payment system

can be permanently fixed.

‘‘The defense budget is in financial chaos,’’

said Sen. Charles E. Grassley (R-Iowa), who