I 
110TH CONGRESS 
2D SESSION 
H. R. 5887 
To provide to the Secretary of Interior a mechanism to cancel contracts 
for the sale of materials CA–20139 and CA–22901, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 24, 2008 
Mr. MCKEON introduced the following bill; which was referred to the Com-
mittee on Natural Resources, and in addition to the Committee on Ways 
and Means, for a period to be subsequently determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned 
A BILL 
To provide to the Secretary of Interior a mechanism to 
cancel contracts for the sale of materials CA–20139 and 
CA–22901, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Soledad Canyon Mine 
Act’’. 
SEC. 2. FINDING AND PURPOSES. 
(a) FINDINGS.—The Congress finds the following: 
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(1) Transit Mix Concrete Corporation holds two 
valid Federal contracts, numbered CA–20139 and 
CA–22901, issued under the Materials Act of 1947, 
for the extraction of approximately 56,000,000 tons 
of sand and gravel from the Federal mineral estate 
in lands located in Soledad Canyon adjacent to the 
city of Santa Clarita, California. 
(2) It is in the best interest of the citizens of 
California and the Federal Government to cancel the 
Contracts and prohibit future mining in the Soledad 
Canyon area of California. 
(3) TMC should receive as just compensation 
for such cancellation the fair market value of the 
Contracts and all costs, fees, and covered liabilities 
incurred by TMC in good faith in its efforts to de-
velop the Contracts. 
(4) A site-specific solution that is fair to TMC 
and that seeks to protect the environment and mini-
mize impacts on local transportation systems is in 
the best interest of the Nation. 
(5) Considerable sums of money have been ex-
pended by TMC and the city of Santa Clarita on 
legal and other services in trying to ensure their in-
terests are protected with respect to Contracts CA– 
20139 and CA–22901. 
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(b) PURPOSES.—The purposes of this Act are the fol-
lowing: 
(1) To provide to the Bureau of Land Manage-
ment the authority to cancel contracts CA–20139 
and CA–22901 and prohibit future mining in the 
Soledad Canyon. 
(2) To provide a means for TMC to recover as 
just compensation for the cancellation of the Con-
tracts the fair market value of, and TMC’s expendi-
tures and covered liabilities pursuing the develop-
ment of, the Contracts. 
(3) To provide the Bureau of Land Manage-
ment tools to verify expenses incurred by TMC and 
provide relief. 
(4) To provide timelines for the verification of 
costs incurred by TMC and the determination of just 
compensation, and to provide a dispute resolution 
process. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) CONTRACTS.—The term ‘‘Contracts’’ means 
Bureau of Land Management mineral contracts 
numbered CA–20139 and CA–22901. 
(2) COVERED LIABILITIES.—The term ‘‘covered 
liabilities’’ includes any court-ordered or court-ap-
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proved payment, settlement, or other liability on the 
part of TMC for damages, costs, compensation, or 
reimbursement to any third party for agreements en-
tered into by TMC in good faith prior to January 
1, 2008, in order to exercise rights under the Con-
tracts. 
(3) MATERIALS ACT OF 1947.—The term ‘‘Ma-
terials Act of 1947’’ means the Act of July 31, 
1947, (chapter 406; 61 Stat. 681; 30 U.S.C. 601– 
604). 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Interior. 
(5) TMC.—The term ‘‘TMC’’ means the Tran-
sit Mixed Concrete Corporation and its successors in 
interest, including CEMEX USA. 
SEC. 4. CANCELLATION OF THE CONTRACTS. 
(a) CONTRACT
CANCELLATIONS.—The Secretary 
shall cancel Bureau of Land Management mineral con-
tracts CA–20139 and CA–22901 and withdraw those 
areas that were subject to the Contracts from further min-
eral entry under all mineral leasing and sales authorities 
available to the Secretary, effective on the date of the en-
actment of this Act. 
(b) COMPENSATION.— 
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(1) IN
GENERAL.—As compensation for the 
cancellation of the Contracts, TMC shall receive fair 
market value of the Contracts and TMC’s expendi-
tures and covered liabilities in trying to bring the 
Contracts into commercial production. As such com-
pensation, the Secretary shall provide to TMC sur-
face and mineral interests and additional value in 
accordance with subsection (d) having a total value 
equal to the amount described in paragraph (3). All 
such expenditures must have been incurred by TMC 
in good faith in connection with its efforts to bring 
the Contracts into commercial production: Provided, 
however, that compensation for covered liabilities 
may be paid to TMC under this section for up to 15 
years following the effective date of this Act. 
(2) INCREASE
IN
ADJUSTED
BASIS
OF
CON-
TRACT UPON CANCELLATION.—For purposes of the 
Internal Revenue Code of 1986, the adjusted basis 
of any contract to which section 4(a) applies shall be 
increased (immediately before the cancellation of 
such contract under such section) by the excess (if 
any) of— 
(A) the fair market value of such contract 
(determined immediately before such cancella-
tion), over 
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(B) the adjusted basis of such contract (as 
determined immediately before the application 
of this section). 
(3) VALUE
DESCRIBED.—The compensation 
provided for in paragraph (1) is equal to the sum of 
the following: 
(A) All amounts paid to the United States 
by TMC with respect to the Contracts as bonus 
bids or other prepayments. 
(B) Interest on amounts referred to in 
subparagraph (A), from the date of payment of 
such amounts to the United States, at a rate 
determined by the Secretary. 
(C) Amounts expended by TMC in secur-
ing the contracts and trying to bring them into 
production, including— 
(i) all actual costs, including fees, as-
sociated with the engineering and environ-
mental 
studies, 
and 
permitting 
pro-
ceedings, that were incurred in good faith 
in TMC’s efforts to exercise the rights 
granted under the Contract terms; and 
(ii) all actual legal costs, including 
fees and covered liabilities, incurred in 
good faith in TMC’s efforts to exercise the 
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rights granted in the Contracts, including 
all fees and costs associated with securing 
permits and entitlements, litigation to com-
pel, secure, or defend permits or entitle-
ments, and litigation in connection with 
disputes relating to mineral and surface es-
tate rights to the property that is the sub-
ject of the Contracts. 
(D) The fair market value of the Con-
tracts. 
(4) 
DETERMINATION
OF
FAIR
MARKET 
VALUE.—The Secretary shall, within six months 
after the date of enactment of this Act, determine by 
mineral appraisal the fair market value of the con-
tracts at the time of such determination for pur-
poses of paragraph (3)(D), determine by mineral ap-
praisal or other generally accepted applicable ap-
praisal techniques the fair market value of the sur-
face and mineral estate identified in the map re-
ferred to in subsection (d), and notify TMC of those 
determinations. In determining the fair market value 
of the Contracts, the Secretary shall assume that— 
(A) TMC has obtained all permits and en-
titlements necessary to mine, produce, process, 
and sell sand and gravel from the Contracts; 
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(B) mining operations under the Contracts 
have commenced at the time of the determina-
tion, with maximum annual production volumes 
that— 
(i) are based on the projected supply 
and demand outlook at the time of deter-
mination; and 
(ii) reflect depletion of the reserves of 
the Contracts within the effective periods 
of the Contract; 
(C) the fair market value of the Contracts 
includes the present value of expected future 
net cash flows to be derived from the mining, 
producing, processing, and sale of the sand and 
gravel contained in the Contracts over the min-
imum time necessary to mine, produce, process, 
and sell such sand and gravel, taking into con-
sideration— 
(i) the material deposit contained in 
the contract sites and its quality, volume, 
minability, and reclamation requirements; 
(ii) the proximity of the contract sites 
to markets; 
(iii) the type of market that could be 
served from the contract sites, including 
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future supply, demand, and probable price 
increases based upon construction material 
data developed by the State of California; 
(iv) the cost of mining, producing, 
processing, and selling the material re-
served in the contract sites; 
(v) the types and costs of transpor-
tation for such production from the con-
tract sites to markets; 
(vi) royalties, taxes, and fees to mine 
and sell the production from the contract 
sites; 
(vii) similar market sales of materials 
the area or region of the contract sites; 
and 
(viii) the net present values of ex-
pected future cash flows from proposed 
mining operations of the Contract sites 
taking into consideration, at a minimum, 
the matters referred to in clauses (i) 
through (viii). 
(c) SUBMISSION OF EXPENSES INCURRED.— 
(1) IN GENERAL.—To assist in the verification 
of the amounts expended referred to in subsection 
(b)(3)(C), TMC shall submit to the Secretary within 
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60 days after the date of enactment of this Act an 
itemized list of such amounts, with enough detail 
and supporting documentation so the Secretary can 
determine that the expenses are associated with the 
Contracts. 
(2) ARBITRATION.—The Secretary shall issue 
the determination of the amounts expended referred 
to in subsection (b)(3)(C) within 60 days after re-
ceipt of the itemized list required under paragraph 
(1). If the Secretary disapproves such list, the Sec-
retary shall, upon request of TMC, determine the 
economic value invested for purposes of subsection 
(b)(3) through arbitration in accordance with sub-
chapter IV of chapter 5 of title 5, United States 
Code. 
(d) RETURN
OF
VALUE
OPPORTUNITIES
FOR 
TMC.— 
(1) IN GENERAL.—Within six months after the 
completion of the requirements of subsections (b) 
and (c), the Secretary shall provide to TMC the fol-
lowing: 
(A) Surface and mineral estate interests 
and additional value under subsection (b)(1) 
using the surface and mineral estate as de-
scribed and delineated as Area A on the map 
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entitled ‘‘Cemex USA and City of Victorville, 
California Land Disposal and Acquisition 
Agreement’’ and on file with the Secretary, con-
sisting of approximately 5,000 acres. 
(B) If the fair market value of the surface 
and mineral estate used under subparagraph 
(A) is less than the sum described in subsection 
(b)(3), additional mineral or surface estate 
under subsection (b)(1) using the surface and 
mineral estate as described and delineated as 
Area B on the map entitled ‘‘Cemex USA and 
City of Victorville, California Land Disposal 
and Acquisition Agreement’’ and on file with 
the Secretary, consisting of approximately 
3,000 acres as is necessary so that the sum of 
the values provided under subparagraph (A) 
and this subparagraph does not exceed the sum 
described in subsection (b)(3). 
(C) If the sum of the fair market values of 
the surface and mineral estates and additional 
value provided under subparagraphs (A) and 
(B) is less that the sum described in subsection 
(b)(3), additional value as is necessary so that 
the sum of the values provided under subpara-
graphs (A) and (B) and this subparagraph does 
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not exceed the sum described in subsection 
(b)(3), in the form of one or more of the fol-
lowing that are mutually agreed to by the Sec-
retary and TMC: 
(i) Credits that may be applied 
against future royalties, bonus bids, or 
rental fees for Federal lands administered 
by the Secretary and located within the 
State of California, including leases for all 
submerged lands of the outer Continental 
Shelf. 
(ii) Interest in the mineral estate in 
Federal lands in the State of California 
that are available for sale under the Min-
eral Leasing Act (30 U.S.C. 181 et seq.) 
or other law administered by the Secretary. 
(iii) Interests in the surface estate in 
Federal lands in the State of California 
that are under the administrative jurisdic-
tion of the Secretary and that are available 
for disposal. 
(e) TREATMENT OF CREDITS.— 
(1) TERM.—Credits provided under subsection 
(d) shall expire at the end of the 10-year period be-
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ginning on the date the credits are issued by the 
Secretary. 
(2) ASSIGNMENT.—TMC may assign credits 
provided to TMC under subsection (d) to any person 
who satisfies the same requirements to hold the Con-
tracts as those that applied to TMC under the Mate-
rials Act of 1947. 
(f) REFERRAL TO COURT OF CLAIMS.— 
(1) REFERRAL.—If within 12 months after the 
date of enactment of this Act, the Secretary and 
TMC do not reach agreement under subsections (b), 
(c), and (d) regarding the financial and mineral pro-
duction opportunities to be provided by the Sec-
retary to TMC under subsection (b)(1), or, if within 
3 months after TMC receives notice in accordance 
with subsection (b)(4) of the fair market value de-
termined by the Secretary of the surface and min-
eral estate identified in the maps referred to in sub-
section (d) TMC or the city of Victorville, California, 
notifies the Secretary that it disagrees with the Sec-
retary’s determination, the Secretary shall refer the 
issues upon which TMC, or the city of Victorville, 
California, and the Secretary are not in agreement 
with respect to such an agreement or fair market 
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value to the United States Court of Federal Claims 
for resolution 
(2) RESOLUTION BY COURT.—In any referral 
under this subsection, the court shall— 
(A) determine de novo the values described 
in subsection (b) and (d), including the fair 
market values of the surface and mineral es-
tates as described and delineated on the maps 
referred to in subsection (d)(1); and 
(B) determine and order the Secretary to 
provide financial and mineral production oppor-
tunities consistent with subparagraph (A), for 
purposes of subsections (b)(1) and (d). 
SEC. 5. LIMITATIONS ON FUTURE LEASING FOR LAND OR 
MINERAL ESTATE IN THE VICTOR VALLEY 
AREA OF CALIFORNIA. 
Notwithstanding anything in this Act to the contrary, 
prior to any lease, transfer, or other disposition of land 
or any mineral or surface estate for any area that is lo-
cated in the city of Victorville, California, the city of 
Victorville’s sphere of influence, or the city of Victorville’s 
proposed sphere of influence, all as delineated on the map 
entitled ‘‘Cemex USA and City of Victorville, California 
Land Disposal and Acquisition Agreement’’ and on file 
with the Secretary, the Secretary shall— 
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(1) consult with the city of Victorville, Cali-
fornia, and surface owners in that area; and 
(2) prohibit mining in that area. 
Æ 
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