[Senate Report 111-264]
[From the U.S. Government Printing Office]


                                                       Calendar No. 534
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-264

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



 
               SURFACE MINING CONTROL AND RECLAMATION ACT

                                _______
                                

                 August 5, 2010.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 2830]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 2830) 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, having considered the 
same, reports favorably thereon with an amendment and 
recommends that the bill, as amended, do pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. ABANDONED MINE RECLAMATION.

    (a) Reclamation Fee.--Section 402(g)(6)(A) of the Surface Mining 
Control and Reclamation Act of 1977 (30 U.S.C. 1232(g)(6)(A)) is 
amended by inserting ``and section 411(h)(1)'' after ``paragraphs (1) 
and (5)''.
    (b) Filling Voids and Sealing Tunnels.--Section 409(b) of the 
Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1239(b)) 
is amended by inserting ``and section 411(h)(1)'' after ``section 
402(g)''.
    (c) Use of Funds.--Section 411(h)(1)(D)(ii) of the Surface Mining 
Control and Reclamation Act of 1977 (30 U.S.C. 1240a(h)(1)(D)(ii)) is 
amended by striking ``section 403'' and inserting ``section 402(g)(6), 
403, or 409''.

                                Purpose

    The purpose of S. 2830 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.

                          Background and Need

    The Surface Mining Control and Reclamation Act of 1977 
(SMCRA) was enacted, among other things, to promote the 
reclamation of abandoned mines that endanger public health and 
safety and degrade the environment. It created a reclamation 
program, which is administered by the Office of Surface Mining 
Reclamation and Enforcement of the Department of the Interior, 
and is funded by an Abandoned Mine Land (AML) fee assessed on 
each ton of coal produced. Funds collected under the program 
are used 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 historically been 
available to address noncoal mine sites. Several western 
states, including New Mexico, Colorado, and Utah, have 
traditionally relied on AML funds to reclaim noncoal sites.
    The Surface Mining Control and Reclamation Act Amendments 
of 2006, which was enacted as part of the Tax Relief and Health 
Care Act of 2006 (Pub. L. No. 109-432), reauthorized collection 
of the AML fee, which would otherwise have expired. In 
addition, the 2006 amendments added a provision to section 411 
of SMCRA that requires the Secretary of the Interior to pay 
states and Indian tribes the so-called ``unappropriated balance 
amounts,'' which were previously allocated, but had not been 
paid, to the states and tribes. The Department of the Interior, 
pursuant to a Memorandum Opinion (M-37014) issued by the 
Solicitor on December 5, 2007, has interpreted the amendment to 
section 411 to prohibit ``uncertified'' States and Indian 
tribes (i.e., States and tribes that have not certified 
completion of their abandoned coal reclamation work pursuant to 
section 411(a) of SMCRA with the Secretary's concurrence) to 
use their ``unappropriated balance amounts'' provided to them 
under the AML program to address problems relating to noncoal 
abandoned mines. This same Memorandum Opinion also limits the 
ability of uncertified States and Indian tribes to use 
unappropriated balance amounts under the AML program for 
deposit into an acid mine drainage abatement and treatment 
fund.
    As previously noted, prior to the enactment of the 2006 
amendments, AML funds were available to uncertified States and 
Indian tribes to reclaim both coal and noncoal sites and 
western states such as New Mexico, Colorado, and Utah were able 
to prioritize the use of their 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 
at these sites 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. The 2006 amendment to section 
411, as interpreted by the Solicitor, prevents states from 
allocating their AML funds to address their most pressing 
needs.
    S. 2830 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 and 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. 2830 was introduced by Senator Bingaman on December 3, 
2009, with five original co-sponsors, Senators Bennet, Bennett, 
Hatch, Mark Udall, and Tom Udall. The Subcommittee on Public 
Lands and Forests held a hearing on the bill on April 21, 2010. 
The Committee on Energy and Natural Resources considered the 
bill and adopted an amendment in the nature of a substitute at 
its business meeting on June 16, 2010. The Committee ordered S. 
2830, as amended, favorably reported at its business meeting on 
June 21, 2010.

                        Committee Recommendation

    The Committee on Energy and Natural Resources, in open 
business session on June 21, 2010, by a voice vote of a quorum 
present, recommends that the Senate pass S. 2830, if amended as 
described herein.

                          Committee Amendment

    During its consideration of S. 2830, the Committee adopted 
an amendment in the nature of a substitute. The amendment 
provides that unappropriated balance amounts paid to 
uncertified States and Indian tribes under the Abandoned Mine 
Land Program pursuant to the Surface Mining Control and 
Reclamation Act can be used for acid mine drainage set-aside 
programs and for noncoal abandoned mine land reclamation.

                      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. 2830--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

    CBO estimates that enacting S. 2830 would reduce direct 
spending by about $5 million over the 2011-2020 period; 
therefore, pay-as-you-go procedures would apply. Enacting the 
legislation would not affect revenues. S. 2830 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 practices. Because such grants and 
payments are not subject to annual appropriation, they are 
considered direct spending. States and tribes that currently 
have backlogs of coal reclamation projects--so-called 
noncertified states--are obligated, under current law, to use 
those grants exclusively for those specific coal projects.
    S. 2830 would allow those noncertified states and tribes to 
use those funds for other types of reclamation projects not 
related to coal mining. CBO expects this change would increase 
direct spending in the near term by accelerating spending of 
reclamation grants. However, that short-term increase would be 
more than offset by reduced spending in later years because 
enacting the bill would prolong the certification process for 
some states. On balance CBO expects that this change would 
reduce the amount of direct spending by the federal government 
over the next 10 years.
    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. 
2830, if some states and tribes substitute noncoal projects for 
coal projects in the near term and delay their certification 
status by at least one year, total direct spending over the 
next 10 years would be less than anticipated under current law. 
The number of states and tribes that would be affected and the 
extent to which they would delay certification are uncertain. 
However, based on information from OSM and some of the affected 
states and tribes, CBO estimates that enacting the legislation 
would reduce direct spending by about $5 million over the 2011-
2020 period. Under current law direct spending for these grants 
and payments is expected to total about $4 billion over that 
period.
    The Statutory Pay-As-You-Go Act of 2010 establishes budget 
reporting and enforcement procedures for legislation affecting 
direct spending or revenues. S. 2830 would reduce direct 
spending from certain payments to states and tribes to reclaim 
abandoned mines. The changes in the deficit that are subject to 
those pay-as-you-go procedures are shown in the following 
table.

  CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 2830, 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, AS REPORTED BY THE SENATE COMMITTEE ON
                                                      ENERGY AND NATURAL RESOURCES ON JUNE 21, 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                             2010    2011    2012    2013    2014    2015    2016    2017    2018    2019    2020   2010-2015  2010-2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go...................       0       1       2       2      -2      -2      -2      -1      -1      -1      -1         1         -5
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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. 2830.
    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. 2830, as ordered reported.

                   Congressionally Directed Spending

    S. 2830, 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. 2830 on April 21, 
2010, which is provided below.

 Statement of Glenda Owens, Deputy Director, 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. 
2830. I look forward to working with you on matters relating to 
the Surface Mining Control and Reclamation Act of 1977 (SMCRA).
    S. 2830 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 2011 Budget proposal to limit SMCRA payments to 
high priority coal sites.
    The FY 2011 President's Budget includes a proposal to focus 
AML funds on the high priority coal reclamation sites in order 
to ensure that the most hazardous issues can be addressed 
before the AML fee expires. In addition to terminating 
unrestricted payments to certified states and tribes, the 
proposal will require all noncertified states to use their 
funding only for high priority coal reclamation projects.


                               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 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 may develop 
a State program for reclamation of abandoned mines. The 
Secretary may approve the State reclamation program and fund 
it. 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, 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.
    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. 
One change extended OSM's reclamation fee collection authority 
through September 30, 2021. The statutory fee rates were 
reduced by 10 percent from the current levels for the period 
from October 1, 2007, through September 30, 2012, and 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 fee collections for 
certified States are distributed as historic coal funds. The 
RAMP share was eliminated, and the historic coal allocation is 
further increased by the amount that previously was allocated 
to RAMP.
    Since 2006, the Department has interpreted the language of 
SMCRA section 411(h) to require that OSM use grants to provide 
funds to eligible States and Indian tribes and to preclude 
noncertified states and Indian tribes from using funds that 
they receive under that section for noncoal reclamation.


                                s. 2830


    Under SMCRA, states can use some of the AML funds they 
receive for non-coal reclamation. S. 2830 would amend SMCRA to 
allow noncertified states and tribes to use their mandatory 
funds received under Section 411(h)(1) from their 
unappropriated AML Fund balance for reclamation activities on 
non-coal mine sites. Noncertified states and tribes can already 
use the funds they receive from the ``state share'' and 
``historic coal'' formulas for non-coal reclamation.
    When Secretary Salazar appeared before the Committee on 
Energy and Natural Resources to testify about the FY 2011 
President's Budget for the Department of the Interior, he noted 
that in developing a balanced budget request for FY 2011, tough 
choices had to be made. The budget, in addition to eliminating 
unrestricted payments to certified states, also proposes 
limiting the use of AML payments to priority coal reclamation 
projects. The Department cannot support S. 2830 because it is 
inconsistent with the Fiscal Year 2011 budget.
    In an effort to focus the AML program on coal reclamation 
before the reclamation fee terminates, the President's FY 2011 
budget proposes to restrict the use of AML funds by 
noncertified states to high priority coal reclamation. Because 
S. 2830 is inconsistent with the Administration's goal of 
ensuring expeditious coal reclamation, we cannot support this 
bill.
    While we recognize the dangers that abandoned hard rock 
mines can pose, AML funding needs to be focused on the highest 
priority problems Congress originally identified in 1977. The 
challenging economic conditions, coupled with this 
Administration's commitment to fiscal responsibility, only 
heighten the need for AML funds to be devoted to the highest 
priority coal problems. We note that the administration has 
continued to invest in AML, both through the Bureau of Land 
Management and National Park Service American Recovery and 
Reinvestment Act of 2009 funding and the FY 2011 President's 
Budget to address hardrock mine reclamation on Federal Lands.
    We share your concern about non-coal abandoned mine sites 
and would be happy to share the expertise gained administering 
SMCRA and work with the Congress and this committee as we seek 
to address abandoned non-coal mine problems.
    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.

    Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, That this 
Act may be cited as the ``Surface Mining Control and 
Reclamation Act of 1977''.

           *       *       *       *       *       *       *


                            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.

           *       *       *       *       *       *       *