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DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS ACT, 1998
(Senate - September 18, 1997)

Text of this article available as: TXT PDF [Pages S9575-S9600] DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS ACT, 1998 The Senate continued with the consideration of the bill. Mr. BUMPERS. Mr. President, I ask unanimous consent that my distinguished colleague and friend from Montana, Senator Baucus, be recognized for 10 minutes, without my losing the right to the floor, and that I immediately be recognized following the conclusion of his remarks. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Mr. BAUCUS. Mr. President, first I want to thank my very good friend and colleague, Senator Bumpers, for yielding the time. It is very gracious of him. He has waited a good period of time to offer his amendment. Mr. President, I rise today to call on Congress to complete the New World Mine acquisition and protect Yellowstone National Park. Now that the administration and congressional leadership have reached a budget agreement that allows for the acquisition of the New World lands, we need to move decisively. We have belabored this matter much too long and now is the time to finish the job. Yellowstone National Park was created 125 years ago. ``For the Benefit and Enjoyment of the People.'' Indeed, this is the entrance at mammoth Yellowstone Park. You probably cannot read the inscription over the arch but it says ``For the Benefit and Enjoyment of the People.'' And of course, immediately to my right is the Old Faithful geyser. Every year, Mr. President, 3 million people visit the park, bringing their children and grandchildren to enjoy the unspoiled beauty that is Yellowstone--from the Roosevelt arch, which I am pointing to here on my right, at the original entrance, to the breathtaking grandeur of Old Faithful, to the spectacular wildlife which calls this unique place home. During the month of August, I was fortunate to be present to celebrate Yellowstone's 125th anniversary with Vice President Al Gore. As I entered the park, I remembered my first trip to Yellowstone many years ago. The noble and majestic geysers, the boiling paint pots, and the vast scenery were the stuff of magic to a small child--and remain so today. These wonders cannot be seen anywhere else in the United States or, for that matter, in the world. I guarantee you there is not one Montanan, young or old, that does not fondly remember his or her first visit to the park, or anybody in our country for that matter. Finishing the New World acquisition is critical so our children may witness the wonders of nature, much as we have over the past 125 years. For the past 8 years, America has lived with the threat that a large gold mine could harm Yellowstone, our Nation's first national park. This mine, [[Page S9576]] on the park boundary, could irreparably damage the park by polluting rivers and devastating wildlife habitat. In 1996, local citizens, the mining company itself, and the administration, reached a consensus agreement that would stop the proposed mine--they all agreed; the administration, the local community, and the company--and it would protect Yellowstone and surrounding communities. This agreement provides for the Federal Government to acquire the mine property from Battle Mountain Gold in exchange for $65 million. The balanced budget agreement calls for this money to be appropriated from the Land and Water Conservation Fund. The New World agreement, I think, is very important for two reasons. First, it protects Yellowstone National Park for future generations. What could be more important? Second, it protects my State of Montana. It protects Montana's natural heritage, but it also protects Montana's economy. Many of the local communities surrounding Yellowstone depend on the park for their economic well-being. If the mine had been built, Yellowstone would have been harmed, and with it the communities and the families that depend on Yellowstone for their livelihood. It is for this reason that a majority of local citizens and businesses oppose the mine and support the agreement. In addition, the agreement obligates the mining company to spend $22.5 million to clean up historic mine pollution at the headwaters of the Yellowstone River. This will create jobs and clean up the environment, thereby benefiting the regional economy and improving locally fisheries. As a Senator representing Montana, I will fight to ensure that Montana receives these benefits. The bipartisan budget agreement provides an increase of $700 million in land and water conservation funding. Of this increase, $315 million has been designated as funding for priority land acquisitions. It is my understanding in speaking with the administration and with others that the New World and Headwaters acquisition were specifically discussed as the projects that would be funded by the $315 million designation. It would be unconscionable for Congress to violate the spirit and the intent of the budget agreement by failing to appropriate the funding necessary to complete the New World acquisition. In addition, placing further restrictions such as requiring authorization is both unnecessary and unwise. We need no additional authorization. The agreement has been agreed to already. New legal procedures, on the other hand, would just stall an already reached agreement, one that is widely supported and one that protects the park. Every year, numerous land acquisitions that are not individually authorized take place utilizing Land and Water Conservation Funds. By attaching strings to this acquisition--it is an authorization--Congress will have done nothing but endanger Yellowstone National Park. Indeed, the President's senior advisers strongly object to attaching any strings to this funding, and if Congress insists on stalling and delaying this agreement, the President may well veto the Interior appropriations bill upon the recommendation of OMB and other agencies. Because Yellowstone is at stake, he would be right to do so. I pledge here today to help lead the charge to uphold that veto if necessary. When Yellowstone and Montana's heritage is threatened, I will not sit idly by. We can and we must protect Yellowstone National Park. I thank my good friend, the Senator from Arkansas, and I yield the floor. excepted committee amendment beginning on page 123, line 9 Mr. BUMPERS. Mr. President, I ask unanimous consent that the pending amendment be laid aside and that the Senate proceed to the committee amendment beginning on page 123, line 9. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Amendment No. 1224 To Excepted Committee Amendment Beginning on Page 123, Line 9 Through Page 124, Line 20 (Purpose: To ensure that Federal taxpayers receive a fair return for the extraction of locatable minerals on public domain land and that abandoned mines are reclaimed) Mr. BUMPERS. Mr. President, I send an amendment to the desk. The PRESIDING OFFICER. The clerk will report. The legislative clerk read as follows: The Senator from Arkansas [Mr. Bumpers], for himself and Mr. Gregg, proposes an amendment numbered 1224 to excepted committee amendment beginning on page 123, line 9. Mr. BUMPERS. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: Add the following at the end of the pending Committee amendment as amended: ``(c)(1) Each person producing locatable minerals (including associated minerals) from any mining claim located under the general mining laws, or mineral concentrates derived from locatable minerals produced from any mining claim located under the general mining laws, as the case may be, shall pay a royalty of 5 percent of the net smelter return from the production of such locatable minerals or concentrates, as the case may be. ``(2) Each person responsible for making royalty payments under this section shall make such payments to the Secretary of the Interior not later than 30 days after the end of the calendar month in which the mineral or mineral concentrates are produced and first place in marketable condition, consistent with prevailing practices in the industry. ``(3) All persons holding mining claims located under the general mining laws shall provide to the Secretary such information as determined necessary by the Secretary to ensure compliance with this section, including, but not limited to, quarterly reports, records, documents, and other data. Such reports may also include, but not be limited to, pertinent technical and financial data relating to the quantity, quality, and amount of all minerals extracted from the mining claim. ``(4) The Secretary is authorized to conduct such audits of all persons holding mining claims located under the general mining laws as he deems necessary for the purposes of ensuring compliance with the requirements of this subsection. ``(5) Any person holding mining claims located under the general mining laws who knowingly or willfully prepares, maintains, or submits false, inaccurate, or misleading information required by this section, or fails or refuses to submit such information, shall be subject to a penalty imposed by the Secretary. ``(6) This subsection shall take effect with respect to minerals produced from a mining claim in calendar months beginning after enactment of this Act. ``(d)(1) Any person producing hardrock minerals from a mine that was within a mining claim that has subsequently been patented under the general mining laws shall pay a reclamation fee to the Secretary under this subsection. The amount of such fee shall be equal to a percentage of the net proceeds from such mine. The percentage shall be based upon the ratio of the net proceeds to the gross proceeds related to such production in accordance with the following table: Net proceeds as percentage of gross proceeds: Rate \1 \ Less than 10............................................... 2.00 10 or more but less than 18................................ 2.50 18 or more but less than 26................................ 3.00 26 or more but less than 34................................ 3.50 34 or more but less than 42................................ 4.00 42 or more but less than 50................................ 4.50 50 or more................................................. 5.00 \1\ Rate of fee as percentage of net proceeds. ``(2) Gross proceeds of less than $500,000 from minerals produced in any calendar year shall be exempt from the reclamation fee under this subsection for that year if such proceeds are from one or more mines located in a single patented claim or on two or more contiguous patented claims. ``(3) The amount of all fees payable under this subsection for any calendar year shall be paid to the Secretary within 60 days after the end of such year. ``(e) Receipts from the fees collected under subsections and (d) shall be paid into an Abandoned Minerals Mine Reclamation Fund. ``(f)(1) There is established on the books of the Treasury of the United States an interest-bearing fund to be known as the Abandoned Minerals Mine Reclamation Fund (hereinafter referred to in this section as the ``Fund''). The Fund shall be administered by the Secretary. ``(2) The Secretary shall notify the Secretary of the Treasury as to what portion of the Fund is not, in his judgement, required to meet current withdrawals. The Secretary of the Treasury shall invest such portion of the Fund in public debt securities with maturities suitable for the needs of such Fund and bearing interest at rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketplace obligations of the United States of comparable maturities. The income on such investments shall be credited to, and form a part of, the Fund. ``(3) The Secretary is, subject to appropriations, authorized to use moneys in the Fund [[Page S9577]] for the reclamation and restoration of land and water resources adversely affected by past mineral (other than coal and fluid minerals) and mineral material mining, including but not limited to, any of the following: ``(A) Reclamation and restoration of abandoned surface mined areas. ``(B) Reclamation and restoration of abandoned milling and processing areas. ``(C) Sealing, filling, and grading abandoned deep mine entries. ``(D) Planting of land adversely affected by past mining to prevent erosion and sedimentation. ``(E) Prevention, abatement, treatment and control of water pollution created by abandoned mine drainage. ``(F) Control of surface subsidence due to abandoned deep mines. ``(G) Such expenses as may be necessary to accomplish the purposes of this section. ``(4) Land and waters eligible for reclamation expenditures under this section shall be those within the boundaries of States that have lands subject to the general mining laws-- ``(A) which were mined or processed for minerals and mineral materials or which were affected by such mining or processing, and abandoned or left in an inadequate reclamation status prior to the date of enactment of this title; ``(B) for which the Secretary makes a determination that there is no continuing reclamation responsibility under State or Federal laws; and ``(C) for which it can be established that such lands do not contain minerals which could economically be extracted through the reprocessing or remining of such lands. ``(5) Sites and areas designated for remedial action pursuant to the Uranium Mill Tailings Radiation Control Act of 1978 (42 U.S.C. 7901 and following) or which have been listed for remedial action pursuant to the Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. 9601 and following) shall not be eligible for expenditures from the Fund under this section. ``(g) As used in this Section: ``(1) The term ``gross proceeds'' means the value of any extracted hardrock mineral which was: (A) sold; (B) exchanged for any thing or service; (C) removed from the country in a form ready for use or sale; or (D) initially used in a manufacturing process or in providing a service. ``(2) The term ``net proceeds'' means gross proceeds less the sum of the following deductions: (A) The actual cost of extracting the mineral. (B) The actual cost of transporting the mineral to the place or places of reduction, refining and sale. (C) The actual cost of reduction, refining and sale. (D) The actual cost of marketing and delivering the mineral and the conversion of the mineral into money. (E) The actual cost of maintenance and repairs of: (i) All machinery, equipment, apparatus and facilities used in the mine. (ii) All milling, refining, smelting and reduction works, plants and facilities. (iii) All facilities and equipment for transportation. (F) The actual cost of fire insurance on the machinery, equipment, apparatus, works, plants and facilities mentioned in subsection (E). (G) Depreciation of the original capitalized cost of the machinery, equipment, apparatus, works, plants and facilities mentioned in subsection (E). (H) All money expended for premiums for industrial insurance, and the actual cost of hospital and medical attention and accident benefits and group insurance for all employees. (I) The actual cost of developmental work in or about the mine or upon a group of mines when operated as a unit. (J) All royalties and severance taxes paid to the Federal government or State governments. ``(3) The term ``hardrock minerals'' means any mineral other than a mineral that would be subject to disposition under any of the following if located on land subject to the general mining laws: (A) the Mineral Leasing Act (30 U.S.C. 181 and following); (B) the Geothermal Steam Act of 1970 (30 U.S.C. 100 and following); (C) the Act of July 31, 1947, commonly known as the Materials Act of 1947 (30 U.S.C. 601 and following); or (D) the Mineral Leasing for Acquired Lands Act (30 U.S.C. 351 and following). ``(4) The term ``Secretary'' means the Secretary of the Interior. ``(5) The term ``patented mining claim'' means an interest in land which has been obtained pursuant to sections 2325 and 2326 of the Revised Statutes (30 U.S.C. 29 and 30) for vein or lode claims and sections 2329, 2330, 2331, and 2333 of the Revised Statutes (30 U.S.C. 35, 36 and 37) for placer claims, or section 2337 of the Revised Statutes (30 U.S.C. 42) for mill site claims. ``(6) The term ``general mining laws'' means those Acts which generally comprise Chapters 2, 12A, and 16, and sections 161 and 162 of title 30 of the United States Code.'' The PRESIDING OFFICER (Mr. Bennett). The Senator from Arkansas. Mr. BUMPERS. Mr. President, I have come here today for the eighth consecutive year to debate what I feel very strongly about and have always felt strongly about. I have never succeeded. Since I am going to be leaving next year, I know all my friends from the West are going to be saddened by my departure, and so far I don't have an heir apparent to take on this issue. First of all, I want to make an announcement to the 262 million American people who know very little or nothing about this issue. The first announcement I want to make today is that they are now saddled with a clean-up cost of all the abandoned mining sites in the United States of somewhere between $32.7 and $71.5 billion. Now, let me say to the American people while I am making that announcement, you didn't do it, you had nothing to do with it, but you are going to have to pick up the tab of between $32 to $71 billion. The Mineral Policy Center says there are 557,000 abandoned mines in the United States. Think of that--557,000 abandoned mines, and 59 of those are on the Superfund National Priority List. Mining has also produced 12,000 miles of polluted streams. The American people didn't cause it; the mining industry did it, and 2,000 of those 557,000 sites are in our national parks. Now, Mr. President, my amendment would establish a reclamation fund in the Treasury and it would be funded by a 5-percent net smelter return for mining operations on taxpayer-owned land. Royalties based on gross income or a net smelter return are traditionally charged for mining on private land and for mining on State-owned land. Much of the hardrock mining going on in this country is being done on the lands that you have heard me talk a great deal about--that is, lands that have been sold by the Federal Government for $2.50 an acre. However, a significant amount of mining goes on on lands where people have a mining claim on Federal lands and they get a permit to start mining. The Federal Government continues to own the land. We don't get anything for it. We don't even get $2.50 an acre for that land. So my net smelter royalty only applies to those lands which we still own. Now, isn't that normal and natural? If you own land that has gold under it and somebody comes by and wants to mine the gold under your land, the first thing you do is say, how much royalty are you willing to pay? Nationwide, that figure is about 5 percent. But I can tell you one thing, and this is a major point, if somebody came to you and said, I want to mine the gold, the silver, platinum, or palladium under your land, the first thing you would demand is, How much are you going to pay me for it? The U.S. Government cannot because Congress won't let them charge a royalty for mining on public land. We say, ``Here are some of the terms under which you can mine. ``Sic 'em, Tiger.'' Have a good time. Make a lot of money. And be sure you don't send the Federal Government, namely, the taxpayer of America, any money, and if you possibly can, leave an unmitigated environmental disaster on our hands for the taxpayers to clean up.'' You know, Mr. President, I still can't believe it goes on. I have been at this for 8 years and I still cannot believe what I just said, but it is true. The other part of my bill establishes a net-income based reclamation fee based on the profits of the mining company on lands that were Federal lands but that have been patented by the mining companies; that is, lands which we have sold for $2.50 an acre. The only way in the world we can ever recover anything from these mines is through a reclamation fee. It is altogether proper that we get something in return for the lands that we sold for $2.50 an acre and it is altogether proper that that money be used to reclaim these 557,000 abandoned mine sites. Mr. President, here is a closer look at what I just got through saying. The royalty rate in the Bumpers/Gregg amendment is 5 percent net smelter return, which is typically what is charged for mining operations on private land. The royalty will produce $175 million over the next 5 years. The reclamation fee ranges from 2 to 5 percent of net income for operations on patented lands, the lands that we sold for $2.50 an acre. That produces $750 million. And altogether, those two provisions would, over the next 5 years, [[Page S9578]] produce $925 million--not a very big beginning on the roughly $32 to $70 billion we are going to have to cough up to clean those places up. Mr. President, look at this chart right here. The thing that is a real enigma to me, is that we make the coal operators in this country pay us 12.5 percent of their gross income for every ton of coal they take off of Federal lands. That is for surface coal. If it's an underground mine the coal companies pay a royalty of 8 percent of their gross income to the Federal Government. Natural gas. If you want to bid on Federal lands and produce natural gas, it is incumbent upon you to pay a minimum of 12.5 percent of your gross income. When it comes to oil, if you want to drill in the Gulf of Mexico, you must also pay a 12.5 percent gross royalty. There are oil and gas wells all over the Western part of the United States. And for every dollar of gas or oil they produce, they send Uncle Sam 12.5 cents. But look here. For gold, they don't send anything. For silver, they don't send anything. For platinum, they don't send anything. And since 1872, when the old mining law was signed by Ulysses Grant, the mining companies have not paid a penny to the U.S. Treasury. Now, Mr. President, in 1986--and I use this just as an illustration to tell you why we so desperately need this reclamation fund in the U.S. Treasury--there was a mine called Summitville in Colorado. Summitville was owned by a Canadian mining company called Galactic Resources. They got a permit to mine on private land from the State of Colorado. In June of that same year, their cyanide/plastic undercoating--and I will explain that in a moment--began to leak. Let me stop just a moment and tell people, my colleagues, how gold mining is conducted. You have these giant shovels that take the dirt and you put it on a track and you carry it to a site and you stack it up on top of a plastic pad, which you hope is leakproof. And then you begin to drip--listen to this--you begin to drip cyanide--yes, cyanide--across the top of this giant heap of dirt. The cyanide filters down through this big load of dirt and it gathers up the gold and it filters out to a trench on the side. Now, you have to bear in mind that if that plastic pad, which I just described for you a moment ago, is not leakproof, if it springs a leak, you have cyanide dripping right into the ground, right into the water table, or going right into the nearest stream, and so it was with Summitville. The plastic coating on the ground, which was supposed to keep the cyanide controlled, began to leak. And the cyanide began to escape. And the cyanide began to run into the streams headed right for the Rio Grande River. Galactic could not do anything. They weren't close to capable of doing anything. And so the Federal Government goes to Galactic and says, ``We want you to stop this and we want you to pay us damages.'' Do you know what they did? They took bankruptcy. Smart move. They took bankruptcy. So what does that leave the U.S. Government, which is going to ultimately have the responsibility for controlling this leakage of cyanide poison? It leaves us with a $4.7 million bond. That is the bond they had put up to the State of Colorado in order to mine. Here you have a minimum of $60 million disaster on your hands with a $4.7 million bond. And so it is today, Mr. President--35 people employed since 1986, controlling the cyanide runoff from the mine in Colorado, and the ultimate cost to the taxpayers of this country will be $60 million, minimum. Here is one that is even better, Mr. President. This came out of the New York Times 2 days ago. It is a shame that every American citizen can't read this. It's called ``The Blame Slag Heap.'' In northern Idaho's Silver Valley, the abstractions of the Superfund program--``remediation,'' ``restoration,'' ``liability''--meet real life. For over a century, the region's silver mines provided bullets for our soldiers and fortunes for some of our richest corporations. The mines also created a toxic legacy: wastes and tailings, hundreds of billions of pounds of contaminated sediment * * *. In 1996--13 years after the area was declared the nation's second-largest Superfund site, the Justice Department filed a $600 million lawsuit against the surviving mining companies. The estimated cost of cleanup ranges up to a billion dollars. The Government sued after rejecting the companies' laughably low settlement offer of $1 million. A $1 billion cleanup, and the company that caused the damage offers $1 million to settle. The companies, however, have countersued. They are countersuing the Federal Government, and do you know what they allege? They say it happened because the U.S. Government failed to regulate the disposal of mining waters. Can you imagine that? The company is suing the Government because the Government didn't supervise more closely. The story closes out by saying, ``Stop me before I kill again.'' Mr. President, I ask unanimous consent the article from the New York Times be printed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: The Blame Slag Heap (By Mark Solomon) Spokane, Wash.--In northern Idaho's Silver Valley, the abstractions of the Superfund program--``remediation,'' ``restoration,'' ``liability''--meet real life. For over a century, the region's silver mines provided bullets for our soldiers and fortunes for some of our richest corporations. The mines also created a toxic legacy: wastes and tailings, hundreds of billions of pounds of contaminated sediment, leaching into a watershed that is now home to more than half a million people. In 1996, 13 years after the area was declared the nation's second-largest Superfund site, the Justice Department filed a $600 million lawsuit against the surviving mining companies. The estimated cost of the clean-up ranges up to a billion dollars. The Government sued after rejecting the companies' laughably low settlement offer of $1 million. If the companies don't pay, the Federal taxpayers will have to pick up the tab. The companies, however, have countersued, alleging, among other things, that the Government itself should be held responsible. Why? Because it failed to regulate the disposal of mining wastes. Do I believe my ears? In this era of deregulation, when industry seeks to replace environmental laws with a voluntary system, are the companies really saying that if only they had been regulated more they would have stopped polluting? I've heard the Government blamed for a lot of things, but regulatory laxity was never one of them--until now. In fact, Idaho's mining industry has long fought every attempt at reform. In 1932, for example, a Federal study called for the building of holding ponds to capture the mines' wastes. The companies fought that plan for 36 years, until the Clean Water Act forced them to comply. Now Congress is debating the reauthorization of the Superfund, and industry wants to weaken the provision on damage to natural resources. If the effort succeeds, what will happen in 50 years? Will the polluters sue the Government, blaming it for failing to prevent environmental damage? Quick, stop them before they kill again. Mr. CRAIG. Will the Senator yield specifically to his last comment? Mr. BUMPERS. I yield for a question. Mr. CRAIG. Does the Senator know about the new science that comes out of the study of the Superfund site in Silver Valley, ID? Does he understand also that mediation on the Superfund is now tied up in the courts--conducted by the State of Idaho--that has really produced more cleanup and prevented more heavy metals from going into the water system, and the value of that? Does he also recognize that the suit filed by the Attorney General was more politics and less substance? Mr. BUMPERS. That is a subjective judgment, is it not? Mr. CRAIG. I believe that is a fact. Thank you. Mr. BUMPERS. Is it not true that the company has countersued the Federal Government saying, ``You should have stopped us long ago''? Isn't that what the countersuit says--``You should have regulated us more closely''? Mr. CRAIG. But the countersuit says that based on today's science, if we had known it then, which we didn't--you didn't, I didn't, and no scientist understood it--then we could have done something different. But as of now this is not an issue for mining law; this is an issue of a Superfund law that doesn't work, that promotes litigation. That is why the arguments you make are really not against mining law reform, which you and I support in some form. What you are really taking is a Superfund law that is tied up in the committees of this Senate, is nonfunctional, and produces lawsuits. Mr. BUMPERS. Can you tell me where the Superfund law says if you [[Page S9579]] were ignorant of what you were doing and caused the damage, you are excused? Do you know of any place in the Superfund where there is such language as that? Mr. CRAIG. What I understand is we have a 100-year-old mine where we are trying to take today's science and, looking at it based on your argument, move it back 100 years. We should be intent on solving today's problems and not arguing 100 years later. Mr. BUMPERS. Is the State of Idaho willing to take over this cleanup site and absolve the U.S. Government of any further liability? Mr. CRAIG. My guess is that the State of Idaho with some limited assistance would champion that cause. I have introduced legislation that would create a base of authority. We believe it would cost the Federal Government less than $100 million. The State would work with some matching moneys. They would bring in the mining companies and force them to the table to establish the liability. Guess what would happen, Senator. We would be out of the courts. Lawyers would lose hundreds of thousands of dollars in legal fees. And we would be cleaning up Superfund sites that have been in litigation for a decade, by your own admission and argument. Mr. BUMPERS. Senator, the U.S. Government has sued this company for $600 million. The Government estimates that the cleanup cost is going to be $1 billion. The Senator comes from the great State of Idaho, and I am sure they don't enjoy ingesting cyanide any more than anybody else in any other State would. But the Senator would have to admit that Idaho couldn't, if it wanted to, clean up this site. It doesn't have the resources. It is the taxpayers of this country that are stuck with that $1 billion debt out there with a company which brashly says, ``If you would have regulated us closer, we wouldn't have done it.'' That is like saying, ``If you had taken my pistol away from me, I wouldn't have committed that murder.'' Mr. CRAIG. If you would yield only briefly again--I do appreciate your courtesy--there is not a $1 billion price tag. That is a figment of the imagination of some of our environmental friends. There is no basis for that argument. There isn't a reasonable scientist who doesn't recognize that for a couple hundred million dollars of well-placed money, that problem goes away. But, as you know, when you involve the Federal Government, you multiply it by at least five. That is exactly what has gone on here. I will tell you that for literally tens of millions of dollars, the State of Idaho, managing a trust fund, has shut down more abandoned mines, closed off the mouths of those mines, and stopped the leaking of heavy metal waters into the Kootenay River, and into the Coeur d'Alene, and done so much more productively, and it has not cost $1 billion. Nobody in Idaho, including our State government, puts a $1 billion price tag on this. This is great rhetoric, but it is phony economics. Mr. BUMPERS. Mr. President, let me just say to the Senator from Idaho that my legislation for 8 long years has been an anathema to him. I am not saying if I were a Senator from Alaska, Idaho, or Nevada I wouldn't be making the same arguments. But I want to make this offer. It is a standing offer. If the State of Idaho will commit and put up a bond that they will clean up all those abandoned mine sites in that State, that they will take on the responsibility, and do it in good order, and as speedily as possible, I will withdraw my amendment. I don't have the slightest fear. We all know that this is a Federal problem. It is a Federal responsibility to clean up these mine sites. The only way we can do it is to get some money out of the people who got the land virtually free and who have left us with this $30 billion to $70 billion price tag. Let me go back, Mr. President, and just state that since 1872 the U.S. Government in all of its generosity has given away 3.244 million acres of land. We have given it away for $2.50 an acre. Sometimes we got as much as $5 an acre. There are 330,000 claims still pending in this country. And the Mineral Policy Center estimates that since 1872 we have patented land containing $243 billion worth of minerals--land that used to belong to the taxpayers of this country. We now have a moratorium on all but 235 patent applications. But the 235 applications, when they are granted, will represent the continued taxpayer giveaway of billions of dollars worth of minerals and land. Stillwater Mining Company in Montana has a first half certificate for 2,000 acres of land in the State of Montana. What does that mean? That means they are virtually assured of getting a deed to 2,000 acres of land. It means that they are virtually assured of paying the princely sum of $10,180. Guess what is what is lying underneath the 2,000 acres: $38 billion worth of palladium and platinum. My figure? No. Stillwater's figure. Look at their prospectus. Look at their annual report. They are saying to the people who own stock, ``Have we pulled off a coup.'' We are going to get 2,000 acres of Federal land for $10,180, and it has $38 billion worth of hardrock minerals under it--palladium and platinum. You know, one of the things that I think causes me to fail every year is that it is so gross, so egregious, that people can't believe it is factual, that it is actually happening. But it is true. Look at what happened to Asarco. They paid the U.S. Government $1,745. What did they get? $2.9 billion worth of copper and silver. You never heard of a company called Faxe Kalk. Do you know the reason you never heard of it? It is a foreign mining company. You don't usually hear of them. The other reason you don't hear of them is because they are a Danish company. One of the things that makes this issue so unpalatable is that many of the biggest 25 mining companies in the United States are foreign companies. We ought to go today to Denmark and say, ``We would like some of your North Sea oil.'' What do you think they would say if we said, ``Look, we are going to start drilling here off the coast of Denmark. We will give you a dollar now and then for the privilege.'' They would say, ``You need to be submitted for a saliva test.'' But the Faxe Kalk Corporation comes here, and they say, ``You have 110 acres out here in Idaho, Uncle Sam. We would like to have it. We will pay $275 for it.'' So they go to Bruce Babbitt and they say, ``We will give you $275 for this 110 acres.'' Do you know what is underneath it? One billion dollars worth of a mineral called travertine. It is a mineral used to whiten paper. That is $275 the taxpayers get and $1 billion a Danish corporation gets. In 1995 the Secretary of the Interior was forced to deed 1,800 acres of public land in Nevada to Barrick Gold Co., a Canadian company, for its Gold Strike Mine. Barrick paid $9,000 for that 1,800 acres. Mr. President, there isn't a place in the Ozark Mountains of my State where you could buy land for one-tenth that price. The law required Secretary Babbitt to give Barrick, which is the most profitable gold company in the world, land containing $11 billion worth of gold for $9,000. I could go on. There are other cases just as egregious as that. For 8 long years, I have stood at this very desk, and I have made these arguments, as I say, which are so outrageous I can hardly believe I am saying them, let alone believing them. Newmont Mining Co. is one of the biggest gold companies in the world. They have a large mine in Nevada which is partially on private land. When people say that somebody is mining on private lands, if you will check, Mr. President, you will find that in most cases that land was Federal land that somebody else patented, and then somebody like Newmont comes along, and they say, ``You hold a patent on this land that you got from the Federal Government for $2.50 an acre and we want to mine on it.'' Do you know what Newmont pays to the land owner on its mine in Nevada? An 18 percent royalty. Mr. President, as I just mentioned, most of the land being mined on, so-called private lands, are private because somebody bought it from the Federal Government years ago for $2.50 or $5 an acre. True, it is private. They own it. They paid for it. The mining companies are willing to pay the States--they are willing to pay the States a royalty. They are willing to pay the States a severance tax. They are willing to pay the private owners of this country an average of 5 percent. But when it [[Page S9580]] comes to paying the Federal Government, it is absolutely anathema to them. There is no telling how much the National Mining Association spends every year on lobbying, on publicity, on mailers, you name it, to keep this sweetheart deal alive. Since I started on this debate 8 years ago, the mining companies of this country have taken out billions of dollars worth of minerals from taxpayer-owned land. And do you know what the Federal Government and the taxpayers of this country got in exchange for that? One environmental disaster after another to clean up. And so that is the reason my bill, which contains a royalty and a reclamation fee, goes into a reclamation fund to at least start undoing the environmental damage these people have done because it is too late to get a royalty out of them. The gold is gone. We got the shaft. They got the gold. And it is too late to do anything about it. But you can start making them pay now to clean up those 555,000 sites. Arizona has a 2 percent gross value royalty for mines located on State lands and a 2.5 percent net income severance tax for all mines in the State. Montana, 5 percent; fair market for raw metallic minerals; 1.6 percent of the gross value in excess of $250,000 for gold, silver, platinum group metals. All of these States charge royalties for mining operations on State- owned land. Most of them also charge a severance tax for mining operations on all land in the State. Mr. President, what do they know that we don't? A lot. The States are collecting the money, but not Uncle Sam. Do you know why I have lost this fight for the last 8 years? Those States that have mining on Federal lands have great representation in the U.S. Senate. I know that every single Western Senator is going to start flocking onto this floor as soon as I start talking about this amendment. Do you see anybody else on this floor who is not from the West? Do you know why? My mother used to say, ``Everybody's business is nobody's business.'' This is everybody's business, except it just doesn't affect their States. There are no mining jobs in their States. For 8 years I have heard all these sayings, as to how many jobs you are going to lose, despite the fact the Congressional Budget Office says, ``None.'' ``You are going to lose all these jobs. It is going to discommode the economies of our respective States.'' And yet the States don't hesitate. We have people in this body who are Senators from the West who have served in State legislatures, who helped pass these laws, who helped impose royalties and severance taxes against the mining companies. But somehow or other they go into gridlock when they get here. At the State level they don't mind assessing these kinds of taxes. The States need the money. We do, too. We are the ones who are tagged with this gigantic bill for reclamation. Mr. President, I could go through a list of things I have here. Amax, for example, pays 6-percent royalty on the Fort Knox Mine in Alaska. The chairman of the Energy Committee 2 years ago passed legislation providing for a land exchange on Forest Service land in Alaska. The Kennecott Mining Co. was willing to pay the Forest Service a $1.1 million fee up front, and then a 3-percent net smelter return on the rest of it. We agreed on it, ratified it. I voted for it. But, now, isn't it strange that here is a mine in Alaska that we had to legislatively approve--because of the ownership of the land, it involved a land exchange--and I was happy to do it because it was a fair deal and these people demonstrated an interest in paying a fair royalty for what they took. Mr. President, I will yield the floor. I will not belabor this any further. Mr. MURKOWSKI. I wonder if the Senator will yield for a question, because it affects my particular State? Mr. BUMPERS. I was getting ready to yield the floor. I want to say in closing, I know a lot of people would like to get out of here as early as they can tonight. I don't intend to belabor this. I said mostly what I want to say. I may respond to a few things that are said, so I am going to turn it over to my friends from the West and let them respond for a while, and then hopefully we can get into a time agreement after four or five speakers have spoken. I yield the floor. The PRESIDING OFFICER. The Senator from Alaska. Mr. MURKOWSKI. Mr. President, I would like to respond to my friend from Arkansas on the mining issues he brings up. Mr. BUMPERS. Will the Senator yield for just a moment? When I introduced this amendment, I failed to state that my chief cosponsor on the bill is Senator Gregg from New Hampshire. The PRESIDING OFFICER. The Senator from Alaska. Mr. MURKOWSKI. Again, I would like to call attention to the statement that was made by the Senator from Arkansas relative to the Green Creek Mine. The thing that made that so different is the unique characteristic of that particular discovery, where all the components were known relative to the value of the minerals. The roads were in, the infrastructure was in. It was not a matter of discovery, going out in an area and wondering whether you were going to develop a sufficiency of resources to amortize the investment necessary to put in a mine. So I remind my colleagues, there is a big difference between the rhetoric that we have heard here and the practical realities of experience in the mining industry. We have seen both the effort by Canada and Mexico to initiate royalties. What has happened to their mining industry? It simply moved offshore. We have to maintain a competitive atmosphere on a worldwide basis; otherwise the reality for United States mining will be the same as was experienced in both Mexico and Canada. I strongly urge my colleagues to join me in opposition to Senator Bumpers' amendment. This is not the first attempt he has made, initiating actions through the Interior appropriations process. We seem to be subjected to this every year. I know the intentions are good. But the reality is that the amendment as offered represents a profound--and I urge my colleagues to reflect on this--a profound and wide-reaching attempt to reform the Nation's mining laws in a way that prevents any real understanding of the impacts of the legislation. Because, as written, Senator Bumpers' amendment would not only put a royalty of all mining claims--all mining claims--but would also put a fee on all minerals produced off of lands that have ever gone to patent. Those are private lands. Let me, again, cite what this amendment does. It would not only put a royalty on all mining claims, but would also put a fee on all minerals produced off lands that have ever gone to patent. Those are private lands. So, this is nothing more than a tax. It is a tax. And it is this Senator's opinion that this makes Senator Bumpers' amendment subject to a constitutional point of order. Let me set this aside for a moment and address the specifics of my opposition to the amendment. This approach to revenue generation is no different than placing a tax on, say, all agricultural production from lands that were at one time, say, homesteads. It is retroactive. Even though Senator Bumpers doesn't like it, the fact remains that patent claims are exactly the same as homestead lands. They are all private lands. I cannot even begin to imagine the genesis of this punitive and dangerous amendment. This is an unmitigated attack on all things mining. We have absolutely no idea what impact this legislation would have on our ability to maintain a dependable supply of minerals; no idea what environmental disasters would be created when this legislation shuts down the producing mines across the country. We have no idea how many workers will be put on the unemployment line. We have no idea whatsoever on the effects of this legislation. The issue is very complex. It is not appropriate that it be dealt with in an appropriations process. There is a right way and a wrong way to go about mining reform. You can chose the right way and offer your reform in a fair and open process, giving everyone the opportunity to participate in the formation of the legislation, which is what Senator Craig and I, along with the cosponsors of the legislation, have attempted to do in the legislation that has been offered. Or you can, as I observe, do what Senator Bumpers has seen fit to do and offer your legislation in a form where not one single person [[Page S9581]] outside the Senator's office has the opportunity to either understand or contribute to the process. I think there is too much at stake in mining reform to treat this complex subject in such a dangerous and offhand manner. Senator Craig, along with myself, Senator Reid, Senator Bryan, Senator Bennett, Senator Burns, Senator Hatch, Senator Thomas, Senator Campbell, Senator Stevens, Senator Kempthorne, among a few, have introduced S. 1102, the Mining Reform Act of 1997. As such, I encourage my colleagues to recognize the time and effort that has been put into developing a package of reforms that set the stage for a meaningful, honest, and comprehensive reform. We are going to be holding a series of hearings to explore all aspects of the legislation and the effect it will have on the Nation's environment and economy. I know many Members have indicated their interest in the formation of this legislation and the process of the hearings as they unfold and intend to participate. This is how reforms should take place. Reform should take place in an orderly manner in the hearing process, and we have lived up, I think, to the expectations of those who have indicated, ``All right, we will stand with you, but give us a bill.'' We have met that obligation and filed a piece of comprehensive mining reform legislation. We are going to consider the amendments as part of the process of debate, and if they make a legitimate contribution to the mining reform effort--and I emphasize reform effort--we are going to adopt them. This is the appropriate method to resolve mining reform, not as a last- minute amendment to the Interior appropriations bill, which we have seen the Senator from Arkansas propose time and time again. The reform that Senator Craig, I, and others have offered lays a solid foundation upon which to build mining reform. Our mining reform bill should, I think, please reasonable voices on both sides. If you seek reform that brings a fair return to the Treasury, and it is patterned after the policies of the mining law of Nevada--and it works in Nevada--and it protects the environment and preserves our ability to produce strategic minerals, I think you will find a great deal to support in this legislation. It does work. The legislation protects some of the smaller interests, the small miners. It maintains traditional location and discovery practices. Yes, it is time for reform, but it has to be done right. Bad decisions will harm a $5 billion industry whose products are the muscle and sinew of the Nation's industrial output. The future of as many as 120,000 American miners and their families and their communities are at stake. Any action to move on amendment is absolutely irresponsible to those individuals, because it is the wrong way to do it. I know you have heard this before, time and time again, but we do have a bill in now and it is a responsible bill. We owe Americans a balanced and open resolution to the mining reform debate. This reform mining legislation honors the past, recognizes the present, and sets the stage, I think, for a bright future. The legislation that we offer advances reforms in four areas: royalties, patents, operations, and reclamation. Let me be very brief in referring to the royalties. The legislation creates the first-ever hard rock royalty. It requires that 5 percent of the profit made from mining on Federal lands be paid to the Federal Government. This legislation seeks a percentage of the profit, not the value of the mineral in place. We do this for a very specific reason. Failure to do so would cause a shutdown of many operations and prevent the opening of new mines. It would also cause other operators to cast low-ore concentrates into the spoil pile as they seek out only the very highest grade of ores. America boasts some very profitable mines, but there is an equal number that operate on a very thin margin. The Senator from Arkansas doesn't address the reality of what happens when the price of silver or the price of gold drops and their margin squeezes. We have some mines that actually operate during those periods with substantial losses. That is why we designed our royalty to take a percentage of the profits. Under the proposal that the Senator from Arkansas has proposed, time and time again, many of these mines would actually operate at a loss because they could not deduct their production costs prior to the sale of their finished product. If the mine makes money, the public gets a share. That is a fair way to do it. Nobody benefits from a royalty system so intrusive that it must be paid for through the loss of jobs, the health of local communities, and the abandonment of lower grade mineral resources. Some would want to simply drive the mining industry out of the United States because they look at it as some kind of an environmental devil that somehow can't, through advanced technology, make a contribution to the Nation. I say that they can, they will and, through this legislation, they will be able to do a better job. In 1974, British Columbia put a royalty on minerals before cost of production was factored in. Five thousand miners lost their jobs. That is a fact. Only one new mine went into operation in 1976. The industry was devastated. The royalty was removed 2 years later in 1978. That is the reality of the world in which we live and the international competitiveness associated with this industry. Years later, the industry in British Columbia still has not completely recovered. I happen to know what I am talking about because the Senator from Alaska is very close to our neighbors in British Columbia. So I say to those who forget history, they are doomed to repeat it. Patents: Patenting grants the right to take title to lands containing minerals upon demonstration that the land can support a profitable operation. Patents have been abused, no question about it. A small number of unscrupulous individuals have located mineral operations for the sole purpose of gaining title and turning the land into a lodge or ski resort. These practices are wrong. They are not allowed under the new legislation. The reform that we have offered cures these problems without punishing the innocent. We would continue to issue patents to people engaged in legitimate mining operations, but a patent would be revoked if the land is used for purposes other than mining. Operations: To separate legitimate miners from mere speculators and to unburden the Government from mining claims with no real potential, we require a $25 filing fee be paid at the time the claim is filed and make the annual $100 claim maintenance fee permanent. Environmental protection: Our revisions weave a tight environmental safety net. The reform permit process requires approval for all but the most minimal activities. The bill requires reclamation, and the bill requires full bonding to deal with abandonment. The Senator from Arkansas doesn't acknowledge the effort relative to what this bonding will mean. It will mean that mines that are abandoned will have a reclamation bond in place to make sure the public does not have to bear the cost of cleanup. The bond is going to be there; it is going to be held. It is a performance bond, that is what it means. As we address the responsibility for a prudent mining bill, please recognize the contributions that have been made in trying to formulate something realistic that will address the abuses that we have had in the past. That is what we do in our bill. The bill addresses mines already abandoned by establishing a reclamation fund as well. Filing fees, maintenance fees and the royalty go into that fund. So we have addressed that in a responsible manner. For those who seek meaningful reform to the Nation's general mining laws, then our legislation does the job. It fixes past abuses without punishing the innocent. It shares profits without putting people out of work. It assures the mining operations cause the least possible disturbance. And it makes sure we don't pay for actions of a few bad operators and provide sources of funds for reclamation. Both sides of the mining reform debate have come a long way toward a constructive compromise. I have met with Senator Bumpers on many occasions, and at one time actually thought we were going to reach an accord. But unfortunately we didn't. But we have gone ahead and put in the bill. The bill will help carry us, I think, the last [[Page S9582]] mile and provide the balanced reform that has, so far, eluded us. I urge my colleagues to join with me, Senator Craig and others in continuing to craft this open and meaningful mining reform. With equal vigor, I ask each and every Member of this body to join us in opposing Senator Bumpers' proposal, a reform crafted in the dark of night and offered in a forum guaranteed to confuse and shroud the real impact of the legislation. Mr. President, I yield the floor. Mr. GORTON addressed the Chair. The PRESIDING OFFICER. The Senator from Washington. Mr. GORTON. Mr. President, I will not at this point speak to the merits of the amendment. Both the Senator from Arkansas and the Senator from Alaska have done so, each of them repeating points that I can remember having heard almost verbatim in several previous sessions of Congress. My remarks will be much more narrow. Section (d)(1) of this amendment states: Any person producing hardrock minerals from a mine that was within a mining claim that has subsequently been patented under the general mining laws shall pay a reclamation fee to the Secretary under this subsection. The Senator from Arkansas quite properly described that fee as a severance tax, and a severance tax it is. It applies only to minerals coming out, presumably, in the future from certain classes of lands in the United States. It is not something directed at the restoration of those lands, but is to be used as a source of money for much broader purposes. The Senator's description of it as a tax is accurate. Article I, section 7 of the Constitution of the United States under which we operate states--and I quote-- All Bills for raising revenue shall originate in the House of Representatives. No such tax appears in the similar bill that the House of Representatives has passed. It is crystal clear to me that should this tax be added on to this bill it will be blue slipped in the House of Representatives, that is, it will not be considered on the grounds that that portion of the bill, that subject of the bill could only originate in the House. The House of Representatives is as jealous of its prerogatives to originate tax bills as the Senate is to ratifying treaties or to confirm Presidential appointments or to engage in any of the activities that are lodged by the Constitution in this body. Point of Order As a consequence, although there has been some time devoted to the merits of this amendment, and because I believe that it clearly violates article I, section 7 of the Constitution, I raise a constitutional point of order against the amendment. The PRESIDING OFFICER. The question before the Senate is debatable. Is the point of order well-taken, would be the question? Mr. REID addressed the Chair. The PRESIDING OFFICER. The Senator from Nevada. Mr. REID. Parliamentary inquiry. Do we ask for the yeas and nays at this time? The PRESIDING OFFICER. It is appropriate. Mr. REID. I do so. The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. The PRESIDING OFFICER. Is there further debate? Mr. REID addressed the Chair. The PRESIDING OFFICER. The Senator from Nevada. Mr. REID. I hope that we can resolve this issue. It is quite clear that it does violate the Constitution of the United States. That is by taking the Senator's own statement during the time he was debating his amendment. It is clear from his own statement that it is a violation of the Constitution. I say to my friends who are listening to this debate, Members of the Senate, that we would vote on this issue and if this issue prevails, of course, the amendment falls. But I would also say that we should look at this on the legal aspect. If this stays in this bill, the bill is gone. There is no question that it is unconstitutional and we should vote based on the constitutionality of this amendment, not on the merits of the amendment. I say to my friends that we have voted on some aspect of an amendment like this on other occasions. My friend from Arkansas has framed it differently this time. Therefore, we have raised this point of order. I ask that we dispose of this. It is getting late into the night. I repeat, if this constitutional point of order is upheld, the amendment falls. Ms. LANDRIEU addressed the Chair. The PRESIDING OFFICER. The Senator from Louisiana. Ms. LANDRIEU. Mr. President, I know we will probably soon be voting on this important amendment and on this important issue. I was sitting in my office and listening to my distinguished colleague from Arkansas, my friend and neighbor, and thought that I might come down and try to give him some help and support, not that he needs any more help in articulating the issue and speaking about it and outlining it, which he does so beautifully, but to let him know that as a new member of the Energy Committee, one that just arrived here and has not spent even a year here, and with him getting ready to retire and having announced his retirement, that I want to let him know I am going to pick up this ball wherever it may land today, I say to Senator Bumpers. I come from a State that has obviously some mining interests, but I come from a State that has had oil and gas development and exploration for many years. I am from a position of understanding that when it is done correctly how much of a benefit it can be in terms of jobs and economic development and helping people and enriching the corporations and businesses as well as the average working man and woma

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DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS ACT, 1998
(Senate - September 18, 1997)

Text of this article available as: TXT PDF [Pages S9575-S9600] DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS ACT, 1998 The Senate continued with the consideration of the bill. Mr. BUMPERS. Mr. President, I ask unanimous consent that my distinguished colleague and friend from Montana, Senator Baucus, be recognized for 10 minutes, without my losing the right to the floor, and that I immediately be recognized following the conclusion of his remarks. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Mr. BAUCUS. Mr. President, first I want to thank my very good friend and colleague, Senator Bumpers, for yielding the time. It is very gracious of him. He has waited a good period of time to offer his amendment. Mr. President, I rise today to call on Congress to complete the New World Mine acquisition and protect Yellowstone National Park. Now that the administration and congressional leadership have reached a budget agreement that allows for the acquisition of the New World lands, we need to move decisively. We have belabored this matter much too long and now is the time to finish the job. Yellowstone National Park was created 125 years ago. ``For the Benefit and Enjoyment of the People.'' Indeed, this is the entrance at mammoth Yellowstone Park. You probably cannot read the inscription over the arch but it says ``For the Benefit and Enjoyment of the People.'' And of course, immediately to my right is the Old Faithful geyser. Every year, Mr. President, 3 million people visit the park, bringing their children and grandchildren to enjoy the unspoiled beauty that is Yellowstone--from the Roosevelt arch, which I am pointing to here on my right, at the original entrance, to the breathtaking grandeur of Old Faithful, to the spectacular wildlife which calls this unique place home. During the month of August, I was fortunate to be present to celebrate Yellowstone's 125th anniversary with Vice President Al Gore. As I entered the park, I remembered my first trip to Yellowstone many years ago. The noble and majestic geysers, the boiling paint pots, and the vast scenery were the stuff of magic to a small child--and remain so today. These wonders cannot be seen anywhere else in the United States or, for that matter, in the world. I guarantee you there is not one Montanan, young or old, that does not fondly remember his or her first visit to the park, or anybody in our country for that matter. Finishing the New World acquisition is critical so our children may witness the wonders of nature, much as we have over the past 125 years. For the past 8 years, America has lived with the threat that a large gold mine could harm Yellowstone, our Nation's first national park. This mine, [[Page S9576]] on the park boundary, could irreparably damage the park by polluting rivers and devastating wildlife habitat. In 1996, local citizens, the mining company itself, and the administration, reached a consensus agreement that would stop the proposed mine--they all agreed; the administration, the local community, and the company--and it would protect Yellowstone and surrounding communities. This agreement provides for the Federal Government to acquire the mine property from Battle Mountain Gold in exchange for $65 million. The balanced budget agreement calls for this money to be appropriated from the Land and Water Conservation Fund. The New World agreement, I think, is very important for two reasons. First, it protects Yellowstone National Park for future generations. What could be more important? Second, it protects my State of Montana. It protects Montana's natural heritage, but it also protects Montana's economy. Many of the local communities surrounding Yellowstone depend on the park for their economic well-being. If the mine had been built, Yellowstone would have been harmed, and with it the communities and the families that depend on Yellowstone for their livelihood. It is for this reason that a majority of local citizens and businesses oppose the mine and support the agreement. In addition, the agreement obligates the mining company to spend $22.5 million to clean up historic mine pollution at the headwaters of the Yellowstone River. This will create jobs and clean up the environment, thereby benefiting the regional economy and improving locally fisheries. As a Senator representing Montana, I will fight to ensure that Montana receives these benefits. The bipartisan budget agreement provides an increase of $700 million in land and water conservation funding. Of this increase, $315 million has been designated as funding for priority land acquisitions. It is my understanding in speaking with the administration and with others that the New World and Headwaters acquisition were specifically discussed as the projects that would be funded by the $315 million designation. It would be unconscionable for Congress to violate the spirit and the intent of the budget agreement by failing to appropriate the funding necessary to complete the New World acquisition. In addition, placing further restrictions such as requiring authorization is both unnecessary and unwise. We need no additional authorization. The agreement has been agreed to already. New legal procedures, on the other hand, would just stall an already reached agreement, one that is widely supported and one that protects the park. Every year, numerous land acquisitions that are not individually authorized take place utilizing Land and Water Conservation Funds. By attaching strings to this acquisition--it is an authorization--Congress will have done nothing but endanger Yellowstone National Park. Indeed, the President's senior advisers strongly object to attaching any strings to this funding, and if Congress insists on stalling and delaying this agreement, the President may well veto the Interior appropriations bill upon the recommendation of OMB and other agencies. Because Yellowstone is at stake, he would be right to do so. I pledge here today to help lead the charge to uphold that veto if necessary. When Yellowstone and Montana's heritage is threatened, I will not sit idly by. We can and we must protect Yellowstone National Park. I thank my good friend, the Senator from Arkansas, and I yield the floor. excepted committee amendment beginning on page 123, line 9 Mr. BUMPERS. Mr. President, I ask unanimous consent that the pending amendment be laid aside and that the Senate proceed to the committee amendment beginning on page 123, line 9. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Amendment No. 1224 To Excepted Committee Amendment Beginning on Page 123, Line 9 Through Page 124, Line 20 (Purpose: To ensure that Federal taxpayers receive a fair return for the extraction of locatable minerals on public domain land and that abandoned mines are reclaimed) Mr. BUMPERS. Mr. President, I send an amendment to the desk. The PRESIDING OFFICER. The clerk will report. The legislative clerk read as follows: The Senator from Arkansas [Mr. Bumpers], for himself and Mr. Gregg, proposes an amendment numbered 1224 to excepted committee amendment beginning on page 123, line 9. Mr. BUMPERS. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: Add the following at the end of the pending Committee amendment as amended: ``(c)(1) Each person producing locatable minerals (including associated minerals) from any mining claim located under the general mining laws, or mineral concentrates derived from locatable minerals produced from any mining claim located under the general mining laws, as the case may be, shall pay a royalty of 5 percent of the net smelter return from the production of such locatable minerals or concentrates, as the case may be. ``(2) Each person responsible for making royalty payments under this section shall make such payments to the Secretary of the Interior not later than 30 days after the end of the calendar month in which the mineral or mineral concentrates are produced and first place in marketable condition, consistent with prevailing practices in the industry. ``(3) All persons holding mining claims located under the general mining laws shall provide to the Secretary such information as determined necessary by the Secretary to ensure compliance with this section, including, but not limited to, quarterly reports, records, documents, and other data. Such reports may also include, but not be limited to, pertinent technical and financial data relating to the quantity, quality, and amount of all minerals extracted from the mining claim. ``(4) The Secretary is authorized to conduct such audits of all persons holding mining claims located under the general mining laws as he deems necessary for the purposes of ensuring compliance with the requirements of this subsection. ``(5) Any person holding mining claims located under the general mining laws who knowingly or willfully prepares, maintains, or submits false, inaccurate, or misleading information required by this section, or fails or refuses to submit such information, shall be subject to a penalty imposed by the Secretary. ``(6) This subsection shall take effect with respect to minerals produced from a mining claim in calendar months beginning after enactment of this Act. ``(d)(1) Any person producing hardrock minerals from a mine that was within a mining claim that has subsequently been patented under the general mining laws shall pay a reclamation fee to the Secretary under this subsection. The amount of such fee shall be equal to a percentage of the net proceeds from such mine. The percentage shall be based upon the ratio of the net proceeds to the gross proceeds related to such production in accordance with the following table: Net proceeds as percentage of gross proceeds: Rate \1 \ Less than 10............................................... 2.00 10 or more but less than 18................................ 2.50 18 or more but less than 26................................ 3.00 26 or more but less than 34................................ 3.50 34 or more but less than 42................................ 4.00 42 or more but less than 50................................ 4.50 50 or more................................................. 5.00 \1\ Rate of fee as percentage of net proceeds. ``(2) Gross proceeds of less than $500,000 from minerals produced in any calendar year shall be exempt from the reclamation fee under this subsection for that year if such proceeds are from one or more mines located in a single patented claim or on two or more contiguous patented claims. ``(3) The amount of all fees payable under this subsection for any calendar year shall be paid to the Secretary within 60 days after the end of such year. ``(e) Receipts from the fees collected under subsections and (d) shall be paid into an Abandoned Minerals Mine Reclamation Fund. ``(f)(1) There is established on the books of the Treasury of the United States an interest-bearing fund to be known as the Abandoned Minerals Mine Reclamation Fund (hereinafter referred to in this section as the ``Fund''). The Fund shall be administered by the Secretary. ``(2) The Secretary shall notify the Secretary of the Treasury as to what portion of the Fund is not, in his judgement, required to meet current withdrawals. The Secretary of the Treasury shall invest such portion of the Fund in public debt securities with maturities suitable for the needs of such Fund and bearing interest at rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketplace obligations of the United States of comparable maturities. The income on such investments shall be credited to, and form a part of, the Fund. ``(3) The Secretary is, subject to appropriations, authorized to use moneys in the Fund [[Page S9577]] for the reclamation and restoration of land and water resources adversely affected by past mineral (other than coal and fluid minerals) and mineral material mining, including but not limited to, any of the following: ``(A) Reclamation and restoration of abandoned surface mined areas. ``(B) Reclamation and restoration of abandoned milling and processing areas. ``(C) Sealing, filling, and grading abandoned deep mine entries. ``(D) Planting of land adversely affected by past mining to prevent erosion and sedimentation. ``(E) Prevention, abatement, treatment and control of water pollution created by abandoned mine drainage. ``(F) Control of surface subsidence due to abandoned deep mines. ``(G) Such expenses as may be necessary to accomplish the purposes of this section. ``(4) Land and waters eligible for reclamation expenditures under this section shall be those within the boundaries of States that have lands subject to the general mining laws-- ``(A) which were mined or processed for minerals and mineral materials or which were affected by such mining or processing, and abandoned or left in an inadequate reclamation status prior to the date of enactment of this title; ``(B) for which the Secretary makes a determination that there is no continuing reclamation responsibility under State or Federal laws; and ``(C) for which it can be established that such lands do not contain minerals which could economically be extracted through the reprocessing or remining of such lands. ``(5) Sites and areas designated for remedial action pursuant to the Uranium Mill Tailings Radiation Control Act of 1978 (42 U.S.C. 7901 and following) or which have been listed for remedial action pursuant to the Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. 9601 and following) shall not be eligible for expenditures from the Fund under this section. ``(g) As used in this Section: ``(1) The term ``gross proceeds'' means the value of any extracted hardrock mineral which was: (A) sold; (B) exchanged for any thing or service; (C) removed from the country in a form ready for use or sale; or (D) initially used in a manufacturing process or in providing a service. ``(2) The term ``net proceeds'' means gross proceeds less the sum of the following deductions: (A) The actual cost of extracting the mineral. (B) The actual cost of transporting the mineral to the place or places of reduction, refining and sale. (C) The actual cost of reduction, refining and sale. (D) The actual cost of marketing and delivering the mineral and the conversion of the mineral into money. (E) The actual cost of maintenance and repairs of: (i) All machinery, equipment, apparatus and facilities used in the mine. (ii) All milling, refining, smelting and reduction works, plants and facilities. (iii) All facilities and equipment for transportation. (F) The actual cost of fire insurance on the machinery, equipment, apparatus, works, plants and facilities mentioned in subsection (E). (G) Depreciation of the original capitalized cost of the machinery, equipment, apparatus, works, plants and facilities mentioned in subsection (E). (H) All money expended for premiums for industrial insurance, and the actual cost of hospital and medical attention and accident benefits and group insurance for all employees. (I) The actual cost of developmental work in or about the mine or upon a group of mines when operated as a unit. (J) All royalties and severance taxes paid to the Federal government or State governments. ``(3) The term ``hardrock minerals'' means any mineral other than a mineral that would be subject to disposition under any of the following if located on land subject to the general mining laws: (A) the Mineral Leasing Act (30 U.S.C. 181 and following); (B) the Geothermal Steam Act of 1970 (30 U.S.C. 100 and following); (C) the Act of July 31, 1947, commonly known as the Materials Act of 1947 (30 U.S.C. 601 and following); or (D) the Mineral Leasing for Acquired Lands Act (30 U.S.C. 351 and following). ``(4) The term ``Secretary'' means the Secretary of the Interior. ``(5) The term ``patented mining claim'' means an interest in land which has been obtained pursuant to sections 2325 and 2326 of the Revised Statutes (30 U.S.C. 29 and 30) for vein or lode claims and sections 2329, 2330, 2331, and 2333 of the Revised Statutes (30 U.S.C. 35, 36 and 37) for placer claims, or section 2337 of the Revised Statutes (30 U.S.C. 42) for mill site claims. ``(6) The term ``general mining laws'' means those Acts which generally comprise Chapters 2, 12A, and 16, and sections 161 and 162 of title 30 of the United States Code.'' The PRESIDING OFFICER (Mr. Bennett). The Senator from Arkansas. Mr. BUMPERS. Mr. President, I have come here today for the eighth consecutive year to debate what I feel very strongly about and have always felt strongly about. I have never succeeded. Since I am going to be leaving next year, I know all my friends from the West are going to be saddened by my departure, and so far I don't have an heir apparent to take on this issue. First of all, I want to make an announcement to the 262 million American people who know very little or nothing about this issue. The first announcement I want to make today is that they are now saddled with a clean-up cost of all the abandoned mining sites in the United States of somewhere between $32.7 and $71.5 billion. Now, let me say to the American people while I am making that announcement, you didn't do it, you had nothing to do with it, but you are going to have to pick up the tab of between $32 to $71 billion. The Mineral Policy Center says there are 557,000 abandoned mines in the United States. Think of that--557,000 abandoned mines, and 59 of those are on the Superfund National Priority List. Mining has also produced 12,000 miles of polluted streams. The American people didn't cause it; the mining industry did it, and 2,000 of those 557,000 sites are in our national parks. Now, Mr. President, my amendment would establish a reclamation fund in the Treasury and it would be funded by a 5-percent net smelter return for mining operations on taxpayer-owned land. Royalties based on gross income or a net smelter return are traditionally charged for mining on private land and for mining on State-owned land. Much of the hardrock mining going on in this country is being done on the lands that you have heard me talk a great deal about--that is, lands that have been sold by the Federal Government for $2.50 an acre. However, a significant amount of mining goes on on lands where people have a mining claim on Federal lands and they get a permit to start mining. The Federal Government continues to own the land. We don't get anything for it. We don't even get $2.50 an acre for that land. So my net smelter royalty only applies to those lands which we still own. Now, isn't that normal and natural? If you own land that has gold under it and somebody comes by and wants to mine the gold under your land, the first thing you do is say, how much royalty are you willing to pay? Nationwide, that figure is about 5 percent. But I can tell you one thing, and this is a major point, if somebody came to you and said, I want to mine the gold, the silver, platinum, or palladium under your land, the first thing you would demand is, How much are you going to pay me for it? The U.S. Government cannot because Congress won't let them charge a royalty for mining on public land. We say, ``Here are some of the terms under which you can mine. ``Sic 'em, Tiger.'' Have a good time. Make a lot of money. And be sure you don't send the Federal Government, namely, the taxpayer of America, any money, and if you possibly can, leave an unmitigated environmental disaster on our hands for the taxpayers to clean up.'' You know, Mr. President, I still can't believe it goes on. I have been at this for 8 years and I still cannot believe what I just said, but it is true. The other part of my bill establishes a net-income based reclamation fee based on the profits of the mining company on lands that were Federal lands but that have been patented by the mining companies; that is, lands which we have sold for $2.50 an acre. The only way in the world we can ever recover anything from these mines is through a reclamation fee. It is altogether proper that we get something in return for the lands that we sold for $2.50 an acre and it is altogether proper that that money be used to reclaim these 557,000 abandoned mine sites. Mr. President, here is a closer look at what I just got through saying. The royalty rate in the Bumpers/Gregg amendment is 5 percent net smelter return, which is typically what is charged for mining operations on private land. The royalty will produce $175 million over the next 5 years. The reclamation fee ranges from 2 to 5 percent of net income for operations on patented lands, the lands that we sold for $2.50 an acre. That produces $750 million. And altogether, those two provisions would, over the next 5 years, [[Page S9578]] produce $925 million--not a very big beginning on the roughly $32 to $70 billion we are going to have to cough up to clean those places up. Mr. President, look at this chart right here. The thing that is a real enigma to me, is that we make the coal operators in this country pay us 12.5 percent of their gross income for every ton of coal they take off of Federal lands. That is for surface coal. If it's an underground mine the coal companies pay a royalty of 8 percent of their gross income to the Federal Government. Natural gas. If you want to bid on Federal lands and produce natural gas, it is incumbent upon you to pay a minimum of 12.5 percent of your gross income. When it comes to oil, if you want to drill in the Gulf of Mexico, you must also pay a 12.5 percent gross royalty. There are oil and gas wells all over the Western part of the United States. And for every dollar of gas or oil they produce, they send Uncle Sam 12.5 cents. But look here. For gold, they don't send anything. For silver, they don't send anything. For platinum, they don't send anything. And since 1872, when the old mining law was signed by Ulysses Grant, the mining companies have not paid a penny to the U.S. Treasury. Now, Mr. President, in 1986--and I use this just as an illustration to tell you why we so desperately need this reclamation fund in the U.S. Treasury--there was a mine called Summitville in Colorado. Summitville was owned by a Canadian mining company called Galactic Resources. They got a permit to mine on private land from the State of Colorado. In June of that same year, their cyanide/plastic undercoating--and I will explain that in a moment--began to leak. Let me stop just a moment and tell people, my colleagues, how gold mining is conducted. You have these giant shovels that take the dirt and you put it on a track and you carry it to a site and you stack it up on top of a plastic pad, which you hope is leakproof. And then you begin to drip--listen to this--you begin to drip cyanide--yes, cyanide--across the top of this giant heap of dirt. The cyanide filters down through this big load of dirt and it gathers up the gold and it filters out to a trench on the side. Now, you have to bear in mind that if that plastic pad, which I just described for you a moment ago, is not leakproof, if it springs a leak, you have cyanide dripping right into the ground, right into the water table, or going right into the nearest stream, and so it was with Summitville. The plastic coating on the ground, which was supposed to keep the cyanide controlled, began to leak. And the cyanide began to escape. And the cyanide began to run into the streams headed right for the Rio Grande River. Galactic could not do anything. They weren't close to capable of doing anything. And so the Federal Government goes to Galactic and says, ``We want you to stop this and we want you to pay us damages.'' Do you know what they did? They took bankruptcy. Smart move. They took bankruptcy. So what does that leave the U.S. Government, which is going to ultimately have the responsibility for controlling this leakage of cyanide poison? It leaves us with a $4.7 million bond. That is the bond they had put up to the State of Colorado in order to mine. Here you have a minimum of $60 million disaster on your hands with a $4.7 million bond. And so it is today, Mr. President--35 people employed since 1986, controlling the cyanide runoff from the mine in Colorado, and the ultimate cost to the taxpayers of this country will be $60 million, minimum. Here is one that is even better, Mr. President. This came out of the New York Times 2 days ago. It is a shame that every American citizen can't read this. It's called ``The Blame Slag Heap.'' In northern Idaho's Silver Valley, the abstractions of the Superfund program--``remediation,'' ``restoration,'' ``liability''--meet real life. For over a century, the region's silver mines provided bullets for our soldiers and fortunes for some of our richest corporations. The mines also created a toxic legacy: wastes and tailings, hundreds of billions of pounds of contaminated sediment * * *. In 1996--13 years after the area was declared the nation's second-largest Superfund site, the Justice Department filed a $600 million lawsuit against the surviving mining companies. The estimated cost of cleanup ranges up to a billion dollars. The Government sued after rejecting the companies' laughably low settlement offer of $1 million. A $1 billion cleanup, and the company that caused the damage offers $1 million to settle. The companies, however, have countersued. They are countersuing the Federal Government, and do you know what they allege? They say it happened because the U.S. Government failed to regulate the disposal of mining waters. Can you imagine that? The company is suing the Government because the Government didn't supervise more closely. The story closes out by saying, ``Stop me before I kill again.'' Mr. President, I ask unanimous consent the article from the New York Times be printed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: The Blame Slag Heap (By Mark Solomon) Spokane, Wash.--In northern Idaho's Silver Valley, the abstractions of the Superfund program--``remediation,'' ``restoration,'' ``liability''--meet real life. For over a century, the region's silver mines provided bullets for our soldiers and fortunes for some of our richest corporations. The mines also created a toxic legacy: wastes and tailings, hundreds of billions of pounds of contaminated sediment, leaching into a watershed that is now home to more than half a million people. In 1996, 13 years after the area was declared the nation's second-largest Superfund site, the Justice Department filed a $600 million lawsuit against the surviving mining companies. The estimated cost of the clean-up ranges up to a billion dollars. The Government sued after rejecting the companies' laughably low settlement offer of $1 million. If the companies don't pay, the Federal taxpayers will have to pick up the tab. The companies, however, have countersued, alleging, among other things, that the Government itself should be held responsible. Why? Because it failed to regulate the disposal of mining wastes. Do I believe my ears? In this era of deregulation, when industry seeks to replace environmental laws with a voluntary system, are the companies really saying that if only they had been regulated more they would have stopped polluting? I've heard the Government blamed for a lot of things, but regulatory laxity was never one of them--until now. In fact, Idaho's mining industry has long fought every attempt at reform. In 1932, for example, a Federal study called for the building of holding ponds to capture the mines' wastes. The companies fought that plan for 36 years, until the Clean Water Act forced them to comply. Now Congress is debating the reauthorization of the Superfund, and industry wants to weaken the provision on damage to natural resources. If the effort succeeds, what will happen in 50 years? Will the polluters sue the Government, blaming it for failing to prevent environmental damage? Quick, stop them before they kill again. Mr. CRAIG. Will the Senator yield specifically to his last comment? Mr. BUMPERS. I yield for a question. Mr. CRAIG. Does the Senator know about the new science that comes out of the study of the Superfund site in Silver Valley, ID? Does he understand also that mediation on the Superfund is now tied up in the courts--conducted by the State of Idaho--that has really produced more cleanup and prevented more heavy metals from going into the water system, and the value of that? Does he also recognize that the suit filed by the Attorney General was more politics and less substance? Mr. BUMPERS. That is a subjective judgment, is it not? Mr. CRAIG. I believe that is a fact. Thank you. Mr. BUMPERS. Is it not true that the company has countersued the Federal Government saying, ``You should have stopped us long ago''? Isn't that what the countersuit says--``You should have regulated us more closely''? Mr. CRAIG. But the countersuit says that based on today's science, if we had known it then, which we didn't--you didn't, I didn't, and no scientist understood it--then we could have done something different. But as of now this is not an issue for mining law; this is an issue of a Superfund law that doesn't work, that promotes litigation. That is why the arguments you make are really not against mining law reform, which you and I support in some form. What you are really taking is a Superfund law that is tied up in the committees of this Senate, is nonfunctional, and produces lawsuits. Mr. BUMPERS. Can you tell me where the Superfund law says if you [[Page S9579]] were ignorant of what you were doing and caused the damage, you are excused? Do you know of any place in the Superfund where there is such language as that? Mr. CRAIG. What I understand is we have a 100-year-old mine where we are trying to take today's science and, looking at it based on your argument, move it back 100 years. We should be intent on solving today's problems and not arguing 100 years later. Mr. BUMPERS. Is the State of Idaho willing to take over this cleanup site and absolve the U.S. Government of any further liability? Mr. CRAIG. My guess is that the State of Idaho with some limited assistance would champion that cause. I have introduced legislation that would create a base of authority. We believe it would cost the Federal Government less than $100 million. The State would work with some matching moneys. They would bring in the mining companies and force them to the table to establish the liability. Guess what would happen, Senator. We would be out of the courts. Lawyers would lose hundreds of thousands of dollars in legal fees. And we would be cleaning up Superfund sites that have been in litigation for a decade, by your own admission and argument. Mr. BUMPERS. Senator, the U.S. Government has sued this company for $600 million. The Government estimates that the cleanup cost is going to be $1 billion. The Senator comes from the great State of Idaho, and I am sure they don't enjoy ingesting cyanide any more than anybody else in any other State would. But the Senator would have to admit that Idaho couldn't, if it wanted to, clean up this site. It doesn't have the resources. It is the taxpayers of this country that are stuck with that $1 billion debt out there with a company which brashly says, ``If you would have regulated us closer, we wouldn't have done it.'' That is like saying, ``If you had taken my pistol away from me, I wouldn't have committed that murder.'' Mr. CRAIG. If you would yield only briefly again--I do appreciate your courtesy--there is not a $1 billion price tag. That is a figment of the imagination of some of our environmental friends. There is no basis for that argument. There isn't a reasonable scientist who doesn't recognize that for a couple hundred million dollars of well-placed money, that problem goes away. But, as you know, when you involve the Federal Government, you multiply it by at least five. That is exactly what has gone on here. I will tell you that for literally tens of millions of dollars, the State of Idaho, managing a trust fund, has shut down more abandoned mines, closed off the mouths of those mines, and stopped the leaking of heavy metal waters into the Kootenay River, and into the Coeur d'Alene, and done so much more productively, and it has not cost $1 billion. Nobody in Idaho, including our State government, puts a $1 billion price tag on this. This is great rhetoric, but it is phony economics. Mr. BUMPERS. Mr. President, let me just say to the Senator from Idaho that my legislation for 8 long years has been an anathema to him. I am not saying if I were a Senator from Alaska, Idaho, or Nevada I wouldn't be making the same arguments. But I want to make this offer. It is a standing offer. If the State of Idaho will commit and put up a bond that they will clean up all those abandoned mine sites in that State, that they will take on the responsibility, and do it in good order, and as speedily as possible, I will withdraw my amendment. I don't have the slightest fear. We all know that this is a Federal problem. It is a Federal responsibility to clean up these mine sites. The only way we can do it is to get some money out of the people who got the land virtually free and who have left us with this $30 billion to $70 billion price tag. Let me go back, Mr. President, and just state that since 1872 the U.S. Government in all of its generosity has given away 3.244 million acres of land. We have given it away for $2.50 an acre. Sometimes we got as much as $5 an acre. There are 330,000 claims still pending in this country. And the Mineral Policy Center estimates that since 1872 we have patented land containing $243 billion worth of minerals--land that used to belong to the taxpayers of this country. We now have a moratorium on all but 235 patent applications. But the 235 applications, when they are granted, will represent the continued taxpayer giveaway of billions of dollars worth of minerals and land. Stillwater Mining Company in Montana has a first half certificate for 2,000 acres of land in the State of Montana. What does that mean? That means they are virtually assured of getting a deed to 2,000 acres of land. It means that they are virtually assured of paying the princely sum of $10,180. Guess what is what is lying underneath the 2,000 acres: $38 billion worth of palladium and platinum. My figure? No. Stillwater's figure. Look at their prospectus. Look at their annual report. They are saying to the people who own stock, ``Have we pulled off a coup.'' We are going to get 2,000 acres of Federal land for $10,180, and it has $38 billion worth of hardrock minerals under it--palladium and platinum. You know, one of the things that I think causes me to fail every year is that it is so gross, so egregious, that people can't believe it is factual, that it is actually happening. But it is true. Look at what happened to Asarco. They paid the U.S. Government $1,745. What did they get? $2.9 billion worth of copper and silver. You never heard of a company called Faxe Kalk. Do you know the reason you never heard of it? It is a foreign mining company. You don't usually hear of them. The other reason you don't hear of them is because they are a Danish company. One of the things that makes this issue so unpalatable is that many of the biggest 25 mining companies in the United States are foreign companies. We ought to go today to Denmark and say, ``We would like some of your North Sea oil.'' What do you think they would say if we said, ``Look, we are going to start drilling here off the coast of Denmark. We will give you a dollar now and then for the privilege.'' They would say, ``You need to be submitted for a saliva test.'' But the Faxe Kalk Corporation comes here, and they say, ``You have 110 acres out here in Idaho, Uncle Sam. We would like to have it. We will pay $275 for it.'' So they go to Bruce Babbitt and they say, ``We will give you $275 for this 110 acres.'' Do you know what is underneath it? One billion dollars worth of a mineral called travertine. It is a mineral used to whiten paper. That is $275 the taxpayers get and $1 billion a Danish corporation gets. In 1995 the Secretary of the Interior was forced to deed 1,800 acres of public land in Nevada to Barrick Gold Co., a Canadian company, for its Gold Strike Mine. Barrick paid $9,000 for that 1,800 acres. Mr. President, there isn't a place in the Ozark Mountains of my State where you could buy land for one-tenth that price. The law required Secretary Babbitt to give Barrick, which is the most profitable gold company in the world, land containing $11 billion worth of gold for $9,000. I could go on. There are other cases just as egregious as that. For 8 long years, I have stood at this very desk, and I have made these arguments, as I say, which are so outrageous I can hardly believe I am saying them, let alone believing them. Newmont Mining Co. is one of the biggest gold companies in the world. They have a large mine in Nevada which is partially on private land. When people say that somebody is mining on private lands, if you will check, Mr. President, you will find that in most cases that land was Federal land that somebody else patented, and then somebody like Newmont comes along, and they say, ``You hold a patent on this land that you got from the Federal Government for $2.50 an acre and we want to mine on it.'' Do you know what Newmont pays to the land owner on its mine in Nevada? An 18 percent royalty. Mr. President, as I just mentioned, most of the land being mined on, so-called private lands, are private because somebody bought it from the Federal Government years ago for $2.50 or $5 an acre. True, it is private. They own it. They paid for it. The mining companies are willing to pay the States--they are willing to pay the States a royalty. They are willing to pay the States a severance tax. They are willing to pay the private owners of this country an average of 5 percent. But when it [[Page S9580]] comes to paying the Federal Government, it is absolutely anathema to them. There is no telling how much the National Mining Association spends every year on lobbying, on publicity, on mailers, you name it, to keep this sweetheart deal alive. Since I started on this debate 8 years ago, the mining companies of this country have taken out billions of dollars worth of minerals from taxpayer-owned land. And do you know what the Federal Government and the taxpayers of this country got in exchange for that? One environmental disaster after another to clean up. And so that is the reason my bill, which contains a royalty and a reclamation fee, goes into a reclamation fund to at least start undoing the environmental damage these people have done because it is too late to get a royalty out of them. The gold is gone. We got the shaft. They got the gold. And it is too late to do anything about it. But you can start making them pay now to clean up those 555,000 sites. Arizona has a 2 percent gross value royalty for mines located on State lands and a 2.5 percent net income severance tax for all mines in the State. Montana, 5 percent; fair market for raw metallic minerals; 1.6 percent of the gross value in excess of $250,000 for gold, silver, platinum group metals. All of these States charge royalties for mining operations on State- owned land. Most of them also charge a severance tax for mining operations on all land in the State. Mr. President, what do they know that we don't? A lot. The States are collecting the money, but not Uncle Sam. Do you know why I have lost this fight for the last 8 years? Those States that have mining on Federal lands have great representation in the U.S. Senate. I know that every single Western Senator is going to start flocking onto this floor as soon as I start talking about this amendment. Do you see anybody else on this floor who is not from the West? Do you know why? My mother used to say, ``Everybody's business is nobody's business.'' This is everybody's business, except it just doesn't affect their States. There are no mining jobs in their States. For 8 years I have heard all these sayings, as to how many jobs you are going to lose, despite the fact the Congressional Budget Office says, ``None.'' ``You are going to lose all these jobs. It is going to discommode the economies of our respective States.'' And yet the States don't hesitate. We have people in this body who are Senators from the West who have served in State legislatures, who helped pass these laws, who helped impose royalties and severance taxes against the mining companies. But somehow or other they go into gridlock when they get here. At the State level they don't mind assessing these kinds of taxes. The States need the money. We do, too. We are the ones who are tagged with this gigantic bill for reclamation. Mr. President, I could go through a list of things I have here. Amax, for example, pays 6-percent royalty on the Fort Knox Mine in Alaska. The chairman of the Energy Committee 2 years ago passed legislation providing for a land exchange on Forest Service land in Alaska. The Kennecott Mining Co. was willing to pay the Forest Service a $1.1 million fee up front, and then a 3-percent net smelter return on the rest of it. We agreed on it, ratified it. I voted for it. But, now, isn't it strange that here is a mine in Alaska that we had to legislatively approve--because of the ownership of the land, it involved a land exchange--and I was happy to do it because it was a fair deal and these people demonstrated an interest in paying a fair royalty for what they took. Mr. President, I will yield the floor. I will not belabor this any further. Mr. MURKOWSKI. I wonder if the Senator will yield for a question, because it affects my particular State? Mr. BUMPERS. I was getting ready to yield the floor. I want to say in closing, I know a lot of people would like to get out of here as early as they can tonight. I don't intend to belabor this. I said mostly what I want to say. I may respond to a few things that are said, so I am going to turn it over to my friends from the West and let them respond for a while, and then hopefully we can get into a time agreement after four or five speakers have spoken. I yield the floor. The PRESIDING OFFICER. The Senator from Alaska. Mr. MURKOWSKI. Mr. President, I would like to respond to my friend from Arkansas on the mining issues he brings up. Mr. BUMPERS. Will the Senator yield for just a moment? When I introduced this amendment, I failed to state that my chief cosponsor on the bill is Senator Gregg from New Hampshire. The PRESIDING OFFICER. The Senator from Alaska. Mr. MURKOWSKI. Again, I would like to call attention to the statement that was made by the Senator from Arkansas relative to the Green Creek Mine. The thing that made that so different is the unique characteristic of that particular discovery, where all the components were known relative to the value of the minerals. The roads were in, the infrastructure was in. It was not a matter of discovery, going out in an area and wondering whether you were going to develop a sufficiency of resources to amortize the investment necessary to put in a mine. So I remind my colleagues, there is a big difference between the rhetoric that we have heard here and the practical realities of experience in the mining industry. We have seen both the effort by Canada and Mexico to initiate royalties. What has happened to their mining industry? It simply moved offshore. We have to maintain a competitive atmosphere on a worldwide basis; otherwise the reality for United States mining will be the same as was experienced in both Mexico and Canada. I strongly urge my colleagues to join me in opposition to Senator Bumpers' amendment. This is not the first attempt he has made, initiating actions through the Interior appropriations process. We seem to be subjected to this every year. I know the intentions are good. But the reality is that the amendment as offered represents a profound--and I urge my colleagues to reflect on this--a profound and wide-reaching attempt to reform the Nation's mining laws in a way that prevents any real understanding of the impacts of the legislation. Because, as written, Senator Bumpers' amendment would not only put a royalty of all mining claims--all mining claims--but would also put a fee on all minerals produced off of lands that have ever gone to patent. Those are private lands. Let me, again, cite what this amendment does. It would not only put a royalty on all mining claims, but would also put a fee on all minerals produced off lands that have ever gone to patent. Those are private lands. So, this is nothing more than a tax. It is a tax. And it is this Senator's opinion that this makes Senator Bumpers' amendment subject to a constitutional point of order. Let me set this aside for a moment and address the specifics of my opposition to the amendment. This approach to revenue generation is no different than placing a tax on, say, all agricultural production from lands that were at one time, say, homesteads. It is retroactive. Even though Senator Bumpers doesn't like it, the fact remains that patent claims are exactly the same as homestead lands. They are all private lands. I cannot even begin to imagine the genesis of this punitive and dangerous amendment. This is an unmitigated attack on all things mining. We have absolutely no idea what impact this legislation would have on our ability to maintain a dependable supply of minerals; no idea what environmental disasters would be created when this legislation shuts down the producing mines across the country. We have no idea how many workers will be put on the unemployment line. We have no idea whatsoever on the effects of this legislation. The issue is very complex. It is not appropriate that it be dealt with in an appropriations process. There is a right way and a wrong way to go about mining reform. You can chose the right way and offer your reform in a fair and open process, giving everyone the opportunity to participate in the formation of the legislation, which is what Senator Craig and I, along with the cosponsors of the legislation, have attempted to do in the legislation that has been offered. Or you can, as I observe, do what Senator Bumpers has seen fit to do and offer your legislation in a form where not one single person [[Page S9581]] outside the Senator's office has the opportunity to either understand or contribute to the process. I think there is too much at stake in mining reform to treat this complex subject in such a dangerous and offhand manner. Senator Craig, along with myself, Senator Reid, Senator Bryan, Senator Bennett, Senator Burns, Senator Hatch, Senator Thomas, Senator Campbell, Senator Stevens, Senator Kempthorne, among a few, have introduced S. 1102, the Mining Reform Act of 1997. As such, I encourage my colleagues to recognize the time and effort that has been put into developing a package of reforms that set the stage for a meaningful, honest, and comprehensive reform. We are going to be holding a series of hearings to explore all aspects of the legislation and the effect it will have on the Nation's environment and economy. I know many Members have indicated their interest in the formation of this legislation and the process of the hearings as they unfold and intend to participate. This is how reforms should take place. Reform should take place in an orderly manner in the hearing process, and we have lived up, I think, to the expectations of those who have indicated, ``All right, we will stand with you, but give us a bill.'' We have met that obligation and filed a piece of comprehensive mining reform legislation. We are going to consider the amendments as part of the process of debate, and if they make a legitimate contribution to the mining reform effort--and I emphasize reform effort--we are going to adopt them. This is the appropriate method to resolve mining reform, not as a last- minute amendment to the Interior appropriations bill, which we have seen the Senator from Arkansas propose time and time again. The reform that Senator Craig, I, and others have offered lays a solid foundation upon which to build mining reform. Our mining reform bill should, I think, please reasonable voices on both sides. If you seek reform that brings a fair return to the Treasury, and it is patterned after the policies of the mining law of Nevada--and it works in Nevada--and it protects the environment and preserves our ability to produce strategic minerals, I think you will find a great deal to support in this legislation. It does work. The legislation protects some of the smaller interests, the small miners. It maintains traditional location and discovery practices. Yes, it is time for reform, but it has to be done right. Bad decisions will harm a $5 billion industry whose products are the muscle and sinew of the Nation's industrial output. The future of as many as 120,000 American miners and their families and their communities are at stake. Any action to move on amendment is absolutely irresponsible to those individuals, because it is the wrong way to do it. I know you have heard this before, time and time again, but we do have a bill in now and it is a responsible bill. We owe Americans a balanced and open resolution to the mining reform debate. This reform mining legislation honors the past, recognizes the present, and sets the stage, I think, for a bright future. The legislation that we offer advances reforms in four areas: royalties, patents, operations, and reclamation. Let me be very brief in referring to the royalties. The legislation creates the first-ever hard rock royalty. It requires that 5 percent of the profit made from mining on Federal lands be paid to the Federal Government. This legislation seeks a percentage of the profit, not the value of the mineral in place. We do this for a very specific reason. Failure to do so would cause a shutdown of many operations and prevent the opening of new mines. It would also cause other operators to cast low-ore concentrates into the spoil pile as they seek out only the very highest grade of ores. America boasts some very profitable mines, but there is an equal number that operate on a very thin margin. The Senator from Arkansas doesn't address the reality of what happens when the price of silver or the price of gold drops and their margin squeezes. We have some mines that actually operate during those periods with substantial losses. That is why we designed our royalty to take a percentage of the profits. Under the proposal that the Senator from Arkansas has proposed, time and time again, many of these mines would actually operate at a loss because they could not deduct their production costs prior to the sale of their finished product. If the mine makes money, the public gets a share. That is a fair way to do it. Nobody benefits from a royalty system so intrusive that it must be paid for through the loss of jobs, the health of local communities, and the abandonment of lower grade mineral resources. Some would want to simply drive the mining industry out of the United States because they look at it as some kind of an environmental devil that somehow can't, through advanced technology, make a contribution to the Nation. I say that they can, they will and, through this legislation, they will be able to do a better job. In 1974, British Columbia put a royalty on minerals before cost of production was factored in. Five thousand miners lost their jobs. That is a fact. Only one new mine went into operation in 1976. The industry was devastated. The royalty was removed 2 years later in 1978. That is the reality of the world in which we live and the international competitiveness associated with this industry. Years later, the industry in British Columbia still has not completely recovered. I happen to know what I am talking about because the Senator from Alaska is very close to our neighbors in British Columbia. So I say to those who forget history, they are doomed to repeat it. Patents: Patenting grants the right to take title to lands containing minerals upon demonstration that the land can support a profitable operation. Patents have been abused, no question about it. A small number of unscrupulous individuals have located mineral operations for the sole purpose of gaining title and turning the land into a lodge or ski resort. These practices are wrong. They are not allowed under the new legislation. The reform that we have offered cures these problems without punishing the innocent. We would continue to issue patents to people engaged in legitimate mining operations, but a patent would be revoked if the land is used for purposes other than mining. Operations: To separate legitimate miners from mere speculators and to unburden the Government from mining claims with no real potential, we require a $25 filing fee be paid at the time the claim is filed and make the annual $100 claim maintenance fee permanent. Environmental protection: Our revisions weave a tight environmental safety net. The reform permit process requires approval for all but the most minimal activities. The bill requires reclamation, and the bill requires full bonding to deal with abandonment. The Senator from Arkansas doesn't acknowledge the effort relative to what this bonding will mean. It will mean that mines that are abandoned will have a reclamation bond in place to make sure the public does not have to bear the cost of cleanup. The bond is going to be there; it is going to be held. It is a performance bond, that is what it means. As we address the responsibility for a prudent mining bill, please recognize the contributions that have been made in trying to formulate something realistic that will address the abuses that we have had in the past. That is what we do in our bill. The bill addresses mines already abandoned by establishing a reclamation fund as well. Filing fees, maintenance fees and the royalty go into that fund. So we have addressed that in a responsible manner. For those who seek meaningful reform to the Nation's general mining laws, then our legislation does the job. It fixes past abuses without punishing the innocent. It shares profits without putting people out of work. It assures the mining operations cause the least possible disturbance. And it makes sure we don't pay for actions of a few bad operators and provide sources of funds for reclamation. Both sides of the mining reform debate have come a long way toward a constructive compromise. I have met with Senator Bumpers on many occasions, and at one time actually thought we were going to reach an accord. But unfortunately we didn't. But we have gone ahead and put in the bill. The bill will help carry us, I think, the last [[Page S9582]] mile and provide the balanced reform that has, so far, eluded us. I urge my colleagues to join with me, Senator Craig and others in continuing to craft this open and meaningful mining reform. With equal vigor, I ask each and every Member of this body to join us in opposing Senator Bumpers' proposal, a reform crafted in the dark of night and offered in a forum guaranteed to confuse and shroud the real impact of the legislation. Mr. President, I yield the floor. Mr. GORTON addressed the Chair. The PRESIDING OFFICER. The Senator from Washington. Mr. GORTON. Mr. President, I will not at this point speak to the merits of the amendment. Both the Senator from Arkansas and the Senator from Alaska have done so, each of them repeating points that I can remember having heard almost verbatim in several previous sessions of Congress. My remarks will be much more narrow. Section (d)(1) of this amendment states: Any person producing hardrock minerals from a mine that was within a mining claim that has subsequently been patented under the general mining laws shall pay a reclamation fee to the Secretary under this subsection. The Senator from Arkansas quite properly described that fee as a severance tax, and a severance tax it is. It applies only to minerals coming out, presumably, in the future from certain classes of lands in the United States. It is not something directed at the restoration of those lands, but is to be used as a source of money for much broader purposes. The Senator's description of it as a tax is accurate. Article I, section 7 of the Constitution of the United States under which we operate states--and I quote-- All Bills for raising revenue shall originate in the House of Representatives. No such tax appears in the similar bill that the House of Representatives has passed. It is crystal clear to me that should this tax be added on to this bill it will be blue slipped in the House of Representatives, that is, it will not be considered on the grounds that that portion of the bill, that subject of the bill could only originate in the House. The House of Representatives is as jealous of its prerogatives to originate tax bills as the Senate is to ratifying treaties or to confirm Presidential appointments or to engage in any of the activities that are lodged by the Constitution in this body. Point of Order As a consequence, although there has been some time devoted to the merits of this amendment, and because I believe that it clearly violates article I, section 7 of the Constitution, I raise a constitutional point of order against the amendment. The PRESIDING OFFICER. The question before the Senate is debatable. Is the point of order well-taken, would be the question? Mr. REID addressed the Chair. The PRESIDING OFFICER. The Senator from Nevada. Mr. REID. Parliamentary inquiry. Do we ask for the yeas and nays at this time? The PRESIDING OFFICER. It is appropriate. Mr. REID. I do so. The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. The PRESIDING OFFICER. Is there further debate? Mr. REID addressed the Chair. The PRESIDING OFFICER. The Senator from Nevada. Mr. REID. I hope that we can resolve this issue. It is quite clear that it does violate the Constitution of the United States. That is by taking the Senator's own statement during the time he was debating his amendment. It is clear from his own statement that it is a violation of the Constitution. I say to my friends who are listening to this debate, Members of the Senate, that we would vote on this issue and if this issue prevails, of course, the amendment falls. But I would also say that we should look at this on the legal aspect. If this stays in this bill, the bill is gone. There is no question that it is unconstitutional and we should vote based on the constitutionality of this amendment, not on the merits of the amendment. I say to my friends that we have voted on some aspect of an amendment like this on other occasions. My friend from Arkansas has framed it differently this time. Therefore, we have raised this point of order. I ask that we dispose of this. It is getting late into the night. I repeat, if this constitutional point of order is upheld, the amendment falls. Ms. LANDRIEU addressed the Chair. The PRESIDING OFFICER. The Senator from Louisiana. Ms. LANDRIEU. Mr. President, I know we will probably soon be voting on this important amendment and on this important issue. I was sitting in my office and listening to my distinguished colleague from Arkansas, my friend and neighbor, and thought that I might come down and try to give him some help and support, not that he needs any more help in articulating the issue and speaking about it and outlining it, which he does so beautifully, but to let him know that as a new member of the Energy Committee, one that just arrived here and has not spent even a year here, and with him getting ready to retire and having announced his retirement, that I want to let him know I am going to pick up this ball wherever it may land today, I say to Senator Bumpers. I come from a State that has obviously some mining interests, but I come from a State that has had oil and gas development and exploration for many years. I am from a position of understanding that when it is done correctly how much of a benefit it can be in terms of jobs and economic development and helping people and enriching the corporations and businesses as well as the average working ma

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DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS ACT, 1998
(Senate - September 18, 1997)

Text of this article available as: TXT PDF [Pages S9575-S9600] DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS ACT, 1998 The Senate continued with the consideration of the bill. Mr. BUMPERS. Mr. President, I ask unanimous consent that my distinguished colleague and friend from Montana, Senator Baucus, be recognized for 10 minutes, without my losing the right to the floor, and that I immediately be recognized following the conclusion of his remarks. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Mr. BAUCUS. Mr. President, first I want to thank my very good friend and colleague, Senator Bumpers, for yielding the time. It is very gracious of him. He has waited a good period of time to offer his amendment. Mr. President, I rise today to call on Congress to complete the New World Mine acquisition and protect Yellowstone National Park. Now that the administration and congressional leadership have reached a budget agreement that allows for the acquisition of the New World lands, we need to move decisively. We have belabored this matter much too long and now is the time to finish the job. Yellowstone National Park was created 125 years ago. ``For the Benefit and Enjoyment of the People.'' Indeed, this is the entrance at mammoth Yellowstone Park. You probably cannot read the inscription over the arch but it says ``For the Benefit and Enjoyment of the People.'' And of course, immediately to my right is the Old Faithful geyser. Every year, Mr. President, 3 million people visit the park, bringing their children and grandchildren to enjoy the unspoiled beauty that is Yellowstone--from the Roosevelt arch, which I am pointing to here on my right, at the original entrance, to the breathtaking grandeur of Old Faithful, to the spectacular wildlife which calls this unique place home. During the month of August, I was fortunate to be present to celebrate Yellowstone's 125th anniversary with Vice President Al Gore. As I entered the park, I remembered my first trip to Yellowstone many years ago. The noble and majestic geysers, the boiling paint pots, and the vast scenery were the stuff of magic to a small child--and remain so today. These wonders cannot be seen anywhere else in the United States or, for that matter, in the world. I guarantee you there is not one Montanan, young or old, that does not fondly remember his or her first visit to the park, or anybody in our country for that matter. Finishing the New World acquisition is critical so our children may witness the wonders of nature, much as we have over the past 125 years. For the past 8 years, America has lived with the threat that a large gold mine could harm Yellowstone, our Nation's first national park. This mine, [[Page S9576]] on the park boundary, could irreparably damage the park by polluting rivers and devastating wildlife habitat. In 1996, local citizens, the mining company itself, and the administration, reached a consensus agreement that would stop the proposed mine--they all agreed; the administration, the local community, and the company--and it would protect Yellowstone and surrounding communities. This agreement provides for the Federal Government to acquire the mine property from Battle Mountain Gold in exchange for $65 million. The balanced budget agreement calls for this money to be appropriated from the Land and Water Conservation Fund. The New World agreement, I think, is very important for two reasons. First, it protects Yellowstone National Park for future generations. What could be more important? Second, it protects my State of Montana. It protects Montana's natural heritage, but it also protects Montana's economy. Many of the local communities surrounding Yellowstone depend on the park for their economic well-being. If the mine had been built, Yellowstone would have been harmed, and with it the communities and the families that depend on Yellowstone for their livelihood. It is for this reason that a majority of local citizens and businesses oppose the mine and support the agreement. In addition, the agreement obligates the mining company to spend $22.5 million to clean up historic mine pollution at the headwaters of the Yellowstone River. This will create jobs and clean up the environment, thereby benefiting the regional economy and improving locally fisheries. As a Senator representing Montana, I will fight to ensure that Montana receives these benefits. The bipartisan budget agreement provides an increase of $700 million in land and water conservation funding. Of this increase, $315 million has been designated as funding for priority land acquisitions. It is my understanding in speaking with the administration and with others that the New World and Headwaters acquisition were specifically discussed as the projects that would be funded by the $315 million designation. It would be unconscionable for Congress to violate the spirit and the intent of the budget agreement by failing to appropriate the funding necessary to complete the New World acquisition. In addition, placing further restrictions such as requiring authorization is both unnecessary and unwise. We need no additional authorization. The agreement has been agreed to already. New legal procedures, on the other hand, would just stall an already reached agreement, one that is widely supported and one that protects the park. Every year, numerous land acquisitions that are not individually authorized take place utilizing Land and Water Conservation Funds. By attaching strings to this acquisition--it is an authorization--Congress will have done nothing but endanger Yellowstone National Park. Indeed, the President's senior advisers strongly object to attaching any strings to this funding, and if Congress insists on stalling and delaying this agreement, the President may well veto the Interior appropriations bill upon the recommendation of OMB and other agencies. Because Yellowstone is at stake, he would be right to do so. I pledge here today to help lead the charge to uphold that veto if necessary. When Yellowstone and Montana's heritage is threatened, I will not sit idly by. We can and we must protect Yellowstone National Park. I thank my good friend, the Senator from Arkansas, and I yield the floor. excepted committee amendment beginning on page 123, line 9 Mr. BUMPERS. Mr. President, I ask unanimous consent that the pending amendment be laid aside and that the Senate proceed to the committee amendment beginning on page 123, line 9. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Amendment No. 1224 To Excepted Committee Amendment Beginning on Page 123, Line 9 Through Page 124, Line 20 (Purpose: To ensure that Federal taxpayers receive a fair return for the extraction of locatable minerals on public domain land and that abandoned mines are reclaimed) Mr. BUMPERS. Mr. President, I send an amendment to the desk. The PRESIDING OFFICER. The clerk will report. The legislative clerk read as follows: The Senator from Arkansas [Mr. Bumpers], for himself and Mr. Gregg, proposes an amendment numbered 1224 to excepted committee amendment beginning on page 123, line 9. Mr. BUMPERS. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: Add the following at the end of the pending Committee amendment as amended: ``(c)(1) Each person producing locatable minerals (including associated minerals) from any mining claim located under the general mining laws, or mineral concentrates derived from locatable minerals produced from any mining claim located under the general mining laws, as the case may be, shall pay a royalty of 5 percent of the net smelter return from the production of such locatable minerals or concentrates, as the case may be. ``(2) Each person responsible for making royalty payments under this section shall make such payments to the Secretary of the Interior not later than 30 days after the end of the calendar month in which the mineral or mineral concentrates are produced and first place in marketable condition, consistent with prevailing practices in the industry. ``(3) All persons holding mining claims located under the general mining laws shall provide to the Secretary such information as determined necessary by the Secretary to ensure compliance with this section, including, but not limited to, quarterly reports, records, documents, and other data. Such reports may also include, but not be limited to, pertinent technical and financial data relating to the quantity, quality, and amount of all minerals extracted from the mining claim. ``(4) The Secretary is authorized to conduct such audits of all persons holding mining claims located under the general mining laws as he deems necessary for the purposes of ensuring compliance with the requirements of this subsection. ``(5) Any person holding mining claims located under the general mining laws who knowingly or willfully prepares, maintains, or submits false, inaccurate, or misleading information required by this section, or fails or refuses to submit such information, shall be subject to a penalty imposed by the Secretary. ``(6) This subsection shall take effect with respect to minerals produced from a mining claim in calendar months beginning after enactment of this Act. ``(d)(1) Any person producing hardrock minerals from a mine that was within a mining claim that has subsequently been patented under the general mining laws shall pay a reclamation fee to the Secretary under this subsection. The amount of such fee shall be equal to a percentage of the net proceeds from such mine. The percentage shall be based upon the ratio of the net proceeds to the gross proceeds related to such production in accordance with the following table: Net proceeds as percentage of gross proceeds: Rate \1 \ Less than 10............................................... 2.00 10 or more but less than 18................................ 2.50 18 or more but less than 26................................ 3.00 26 or more but less than 34................................ 3.50 34 or more but less than 42................................ 4.00 42 or more but less than 50................................ 4.50 50 or more................................................. 5.00 \1\ Rate of fee as percentage of net proceeds. ``(2) Gross proceeds of less than $500,000 from minerals produced in any calendar year shall be exempt from the reclamation fee under this subsection for that year if such proceeds are from one or more mines located in a single patented claim or on two or more contiguous patented claims. ``(3) The amount of all fees payable under this subsection for any calendar year shall be paid to the Secretary within 60 days after the end of such year. ``(e) Receipts from the fees collected under subsections and (d) shall be paid into an Abandoned Minerals Mine Reclamation Fund. ``(f)(1) There is established on the books of the Treasury of the United States an interest-bearing fund to be known as the Abandoned Minerals Mine Reclamation Fund (hereinafter referred to in this section as the ``Fund''). The Fund shall be administered by the Secretary. ``(2) The Secretary shall notify the Secretary of the Treasury as to what portion of the Fund is not, in his judgement, required to meet current withdrawals. The Secretary of the Treasury shall invest such portion of the Fund in public debt securities with maturities suitable for the needs of such Fund and bearing interest at rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketplace obligations of the United States of comparable maturities. The income on such investments shall be credited to, and form a part of, the Fund. ``(3) The Secretary is, subject to appropriations, authorized to use moneys in the Fund [[Page S9577]] for the reclamation and restoration of land and water resources adversely affected by past mineral (other than coal and fluid minerals) and mineral material mining, including but not limited to, any of the following: ``(A) Reclamation and restoration of abandoned surface mined areas. ``(B) Reclamation and restoration of abandoned milling and processing areas. ``(C) Sealing, filling, and grading abandoned deep mine entries. ``(D) Planting of land adversely affected by past mining to prevent erosion and sedimentation. ``(E) Prevention, abatement, treatment and control of water pollution created by abandoned mine drainage. ``(F) Control of surface subsidence due to abandoned deep mines. ``(G) Such expenses as may be necessary to accomplish the purposes of this section. ``(4) Land and waters eligible for reclamation expenditures under this section shall be those within the boundaries of States that have lands subject to the general mining laws-- ``(A) which were mined or processed for minerals and mineral materials or which were affected by such mining or processing, and abandoned or left in an inadequate reclamation status prior to the date of enactment of this title; ``(B) for which the Secretary makes a determination that there is no continuing reclamation responsibility under State or Federal laws; and ``(C) for which it can be established that such lands do not contain minerals which could economically be extracted through the reprocessing or remining of such lands. ``(5) Sites and areas designated for remedial action pursuant to the Uranium Mill Tailings Radiation Control Act of 1978 (42 U.S.C. 7901 and following) or which have been listed for remedial action pursuant to the Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. 9601 and following) shall not be eligible for expenditures from the Fund under this section. ``(g) As used in this Section: ``(1) The term ``gross proceeds'' means the value of any extracted hardrock mineral which was: (A) sold; (B) exchanged for any thing or service; (C) removed from the country in a form ready for use or sale; or (D) initially used in a manufacturing process or in providing a service. ``(2) The term ``net proceeds'' means gross proceeds less the sum of the following deductions: (A) The actual cost of extracting the mineral. (B) The actual cost of transporting the mineral to the place or places of reduction, refining and sale. (C) The actual cost of reduction, refining and sale. (D) The actual cost of marketing and delivering the mineral and the conversion of the mineral into money. (E) The actual cost of maintenance and repairs of: (i) All machinery, equipment, apparatus and facilities used in the mine. (ii) All milling, refining, smelting and reduction works, plants and facilities. (iii) All facilities and equipment for transportation. (F) The actual cost of fire insurance on the machinery, equipment, apparatus, works, plants and facilities mentioned in subsection (E). (G) Depreciation of the original capitalized cost of the machinery, equipment, apparatus, works, plants and facilities mentioned in subsection (E). (H) All money expended for premiums for industrial insurance, and the actual cost of hospital and medical attention and accident benefits and group insurance for all employees. (I) The actual cost of developmental work in or about the mine or upon a group of mines when operated as a unit. (J) All royalties and severance taxes paid to the Federal government or State governments. ``(3) The term ``hardrock minerals'' means any mineral other than a mineral that would be subject to disposition under any of the following if located on land subject to the general mining laws: (A) the Mineral Leasing Act (30 U.S.C. 181 and following); (B) the Geothermal Steam Act of 1970 (30 U.S.C. 100 and following); (C) the Act of July 31, 1947, commonly known as the Materials Act of 1947 (30 U.S.C. 601 and following); or (D) the Mineral Leasing for Acquired Lands Act (30 U.S.C. 351 and following). ``(4) The term ``Secretary'' means the Secretary of the Interior. ``(5) The term ``patented mining claim'' means an interest in land which has been obtained pursuant to sections 2325 and 2326 of the Revised Statutes (30 U.S.C. 29 and 30) for vein or lode claims and sections 2329, 2330, 2331, and 2333 of the Revised Statutes (30 U.S.C. 35, 36 and 37) for placer claims, or section 2337 of the Revised Statutes (30 U.S.C. 42) for mill site claims. ``(6) The term ``general mining laws'' means those Acts which generally comprise Chapters 2, 12A, and 16, and sections 161 and 162 of title 30 of the United States Code.'' The PRESIDING OFFICER (Mr. Bennett). The Senator from Arkansas. Mr. BUMPERS. Mr. President, I have come here today for the eighth consecutive year to debate what I feel very strongly about and have always felt strongly about. I have never succeeded. Since I am going to be leaving next year, I know all my friends from the West are going to be saddened by my departure, and so far I don't have an heir apparent to take on this issue. First of all, I want to make an announcement to the 262 million American people who know very little or nothing about this issue. The first announcement I want to make today is that they are now saddled with a clean-up cost of all the abandoned mining sites in the United States of somewhere between $32.7 and $71.5 billion. Now, let me say to the American people while I am making that announcement, you didn't do it, you had nothing to do with it, but you are going to have to pick up the tab of between $32 to $71 billion. The Mineral Policy Center says there are 557,000 abandoned mines in the United States. Think of that--557,000 abandoned mines, and 59 of those are on the Superfund National Priority List. Mining has also produced 12,000 miles of polluted streams. The American people didn't cause it; the mining industry did it, and 2,000 of those 557,000 sites are in our national parks. Now, Mr. President, my amendment would establish a reclamation fund in the Treasury and it would be funded by a 5-percent net smelter return for mining operations on taxpayer-owned land. Royalties based on gross income or a net smelter return are traditionally charged for mining on private land and for mining on State-owned land. Much of the hardrock mining going on in this country is being done on the lands that you have heard me talk a great deal about--that is, lands that have been sold by the Federal Government for $2.50 an acre. However, a significant amount of mining goes on on lands where people have a mining claim on Federal lands and they get a permit to start mining. The Federal Government continues to own the land. We don't get anything for it. We don't even get $2.50 an acre for that land. So my net smelter royalty only applies to those lands which we still own. Now, isn't that normal and natural? If you own land that has gold under it and somebody comes by and wants to mine the gold under your land, the first thing you do is say, how much royalty are you willing to pay? Nationwide, that figure is about 5 percent. But I can tell you one thing, and this is a major point, if somebody came to you and said, I want to mine the gold, the silver, platinum, or palladium under your land, the first thing you would demand is, How much are you going to pay me for it? The U.S. Government cannot because Congress won't let them charge a royalty for mining on public land. We say, ``Here are some of the terms under which you can mine. ``Sic 'em, Tiger.'' Have a good time. Make a lot of money. And be sure you don't send the Federal Government, namely, the taxpayer of America, any money, and if you possibly can, leave an unmitigated environmental disaster on our hands for the taxpayers to clean up.'' You know, Mr. President, I still can't believe it goes on. I have been at this for 8 years and I still cannot believe what I just said, but it is true. The other part of my bill establishes a net-income based reclamation fee based on the profits of the mining company on lands that were Federal lands but that have been patented by the mining companies; that is, lands which we have sold for $2.50 an acre. The only way in the world we can ever recover anything from these mines is through a reclamation fee. It is altogether proper that we get something in return for the lands that we sold for $2.50 an acre and it is altogether proper that that money be used to reclaim these 557,000 abandoned mine sites. Mr. President, here is a closer look at what I just got through saying. The royalty rate in the Bumpers/Gregg amendment is 5 percent net smelter return, which is typically what is charged for mining operations on private land. The royalty will produce $175 million over the next 5 years. The reclamation fee ranges from 2 to 5 percent of net income for operations on patented lands, the lands that we sold for $2.50 an acre. That produces $750 million. And altogether, those two provisions would, over the next 5 years, [[Page S9578]] produce $925 million--not a very big beginning on the roughly $32 to $70 billion we are going to have to cough up to clean those places up. Mr. President, look at this chart right here. The thing that is a real enigma to me, is that we make the coal operators in this country pay us 12.5 percent of their gross income for every ton of coal they take off of Federal lands. That is for surface coal. If it's an underground mine the coal companies pay a royalty of 8 percent of their gross income to the Federal Government. Natural gas. If you want to bid on Federal lands and produce natural gas, it is incumbent upon you to pay a minimum of 12.5 percent of your gross income. When it comes to oil, if you want to drill in the Gulf of Mexico, you must also pay a 12.5 percent gross royalty. There are oil and gas wells all over the Western part of the United States. And for every dollar of gas or oil they produce, they send Uncle Sam 12.5 cents. But look here. For gold, they don't send anything. For silver, they don't send anything. For platinum, they don't send anything. And since 1872, when the old mining law was signed by Ulysses Grant, the mining companies have not paid a penny to the U.S. Treasury. Now, Mr. President, in 1986--and I use this just as an illustration to tell you why we so desperately need this reclamation fund in the U.S. Treasury--there was a mine called Summitville in Colorado. Summitville was owned by a Canadian mining company called Galactic Resources. They got a permit to mine on private land from the State of Colorado. In June of that same year, their cyanide/plastic undercoating--and I will explain that in a moment--began to leak. Let me stop just a moment and tell people, my colleagues, how gold mining is conducted. You have these giant shovels that take the dirt and you put it on a track and you carry it to a site and you stack it up on top of a plastic pad, which you hope is leakproof. And then you begin to drip--listen to this--you begin to drip cyanide--yes, cyanide--across the top of this giant heap of dirt. The cyanide filters down through this big load of dirt and it gathers up the gold and it filters out to a trench on the side. Now, you have to bear in mind that if that plastic pad, which I just described for you a moment ago, is not leakproof, if it springs a leak, you have cyanide dripping right into the ground, right into the water table, or going right into the nearest stream, and so it was with Summitville. The plastic coating on the ground, which was supposed to keep the cyanide controlled, began to leak. And the cyanide began to escape. And the cyanide began to run into the streams headed right for the Rio Grande River. Galactic could not do anything. They weren't close to capable of doing anything. And so the Federal Government goes to Galactic and says, ``We want you to stop this and we want you to pay us damages.'' Do you know what they did? They took bankruptcy. Smart move. They took bankruptcy. So what does that leave the U.S. Government, which is going to ultimately have the responsibility for controlling this leakage of cyanide poison? It leaves us with a $4.7 million bond. That is the bond they had put up to the State of Colorado in order to mine. Here you have a minimum of $60 million disaster on your hands with a $4.7 million bond. And so it is today, Mr. President--35 people employed since 1986, controlling the cyanide runoff from the mine in Colorado, and the ultimate cost to the taxpayers of this country will be $60 million, minimum. Here is one that is even better, Mr. President. This came out of the New York Times 2 days ago. It is a shame that every American citizen can't read this. It's called ``The Blame Slag Heap.'' In northern Idaho's Silver Valley, the abstractions of the Superfund program--``remediation,'' ``restoration,'' ``liability''--meet real life. For over a century, the region's silver mines provided bullets for our soldiers and fortunes for some of our richest corporations. The mines also created a toxic legacy: wastes and tailings, hundreds of billions of pounds of contaminated sediment * * *. In 1996--13 years after the area was declared the nation's second-largest Superfund site, the Justice Department filed a $600 million lawsuit against the surviving mining companies. The estimated cost of cleanup ranges up to a billion dollars. The Government sued after rejecting the companies' laughably low settlement offer of $1 million. A $1 billion cleanup, and the company that caused the damage offers $1 million to settle. The companies, however, have countersued. They are countersuing the Federal Government, and do you know what they allege? They say it happened because the U.S. Government failed to regulate the disposal of mining waters. Can you imagine that? The company is suing the Government because the Government didn't supervise more closely. The story closes out by saying, ``Stop me before I kill again.'' Mr. President, I ask unanimous consent the article from the New York Times be printed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: The Blame Slag Heap (By Mark Solomon) Spokane, Wash.--In northern Idaho's Silver Valley, the abstractions of the Superfund program--``remediation,'' ``restoration,'' ``liability''--meet real life. For over a century, the region's silver mines provided bullets for our soldiers and fortunes for some of our richest corporations. The mines also created a toxic legacy: wastes and tailings, hundreds of billions of pounds of contaminated sediment, leaching into a watershed that is now home to more than half a million people. In 1996, 13 years after the area was declared the nation's second-largest Superfund site, the Justice Department filed a $600 million lawsuit against the surviving mining companies. The estimated cost of the clean-up ranges up to a billion dollars. The Government sued after rejecting the companies' laughably low settlement offer of $1 million. If the companies don't pay, the Federal taxpayers will have to pick up the tab. The companies, however, have countersued, alleging, among other things, that the Government itself should be held responsible. Why? Because it failed to regulate the disposal of mining wastes. Do I believe my ears? In this era of deregulation, when industry seeks to replace environmental laws with a voluntary system, are the companies really saying that if only they had been regulated more they would have stopped polluting? I've heard the Government blamed for a lot of things, but regulatory laxity was never one of them--until now. In fact, Idaho's mining industry has long fought every attempt at reform. In 1932, for example, a Federal study called for the building of holding ponds to capture the mines' wastes. The companies fought that plan for 36 years, until the Clean Water Act forced them to comply. Now Congress is debating the reauthorization of the Superfund, and industry wants to weaken the provision on damage to natural resources. If the effort succeeds, what will happen in 50 years? Will the polluters sue the Government, blaming it for failing to prevent environmental damage? Quick, stop them before they kill again. Mr. CRAIG. Will the Senator yield specifically to his last comment? Mr. BUMPERS. I yield for a question. Mr. CRAIG. Does the Senator know about the new science that comes out of the study of the Superfund site in Silver Valley, ID? Does he understand also that mediation on the Superfund is now tied up in the courts--conducted by the State of Idaho--that has really produced more cleanup and prevented more heavy metals from going into the water system, and the value of that? Does he also recognize that the suit filed by the Attorney General was more politics and less substance? Mr. BUMPERS. That is a subjective judgment, is it not? Mr. CRAIG. I believe that is a fact. Thank you. Mr. BUMPERS. Is it not true that the company has countersued the Federal Government saying, ``You should have stopped us long ago''? Isn't that what the countersuit says--``You should have regulated us more closely''? Mr. CRAIG. But the countersuit says that based on today's science, if we had known it then, which we didn't--you didn't, I didn't, and no scientist understood it--then we could have done something different. But as of now this is not an issue for mining law; this is an issue of a Superfund law that doesn't work, that promotes litigation. That is why the arguments you make are really not against mining law reform, which you and I support in some form. What you are really taking is a Superfund law that is tied up in the committees of this Senate, is nonfunctional, and produces lawsuits. Mr. BUMPERS. Can you tell me where the Superfund law says if you [[Page S9579]] were ignorant of what you were doing and caused the damage, you are excused? Do you know of any place in the Superfund where there is such language as that? Mr. CRAIG. What I understand is we have a 100-year-old mine where we are trying to take today's science and, looking at it based on your argument, move it back 100 years. We should be intent on solving today's problems and not arguing 100 years later. Mr. BUMPERS. Is the State of Idaho willing to take over this cleanup site and absolve the U.S. Government of any further liability? Mr. CRAIG. My guess is that the State of Idaho with some limited assistance would champion that cause. I have introduced legislation that would create a base of authority. We believe it would cost the Federal Government less than $100 million. The State would work with some matching moneys. They would bring in the mining companies and force them to the table to establish the liability. Guess what would happen, Senator. We would be out of the courts. Lawyers would lose hundreds of thousands of dollars in legal fees. And we would be cleaning up Superfund sites that have been in litigation for a decade, by your own admission and argument. Mr. BUMPERS. Senator, the U.S. Government has sued this company for $600 million. The Government estimates that the cleanup cost is going to be $1 billion. The Senator comes from the great State of Idaho, and I am sure they don't enjoy ingesting cyanide any more than anybody else in any other State would. But the Senator would have to admit that Idaho couldn't, if it wanted to, clean up this site. It doesn't have the resources. It is the taxpayers of this country that are stuck with that $1 billion debt out there with a company which brashly says, ``If you would have regulated us closer, we wouldn't have done it.'' That is like saying, ``If you had taken my pistol away from me, I wouldn't have committed that murder.'' Mr. CRAIG. If you would yield only briefly again--I do appreciate your courtesy--there is not a $1 billion price tag. That is a figment of the imagination of some of our environmental friends. There is no basis for that argument. There isn't a reasonable scientist who doesn't recognize that for a couple hundred million dollars of well-placed money, that problem goes away. But, as you know, when you involve the Federal Government, you multiply it by at least five. That is exactly what has gone on here. I will tell you that for literally tens of millions of dollars, the State of Idaho, managing a trust fund, has shut down more abandoned mines, closed off the mouths of those mines, and stopped the leaking of heavy metal waters into the Kootenay River, and into the Coeur d'Alene, and done so much more productively, and it has not cost $1 billion. Nobody in Idaho, including our State government, puts a $1 billion price tag on this. This is great rhetoric, but it is phony economics. Mr. BUMPERS. Mr. President, let me just say to the Senator from Idaho that my legislation for 8 long years has been an anathema to him. I am not saying if I were a Senator from Alaska, Idaho, or Nevada I wouldn't be making the same arguments. But I want to make this offer. It is a standing offer. If the State of Idaho will commit and put up a bond that they will clean up all those abandoned mine sites in that State, that they will take on the responsibility, and do it in good order, and as speedily as possible, I will withdraw my amendment. I don't have the slightest fear. We all know that this is a Federal problem. It is a Federal responsibility to clean up these mine sites. The only way we can do it is to get some money out of the people who got the land virtually free and who have left us with this $30 billion to $70 billion price tag. Let me go back, Mr. President, and just state that since 1872 the U.S. Government in all of its generosity has given away 3.244 million acres of land. We have given it away for $2.50 an acre. Sometimes we got as much as $5 an acre. There are 330,000 claims still pending in this country. And the Mineral Policy Center estimates that since 1872 we have patented land containing $243 billion worth of minerals--land that used to belong to the taxpayers of this country. We now have a moratorium on all but 235 patent applications. But the 235 applications, when they are granted, will represent the continued taxpayer giveaway of billions of dollars worth of minerals and land. Stillwater Mining Company in Montana has a first half certificate for 2,000 acres of land in the State of Montana. What does that mean? That means they are virtually assured of getting a deed to 2,000 acres of land. It means that they are virtually assured of paying the princely sum of $10,180. Guess what is what is lying underneath the 2,000 acres: $38 billion worth of palladium and platinum. My figure? No. Stillwater's figure. Look at their prospectus. Look at their annual report. They are saying to the people who own stock, ``Have we pulled off a coup.'' We are going to get 2,000 acres of Federal land for $10,180, and it has $38 billion worth of hardrock minerals under it--palladium and platinum. You know, one of the things that I think causes me to fail every year is that it is so gross, so egregious, that people can't believe it is factual, that it is actually happening. But it is true. Look at what happened to Asarco. They paid the U.S. Government $1,745. What did they get? $2.9 billion worth of copper and silver. You never heard of a company called Faxe Kalk. Do you know the reason you never heard of it? It is a foreign mining company. You don't usually hear of them. The other reason you don't hear of them is because they are a Danish company. One of the things that makes this issue so unpalatable is that many of the biggest 25 mining companies in the United States are foreign companies. We ought to go today to Denmark and say, ``We would like some of your North Sea oil.'' What do you think they would say if we said, ``Look, we are going to start drilling here off the coast of Denmark. We will give you a dollar now and then for the privilege.'' They would say, ``You need to be submitted for a saliva test.'' But the Faxe Kalk Corporation comes here, and they say, ``You have 110 acres out here in Idaho, Uncle Sam. We would like to have it. We will pay $275 for it.'' So they go to Bruce Babbitt and they say, ``We will give you $275 for this 110 acres.'' Do you know what is underneath it? One billion dollars worth of a mineral called travertine. It is a mineral used to whiten paper. That is $275 the taxpayers get and $1 billion a Danish corporation gets. In 1995 the Secretary of the Interior was forced to deed 1,800 acres of public land in Nevada to Barrick Gold Co., a Canadian company, for its Gold Strike Mine. Barrick paid $9,000 for that 1,800 acres. Mr. President, there isn't a place in the Ozark Mountains of my State where you could buy land for one-tenth that price. The law required Secretary Babbitt to give Barrick, which is the most profitable gold company in the world, land containing $11 billion worth of gold for $9,000. I could go on. There are other cases just as egregious as that. For 8 long years, I have stood at this very desk, and I have made these arguments, as I say, which are so outrageous I can hardly believe I am saying them, let alone believing them. Newmont Mining Co. is one of the biggest gold companies in the world. They have a large mine in Nevada which is partially on private land. When people say that somebody is mining on private lands, if you will check, Mr. President, you will find that in most cases that land was Federal land that somebody else patented, and then somebody like Newmont comes along, and they say, ``You hold a patent on this land that you got from the Federal Government for $2.50 an acre and we want to mine on it.'' Do you know what Newmont pays to the land owner on its mine in Nevada? An 18 percent royalty. Mr. President, as I just mentioned, most of the land being mined on, so-called private lands, are private because somebody bought it from the Federal Government years ago for $2.50 or $5 an acre. True, it is private. They own it. They paid for it. The mining companies are willing to pay the States--they are willing to pay the States a royalty. They are willing to pay the States a severance tax. They are willing to pay the private owners of this country an average of 5 percent. But when it [[Page S9580]] comes to paying the Federal Government, it is absolutely anathema to them. There is no telling how much the National Mining Association spends every year on lobbying, on publicity, on mailers, you name it, to keep this sweetheart deal alive. Since I started on this debate 8 years ago, the mining companies of this country have taken out billions of dollars worth of minerals from taxpayer-owned land. And do you know what the Federal Government and the taxpayers of this country got in exchange for that? One environmental disaster after another to clean up. And so that is the reason my bill, which contains a royalty and a reclamation fee, goes into a reclamation fund to at least start undoing the environmental damage these people have done because it is too late to get a royalty out of them. The gold is gone. We got the shaft. They got the gold. And it is too late to do anything about it. But you can start making them pay now to clean up those 555,000 sites. Arizona has a 2 percent gross value royalty for mines located on State lands and a 2.5 percent net income severance tax for all mines in the State. Montana, 5 percent; fair market for raw metallic minerals; 1.6 percent of the gross value in excess of $250,000 for gold, silver, platinum group metals. All of these States charge royalties for mining operations on State- owned land. Most of them also charge a severance tax for mining operations on all land in the State. Mr. President, what do they know that we don't? A lot. The States are collecting the money, but not Uncle Sam. Do you know why I have lost this fight for the last 8 years? Those States that have mining on Federal lands have great representation in the U.S. Senate. I know that every single Western Senator is going to start flocking onto this floor as soon as I start talking about this amendment. Do you see anybody else on this floor who is not from the West? Do you know why? My mother used to say, ``Everybody's business is nobody's business.'' This is everybody's business, except it just doesn't affect their States. There are no mining jobs in their States. For 8 years I have heard all these sayings, as to how many jobs you are going to lose, despite the fact the Congressional Budget Office says, ``None.'' ``You are going to lose all these jobs. It is going to discommode the economies of our respective States.'' And yet the States don't hesitate. We have people in this body who are Senators from the West who have served in State legislatures, who helped pass these laws, who helped impose royalties and severance taxes against the mining companies. But somehow or other they go into gridlock when they get here. At the State level they don't mind assessing these kinds of taxes. The States need the money. We do, too. We are the ones who are tagged with this gigantic bill for reclamation. Mr. President, I could go through a list of things I have here. Amax, for example, pays 6-percent royalty on the Fort Knox Mine in Alaska. The chairman of the Energy Committee 2 years ago passed legislation providing for a land exchange on Forest Service land in Alaska. The Kennecott Mining Co. was willing to pay the Forest Service a $1.1 million fee up front, and then a 3-percent net smelter return on the rest of it. We agreed on it, ratified it. I voted for it. But, now, isn't it strange that here is a mine in Alaska that we had to legislatively approve--because of the ownership of the land, it involved a land exchange--and I was happy to do it because it was a fair deal and these people demonstrated an interest in paying a fair royalty for what they took. Mr. President, I will yield the floor. I will not belabor this any further. Mr. MURKOWSKI. I wonder if the Senator will yield for a question, because it affects my particular State? Mr. BUMPERS. I was getting ready to yield the floor. I want to say in closing, I know a lot of people would like to get out of here as early as they can tonight. I don't intend to belabor this. I said mostly what I want to say. I may respond to a few things that are said, so I am going to turn it over to my friends from the West and let them respond for a while, and then hopefully we can get into a time agreement after four or five speakers have spoken. I yield the floor. The PRESIDING OFFICER. The Senator from Alaska. Mr. MURKOWSKI. Mr. President, I would like to respond to my friend from Arkansas on the mining issues he brings up. Mr. BUMPERS. Will the Senator yield for just a moment? When I introduced this amendment, I failed to state that my chief cosponsor on the bill is Senator Gregg from New Hampshire. The PRESIDING OFFICER. The Senator from Alaska. Mr. MURKOWSKI. Again, I would like to call attention to the statement that was made by the Senator from Arkansas relative to the Green Creek Mine. The thing that made that so different is the unique characteristic of that particular discovery, where all the components were known relative to the value of the minerals. The roads were in, the infrastructure was in. It was not a matter of discovery, going out in an area and wondering whether you were going to develop a sufficiency of resources to amortize the investment necessary to put in a mine. So I remind my colleagues, there is a big difference between the rhetoric that we have heard here and the practical realities of experience in the mining industry. We have seen both the effort by Canada and Mexico to initiate royalties. What has happened to their mining industry? It simply moved offshore. We have to maintain a competitive atmosphere on a worldwide basis; otherwise the reality for United States mining will be the same as was experienced in both Mexico and Canada. I strongly urge my colleagues to join me in opposition to Senator Bumpers' amendment. This is not the first attempt he has made, initiating actions through the Interior appropriations process. We seem to be subjected to this every year. I know the intentions are good. But the reality is that the amendment as offered represents a profound--and I urge my colleagues to reflect on this--a profound and wide-reaching attempt to reform the Nation's mining laws in a way that prevents any real understanding of the impacts of the legislation. Because, as written, Senator Bumpers' amendment would not only put a royalty of all mining claims--all mining claims--but would also put a fee on all minerals produced off of lands that have ever gone to patent. Those are private lands. Let me, again, cite what this amendment does. It would not only put a royalty on all mining claims, but would also put a fee on all minerals produced off lands that have ever gone to patent. Those are private lands. So, this is nothing more than a tax. It is a tax. And it is this Senator's opinion that this makes Senator Bumpers' amendment subject to a constitutional point of order. Let me set this aside for a moment and address the specifics of my opposition to the amendment. This approach to revenue generation is no different than placing a tax on, say, all agricultural production from lands that were at one time, say, homesteads. It is retroactive. Even though Senator Bumpers doesn't like it, the fact remains that patent claims are exactly the same as homestead lands. They are all private lands. I cannot even begin to imagine the genesis of this punitive and dangerous amendment. This is an unmitigated attack on all things mining. We have absolutely no idea what impact this legislation would have on our ability to maintain a dependable supply of minerals; no idea what environmental disasters would be created when this legislation shuts down the producing mines across the country. We have no idea how many workers will be put on the unemployment line. We have no idea whatsoever on the effects of this legislation. The issue is very complex. It is not appropriate that it be dealt with in an appropriations process. There is a right way and a wrong way to go about mining reform. You can chose the right way and offer your reform in a fair and open process, giving everyone the opportunity to participate in the formation of the legislation, which is what Senator Craig and I, along with the cosponsors of the legislation, have attempted to do in the legislation that has been offered. Or you can, as I observe, do what Senator Bumpers has seen fit to do and offer your legislation in a form where not one single person [[Page S9581]] outside the Senator's office has the opportunity to either understand or contribute to the process. I think there is too much at stake in mining reform to treat this complex subject in such a dangerous and offhand manner. Senator Craig, along with myself, Senator Reid, Senator Bryan, Senator Bennett, Senator Burns, Senator Hatch, Senator Thomas, Senator Campbell, Senator Stevens, Senator Kempthorne, among a few, have introduced S. 1102, the Mining Reform Act of 1997. As such, I encourage my colleagues to recognize the time and effort that has been put into developing a package of reforms that set the stage for a meaningful, honest, and comprehensive reform. We are going to be holding a series of hearings to explore all aspects of the legislation and the effect it will have on the Nation's environment and economy. I know many Members have indicated their interest in the formation of this legislation and the process of the hearings as they unfold and intend to participate. This is how reforms should take place. Reform should take place in an orderly manner in the hearing process, and we have lived up, I think, to the expectations of those who have indicated, ``All right, we will stand with you, but give us a bill.'' We have met that obligation and filed a piece of comprehensive mining reform legislation. We are going to consider the amendments as part of the process of debate, and if they make a legitimate contribution to the mining reform effort--and I emphasize reform effort--we are going to adopt them. This is the appropriate method to resolve mining reform, not as a last- minute amendment to the Interior appropriations bill, which we have seen the Senator from Arkansas propose time and time again. The reform that Senator Craig, I, and others have offered lays a solid foundation upon which to build mining reform. Our mining reform bill should, I think, please reasonable voices on both sides. If you seek reform that brings a fair return to the Treasury, and it is patterned after the policies of the mining law of Nevada--and it works in Nevada--and it protects the environment and preserves our ability to produce strategic minerals, I think you will find a great deal to support in this legislation. It does work. The legislation protects some of the smaller interests, the small miners. It maintains traditional location and discovery practices. Yes, it is time for reform, but it has to be done right. Bad decisions will harm a $5 billion industry whose products are the muscle and sinew of the Nation's industrial output. The future of as many as 120,000 American miners and their families and their communities are at stake. Any action to move on amendment is absolutely irresponsible to those individuals, because it is the wrong way to do it. I know you have heard this before, time and time again, but we do have a bill in now and it is a responsible bill. We owe Americans a balanced and open resolution to the mining reform debate. This reform mining legislation honors the past, recognizes the present, and sets the stage, I think, for a bright future. The legislation that we offer advances reforms in four areas: royalties, patents, operations, and reclamation. Let me be very brief in referring to the royalties. The legislation creates the first-ever hard rock royalty. It requires that 5 percent of the profit made from mining on Federal lands be paid to the Federal Government. This legislation seeks a percentage of the profit, not the value of the mineral in place. We do this for a very specific reason. Failure to do so would cause a shutdown of many operations and prevent the opening of new mines. It would also cause other operators to cast low-ore concentrates into the spoil pile as they seek out only the very highest grade of ores. America boasts some very profitable mines, but there is an equal number that operate on a very thin margin. The Senator from Arkansas doesn't address the reality of what happens when the price of silver or the price of gold drops and their margin squeezes. We have some mines that actually operate during those periods with substantial losses. That is why we designed our royalty to take a percentage of the profits. Under the proposal that the Senator from Arkansas has proposed, time and time again, many of these mines would actually operate at a loss because they could not deduct their production costs prior to the sale of their finished product. If the mine makes money, the public gets a share. That is a fair way to do it. Nobody benefits from a royalty system so intrusive that it must be paid for through the loss of jobs, the health of local communities, and the abandonment of lower grade mineral resources. Some would want to simply drive the mining industry out of the United States because they look at it as some kind of an environmental devil that somehow can't, through advanced technology, make a contribution to the Nation. I say that they can, they will and, through this legislation, they will be able to do a better job. In 1974, British Columbia put a royalty on minerals before cost of production was factored in. Five thousand miners lost their jobs. That is a fact. Only one new mine went into operation in 1976. The industry was devastated. The royalty was removed 2 years later in 1978. That is the reality of the world in which we live and the international competitiveness associated with this industry. Years later, the industry in British Columbia still has not completely recovered. I happen to know what I am talking about because the Senator from Alaska is very close to our neighbors in British Columbia. So I say to those who forget history, they are doomed to repeat it. Patents: Patenting grants the right to take title to lands containing minerals upon demonstration that the land can support a profitable operation. Patents have been abused, no question about it. A small number of unscrupulous individuals have located mineral operations for the sole purpose of gaining title and turning the land into a lodge or ski resort. These practices are wrong. They are not allowed under the new legislation. The reform that we have offered cures these problems without punishing the innocent. We would continue to issue patents to people engaged in legitimate mining operations, but a patent would be revoked if the land is used for purposes other than mining. Operations: To separate legitimate miners from mere speculators and to unburden the Government from mining claims with no real potential, we require a $25 filing fee be paid at the time the claim is filed and make the annual $100 claim maintenance fee permanent. Environmental protection: Our revisions weave a tight environmental safety net. The reform permit process requires approval for all but the most minimal activities. The bill requires reclamation, and the bill requires full bonding to deal with abandonment. The Senator from Arkansas doesn't acknowledge the effort relative to what this bonding will mean. It will mean that mines that are abandoned will have a reclamation bond in place to make sure the public does not have to bear the cost of cleanup. The bond is going to be there; it is going to be held. It is a performance bond, that is what it means. As we address the responsibility for a prudent mining bill, please recognize the contributions that have been made in trying to formulate something realistic that will address the abuses that we have had in the past. That is what we do in our bill. The bill addresses mines already abandoned by establishing a reclamation fund as well. Filing fees, maintenance fees and the royalty go into that fund. So we have addressed that in a responsible manner. For those who seek meaningful reform to the Nation's general mining laws, then our legislation does the job. It fixes past abuses without punishing the innocent. It shares profits without putting people out of work. It assures the mining operations cause the least possible disturbance. And it makes sure we don't pay for actions of a few bad operators and provide sources of funds for reclamation. Both sides of the mining reform debate have come a long way toward a constructive compromise. I have met with Senator Bumpers on many occasions, and at one time actually thought we were going to reach an accord. But unfortunately we didn't. But we have gone ahead and put in the bill. The bill will help carry us, I think, the last [[Page S9582]] mile and provide the balanced reform that has, so far, eluded us. I urge my colleagues to join with me, Senator Craig and others in continuing to craft this open and meaningful mining reform. With equal vigor, I ask each and every Member of this body to join us in opposing Senator Bumpers' proposal, a reform crafted in the dark of night and offered in a forum guaranteed to confuse and shroud the real impact of the legislation. Mr. President, I yield the floor. Mr. GORTON addressed the Chair. The PRESIDING OFFICER. The Senator from Washington. Mr. GORTON. Mr. President, I will not at this point speak to the merits of the amendment. Both the Senator from Arkansas and the Senator from Alaska have done so, each of them repeating points that I can remember having heard almost verbatim in several previous sessions of Congress. My remarks will be much more narrow. Section (d)(1) of this amendment states: Any person producing hardrock minerals from a mine that was within a mining claim that has subsequently been patented under the general mining laws shall pay a reclamation fee to the Secretary under this subsection. The Senator from Arkansas quite properly described that fee as a severance tax, and a severance tax it is. It applies only to minerals coming out, presumably, in the future from certain classes of lands in the United States. It is not something directed at the restoration of those lands, but is to be used as a source of money for much broader purposes. The Senator's description of it as a tax is accurate. Article I, section 7 of the Constitution of the United States under which we operate states--and I quote-- All Bills for raising revenue shall originate in the House of Representatives. No such tax appears in the similar bill that the House of Representatives has passed. It is crystal clear to me that should this tax be added on to this bill it will be blue slipped in the House of Representatives, that is, it will not be considered on the grounds that that portion of the bill, that subject of the bill could only originate in the House. The House of Representatives is as jealous of its prerogatives to originate tax bills as the Senate is to ratifying treaties or to confirm Presidential appointments or to engage in any of the activities that are lodged by the Constitution in this body. Point of Order As a consequence, although there has been some time devoted to the merits of this amendment, and because I believe that it clearly violates article I, section 7 of the Constitution, I raise a constitutional point of order against the amendment. The PRESIDING OFFICER. The question before the Senate is debatable. Is the point of order well-taken, would be the question? Mr. REID addressed the Chair. The PRESIDING OFFICER. The Senator from Nevada. Mr. REID. Parliamentary inquiry. Do we ask for the yeas and nays at this time? The PRESIDING OFFICER. It is appropriate. Mr. REID. I do so. The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. The PRESIDING OFFICER. Is there further debate? Mr. REID addressed the Chair. The PRESIDING OFFICER. The Senator from Nevada. Mr. REID. I hope that we can resolve this issue. It is quite clear that it does violate the Constitution of the United States. That is by taking the Senator's own statement during the time he was debating his amendment. It is clear from his own statement that it is a violation of the Constitution. I say to my friends who are listening to this debate, Members of the Senate, that we would vote on this issue and if this issue prevails, of course, the amendment falls. But I would also say that we should look at this on the legal aspect. If this stays in this bill, the bill is gone. There is no question that it is unconstitutional and we should vote based on the constitutionality of this amendment, not on the merits of the amendment. I say to my friends that we have voted on some aspect of an amendment like this on other occasions. My friend from Arkansas has framed it differently this time. Therefore, we have raised this point of order. I ask that we dispose of this. It is getting late into the night. I repeat, if this constitutional point of order is upheld, the amendment falls. Ms. LANDRIEU addressed the Chair. The PRESIDING OFFICER. The Senator from Louisiana. Ms. LANDRIEU. Mr. President, I know we will probably soon be voting on this important amendment and on this important issue. I was sitting in my office and listening to my distinguished colleague from Arkansas, my friend and neighbor, and thought that I might come down and try to give him some help and support, not that he needs any more help in articulating the issue and speaking about it and outlining it, which he does so beautifully, but to let him know that as a new member of the Energy Committee, one that just arrived here and has not spent even a year here, and with him getting ready to retire and having announced his retirement, that I want to let him know I am going to pick up this ball wherever it may land today, I say to Senator Bumpers. I come from a State that has obviously some mining interests, but I come from a State that has had oil and gas development and exploration for many years. I am from a position of understanding that when it is done correctly how much of a benefit it can be in terms of jobs and economic development and helping people and enriching the corporations and businesses as well as the average working man and woma

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DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS ACT, 1998
(Senate - September 18, 1997)

Text of this article available as: TXT PDF [Pages S9575-S9600] DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS ACT, 1998 The Senate continued with the consideration of the bill. Mr. BUMPERS. Mr. President, I ask unanimous consent that my distinguished colleague and friend from Montana, Senator Baucus, be recognized for 10 minutes, without my losing the right to the floor, and that I immediately be recognized following the conclusion of his remarks. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Mr. BAUCUS. Mr. President, first I want to thank my very good friend and colleague, Senator Bumpers, for yielding the time. It is very gracious of him. He has waited a good period of time to offer his amendment. Mr. President, I rise today to call on Congress to complete the New World Mine acquisition and protect Yellowstone National Park. Now that the administration and congressional leadership have reached a budget agreement that allows for the acquisition of the New World lands, we need to move decisively. We have belabored this matter much too long and now is the time to finish the job. Yellowstone National Park was created 125 years ago. ``For the Benefit and Enjoyment of the People.'' Indeed, this is the entrance at mammoth Yellowstone Park. You probably cannot read the inscription over the arch but it says ``For the Benefit and Enjoyment of the People.'' And of course, immediately to my right is the Old Faithful geyser. Every year, Mr. President, 3 million people visit the park, bringing their children and grandchildren to enjoy the unspoiled beauty that is Yellowstone--from the Roosevelt arch, which I am pointing to here on my right, at the original entrance, to the breathtaking grandeur of Old Faithful, to the spectacular wildlife which calls this unique place home. During the month of August, I was fortunate to be present to celebrate Yellowstone's 125th anniversary with Vice President Al Gore. As I entered the park, I remembered my first trip to Yellowstone many years ago. The noble and majestic geysers, the boiling paint pots, and the vast scenery were the stuff of magic to a small child--and remain so today. These wonders cannot be seen anywhere else in the United States or, for that matter, in the world. I guarantee you there is not one Montanan, young or old, that does not fondly remember his or her first visit to the park, or anybody in our country for that matter. Finishing the New World acquisition is critical so our children may witness the wonders of nature, much as we have over the past 125 years. For the past 8 years, America has lived with the threat that a large gold mine could harm Yellowstone, our Nation's first national park. This mine, [[Page S9576]] on the park boundary, could irreparably damage the park by polluting rivers and devastating wildlife habitat. In 1996, local citizens, the mining company itself, and the administration, reached a consensus agreement that would stop the proposed mine--they all agreed; the administration, the local community, and the company--and it would protect Yellowstone and surrounding communities. This agreement provides for the Federal Government to acquire the mine property from Battle Mountain Gold in exchange for $65 million. The balanced budget agreement calls for this money to be appropriated from the Land and Water Conservation Fund. The New World agreement, I think, is very important for two reasons. First, it protects Yellowstone National Park for future generations. What could be more important? Second, it protects my State of Montana. It protects Montana's natural heritage, but it also protects Montana's economy. Many of the local communities surrounding Yellowstone depend on the park for their economic well-being. If the mine had been built, Yellowstone would have been harmed, and with it the communities and the families that depend on Yellowstone for their livelihood. It is for this reason that a majority of local citizens and businesses oppose the mine and support the agreement. In addition, the agreement obligates the mining company to spend $22.5 million to clean up historic mine pollution at the headwaters of the Yellowstone River. This will create jobs and clean up the environment, thereby benefiting the regional economy and improving locally fisheries. As a Senator representing Montana, I will fight to ensure that Montana receives these benefits. The bipartisan budget agreement provides an increase of $700 million in land and water conservation funding. Of this increase, $315 million has been designated as funding for priority land acquisitions. It is my understanding in speaking with the administration and with others that the New World and Headwaters acquisition were specifically discussed as the projects that would be funded by the $315 million designation. It would be unconscionable for Congress to violate the spirit and the intent of the budget agreement by failing to appropriate the funding necessary to complete the New World acquisition. In addition, placing further restrictions such as requiring authorization is both unnecessary and unwise. We need no additional authorization. The agreement has been agreed to already. New legal procedures, on the other hand, would just stall an already reached agreement, one that is widely supported and one that protects the park. Every year, numerous land acquisitions that are not individually authorized take place utilizing Land and Water Conservation Funds. By attaching strings to this acquisition--it is an authorization--Congress will have done nothing but endanger Yellowstone National Park. Indeed, the President's senior advisers strongly object to attaching any strings to this funding, and if Congress insists on stalling and delaying this agreement, the President may well veto the Interior appropriations bill upon the recommendation of OMB and other agencies. Because Yellowstone is at stake, he would be right to do so. I pledge here today to help lead the charge to uphold that veto if necessary. When Yellowstone and Montana's heritage is threatened, I will not sit idly by. We can and we must protect Yellowstone National Park. I thank my good friend, the Senator from Arkansas, and I yield the floor. excepted committee amendment beginning on page 123, line 9 Mr. BUMPERS. Mr. President, I ask unanimous consent that the pending amendment be laid aside and that the Senate proceed to the committee amendment beginning on page 123, line 9. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Amendment No. 1224 To Excepted Committee Amendment Beginning on Page 123, Line 9 Through Page 124, Line 20 (Purpose: To ensure that Federal taxpayers receive a fair return for the extraction of locatable minerals on public domain land and that abandoned mines are reclaimed) Mr. BUMPERS. Mr. President, I send an amendment to the desk. The PRESIDING OFFICER. The clerk will report. The legislative clerk read as follows: The Senator from Arkansas [Mr. Bumpers], for himself and Mr. Gregg, proposes an amendment numbered 1224 to excepted committee amendment beginning on page 123, line 9. Mr. BUMPERS. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: Add the following at the end of the pending Committee amendment as amended: ``(c)(1) Each person producing locatable minerals (including associated minerals) from any mining claim located under the general mining laws, or mineral concentrates derived from locatable minerals produced from any mining claim located under the general mining laws, as the case may be, shall pay a royalty of 5 percent of the net smelter return from the production of such locatable minerals or concentrates, as the case may be. ``(2) Each person responsible for making royalty payments under this section shall make such payments to the Secretary of the Interior not later than 30 days after the end of the calendar month in which the mineral or mineral concentrates are produced and first place in marketable condition, consistent with prevailing practices in the industry. ``(3) All persons holding mining claims located under the general mining laws shall provide to the Secretary such information as determined necessary by the Secretary to ensure compliance with this section, including, but not limited to, quarterly reports, records, documents, and other data. Such reports may also include, but not be limited to, pertinent technical and financial data relating to the quantity, quality, and amount of all minerals extracted from the mining claim. ``(4) The Secretary is authorized to conduct such audits of all persons holding mining claims located under the general mining laws as he deems necessary for the purposes of ensuring compliance with the requirements of this subsection. ``(5) Any person holding mining claims located under the general mining laws who knowingly or willfully prepares, maintains, or submits false, inaccurate, or misleading information required by this section, or fails or refuses to submit such information, shall be subject to a penalty imposed by the Secretary. ``(6) This subsection shall take effect with respect to minerals produced from a mining claim in calendar months beginning after enactment of this Act. ``(d)(1) Any person producing hardrock minerals from a mine that was within a mining claim that has subsequently been patented under the general mining laws shall pay a reclamation fee to the Secretary under this subsection. The amount of such fee shall be equal to a percentage of the net proceeds from such mine. The percentage shall be based upon the ratio of the net proceeds to the gross proceeds related to such production in accordance with the following table: Net proceeds as percentage of gross proceeds: Rate \1 \ Less than 10............................................... 2.00 10 or more but less than 18................................ 2.50 18 or more but less than 26................................ 3.00 26 or more but less than 34................................ 3.50 34 or more but less than 42................................ 4.00 42 or more but less than 50................................ 4.50 50 or more................................................. 5.00 \1\ Rate of fee as percentage of net proceeds. ``(2) Gross proceeds of less than $500,000 from minerals produced in any calendar year shall be exempt from the reclamation fee under this subsection for that year if such proceeds are from one or more mines located in a single patented claim or on two or more contiguous patented claims. ``(3) The amount of all fees payable under this subsection for any calendar year shall be paid to the Secretary within 60 days after the end of such year. ``(e) Receipts from the fees collected under subsections and (d) shall be paid into an Abandoned Minerals Mine Reclamation Fund. ``(f)(1) There is established on the books of the Treasury of the United States an interest-bearing fund to be known as the Abandoned Minerals Mine Reclamation Fund (hereinafter referred to in this section as the ``Fund''). The Fund shall be administered by the Secretary. ``(2) The Secretary shall notify the Secretary of the Treasury as to what portion of the Fund is not, in his judgement, required to meet current withdrawals. The Secretary of the Treasury shall invest such portion of the Fund in public debt securities with maturities suitable for the needs of such Fund and bearing interest at rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketplace obligations of the United States of comparable maturities. The income on such investments shall be credited to, and form a part of, the Fund. ``(3) The Secretary is, subject to appropriations, authorized to use moneys in the Fund [[Page S9577]] for the reclamation and restoration of land and water resources adversely affected by past mineral (other than coal and fluid minerals) and mineral material mining, including but not limited to, any of the following: ``(A) Reclamation and restoration of abandoned surface mined areas. ``(B) Reclamation and restoration of abandoned milling and processing areas. ``(C) Sealing, filling, and grading abandoned deep mine entries. ``(D) Planting of land adversely affected by past mining to prevent erosion and sedimentation. ``(E) Prevention, abatement, treatment and control of water pollution created by abandoned mine drainage. ``(F) Control of surface subsidence due to abandoned deep mines. ``(G) Such expenses as may be necessary to accomplish the purposes of this section. ``(4) Land and waters eligible for reclamation expenditures under this section shall be those within the boundaries of States that have lands subject to the general mining laws-- ``(A) which were mined or processed for minerals and mineral materials or which were affected by such mining or processing, and abandoned or left in an inadequate reclamation status prior to the date of enactment of this title; ``(B) for which the Secretary makes a determination that there is no continuing reclamation responsibility under State or Federal laws; and ``(C) for which it can be established that such lands do not contain minerals which could economically be extracted through the reprocessing or remining of such lands. ``(5) Sites and areas designated for remedial action pursuant to the Uranium Mill Tailings Radiation Control Act of 1978 (42 U.S.C. 7901 and following) or which have been listed for remedial action pursuant to the Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. 9601 and following) shall not be eligible for expenditures from the Fund under this section. ``(g) As used in this Section: ``(1) The term ``gross proceeds'' means the value of any extracted hardrock mineral which was: (A) sold; (B) exchanged for any thing or service; (C) removed from the country in a form ready for use or sale; or (D) initially used in a manufacturing process or in providing a service. ``(2) The term ``net proceeds'' means gross proceeds less the sum of the following deductions: (A) The actual cost of extracting the mineral. (B) The actual cost of transporting the mineral to the place or places of reduction, refining and sale. (C) The actual cost of reduction, refining and sale. (D) The actual cost of marketing and delivering the mineral and the conversion of the mineral into money. (E) The actual cost of maintenance and repairs of: (i) All machinery, equipment, apparatus and facilities used in the mine. (ii) All milling, refining, smelting and reduction works, plants and facilities. (iii) All facilities and equipment for transportation. (F) The actual cost of fire insurance on the machinery, equipment, apparatus, works, plants and facilities mentioned in subsection (E). (G) Depreciation of the original capitalized cost of the machinery, equipment, apparatus, works, plants and facilities mentioned in subsection (E). (H) All money expended for premiums for industrial insurance, and the actual cost of hospital and medical attention and accident benefits and group insurance for all employees. (I) The actual cost of developmental work in or about the mine or upon a group of mines when operated as a unit. (J) All royalties and severance taxes paid to the Federal government or State governments. ``(3) The term ``hardrock minerals'' means any mineral other than a mineral that would be subject to disposition under any of the following if located on land subject to the general mining laws: (A) the Mineral Leasing Act (30 U.S.C. 181 and following); (B) the Geothermal Steam Act of 1970 (30 U.S.C. 100 and following); (C) the Act of July 31, 1947, commonly known as the Materials Act of 1947 (30 U.S.C. 601 and following); or (D) the Mineral Leasing for Acquired Lands Act (30 U.S.C. 351 and following). ``(4) The term ``Secretary'' means the Secretary of the Interior. ``(5) The term ``patented mining claim'' means an interest in land which has been obtained pursuant to sections 2325 and 2326 of the Revised Statutes (30 U.S.C. 29 and 30) for vein or lode claims and sections 2329, 2330, 2331, and 2333 of the Revised Statutes (30 U.S.C. 35, 36 and 37) for placer claims, or section 2337 of the Revised Statutes (30 U.S.C. 42) for mill site claims. ``(6) The term ``general mining laws'' means those Acts which generally comprise Chapters 2, 12A, and 16, and sections 161 and 162 of title 30 of the United States Code.'' The PRESIDING OFFICER (Mr. Bennett). The Senator from Arkansas. Mr. BUMPERS. Mr. President, I have come here today for the eighth consecutive year to debate what I feel very strongly about and have always felt strongly about. I have never succeeded. Since I am going to be leaving next year, I know all my friends from the West are going to be saddened by my departure, and so far I don't have an heir apparent to take on this issue. First of all, I want to make an announcement to the 262 million American people who know very little or nothing about this issue. The first announcement I want to make today is that they are now saddled with a clean-up cost of all the abandoned mining sites in the United States of somewhere between $32.7 and $71.5 billion. Now, let me say to the American people while I am making that announcement, you didn't do it, you had nothing to do with it, but you are going to have to pick up the tab of between $32 to $71 billion. The Mineral Policy Center says there are 557,000 abandoned mines in the United States. Think of that--557,000 abandoned mines, and 59 of those are on the Superfund National Priority List. Mining has also produced 12,000 miles of polluted streams. The American people didn't cause it; the mining industry did it, and 2,000 of those 557,000 sites are in our national parks. Now, Mr. President, my amendment would establish a reclamation fund in the Treasury and it would be funded by a 5-percent net smelter return for mining operations on taxpayer-owned land. Royalties based on gross income or a net smelter return are traditionally charged for mining on private land and for mining on State-owned land. Much of the hardrock mining going on in this country is being done on the lands that you have heard me talk a great deal about--that is, lands that have been sold by the Federal Government for $2.50 an acre. However, a significant amount of mining goes on on lands where people have a mining claim on Federal lands and they get a permit to start mining. The Federal Government continues to own the land. We don't get anything for it. We don't even get $2.50 an acre for that land. So my net smelter royalty only applies to those lands which we still own. Now, isn't that normal and natural? If you own land that has gold under it and somebody comes by and wants to mine the gold under your land, the first thing you do is say, how much royalty are you willing to pay? Nationwide, that figure is about 5 percent. But I can tell you one thing, and this is a major point, if somebody came to you and said, I want to mine the gold, the silver, platinum, or palladium under your land, the first thing you would demand is, How much are you going to pay me for it? The U.S. Government cannot because Congress won't let them charge a royalty for mining on public land. We say, ``Here are some of the terms under which you can mine. ``Sic 'em, Tiger.'' Have a good time. Make a lot of money. And be sure you don't send the Federal Government, namely, the taxpayer of America, any money, and if you possibly can, leave an unmitigated environmental disaster on our hands for the taxpayers to clean up.'' You know, Mr. President, I still can't believe it goes on. I have been at this for 8 years and I still cannot believe what I just said, but it is true. The other part of my bill establishes a net-income based reclamation fee based on the profits of the mining company on lands that were Federal lands but that have been patented by the mining companies; that is, lands which we have sold for $2.50 an acre. The only way in the world we can ever recover anything from these mines is through a reclamation fee. It is altogether proper that we get something in return for the lands that we sold for $2.50 an acre and it is altogether proper that that money be used to reclaim these 557,000 abandoned mine sites. Mr. President, here is a closer look at what I just got through saying. The royalty rate in the Bumpers/Gregg amendment is 5 percent net smelter return, which is typically what is charged for mining operations on private land. The royalty will produce $175 million over the next 5 years. The reclamation fee ranges from 2 to 5 percent of net income for operations on patented lands, the lands that we sold for $2.50 an acre. That produces $750 million. And altogether, those two provisions would, over the next 5 years, [[Page S9578]] produce $925 million--not a very big beginning on the roughly $32 to $70 billion we are going to have to cough up to clean those places up. Mr. President, look at this chart right here. The thing that is a real enigma to me, is that we make the coal operators in this country pay us 12.5 percent of their gross income for every ton of coal they take off of Federal lands. That is for surface coal. If it's an underground mine the coal companies pay a royalty of 8 percent of their gross income to the Federal Government. Natural gas. If you want to bid on Federal lands and produce natural gas, it is incumbent upon you to pay a minimum of 12.5 percent of your gross income. When it comes to oil, if you want to drill in the Gulf of Mexico, you must also pay a 12.5 percent gross royalty. There are oil and gas wells all over the Western part of the United States. And for every dollar of gas or oil they produce, they send Uncle Sam 12.5 cents. But look here. For gold, they don't send anything. For silver, they don't send anything. For platinum, they don't send anything. And since 1872, when the old mining law was signed by Ulysses Grant, the mining companies have not paid a penny to the U.S. Treasury. Now, Mr. President, in 1986--and I use this just as an illustration to tell you why we so desperately need this reclamation fund in the U.S. Treasury--there was a mine called Summitville in Colorado. Summitville was owned by a Canadian mining company called Galactic Resources. They got a permit to mine on private land from the State of Colorado. In June of that same year, their cyanide/plastic undercoating--and I will explain that in a moment--began to leak. Let me stop just a moment and tell people, my colleagues, how gold mining is conducted. You have these giant shovels that take the dirt and you put it on a track and you carry it to a site and you stack it up on top of a plastic pad, which you hope is leakproof. And then you begin to drip--listen to this--you begin to drip cyanide--yes, cyanide--across the top of this giant heap of dirt. The cyanide filters down through this big load of dirt and it gathers up the gold and it filters out to a trench on the side. Now, you have to bear in mind that if that plastic pad, which I just described for you a moment ago, is not leakproof, if it springs a leak, you have cyanide dripping right into the ground, right into the water table, or going right into the nearest stream, and so it was with Summitville. The plastic coating on the ground, which was supposed to keep the cyanide controlled, began to leak. And the cyanide began to escape. And the cyanide began to run into the streams headed right for the Rio Grande River. Galactic could not do anything. They weren't close to capable of doing anything. And so the Federal Government goes to Galactic and says, ``We want you to stop this and we want you to pay us damages.'' Do you know what they did? They took bankruptcy. Smart move. They took bankruptcy. So what does that leave the U.S. Government, which is going to ultimately have the responsibility for controlling this leakage of cyanide poison? It leaves us with a $4.7 million bond. That is the bond they had put up to the State of Colorado in order to mine. Here you have a minimum of $60 million disaster on your hands with a $4.7 million bond. And so it is today, Mr. President--35 people employed since 1986, controlling the cyanide runoff from the mine in Colorado, and the ultimate cost to the taxpayers of this country will be $60 million, minimum. Here is one that is even better, Mr. President. This came out of the New York Times 2 days ago. It is a shame that every American citizen can't read this. It's called ``The Blame Slag Heap.'' In northern Idaho's Silver Valley, the abstractions of the Superfund program--``remediation,'' ``restoration,'' ``liability''--meet real life. For over a century, the region's silver mines provided bullets for our soldiers and fortunes for some of our richest corporations. The mines also created a toxic legacy: wastes and tailings, hundreds of billions of pounds of contaminated sediment * * *. In 1996--13 years after the area was declared the nation's second-largest Superfund site, the Justice Department filed a $600 million lawsuit against the surviving mining companies. The estimated cost of cleanup ranges up to a billion dollars. The Government sued after rejecting the companies' laughably low settlement offer of $1 million. A $1 billion cleanup, and the company that caused the damage offers $1 million to settle. The companies, however, have countersued. They are countersuing the Federal Government, and do you know what they allege? They say it happened because the U.S. Government failed to regulate the disposal of mining waters. Can you imagine that? The company is suing the Government because the Government didn't supervise more closely. The story closes out by saying, ``Stop me before I kill again.'' Mr. President, I ask unanimous consent the article from the New York Times be printed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: The Blame Slag Heap (By Mark Solomon) Spokane, Wash.--In northern Idaho's Silver Valley, the abstractions of the Superfund program--``remediation,'' ``restoration,'' ``liability''--meet real life. For over a century, the region's silver mines provided bullets for our soldiers and fortunes for some of our richest corporations. The mines also created a toxic legacy: wastes and tailings, hundreds of billions of pounds of contaminated sediment, leaching into a watershed that is now home to more than half a million people. In 1996, 13 years after the area was declared the nation's second-largest Superfund site, the Justice Department filed a $600 million lawsuit against the surviving mining companies. The estimated cost of the clean-up ranges up to a billion dollars. The Government sued after rejecting the companies' laughably low settlement offer of $1 million. If the companies don't pay, the Federal taxpayers will have to pick up the tab. The companies, however, have countersued, alleging, among other things, that the Government itself should be held responsible. Why? Because it failed to regulate the disposal of mining wastes. Do I believe my ears? In this era of deregulation, when industry seeks to replace environmental laws with a voluntary system, are the companies really saying that if only they had been regulated more they would have stopped polluting? I've heard the Government blamed for a lot of things, but regulatory laxity was never one of them--until now. In fact, Idaho's mining industry has long fought every attempt at reform. In 1932, for example, a Federal study called for the building of holding ponds to capture the mines' wastes. The companies fought that plan for 36 years, until the Clean Water Act forced them to comply. Now Congress is debating the reauthorization of the Superfund, and industry wants to weaken the provision on damage to natural resources. If the effort succeeds, what will happen in 50 years? Will the polluters sue the Government, blaming it for failing to prevent environmental damage? Quick, stop them before they kill again. Mr. CRAIG. Will the Senator yield specifically to his last comment? Mr. BUMPERS. I yield for a question. Mr. CRAIG. Does the Senator know about the new science that comes out of the study of the Superfund site in Silver Valley, ID? Does he understand also that mediation on the Superfund is now tied up in the courts--conducted by the State of Idaho--that has really produced more cleanup and prevented more heavy metals from going into the water system, and the value of that? Does he also recognize that the suit filed by the Attorney General was more politics and less substance? Mr. BUMPERS. That is a subjective judgment, is it not? Mr. CRAIG. I believe that is a fact. Thank you. Mr. BUMPERS. Is it not true that the company has countersued the Federal Government saying, ``You should have stopped us long ago''? Isn't that what the countersuit says--``You should have regulated us more closely''? Mr. CRAIG. But the countersuit says that based on today's science, if we had known it then, which we didn't--you didn't, I didn't, and no scientist understood it--then we could have done something different. But as of now this is not an issue for mining law; this is an issue of a Superfund law that doesn't work, that promotes litigation. That is why the arguments you make are really not against mining law reform, which you and I support in some form. What you are really taking is a Superfund law that is tied up in the committees of this Senate, is nonfunctional, and produces lawsuits. Mr. BUMPERS. Can you tell me where the Superfund law says if you [[Page S9579]] were ignorant of what you were doing and caused the damage, you are excused? Do you know of any place in the Superfund where there is such language as that? Mr. CRAIG. What I understand is we have a 100-year-old mine where we are trying to take today's science and, looking at it based on your argument, move it back 100 years. We should be intent on solving today's problems and not arguing 100 years later. Mr. BUMPERS. Is the State of Idaho willing to take over this cleanup site and absolve the U.S. Government of any further liability? Mr. CRAIG. My guess is that the State of Idaho with some limited assistance would champion that cause. I have introduced legislation that would create a base of authority. We believe it would cost the Federal Government less than $100 million. The State would work with some matching moneys. They would bring in the mining companies and force them to the table to establish the liability. Guess what would happen, Senator. We would be out of the courts. Lawyers would lose hundreds of thousands of dollars in legal fees. And we would be cleaning up Superfund sites that have been in litigation for a decade, by your own admission and argument. Mr. BUMPERS. Senator, the U.S. Government has sued this company for $600 million. The Government estimates that the cleanup cost is going to be $1 billion. The Senator comes from the great State of Idaho, and I am sure they don't enjoy ingesting cyanide any more than anybody else in any other State would. But the Senator would have to admit that Idaho couldn't, if it wanted to, clean up this site. It doesn't have the resources. It is the taxpayers of this country that are stuck with that $1 billion debt out there with a company which brashly says, ``If you would have regulated us closer, we wouldn't have done it.'' That is like saying, ``If you had taken my pistol away from me, I wouldn't have committed that murder.'' Mr. CRAIG. If you would yield only briefly again--I do appreciate your courtesy--there is not a $1 billion price tag. That is a figment of the imagination of some of our environmental friends. There is no basis for that argument. There isn't a reasonable scientist who doesn't recognize that for a couple hundred million dollars of well-placed money, that problem goes away. But, as you know, when you involve the Federal Government, you multiply it by at least five. That is exactly what has gone on here. I will tell you that for literally tens of millions of dollars, the State of Idaho, managing a trust fund, has shut down more abandoned mines, closed off the mouths of those mines, and stopped the leaking of heavy metal waters into the Kootenay River, and into the Coeur d'Alene, and done so much more productively, and it has not cost $1 billion. Nobody in Idaho, including our State government, puts a $1 billion price tag on this. This is great rhetoric, but it is phony economics. Mr. BUMPERS. Mr. President, let me just say to the Senator from Idaho that my legislation for 8 long years has been an anathema to him. I am not saying if I were a Senator from Alaska, Idaho, or Nevada I wouldn't be making the same arguments. But I want to make this offer. It is a standing offer. If the State of Idaho will commit and put up a bond that they will clean up all those abandoned mine sites in that State, that they will take on the responsibility, and do it in good order, and as speedily as possible, I will withdraw my amendment. I don't have the slightest fear. We all know that this is a Federal problem. It is a Federal responsibility to clean up these mine sites. The only way we can do it is to get some money out of the people who got the land virtually free and who have left us with this $30 billion to $70 billion price tag. Let me go back, Mr. President, and just state that since 1872 the U.S. Government in all of its generosity has given away 3.244 million acres of land. We have given it away for $2.50 an acre. Sometimes we got as much as $5 an acre. There are 330,000 claims still pending in this country. And the Mineral Policy Center estimates that since 1872 we have patented land containing $243 billion worth of minerals--land that used to belong to the taxpayers of this country. We now have a moratorium on all but 235 patent applications. But the 235 applications, when they are granted, will represent the continued taxpayer giveaway of billions of dollars worth of minerals and land. Stillwater Mining Company in Montana has a first half certificate for 2,000 acres of land in the State of Montana. What does that mean? That means they are virtually assured of getting a deed to 2,000 acres of land. It means that they are virtually assured of paying the princely sum of $10,180. Guess what is what is lying underneath the 2,000 acres: $38 billion worth of palladium and platinum. My figure? No. Stillwater's figure. Look at their prospectus. Look at their annual report. They are saying to the people who own stock, ``Have we pulled off a coup.'' We are going to get 2,000 acres of Federal land for $10,180, and it has $38 billion worth of hardrock minerals under it--palladium and platinum. You know, one of the things that I think causes me to fail every year is that it is so gross, so egregious, that people can't believe it is factual, that it is actually happening. But it is true. Look at what happened to Asarco. They paid the U.S. Government $1,745. What did they get? $2.9 billion worth of copper and silver. You never heard of a company called Faxe Kalk. Do you know the reason you never heard of it? It is a foreign mining company. You don't usually hear of them. The other reason you don't hear of them is because they are a Danish company. One of the things that makes this issue so unpalatable is that many of the biggest 25 mining companies in the United States are foreign companies. We ought to go today to Denmark and say, ``We would like some of your North Sea oil.'' What do you think they would say if we said, ``Look, we are going to start drilling here off the coast of Denmark. We will give you a dollar now and then for the privilege.'' They would say, ``You need to be submitted for a saliva test.'' But the Faxe Kalk Corporation comes here, and they say, ``You have 110 acres out here in Idaho, Uncle Sam. We would like to have it. We will pay $275 for it.'' So they go to Bruce Babbitt and they say, ``We will give you $275 for this 110 acres.'' Do you know what is underneath it? One billion dollars worth of a mineral called travertine. It is a mineral used to whiten paper. That is $275 the taxpayers get and $1 billion a Danish corporation gets. In 1995 the Secretary of the Interior was forced to deed 1,800 acres of public land in Nevada to Barrick Gold Co., a Canadian company, for its Gold Strike Mine. Barrick paid $9,000 for that 1,800 acres. Mr. President, there isn't a place in the Ozark Mountains of my State where you could buy land for one-tenth that price. The law required Secretary Babbitt to give Barrick, which is the most profitable gold company in the world, land containing $11 billion worth of gold for $9,000. I could go on. There are other cases just as egregious as that. For 8 long years, I have stood at this very desk, and I have made these arguments, as I say, which are so outrageous I can hardly believe I am saying them, let alone believing them. Newmont Mining Co. is one of the biggest gold companies in the world. They have a large mine in Nevada which is partially on private land. When people say that somebody is mining on private lands, if you will check, Mr. President, you will find that in most cases that land was Federal land that somebody else patented, and then somebody like Newmont comes along, and they say, ``You hold a patent on this land that you got from the Federal Government for $2.50 an acre and we want to mine on it.'' Do you know what Newmont pays to the land owner on its mine in Nevada? An 18 percent royalty. Mr. President, as I just mentioned, most of the land being mined on, so-called private lands, are private because somebody bought it from the Federal Government years ago for $2.50 or $5 an acre. True, it is private. They own it. They paid for it. The mining companies are willing to pay the States--they are willing to pay the States a royalty. They are willing to pay the States a severance tax. They are willing to pay the private owners of this country an average of 5 percent. But when it [[Page S9580]] comes to paying the Federal Government, it is absolutely anathema to them. There is no telling how much the National Mining Association spends every year on lobbying, on publicity, on mailers, you name it, to keep this sweetheart deal alive. Since I started on this debate 8 years ago, the mining companies of this country have taken out billions of dollars worth of minerals from taxpayer-owned land. And do you know what the Federal Government and the taxpayers of this country got in exchange for that? One environmental disaster after another to clean up. And so that is the reason my bill, which contains a royalty and a reclamation fee, goes into a reclamation fund to at least start undoing the environmental damage these people have done because it is too late to get a royalty out of them. The gold is gone. We got the shaft. They got the gold. And it is too late to do anything about it. But you can start making them pay now to clean up those 555,000 sites. Arizona has a 2 percent gross value royalty for mines located on State lands and a 2.5 percent net income severance tax for all mines in the State. Montana, 5 percent; fair market for raw metallic minerals; 1.6 percent of the gross value in excess of $250,000 for gold, silver, platinum group metals. All of these States charge royalties for mining operations on State- owned land. Most of them also charge a severance tax for mining operations on all land in the State. Mr. President, what do they know that we don't? A lot. The States are collecting the money, but not Uncle Sam. Do you know why I have lost this fight for the last 8 years? Those States that have mining on Federal lands have great representation in the U.S. Senate. I know that every single Western Senator is going to start flocking onto this floor as soon as I start talking about this amendment. Do you see anybody else on this floor who is not from the West? Do you know why? My mother used to say, ``Everybody's business is nobody's business.'' This is everybody's business, except it just doesn't affect their States. There are no mining jobs in their States. For 8 years I have heard all these sayings, as to how many jobs you are going to lose, despite the fact the Congressional Budget Office says, ``None.'' ``You are going to lose all these jobs. It is going to discommode the economies of our respective States.'' And yet the States don't hesitate. We have people in this body who are Senators from the West who have served in State legislatures, who helped pass these laws, who helped impose royalties and severance taxes against the mining companies. But somehow or other they go into gridlock when they get here. At the State level they don't mind assessing these kinds of taxes. The States need the money. We do, too. We are the ones who are tagged with this gigantic bill for reclamation. Mr. President, I could go through a list of things I have here. Amax, for example, pays 6-percent royalty on the Fort Knox Mine in Alaska. The chairman of the Energy Committee 2 years ago passed legislation providing for a land exchange on Forest Service land in Alaska. The Kennecott Mining Co. was willing to pay the Forest Service a $1.1 million fee up front, and then a 3-percent net smelter return on the rest of it. We agreed on it, ratified it. I voted for it. But, now, isn't it strange that here is a mine in Alaska that we had to legislatively approve--because of the ownership of the land, it involved a land exchange--and I was happy to do it because it was a fair deal and these people demonstrated an interest in paying a fair royalty for what they took. Mr. President, I will yield the floor. I will not belabor this any further. Mr. MURKOWSKI. I wonder if the Senator will yield for a question, because it affects my particular State? Mr. BUMPERS. I was getting ready to yield the floor. I want to say in closing, I know a lot of people would like to get out of here as early as they can tonight. I don't intend to belabor this. I said mostly what I want to say. I may respond to a few things that are said, so I am going to turn it over to my friends from the West and let them respond for a while, and then hopefully we can get into a time agreement after four or five speakers have spoken. I yield the floor. The PRESIDING OFFICER. The Senator from Alaska. Mr. MURKOWSKI. Mr. President, I would like to respond to my friend from Arkansas on the mining issues he brings up. Mr. BUMPERS. Will the Senator yield for just a moment? When I introduced this amendment, I failed to state that my chief cosponsor on the bill is Senator Gregg from New Hampshire. The PRESIDING OFFICER. The Senator from Alaska. Mr. MURKOWSKI. Again, I would like to call attention to the statement that was made by the Senator from Arkansas relative to the Green Creek Mine. The thing that made that so different is the unique characteristic of that particular discovery, where all the components were known relative to the value of the minerals. The roads were in, the infrastructure was in. It was not a matter of discovery, going out in an area and wondering whether you were going to develop a sufficiency of resources to amortize the investment necessary to put in a mine. So I remind my colleagues, there is a big difference between the rhetoric that we have heard here and the practical realities of experience in the mining industry. We have seen both the effort by Canada and Mexico to initiate royalties. What has happened to their mining industry? It simply moved offshore. We have to maintain a competitive atmosphere on a worldwide basis; otherwise the reality for United States mining will be the same as was experienced in both Mexico and Canada. I strongly urge my colleagues to join me in opposition to Senator Bumpers' amendment. This is not the first attempt he has made, initiating actions through the Interior appropriations process. We seem to be subjected to this every year. I know the intentions are good. But the reality is that the amendment as offered represents a profound--and I urge my colleagues to reflect on this--a profound and wide-reaching attempt to reform the Nation's mining laws in a way that prevents any real understanding of the impacts of the legislation. Because, as written, Senator Bumpers' amendment would not only put a royalty of all mining claims--all mining claims--but would also put a fee on all minerals produced off of lands that have ever gone to patent. Those are private lands. Let me, again, cite what this amendment does. It would not only put a royalty on all mining claims, but would also put a fee on all minerals produced off lands that have ever gone to patent. Those are private lands. So, this is nothing more than a tax. It is a tax. And it is this Senator's opinion that this makes Senator Bumpers' amendment subject to a constitutional point of order. Let me set this aside for a moment and address the specifics of my opposition to the amendment. This approach to revenue generation is no different than placing a tax on, say, all agricultural production from lands that were at one time, say, homesteads. It is retroactive. Even though Senator Bumpers doesn't like it, the fact remains that patent claims are exactly the same as homestead lands. They are all private lands. I cannot even begin to imagine the genesis of this punitive and dangerous amendment. This is an unmitigated attack on all things mining. We have absolutely no idea what impact this legislation would have on our ability to maintain a dependable supply of minerals; no idea what environmental disasters would be created when this legislation shuts down the producing mines across the country. We have no idea how many workers will be put on the unemployment line. We have no idea whatsoever on the effects of this legislation. The issue is very complex. It is not appropriate that it be dealt with in an appropriations process. There is a right way and a wrong way to go about mining reform. You can chose the right way and offer your reform in a fair and open process, giving everyone the opportunity to participate in the formation of the legislation, which is what Senator Craig and I, along with the cosponsors of the legislation, have attempted to do in the legislation that has been offered. Or you can, as I observe, do what Senator Bumpers has seen fit to do and offer your legislation in a form where not one single person [[Page S9581]] outside the Senator's office has the opportunity to either understand or contribute to the process. I think there is too much at stake in mining reform to treat this complex subject in such a dangerous and offhand manner. Senator Craig, along with myself, Senator Reid, Senator Bryan, Senator Bennett, Senator Burns, Senator Hatch, Senator Thomas, Senator Campbell, Senator Stevens, Senator Kempthorne, among a few, have introduced S. 1102, the Mining Reform Act of 1997. As such, I encourage my colleagues to recognize the time and effort that has been put into developing a package of reforms that set the stage for a meaningful, honest, and comprehensive reform. We are going to be holding a series of hearings to explore all aspects of the legislation and the effect it will have on the Nation's environment and economy. I know many Members have indicated their interest in the formation of this legislation and the process of the hearings as they unfold and intend to participate. This is how reforms should take place. Reform should take place in an orderly manner in the hearing process, and we have lived up, I think, to the expectations of those who have indicated, ``All right, we will stand with you, but give us a bill.'' We have met that obligation and filed a piece of comprehensive mining reform legislation. We are going to consider the amendments as part of the process of debate, and if they make a legitimate contribution to the mining reform effort--and I emphasize reform effort--we are going to adopt them. This is the appropriate method to resolve mining reform, not as a last- minute amendment to the Interior appropriations bill, which we have seen the Senator from Arkansas propose time and time again. The reform that Senator Craig, I, and others have offered lays a solid foundation upon which to build mining reform. Our mining reform bill should, I think, please reasonable voices on both sides. If you seek reform that brings a fair return to the Treasury, and it is patterned after the policies of the mining law of Nevada--and it works in Nevada--and it protects the environment and preserves our ability to produce strategic minerals, I think you will find a great deal to support in this legislation. It does work. The legislation protects some of the smaller interests, the small miners. It maintains traditional location and discovery practices. Yes, it is time for reform, but it has to be done right. Bad decisions will harm a $5 billion industry whose products are the muscle and sinew of the Nation's industrial output. The future of as many as 120,000 American miners and their families and their communities are at stake. Any action to move on amendment is absolutely irresponsible to those individuals, because it is the wrong way to do it. I know you have heard this before, time and time again, but we do have a bill in now and it is a responsible bill. We owe Americans a balanced and open resolution to the mining reform debate. This reform mining legislation honors the past, recognizes the present, and sets the stage, I think, for a bright future. The legislation that we offer advances reforms in four areas: royalties, patents, operations, and reclamation. Let me be very brief in referring to the royalties. The legislation creates the first-ever hard rock royalty. It requires that 5 percent of the profit made from mining on Federal lands be paid to the Federal Government. This legislation seeks a percentage of the profit, not the value of the mineral in place. We do this for a very specific reason. Failure to do so would cause a shutdown of many operations and prevent the opening of new mines. It would also cause other operators to cast low-ore concentrates into the spoil pile as they seek out only the very highest grade of ores. America boasts some very profitable mines, but there is an equal number that operate on a very thin margin. The Senator from Arkansas doesn't address the reality of what happens when the price of silver or the price of gold drops and their margin squeezes. We have some mines that actually operate during those periods with substantial losses. That is why we designed our royalty to take a percentage of the profits. Under the proposal that the Senator from Arkansas has proposed, time and time again, many of these mines would actually operate at a loss because they could not deduct their production costs prior to the sale of their finished product. If the mine makes money, the public gets a share. That is a fair way to do it. Nobody benefits from a royalty system so intrusive that it must be paid for through the loss of jobs, the health of local communities, and the abandonment of lower grade mineral resources. Some would want to simply drive the mining industry out of the United States because they look at it as some kind of an environmental devil that somehow can't, through advanced technology, make a contribution to the Nation. I say that they can, they will and, through this legislation, they will be able to do a better job. In 1974, British Columbia put a royalty on minerals before cost of production was factored in. Five thousand miners lost their jobs. That is a fact. Only one new mine went into operation in 1976. The industry was devastated. The royalty was removed 2 years later in 1978. That is the reality of the world in which we live and the international competitiveness associated with this industry. Years later, the industry in British Columbia still has not completely recovered. I happen to know what I am talking about because the Senator from Alaska is very close to our neighbors in British Columbia. So I say to those who forget history, they are doomed to repeat it. Patents: Patenting grants the right to take title to lands containing minerals upon demonstration that the land can support a profitable operation. Patents have been abused, no question about it. A small number of unscrupulous individuals have located mineral operations for the sole purpose of gaining title and turning the land into a lodge or ski resort. These practices are wrong. They are not allowed under the new legislation. The reform that we have offered cures these problems without punishing the innocent. We would continue to issue patents to people engaged in legitimate mining operations, but a patent would be revoked if the land is used for purposes other than mining. Operations: To separate legitimate miners from mere speculators and to unburden the Government from mining claims with no real potential, we require a $25 filing fee be paid at the time the claim is filed and make the annual $100 claim maintenance fee permanent. Environmental protection: Our revisions weave a tight environmental safety net. The reform permit process requires approval for all but the most minimal activities. The bill requires reclamation, and the bill requires full bonding to deal with abandonment. The Senator from Arkansas doesn't acknowledge the effort relative to what this bonding will mean. It will mean that mines that are abandoned will have a reclamation bond in place to make sure the public does not have to bear the cost of cleanup. The bond is going to be there; it is going to be held. It is a performance bond, that is what it means. As we address the responsibility for a prudent mining bill, please recognize the contributions that have been made in trying to formulate something realistic that will address the abuses that we have had in the past. That is what we do in our bill. The bill addresses mines already abandoned by establishing a reclamation fund as well. Filing fees, maintenance fees and the royalty go into that fund. So we have addressed that in a responsible manner. For those who seek meaningful reform to the Nation's general mining laws, then our legislation does the job. It fixes past abuses without punishing the innocent. It shares profits without putting people out of work. It assures the mining operations cause the least possible disturbance. And it makes sure we don't pay for actions of a few bad operators and provide sources of funds for reclamation. Both sides of the mining reform debate have come a long way toward a constructive compromise. I have met with Senator Bumpers on many occasions, and at one time actually thought we were going to reach an accord. But unfortunately we didn't. But we have gone ahead and put in the bill. The bill will help carry us, I think, the last [[Page S9582]] mile and provide the balanced reform that has, so far, eluded us. I urge my colleagues to join with me, Senator Craig and others in continuing to craft this open and meaningful mining reform. With equal vigor, I ask each and every Member of this body to join us in opposing Senator Bumpers' proposal, a reform crafted in the dark of night and offered in a forum guaranteed to confuse and shroud the real impact of the legislation. Mr. President, I yield the floor. Mr. GORTON addressed the Chair. The PRESIDING OFFICER. The Senator from Washington. Mr. GORTON. Mr. President, I will not at this point speak to the merits of the amendment. Both the Senator from Arkansas and the Senator from Alaska have done so, each of them repeating points that I can remember having heard almost verbatim in several previous sessions of Congress. My remarks will be much more narrow. Section (d)(1) of this amendment states: Any person producing hardrock minerals from a mine that was within a mining claim that has subsequently been patented under the general mining laws shall pay a reclamation fee to the Secretary under this subsection. The Senator from Arkansas quite properly described that fee as a severance tax, and a severance tax it is. It applies only to minerals coming out, presumably, in the future from certain classes of lands in the United States. It is not something directed at the restoration of those lands, but is to be used as a source of money for much broader purposes. The Senator's description of it as a tax is accurate. Article I, section 7 of the Constitution of the United States under which we operate states--and I quote-- All Bills for raising revenue shall originate in the House of Representatives. No such tax appears in the similar bill that the House of Representatives has passed. It is crystal clear to me that should this tax be added on to this bill it will be blue slipped in the House of Representatives, that is, it will not be considered on the grounds that that portion of the bill, that subject of the bill could only originate in the House. The House of Representatives is as jealous of its prerogatives to originate tax bills as the Senate is to ratifying treaties or to confirm Presidential appointments or to engage in any of the activities that are lodged by the Constitution in this body. Point of Order As a consequence, although there has been some time devoted to the merits of this amendment, and because I believe that it clearly violates article I, section 7 of the Constitution, I raise a constitutional point of order against the amendment. The PRESIDING OFFICER. The question before the Senate is debatable. Is the point of order well-taken, would be the question? Mr. REID addressed the Chair. The PRESIDING OFFICER. The Senator from Nevada. Mr. REID. Parliamentary inquiry. Do we ask for the yeas and nays at this time? The PRESIDING OFFICER. It is appropriate. Mr. REID. I do so. The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. The PRESIDING OFFICER. Is there further debate? Mr. REID addressed the Chair. The PRESIDING OFFICER. The Senator from Nevada. Mr. REID. I hope that we can resolve this issue. It is quite clear that it does violate the Constitution of the United States. That is by taking the Senator's own statement during the time he was debating his amendment. It is clear from his own statement that it is a violation of the Constitution. I say to my friends who are listening to this debate, Members of the Senate, that we would vote on this issue and if this issue prevails, of course, the amendment falls. But I would also say that we should look at this on the legal aspect. If this stays in this bill, the bill is gone. There is no question that it is unconstitutional and we should vote based on the constitutionality of this amendment, not on the merits of the amendment. I say to my friends that we have voted on some aspect of an amendment like this on other occasions. My friend from Arkansas has framed it differently this time. Therefore, we have raised this point of order. I ask that we dispose of this. It is getting late into the night. I repeat, if this constitutional point of order is upheld, the amendment falls. Ms. LANDRIEU addressed the Chair. The PRESIDING OFFICER. The Senator from Louisiana. Ms. LANDRIEU. Mr. President, I know we will probably soon be voting on this important amendment and on this important issue. I was sitting in my office and listening to my distinguished colleague from Arkansas, my friend and neighbor, and thought that I might come down and try to give him some help and support, not that he needs any more help in articulating the issue and speaking about it and outlining it, which he does so beautifully, but to let him know that as a new member of the Energy Committee, one that just arrived here and has not spent even a year here, and with him getting ready to retire and having announced his retirement, that I want to let him know I am going to pick up this ball wherever it may land today, I say to Senator Bumpers. I come from a State that has obviously some mining interests, but I come from a State that has had oil and gas development and exploration for many years. I am from a position of understanding that when it is done correctly how much of a benefit it can be in terms of jobs and economic development and helping people and enriching the corporations and businesses as well as the average working ma