Senator BINGAMAN. We have good attendance today. Let me first defer to the ranking member of our full committee, Senator McClure, for any comment that he would have. STATEMENT OF HON. JAMES A. McCLURE, U.S. SENATOR FROM IDAHO Senator MCCLURE. Thank you very much, Mr. Chairman. This is an important subject matter, and I think it does deserve a careful look. We will begin consideration of legislation to reform the law which has governed the development of hardrock minerals on Federal public lands for over 100 years. Having said that, I want to also reaffirm the fact that there have been literally dozens of other statutes enacted over the years since then that also affect mining on the public lands. So I take that aside at the moment just to underscore the fact that we are not dealing with a body of law which is 100 years old. We are dealing with a body of law that originated over 100 years ago and has been developed over the years since that time into a very different complex of rules, regulations and conditions under which the mining industry operates on the public lands of today. It is my view that the Mining Law has served this country well in the past and continues to do so today. The law ensures access for mineral discovery and guarantees those who discover valuable minerals the right to develop them. This element of the law is absolutely critical to the viability of the U.S. hardrock minerals industry. Efforts to reform the 1872 Mining Law should not be driven by sensational headlines and misinformation. What is needed as the Congress takes up this issue is a clear understanding of the operation of the Mining Law and accurate information about the problems associated with it. Last March, the General Accounting Office released a report requested by Congressman Rahall, the Chairman of the House Subcommittee on Mining and Natural Resources on the Mining Law's patent provision and annual assessment requirement. The report recommended that the Congress amend the law to eliminate the patenting of both hardrock minerals and the land required to mine them. It is my view that the conclusions reached in the report are based upon technically inaccurate data which is due in great part to the fact that Representative Rahall asked that the land management agencies not be permitted to review or comment on the report before it was published. Members of the House Interior and Insular Affairs Committee, including my Congressman, Congressman Craig, who is here today, have expressed similar concerns and have recently asked the Bureau of Land Management and the Forest Service to review the GAO report. In addition, the American Mining Congress recently issued a rebuttal to the report which bolsters this Senator's belief that the recommendations made by the GAO are based upon very, very I think it is extremely unfortunate that what might have been a useful document was hamstrung by denying GAO the access to the land managers who may have been able to correct the misinformation and enable GAO to provide informed recommendations. One major premise of the GAO report is that patents are being obtained for purposes other than mining. Certainly I recognize that this is one of the major criticisms of the Mining Law, and it is an issue which needs to be dealt with. I would like to make clear that this Senator will not defend anyone who attempts to utilize the location and patenting provisions of the 1872 act to acquire title to Federal lands for purposes other than mining. One very simple method of dealing with this would be to include a reversionary clause in patents which would return patented lands to the Federal estate if they are used for anything other than mineral development. There is such a reversionary clause in the Recreation and Public Purposes Act, for railroad rights-of-way, and in many other instances. While I am not suggesting a particular amendment at this time, I am pointing out simply that massive revision is not always the solution to a particular problem. In considering legislation to modify the Mining Law, there are some elements of the existing law which I believe are critical if we are to encourage the investment of time and private capital to identify and develop mineral deposits. Specifically, I am referring to the location and patent system which protects a miner's right to locate and extract minerals. Mineral production is good for this country, providing jobs, additional tax base and metal availability. We must not become more dependent on foreign sources for minerals which can and should be produced at home. The location and patent system is critical to the viability of our domestic minerals industry. Let me make it clear if I have not to this point that I am absolutely opposed to the creation of a leasing system for minerals currently locatable under the 1872 law. I see no value in strict diligence requirements, and I do not see any reason why claims should not be held. I also believe that to impose royalties on hardrock mining operations, most of which are economically marginal, would merely shift a large block of those operations into the submarginal category. Additionally, in order to obtain financing for a new mining operation, security of title to the minerals is necessary. I believe a lease to the minerals would prove to be a dubious title at best. I feel very strongly that a leasing system would result in less exploration, fewer minerals discovered, and fewer minerals produced, and thus more dependence on foreign sources for minerals. There are two issues associated with the Mining Law which I believe might be candidates for modification. The first is the prudent man's standard for discovery of a valid claim. Since mineral prices are driven by the world market and constantly fluctuate, I do not believe that rigid application of that standard is appropriate. Second, I agree with those who propose a claimant should be able to pay a fee in lieu of the assessment work required by the 1872 law. I must add, however, that this should in no way be construed as support for the excessive diligence development payments envisioned by Senator Bumpers. Serious consideration should be given, especially by those who are concerned by the environmental effects of mining operations, to permitting claimants who wish to simply hold their claim to pay a fee to the Federal Government rather than disturbing the land until they are prepared to actually mine the claim. Finally, I would like to address the concerns of those who believe that the environmental effects of mining can only be mitigated by piling more and more statutes on the books. I believe that our existing laws, including the Clean Air Act, the Clean Water Act, the Federal Land Policy and Management Act, the National Forest Management Act, among others, provide adequate authority to assure environmentally responsible mining in the United States. If there are problems with our environmental laws, then we should address them. Wholesale revision of the Mining Law to correct a few perceived abuses is likely to simply provide more litigation and frustrate the objective of the Mining Law, which is to encourage private development of the mineral potential of our Federal lands. Mr. Chairman, I greatly appreciate your indulgence with my somewhat lengthy remarks, and I look forward to working with you and other members of the committee as we continue our review of this extremely important statute. Let us try to find the problems and then try to find the solutions to the problems that we find. There are some who wish to appear and testify who because of the press of the committee's schedule were not on the witness list. I would ask unanimous consent that testimony particularly from the Western Mining Council and the National Inholders Association be received for the record.1 Senator BINGAMAN. We will be glad to receive that. Let me just say at this point since we are on that subject that we are going to keep the hearing record open here for two weeks for additional statements that people may want to file who are not on the witness list today. We will be glad to do that. Let me also call on Senator Bumpers and then Senator Burns to see if they have any statement they would like to make before we begin to hear from our witnesses. Senator Bumpers, of course, is the primary sponsor on S. 1126, which would amend the Mining Law of 1872 very substantially. STATEMENT OF HON. DALE BUMPERS, U.S. SENATOR FROM ARKANSAS Senator BUMPERS. Thank you, Mr. Chairman. I want to thank you also for holding the hearing today. We have scheduled this for a long time, and I appreciate the time you can spend with us today. Mr. Chairman, let me say first of all just for the record that the 1872 Mining Law arithmetically, of course, is 117 years old. We initially gave the railroads up to six sections of land on both sides of a right-of-way to encourage them to build a transcontinental rail 1 The statements appear in Appendix II. road. They did it, and they got very wealthy and are still getting wealthy off the coal on that land. I am not here to refight that battle. In 1872, the obvious and historical purpose of the Mining Law was to encourage people to go west and settle. The Mining Law was designed as a great incentive to attract people to the west. Now nobody here today would argue that we are still trying to encourage people to go west. California does not know what it is going to do with the people it has now, let alone those who are coming. So it would be spacious in the extreme to suggest that the original purpose for this law still exists, but it is a shifting target. As other attempts prior to mine have been made to revise this law, the arguments have changed. Now the argument is that we need minerals for strategic purposes and that it is in the interest of the people of this country to encourage mining of all kinds for hardrock minerals and so on. I am not quarreling with the desirability of a hardrock minerals industry. Of course we need one. We need cooper and gold and silver. We need all of those minerals. My efforts here go much deeper than that. I hope that the varying views on this committee regarding this law can be accommodated, and that some kind of a significant revision of the 1872 law can be worked out. I am not wedded to every provision of my bill. I do want to say to the distinguished Senator and my good colleague from Idaho, Senator McClure, that this is not a bill that establishes a leasing system. On the contrary, it retains the location patent process. I think if I had thought it was doable I would probably have changed it to a leasing system. It took me eight years to get Congress to pass a bill to stop leasing our onshore lands for oil and gas by lottery or for $1 an acre on a first come, first served basis. It never really mattered to me what the revenue from that bill was. The point was that the old system was powerfully unfair. Now here I have tried to craft a bill that would at least allow the government to recover the cost of enforcing the mining law or of carrying it out. It is designed to recover our costs, which seem to be minimal. I do not see how anybody could argue with that. It is designed not to adversely affect legitimate miners who find a claim that they suspect has commercially producable minerals on it or under it. I can tell you, it is designed to stop the increasing number of frivolous claims that are being filed and the outright frauds that are being perpetrated. Here is an article from the Reno Gazette Journal dated June 4, 1989. Anthony Perchetti has a claim filed for 540 acres in the Yucca Mountain area. I forget how many claims that is, but now three years after he files those claims for 540 acres and paid $500 for them, DOE is going to pay him $249,000 to relinquish the claims. DOE says that the mineral potential under that 540 acres is nil. Senator MCCLURE. Would you yield on that? Senator MCCLURE. If the mineral potential under the claims is nil, he has no valid claim under existing law. Senator BUMPERS. Why is DOE paying him $249,000? Senator MCCLURE. All I can suggest to you is that either DOE is being very, very frivolous with the taxpayers' money, which I do not discard as a possibility Senator BUMPERS. I submit it is we who are being frivolous with the taxpayers' money. Senator MCCLURE [continuing]. Or that, indeed, they did not really mean it when they said there was no mineral value. It cannot be both. Senator BUMPERS. Obviously, the man who has the claim alleges otherwise. He thinks it has good value, but DOE says we do not care whether it does or not, we want these claims and we want them right now. They are paying $249,000 for them. Senator, you have read the GAO report, and I am not going to go through that litany of horror stories in the GAO report about lands that were patented for $2.50 per acre that now have a value and in many instances have been sold for $10,000 to $13,000 per acre. I trust that BLM will testify here today to the number of frivolous claims that are being filed simply because you can do it for $5. I asked one Senator, I talked to him at length about co-sponsoring this bill. When I finally told him what it was all about, he said, hell, no, I am not going to co-sponsor it. I am heading for Nevada. When you look at all those claims in the GAO report where people obviously never had any intention of mining, I think the Senator will agree with me that we do not have the money or the personnel, and I suspect Bob Burford will certainly verify that today. We do not have the personnel to monitor these claims and stay on top of them. If they did pay any attention, obviously some of these sales could not take place. My point is this. I may be dead wrong, but I hope there are not very many people in this room and I dare say there certainly would not be very many in the Nation who think the United States Government ought to be in the business of selling land that belongs to all the taxpayers of the country for $2.50 per acre or $5.00 per acre. Now under my bill, you can still get a patent to minerals. You cannot do it quite as cheaply as you could before. There are some user fee increases, and there is a royalty. It is designed to provide some returns to the federal government for federal resources. As I said earlier, BLM very seldom requires a bond to insure reclamation. You go in and file your claims, and BLM does not even require a bond in case you start developing the claim. We have pictures galore of disastrous areas where miners have gone in and torn up the surface, found that it was a loser and then walked away from it. Because the United States Government did not so much as even require a bond before the surface was disturbed, we are going to pick up the tab for it. I hope there are not many people in this room and I do not believe there are many in the Nation who think that is right, that the hardrock minerals are not subject to surface mining reclama |