Background Information from YOUCUT: Saves Up to $1.2 Billion Over Ten Years

Floor Speech

Mr. FITZPATRICK. Mr. Speaker, the federal government collects fees from coal mining companies to restore abandoned mining sites. Money from those fees is paid to states to restore abandoned mines within their state. However, several states have successfully restored all of their abandoned mining sites and now are permitted to use the federal mine cleanup payments for anything they want to spend it on. Effectively, for the states that have been ``certified'' as having successfully restored critical mining sites, the mine payments serve as an unrestricted federal subsidy. Several tribal governments also receive payments despite having already remediated all contaminated mining sites on their land.

The Obama administration has proposed terminating these mine reclamation payments to states that no longer use them for their intended purpose.

Here's suggested text to reform the Abandoned Mine Lands program. It's more narrow than the Administration language that adds on whole bunches of bells and whistles, like advisory boards and councils and a competitive grant component without guaranteeing a net reduction in payments. CBO scored our draft language with an initial estimate of $1 B. This language was in the Joint Committee's Republican proposal.

TERMINATION: UNRESTRICTED ABANDONED MINE LANDS PAYMENTS

Department of the Interior

The Administration proposes to terminate mandatory payments from the Treasury to States and tribes that have finished restoring their abandoned coal mines. These payments can now be used for any purpose, and therefore do not contribute to the goal of addressing these hazards.

This proposal is modified from previous Budget proposals in 2010 and 2011 to competitively allocate the remaining funding to address reclamation of the Nation's highest priority abandoned coal mine sites.

Funding Summary $1.2 billion Justification

Coal producers pay a fee on production to fund the reclamation of abandoned coal mines around the country. This abandoned mine land (AML) fee was created so that the coal industry as a whole would take responsibility for cleaning up abandoned coal mines, regardless of where the fees were collected or where the mines were located. However, the funds were authorized to be distributed by a formula based in part on the production volume in each state. Over time, as some States completed their coal reclamation sites and were ``certified'' as complete, the goal of the AML Program was increasingly distorted as ``certified'' States and tribes continued to receive the formula grant payments equal to half of the fees collected within their borders.

These payments to ``certified'' States and tribes may be used for any purpose, so they do not contribute to the original purpose of restoring abandoned coal mine lands. The Administration proposes to focus AML fees on coal mine reclamation by eliminating these unrestricted payments to certified States and tribes, saving approximately $140 million in 2012 and $1.2 billion over 10 years. This action will affect four States and three tribes, in addition to any States that become certified in the future.

Noncertified States will continue to receive payments, but the allocation process would be reformed to address the Nation's most hazardous sites each year. Instead of the current production-based formula, a new competitive grant program would be used to ensure that the Nation's highest priority coal sites are addressed before the AML fee expires.

In December 2010, the President's National Commission on Fiscal Responsibility and Reform recommended this termination, eliminating payments to States and Tribes that have already been certified as completing this reclamation of abandoned coal mines.

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