Statement of Administration Policy: H.R. 918 - Mineral Exploration and Development Act of 1992

(House Rules) and SENT to House on 9/18/92
(Rahall (D) WV and 16 others)

If H.R. 918 were presented to the President in its current form, the Secretary of the Interior would recommend a veto.

The Administration has initiated a series of administrative and environmental reforms regarding mining on Federal lands for "hard-rock" minerals, such as gold and silver. These reforms include bonding requirements, cyanide use requirements, and occupancy/trespass guidelines. In addition, a proposal has been included in the President's Budget for the past three years to replace "due diligence" (a requirement that the claimant perform a certain amount of work on the claim) with a $100 annual fee. This proposal has been adopted by the Congress in the FY 1993 Department of the Interior and Related Agencies Appropriations bill. The Administration believes that these reforms will provide appropriate protection for public lands where hard-rock mining takes place.

Unfortunately, H.R. 918 eliminates the flexibility for Federal land management agencies to respond to changes in the hard-rock mining industry. The bill restricts self-initiation of mineral rights, limits free access across public lands, diminishes the security of private tenure to mineral deposits, and imposes significant regulatory burdens and costs on both the government and the economy. Of major concern, H.R. 918 would:

— Reduce the status of mining claims from a property right to a mere right of use, thereby undermining the security of tenure necessary for private-sector investment in hard-rock mining.

— Force mining claimants to convert their claims within three years or forfeit their valid claims. This may be a compensable taking of private property that could result in a substantial amount of "takings" litigation.

— Establish an extensive regulatory system that imposes a tremendous and unnecessary cost burden on both the government and the economy. This includes dictating detailed reclamation standards without considering the costs of using new technology or the investments in existing technology.

— Require land management agencies to perform unnecessary and extremely expensive reviews of public lands.

— Prevent mineral activities in certain national conservation units without recognizing that mining may be compatible with conservation purposes.

— Lead to many frivolous and expensive citizen lawsuits against the government and the hard-rock mining industry that are aimed solely at delaying or disrupting mining activities.

— Eliminate the discovery of minerals as a basis for issuing new mining claims or contesting inactive ones. This would allow claimants to reserve an area of public lands by merely paying fees without diligently mining.

— Impose an 8 percent royalty on mineral production that substantially increases mining costs, reduces the economic incentive for future mining claims, and will be very difficult to administer.

Scoring for the Purpose of PAYGO

H.R. 918 would increase receipts and direct spending; therefore, it is subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation Act of 1990 (OBRA). The effects of enactment of this legislation would be included in a look back pay-as-you-go sequester report at the end of the Congressional session.

OMB's preliminary scoring estimates of this bill are under development. If H.R. 918 were enacted, final OMB scoring estimates would be published within five days of enactment, as required by OBRA. The cumulative effects of all enacted legislation on direct spending will be issued in monthly reports transmitted to Congress.