April 8, 1996
The Honorable Ralph Regula
Chairman
Subcommittee on Interior and Related Agencies
House Appropriations Committee
B-308 RHOB
Washington, D.C. 20515
RE: OSM FY 97 Budget
Dear Mr. Chairman:
The Reclamation Committee of the Western Interstate Energy Board is pleased to provide you with its views on the Office of Surface Mining and the proposed Fiscal Year 1997 budget for that agency. The Reclamation Committee is comprised of the mine reclamation agencies in the five major western coal producing states of Colorado, Montana, New Mexico, Utah and Wyoming. In 1994 these states produced 355 million tons of coal, accounting for 34 percent of the nation's total coal production.
For many years, the Reclamation Committee has expressed concern to Congress over the budget priorities and direction of OSM. We believe the proposed FY 97 budget reflects an appropriate realignment of priorities, with two important exceptions -- abandoned mine land grants and Title V regulatory grants.
First, the good news. The proposed budget for OSM makes a small, but significant reallocation of funds from regulatory program operations to technical services, training and research. While this reallocation amounts to only slightly more than $2 million, it reflects an important decision by the agency to realign its priorities with the needs of stakeholders and the realities of implementing the 20-year old Surface Mining Control and Reclamation Act (SMCRA). Specifically, the agency is working to move from process-oriented oversight of state programs to results-oriented oversight. Western states strongly endorse this new direction and are working with OSM to develop innovative approaches to data collection, analysis, and presentation that will reflect environmental performance under SMCRA. Such a shift will result in fewer duplicative inspections and more emphasis on the measurement of environmental results.
The funds freed up by the new direction in oversight are critically needed in the areas of technical services, training and research. These programs suffered disproportionate cuts in FY 96, cuts which have damaged the capabilities of state programs. These capabilities need to be restored in FY 97.
In the West, a Regional Technical Team of states and OSM has been established to prioritize technical needs in order to better target available funds to the most critical areas. Because of the significant difference in mining environment in the West as compared to other parts of the country, there are critical technical issues which need to be addressed, such as sediment yield/measurement of erosion, impoundments in arid areas, and revegetation. In addition, OSM is working with western states to improve the efficiency of state regulatory programs. For example, under New Mexico's leadership, a western "Human Resources Directory" is being developed which will provide an inventory of staff skills in state and OSM offices in the entire region. This will allow state regulatory authorities in the West to draw upon expertise in other western states as well as OSM. Development of electronic permitting, which in the West has been pioneered by Wyoming, holds the promise of reducing operator and regulatory agency costs and improving the quality of mine plans and mine plan reviews.
Western states support the proposed reallocation of funds to OSM's technical services, training and research functions. Such funds will help restore the vital training and TIPS programs severely cut in FY 96 and will allow progress to be made on critical western technical issues.
The bad news in the proposed budget is OSM's failure to fully fund state regulatory programs and the continued drastic under-funding for the cleanup of abandoned mines.
State Regulatory Grants: For a sixth year, the proposed budget continues a de facto freeze on state regulatory grants. Regulatory grants have increased only slightly over this period, from $48 million in FY 91 to $50.6 million in FY 96, which is well below the level of inflation. This freeze on state regulatory grants is already starting to undercut the effectiveness of state programs. In FY 97, OSM proposes an $86,000 reduction from FY 96 levels and the diversion of some funds to support tribal programs.
States have estimated that they will require $55.2 million in regulatory grants to operate their Title V programs in FY 97. OSM's proposed budget amounts to a 10 percent shortfall. The Reclamation Committee urges Congress to appropriate at least $55.2 million in regulatory grants, in addition to whatever funds are required for tribal activities.
Abandoned Mines: Proposed appropriations for state Abandoned Mine Land programs continue to be unconscionably low. As a result, less than one-half of the funds collected from the AML fee on coal will actually be spent for its intended purpose -- the cleanup of abandoned mines. Of the estimated $347 million in fees to be collected in FY 97, only $144 million will be awarded in reclamation grants to states. OSM will spend another $23 million on its program development and maintenance activities, $70 million will be diverted to pay for retired miners health benefits, and the remaining $110 million is being used to offset the deficit. As the attached graph shows, as annual collections have grown, appropriations for state grants have dropped and grants as a percent of collections have plummeted. The net result is a bulging surplus in the AML Fund which will top $1.2 billion in FY 97. Meanwhile, the hazards presented by abandoned mines go unabated.
The Reclamation Committee recommends that Congress at a minimum appropriate to states one-half of AML collections in FY 97, or $173 million, as required by SMCRA. Such appropriation should include minimum program funding of $2 million to each state with an approved AML program.
Western states appreciate this opportunity to present our views on OSM's proposed FY 97 budget. We would be pleased to respond to any request for clarification or additional information.
Sincerely,
Michael Long, Chairman
Reclamation Committee
and
Director, Colorado Division of Minerals and Geology
cc: The Honorable Sidney R. Yates