March 3, 1997
The Honorable Ralph Regula
Chairman
Subcommittee on Interior and Related Agencies
House Appropriations Committee
B-308 RHOB
Washington, D.C. 20515
RE: OSM FY 98 Budget
Dear Mr. Chairman:
The Reclamation Committee of the Western Interstate Energy Board is pleased to provide you with its views on the proposed budget for the Office of Surface Mining (OSM) for Fiscal Year 1998. 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 1996, these states produced 381 million tons of coal, accounting for 37 percent of the nation's total coal production.
The proposed FY 98 budget reflects an appropriate realignment of OSM priorities, with three important exceptions — abandoned mine land grants, Title V regulatory grants, and funding of the Technical Information Processing System (TIPS).
Over the past year, major progress has been made in realigning the agency's Title V priorities, particularly in the oversight of state regulatory programs. We wholeheartedly agree with OSM's characterization of oversight in the Budget Justification (United States Department of the Interior Budget Justification, FY 98, Office of Surface Mining, p. 36):
Under the reengineered oversight policy, OSM's oversight evaluation activities primarily focus on end results and the on-the-ground success of States in meeting SMCRA's environmental protection goals, especially prompt and effective reclamation of land mined for coal, and SMCRA's public participation goals.
Prior to the 1996 evaluation year, OSM focused on the States' compliance with State program processes and procedures. With the onset of the 20-year anniversary of the enactment of SMCRA, such a focus is no longer appropriate. State programs have matured to the point where detailed evaluation of every aspect of a State program is no longer necessary or productive in terms of achieving environmental protection or evaluating the impact of mining on society and the environment. Now with the development of State-specific evaluation plans tailored to the unique conditions of each State's program, OSM and States work together to address State program issues and strengthen State surface mining programs.
We urge this Subcommittee to encourage OSM to continue to focus on environmental results.
We also believe that the emphasis on building the capacity of state programs through technical assistance, workshops, and training is an appropriate and critical role for the agency. For example, in the West a very successful Western Regional Technical Team (WRTT) consisting of seven states and OSM has been setting OSM technical assistance priorities. One product from this effort was last September's Interactive Forum on the critical issue of bond release. The forum involved states, OSM, industry and academia. The WRTT is also guiding the development of software training, blasting training, an examination of western revegetation issues, electronic permitting, and improved use of hydrologic data in Cumulative Hydrologic Impact Assessments. The progress on technical assistance in the West has been made possible by the funding of state travel to training and forums. The Reclamation Committee supports a continuation of these activities in FY 98.
Unfortunately, three elements of the proposed budget fail to measure up to the new standard of advancing successful environmental outcomes.
1. Funding of the Abandoned Mine Lands (AML) Program: The budget request for state abandoned mine land grants is woefully inadequate. Under the proposal, for the twelfth consecutive year more money would be collected for abandoned mine clean-up than is appropriated. The surplus in the Trust Fund is projected to balloon to $1.4 billion in FY 98 while abandoned mines remain unreclaimed. For western states, appropriations for AML grants in FY 98 will fall below FY 97 levels, despite the fact that collections are higher. The reduced appropriations are driving more states, including New Mexico and Utah, into the "minimum program state" category which the President has unfortunately proposed to cut from the statutory $2 million per state to $1.5 million. Meanwhile, diversions from the AML Trust Funds are expected to soar from $31.4 million in FY 97 to $56 million in FY 98.
Western governors have proposed a solution to this recurrent problem. On February 4, the Western Governors' Association adopted a resolution urging the Administration and Congress to promptly distribute to States the abandoned mine land funds, including accumulated interest, collected under the Surface Mining Control and Reclamation Act. This should be accomplished by a one-time appropriation of the unexpended balance in the Abandoned Mine Reclamation Trust Fund and annual appropriations of future receipts by the fund. An account within the Trust Fund should be established for each state/tribe. The state/tribe would manage its account and withdraw money from the account on an annual basis as described in a Reclamation Management Plan. The Office of Surface Mining would continue to audit state expenditures from the fund.
Under the governors' proposal, each state receiving money from the fund would be required to develop a Reclamation Management Plan that covers the expenditure of its share of the unexpended balance in the fund and future expected annual receipts from the fund over the remaining seven years of the AML fee.
We urge the Subcommittee to implement the governors' resolution.
2. State Title V Regulatory Grants: Under the President's FY 98 proposal, every coal mining state is slated to have its regulatory grant cut. This is the second consecutive year that OSM has sought to cut state regulatory grants. Over the past five fiscal years, OSM has proposed to reduce state regulatory grants in three years and made no increase in the other two years. The graph compares past and proposed appropriations for Title V grants with the level of funding that was needed to sustain state reclamation efforts at their FY 93 level.
States have estimated that they will require $57.6 million in regulatory grants to operate their Title V programs in FY 98. OSM's budget request of $50.2 million amounts to a 13 percent shortfall. The Reclamation Committee urges Congress to appropriate at least $57.6 million in regulatory grants.
3. Technical Information Processing System (TIPS): The Appendix to the President's budget states that a $300,000 "...decrease for the Technical Information processing System is made possible by the completion of system upgrades and equipment replacement..." This is not accurate.
The proposed cuts in the TIPS budget will prevent needed replacement of five-year old work stations in all 25 states and nearly all OSM offices. Beginning in August 1998, the work station vendor will no longer provide service for these machines. In the strategic plan for the TIPS system — a plan which was developed with substantial state involvement — the aging equipment was to replaced over a two-year period. Beginning the equipment replacement process in FY 98 and completing the replacement process in early FY 99 would limit the time when states or OSM may find themselves saddled with unserviceable machines. The proposed cuts would also cripple efforts to train states (and OSM employees) on the use of the TIPS system.
TIPS has become an integral part of state programs. Every western state makes extensive use of the system. For example, Wyoming uses TIPS for electronic permitting and hydrologic assessments, Montana has developed a geographic information system (GIS) for hydrology which runs on TIPS, and New Mexico uses a GIS system with TIPS for determining AML priorities. These applications represent the cutting edge in improving the quality and reducing the cost to both the states, OSM and the industry of permitting actions. Electronic permitting supported by TIPS can also provide the public with access to permitting information through the Internet. The extensive use of TIPS in the West is not unique. In 1996, TIPS was used 220,000 times, a 100 percent increase in usage over the previous year.
TIPS offers computer capabilities which would be beyond the reach of individual states and individual OSM offices. By capitalizing on the economies of scale resulting from the acquisition of these computer capabilities for all OSM offices and all states, OSM is able to realize substantial savings. Computer technology, however, is prone to obsolescence. If we are to continue to realize the benefits of TIPS, then OSM must accept the reality that software and hardware must be upgraded and replaced.
The benefits of the TIPS system should not be jeopardize by the proposed budget cuts. We urge the Subcommittee to restore $300,000 to the TIPS budget for FY 98.
Western states appreciate this opportunity to present our views on OSM's proposed FY 98 budget. We would be pleased to respond to any request for clarification or additional information.
Sincerely,
[signed]
Michael Long, Chairman
Reclamation Committee
and Director, Colorado Division of Minerals and Geology
cc: The Honorable Sidney R. YatesWestern Governors' Association
February 4, 1997
Resolution 97 - 001
Washington, D.C.
SPONSOR: Governor Johnson
SUBJECT: Management of The Abandoned Mine Restoration Trust Fund
A. BACKGROUND
1. The Abandoned Mine Land (AML) Program, authorized under Title IV of the Surface Mining Control and Reclamation Act of 1977, restores lands mined and abandoned or left inadequately restored before August 3, 1977. AML project goals include eliminating acid mine drainage, reclaiming coal gob and other mine wastes, closing or safeguarding deadly shafts and unstable openings, and removing hazardous mine structures.
2. The AML Program receives 100% of its funding from a fee on each ton of coal produced in the U.S. Actual fees paid during the period 1978 through 1995, plus projections through 1997, total over $4.7 billion. The cumulative unappropriated balance of the Abandoned Mine Reclamation (AMR) Trust Fund for the same period is projected to be over $1.2 billion. The fee expires in 2004.
3. States receive grants from the reclamation fund based on a formula which considers state contributions to the fund, as well as historical coal production. Funding for grants has been made through annual appropriations. Changes in appropriations, including a reduction from $2 million to $1.5 million in the minimum funding level for a state program, have limited the states' ability to execute timely and cost-effective programs to abate serious AML problems.
4. Without sufficient and predictable funding over the remaining life of the programs states cannot adequately prevent deaths and injuries from taking place in abandoned mines, or reclaim abandoned mine lands to productive uses. Unattended AML sites tend to get worse over time increasing reclamation costs. Inflation also increases reclamation costs as projects are delayed The longer reclamation is postponed the less reclamation will be accomplished.
5. In a more competitive electric power industry, competition among fuels used to generate electricity will increase. An extension of the existing fee on coal for AML restoration will be difficult to sustain in a competitive market.
6. In June 1996, western governors adopted a resolution (96-013) urging the restoration of cuts in funding for minimum state AML programs and supporting distribution to the states of the unappropriated balance in the AML funds.
B. GOVERNORS' POLICY STATEMENT
1. The western governors continue to urge the Administration and Congress to promptly distribute to States abandoned mine land funds, including accumulated interest, collected under the Surface Mining Control and Reclamation Act. This should be accomplished by a one-time appropriation of the unexpended balance in the Abandoned Mine Reclamation Trust Fund and annual appropriations of future receipts by the fund. An account within the AMR Fund should be established for each state/tribe. The state/tribe would manage its account and withdraw money from the account on an annual basis as described in a Reclamation Management Plan. The Office of Surface Mining would continue to audit state expenditures from the fund.
2. Each state receiving money from the fund shall develop a Reclamation Management Plan that covers the expenditure of its share of the unexpended balance in the fund and future expected annual receipts from the fund over the remaining eight years of the AML fee.
C. GOVERNORS' MANAGEMENT DIRECTIVE
1. The WGA staff shall transmit a copy of this resolution to the President, the Secretary of the Interior, Chairman of the House and Senate Appropriations Committees, the House and Senate Budget Committees, Resource Committee and Senate Energy and Natural Resources Committee.
2. The WGA staff and the Western Interstate Energy Board shall continue to monitor and report to the governors on any legislative or budget proposals which would impact the Abandoned Mine Land Program.