97-401 - The Abandoned Mine Land Fund: Grants Distribution and Issues
26-Mar-1997; Robert Bamberger; 14 p.
Abstract: The Surface Mining Control and Reclamation Act (SMCRA, P.L. 95-87), enacted in 1977, established reclamation standards for all coal surface mining operations, and for the surface effects of underground mining. It also established the Abandoned Mine Land (AML) program to promote the reclamation of sites mined and abandoned prior to the enactment of SMCRA. To finance reclamation of abandoned mine sites, the legislation established fees on coal production. These collections are divided into federal and state shares; subject to annual appropriation, AML funds are distributed annually to states with approved reclamation programs. Since the program's inception and through FY1996, collections have totaled $4.4 billion; disbursements have totaled $3.3 billion. The AML program touches upon long-held state concerns about levying fees on businesses in states to remedy nationwide problems -- albeit for the ¨common good¨ -- but which dot the landscape disproportionately among the states. In the case of AML, coal production -- current and historic -- is the fundamental and initial determinant of the amounts from each state paid into the AML fund, and what each state receives back for its reclamation program. Coal production has shifted westward. As time passes, more and more of unfunded or unreclaimed sites will be situated in Eastern and Appalachian states where coal production, and the corollary contributions to the AML fund, have declined, suggesting that reauthorization of the fund in later years may be controversial. In the near-term, annual grants to states with less production, and the accumulating unappropriated balance in the AML fund, are likely to be issues. A designated minimum annual grant is made to states whose current and historic coal production would not otherwise support an annual distribution at or above the minimum program level. The authorization to these ¨minimum program states¨ is $2.0 million annually. However, Congress reduced the appropriation to minimum program states to $1.5 million for FY1995-FY1997. The FY1998 budget request proposes to retain this figure. AML distributions were less than receipts in the early years of the program because few states had developed reclamation plans and several carried unobligated balances from prior appropriations. Unappropriated balances are projected to exceed $1.2 billion by the end of FY1997, and some argue that appropriations have been flat in recent years as a means of furthering a different public policy: reducing federal borrowing and the federal deficit. A plan developed by the Interstate Mining Compact Commission proposes a distribution of unappropriated balances to states and tribal accounts. While such a plan might resolve some state discontent, it would have the effect of raising AML expenses over present levels and therefore still require a significant shift in congressional priority toward abandoned mine reclamation. [read report]
Topics: Mining, Economics & Trade