Talking Points for Abandoned Mine Lands Fund

  1. Abandoned Mine Lands – use the money already collected

  2. Abandoned Mine Lands – Distribution of Funds 

  3. Abandoned Mine Lands - extension of reclamation fee


Talking Point 1

Abandoned Mine Lands – use the money already collected


In practically every year since the federal abandoned mine land fund was created, more money has been collected from the tax on coal production than has been appropriated by Congress. Only in 1983-85 and in 1987 did expenditures exceed collections.


The responsibility does not lay entirely, or even primarily, with Congress. The administrations of four presidents have consistently failed to request appropriations from Congress that even approach the amounts being collected from the industry or earned through interest.


As a result, progress on reclaiming thousands of acres of abandoned mines, particularly in the East, has been slow, while the unexpected funds have been allowed to build up in a federal trust fund. By the year 2001, that AML trust fund resting in federal coffers had swollen to $1.4 billion.


This trust fund earns over $100 million in interest each year but those gains are partially offset by the continuing increase in the costs of reclamation.

In addition, Congress found a way in 1992 to further negate the advantage of holding AML funds in trust by passing a law that allows the interest to be used to support the UMWA combined benefits fund. Over $60 million of the interest earned goes each year for this purpose at the discretion of the Secretary of Interior.


Of the total amount currently in the trust fund, over half includes unappropriated money earmarked to go directly to states. The balance represents money set aside for historical coal production areas, federal share grants, the Appalachian Clean Streams Initiative, RAMP Program and emergency programs.

Roughly two thirds of the total trust fund could be used to reclaim sites in eastern states where the need is greatest.


While recognizing the necessity of supporting the health care needs of retired miners and widows, much of this trust fund could be distributed for reclamation projects while still keeping a balance necessary to earn the $60 million in interest that goes annually to the combined benefits fund.


Congress needs to make a commitment to draw the trust fund down to that level through appropriations as soon as possible and to continue to draw it down as demand for the interest declines in future years.


It is also important to insure that the tax collected for abandoned mine reclamation is used for the purpose that was intended and to reclaim as many sites as possible before costs soar even further. The Bush Administration needs to make a commitment to request appropriations equal to the amount collected each year and Congress must appropriate those funds.


Talking Point 2 –

Abandoned Mine Lands – Distribution of Funds 

From the beginning the method in which AML funds have been distributed has posed major problems for the traditional coal states in the East.

Under the federal law, a portion approaching one half of the severance tax collected in each state or tribal nation is automatically allocated to that state or nation. As coal production has increased in western states, a disproportionate share of the money collected has been reserved for areas that have few if any problems related to abandoned coal mines.


For example, Wyoming in 2002 is projected to receive $21.3 million from the annual collections but has virtually no remaining AML sites to be cleaned up. Compare that figure to Pennsylvania, which will collect $19.7 million but has over $4.5 billion in unreclaimed sites, or West Virginia, which will collect $17.5 million but has over $625 million in unreclaimed sites.


The amount reserved for Montana each year is over three times the cost of cleaning up every remaining AML site in the state, while Hopi, Navajo and several other tribal nations have no sites at all that qualify for AML funding.


The western states’ share of these funds makes up a sizable share of the current AML trust fund. Since the states and nations have been unable to submit projects that meet the criteria for funding, that money remains unused as part of the $1.4 billion trust fund sitting in Washington.


Some of the money has found its way back to western states for public water projects, road reconstruction in mining areas, etc. but much remains unused while eastern states continue to receive only a fraction of the money needed to clean up hazardous mine sites dating back 50 years or more.


One answer to the problem seems obvious: Congress needs to amend the law to change distribution patterns and give priority for AML spending and allocations to areas with the greatest need, rather than basing distribution heavily on where the coal is mined and the tax collected.


This change in distribution priorities would also help a number of states that suffered from extensive mining in the past but have little or no current production, such as Oklahoma or Arkansas, and states that have no approved state enforcement program, such as Tennessee.


The proposal that would seem to make the most sense would be to decrease the annual amount allocated directly to states based on production and to increase the annual amount allocated to AML clean-up in historic mining regions, clean stream initiatives and emergency distribution.


The other major question involves distribution of that money already earmarked for states with no AML cleanup requirements. That money represents a significant portion of the existing trust fund, but could remain in the fund to earn interest until a decision is made on how it should be distributed.  


Talking Point 3 –

Abandoned Mine Lands - extension of reclamation fee


When Congress passed the federal surface mining law in 1977, the tax that was imposed on the coal industry (15 cents per ton from deep mined coal and 35 cents from strip-mined coal) to pay for cleaning up old mine sites was assumed to be adequate to solve a majority of the most serious problems related to past mining practices.


It has long become obvious that the money collected during the 25-year life span of the tax will not come close to paying for adequate cleanup of even a fraction of the most serious priority 1 and 2 sites.


The thinking of Congress in establishing the tax with a 2004 sunset date was flawed from the start. Calculations of how much money would be collected were based on production figures during the energy crisis of the late 1970s. Since that time, coal production and collections have totaled considerably less than what was expected.


At the same time, delays in implementing the program resulted in much higher costs for reclamation by the time work was finally commenced, and costs have continued to increase.


A decision by Congress in 1992 to allow around half of the annual interest (roughly $60 million) earned from the AML trust fund to be diverted to the UMWA combined benefits fund to support health care benefits for retired miners and widows has also cut into the amount available for reclamation programs.


Unless the tax is extended beyond the 2004 cutoff date, it will be impossible to clean up even a fraction of the sites categorized as threats to human health and safety with the funds remaining or expected by 2004.


West Virginia Congressman Nick Joe Rayhall has crafted legislation that would extend the tax to 2011. That needs to be a minimum extension if the AML fund is going to collect enough to be truly effective.