SPEAKERS       CONTENTS       INSERTS    
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1999

FISCAL YEAR 2000 BUDGET REQUESTS OF THE U.S. GEOLOGICAL SURVEY, THE OFFICE OF SURFACE MINING, THE MINERALS MANAGEMENT SERVICE AND THE ENERGY AND MINERALS PROGRAM OF THE BUREAU OF LAND MANAGEMENT

HEARING

before the

SUBCOMMITTEE ON ENERGY
AND MINERAL RESOURCES

of the

COMMITTEE ON RESOURCES
HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

FIRST SESSION

FEBRUARY 25, 1999, WASHINGTON, DC
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Serial No. 106–12

Printed for the use of the Committee on Resources

Available via the World Wide Web: http://www.access.gpo.gov/congress/house
or
Committee address: http://www.house.gov/resources

COMMITTEE ON RESOURCES

DON YOUNG, Alaska, Chairman

W.J. (BILLY) TAUZIN, Louisiana
JAMES V. HANSEN, Utah
JIM SAXTON, New Jersey
ELTON GALLEGLY, California
JOHN J. DUNCAN, Jr., Tennessee
JOEL HEFLEY, Colorado
JOHN T. DOOLITTLE, California
WAYNE T. GILCHREST, Maryland
KEN CALVERT, California
RICHARD W. POMBO, California
BARBARA CUBIN, Wyoming
HELEN CHENOWETH, Idaho
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GEORGE P. RADANOVICH, California
WALTER B. JONES, Jr., North Carolina
WILLIAM M. (MAC) THORNBERRY, Texas
CHRIS CANNON, Utah
KEVIN BRADY, Texas
JOHN PETERSON, Pennsylvania
RICK HILL, Montana
BOB SCHAFFER, Colorado
JIM GIBBONS, Nevada
MARK E. SOUDER, Indiana
GREG WALDEN, Oregon
DON SHERWOOD, Pennsylvania
ROBIN HAYES, North Carolina
MIKE SIMPSON, Idaho
THOMAS G. TANCREDO, Colorado

GEORGE MILLER, California
NICK J. RAHALL II, West Virginia
BRUCE F. VENTO, Minnesota
DALE E. KILDEE, Michigan
PETER A. DeFAZIO, Oregon
ENI F.H. FALEOMAVAEGA, American Samoa
NEIL ABERCROMBIE, Hawaii
SOLOMON P. ORTIZ, Texas
OWEN B. PICKETT, Virginia
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FRANK PALLONE, Jr., New Jersey
CALVIN M. DOOLEY, California
CARLOS A. ROMERO-BARCELÓ, Puerto Rico
ROBERT A. UNDERWOOD, Guam
PATRICK J. KENNEDY, Rhode Island
ADAM SMITH, Washington
WILLIAM D. DELAHUNT, Massachusetts
CHRIS JOHN, Louisiana
DONNA CHRISTIAN-CHRISTENSEN, Virgin Islands
RON KIND, Wisconsin
JAY INSLEE, Washington
GRACE F. NAPOLITANO, California
TOM UDALL, New Mexico
MARK UDALL, Colorado
JOSEPH CROWLEY, New York

LLOYD A. JONES, Chief of Staff
ELIZABETH MEGGINSON, Chief Counsel
CHRISTINE KENNEDY, Chief Clerk/Administrator
JOHN LAWRENCE, Democratic Staff Director

Subcommittee on Energy and Mineral Resources
BARBARA CUBIN, Wyoming, CHAIRMAN
W.J. (BILLY) TAUZIN, Louisiana
WILLIAM M. (MAC) THORNBERRY, Texas
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CHRIS CANNON, Utah
KEVIN BRADY, Texas
BOB SCHAFFER, Colorado
JIM GIBBONS, Nevada
GREG WALDEN, Oregon
THOMAS G. TANCREDO, Colorado

ROBERT A. UNDERWOOD, Guam
NICK J. RAHALL II, West Virginia
ENI F.H. FALEOMAVAEGA, American Samoa
SOLOMON P. ORTIZ, Texas
CALVIN M. DOOLEY, California
PATRICK J. KENNEDY, Rhode Island
CHRIS JOHN, Louisiana
JAY INSLEE, Washington
——— ———

BILL CONDIT, Professional Staff
MIKE HENRY, Professional Staff
DEBORAH LANZONE, Professional Staff

C O N T E N T S

    Hearing held February 25, 1999

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Statements of Members:
Cubin, Hon. Barbara, a Representative in Congress from the State of Wyoming
Prepared statement of
Rahall, II, Hon. Nick J., a Representative in Congress from the State of West Virginia
Prepared statement of
Underwood, Hon. Robert, a Delegate in Congress from the Territory of Guam
Prepared statement of

Statements of witnesses:
Groat, Charles, Director, U.S. Geological Survey, U.S. Department of the Interior
Prepared statement of
Hatfield, Nina, Deputy Director, Bureau of Land Management, U.S. Department of the Interior
Prepared statement of
Karpan, Kathy, Director, Office of Surface Mining Reclamation and Enforcement, U.S. Department of the Interior
Prepared statement of
Responses to questions from Mr. Rahall
Kitsos, Thomas, Acting Director, Minerals Management Service, U.S. Department of the Interior
Prepared statement of

Additional material supplied:
Bolognese, Kerry D., Asst. Director–Federal Relations, NASULGC, Washington, DC, prepared statement of

OVERSIGHT HEARING ON FISCAL YEAR 2000 BUDGET REQUESTS OF THE U.S. GEOLOGICAL SURVEY, THE OFFICE OF SURFACE MINING, THE MINERALS MANAGEMENT SERVICE AND THE ENERGY AND MINERALS PROGRAM OF THE BUREAU OF LAND MANAGEMENT
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THURSDAY, FEBRUARY 25, 1999
House of Representatives,    
Subcommittee on Energy and    
Mineral Resources,
Committee on Resources,
Washington, DC.

    The Subcommittee met, pursuant to notice, at 2:08 p.m., in Room 1324, Longworth House Office Building, Hon. Barbara Cubin [chairwoman of the Subcommittee] presiding.

STATEMENT OF HON. BARBARA CUBIN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WYOMING
    Mrs. CUBIN. The Subcommittee on Energy and Mineral Resources will please come to order.
    The Subcommittee is meeting today to hear testimony on the Fiscal Year 2000 budget request of the USGS, the Office of Surface Mining, the Minerals Management Service, and the energy and minerals programs of the BLM. Under rule 4(G) of the Committee rules, any oral opening statements at hearings are limited to the Ranking Majority Member and the Chairman, but we are going to expand that today to any other members that want to give an opening statement.
    So I am skipping all that, Bill.
    The Subcommittee is meeting today to hear testimony on the administration's Fiscal Year 2000 budget request of the four Interior Department agencies within our jurisdiction. First, we have the U.S. Geological Survey, which ''provides the nation with reliable, impartial information to describe and understand the Earth.'' At least that is what their webpage says they do and I think they do.
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    [Laughter.]
    Then we have three bureaus which are regulatory in nature: the Minerals Management Service, the Bureau of Land Management, and the Office of Service Mining Reclamation and Enforcement. The MMS and the BLM's energy and minerals programs are the keepers of federally owned mineral rights. That is, the two agencies administer the laws governing the disposition of our public land and the Outer Continental Shelf mineral endowment. I often wish that there was more disposing of and less keeping of public lands minerals in order to enlarge the revenues that are derived from this endowment, but that is a debate for another day.
    Unique among the Subcommittee's agencies is the Office of Surface Mining, which administers the Federal law governing the surface impacts of all coal mined in the United States, whether it is on public land or private.
    Today we are pleased to have before us the new director of the U.S. Geological Survey, Dr. Charles Groat, a first-time witness before this Subcommittee. We would like to welcome you. Followed by Ms. Kathy Karpan of Rock Springs, Wyoming, the director of the Office of Surface Mining and a friend of mine. We've known each other in Wyoming for a long time and I have always enjoyed with Ms. Karpan and continue to do so. And we have the acting director of the Minerals Management Service, Dr. Tom Kitsos. And, lastly, Ms. Nina Hatfield, a deputy director of the Bureau of Land Management.
    [The prepared statement of Mrs. Cubin follows:]
STATEMENT OF HON. BARBARA CUBIN, A REPESENTATIVE IN CONGRESS FROM THE STATE OF WYOMING
    The Subcommittee is meeting today to hear testimony on the Administration's Fiscal Year 2000 budget request of the four Interior Department agencies within our jurisdiction. First, we have the U.S. Geological Survey, which ''provides the Nation with reliable, impartial information to describe and understand the Earth''—at least that's what their webpage reads. Then we have three bureaus which are regulatory in nature: the Minerals Management Service, the Bureau of Land Management, and the Office of Surface Mining, Reclamation & Enforcement.
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    The MMS and the BLM's energy & minerals program are the ''keepers'' of federally owned mineral rights. That is, the two agencies administer the laws governing the disposition of our public land and outer continental shelf mineral endowment. I often wish there was more ''disposing'' and less ''keeping'' of public lands minerals in order to enlarge the revenues derived from this endowment, but that's a debate for another day.
    Unique among the Subcommittee's agencies is the Office of Surface Mining, which administers the Federal law governing the surface impacts of all coal mined in the U.S. whether it be public land or private.
    Today, we are pleased to have before us the new Director of the U.S. Geological Survey, Dr. Charles Groat, a first-time witness before the Subcommittee; followed by Ms. Kathy Karpan, of Rock Springs, Wyoming, Director of OSM; then the Acting Director of the Minerals Management Service, Dr. Tom Kitsos; and lastly, Ms. Nina Hatfield, a Deputy Director of the Bureau of Land Management.

    Mrs. CUBIN. The Chair now recognizes the Ranking Minority Member for any opening statement that he might have.

STATEMENT OF HON. ROBERT UNDERWOOD, A DELEGATE IN CONGRESS FROM GUAM
    Mr. UNDERWOOD. Thank you, Madam Chairwoman. Today we welcome witnesses from the Bureau of Land Management, Office of Surface Mining, Minerals Management Service, and the U.S. Geological Survey to discuss their proposed budget requests for Fiscal Year 2000.
    The DOI's Fiscal Year 2000 budget request represents an increase of $832 million, or 10.6 percent, over the 1999 appropriations. The DOI request of $8.7 billion underscores President Clinton's commitment to conserving the nation's natural and cultural resources. The budget request focuses on priority initiatives, such as President Clinton's Land Legacy Initiative, which is designed to protect and revitalize America's public land resources.
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    Within the purview of the Energy Subcommittee, the DOI budget includes $25 million to increase reclamation of abandoned coal mining by 15 percent, as part of the administration's Clean Water Action Plan. An additional highlight of the request is the President's budget request of $838.5 million for the U.S. Geological Survey. The request includes $18.5 million in new funding to support science priorities that will address resource management issues and challenges to maintain diverse and healthy ecosystems.
    Another feature of this request is the MMS budget of $240 million for managing the nation's offshore mineral resources. This is about $16.2 million above the 1999 level. Wisely, MMS proposes to assign the increased funds to updating their computerized royalty management program. Management of the Outer Continental Shelf plays a significant role in the nation's energy picture. Revenues collected by the MMS Federal offshore oil and gas program will support President Clinton's Lands Legacy Initiative or one of the legislative proposals now pending before the Resources Committee to dedicate OCS receipts to various conservation programs.
    The BLM's Fiscal Year 2000 budget request is $1,268,700,000. Of that amount, they request $72 million for the energy and minerals program. This is an increase of 3.3 percent above the Fiscal Year 1999 enacted level of funding, which will be used to fund employee pay raises.
    Energy and mineral resources generate the highest commercial values amongst the various uses of public land. Of the $1.1 billion in annual revenues from public lands, energy and mineral development generated nearly $1 billion through rents, royalties, bonuses, sales, and fees. The public lands produce 33 percent of the nation's coal, 11 percent of its natural gas, and 5 percent of its oil. These lands also produce a large portion of the nation's fertilizer minerals, mineral materials, gold, silver, and other metals. During 1998, BLM administered 370 coal leases; 46,000 oil and gas leases, although only 20,000 are actually in production.
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    I look forward to hearing the testimony of our witnesses on these important matters. Thank you, Madam Chairwoman.
    [The prepared statement of Mr. Underwood follows:]
STATEMENT OF HON. ROBERT UNDERWOOD, A DELEGATE IN CONGRESS FROM THE TERRITORY OF GUAM
    Today, we welcome witnesses from the Bureau of Land Management, Office of Surface Mining, Minerals Management Service and the U.S. Geological Survey to discuss their proposed budget requests for Fiscal Year 2000.
    The Department of the Interior's FY 2000 budget request represents an increase of $832 million, or 10.6 percent over the 1999 appropriations. The DOI request of $8.7 billion underscores President Clinton's commitment to conserving the nation's natural and cultural resources. The DOI's FY 2000 budget request focuses on priority initiatives such as President Clinton's Lands Legacy Initiative, which is designed to protect and revitalize America's public land resources.
    Within the purview of the Energy Subcommittee, the DOI budget includes $25 million to increase reclamation of abandoned coal mining by 15 percent, as part of the Administration's Clean Water Action Plan. An additional highlight of the request is the President's budget request of $838.5 million for the U.S. Geological Survey. The request includes $18.5 million in new funding to support science priorities that will address resource management issues and challenges to maintain diverse and healthy ecosystems.
    Another feature of this FY 2000 request is the MMS budget of $240.2 million for managing the nation's offshore mineral resources. This is about $16.2 million above the 1999 level. Wisely, MMS proposes to assign the increased funds to updating their computerized royalty management program. Management of the Outer Continental Shelf plays a significant role in the nation's energy picture. Revenues collected by the MMS Federal offshore oil and gas program will support President Clinton's Lands Legacy Initiative—or one of the legislative proposals now pending before the Resources Committee to dedicate OCS receipts to various conservation programs.
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    The BLM's 2000 Budget request is $1,268,700,000. Of that amount, they request $72,230,000 for the energy and minerals program. This is an increase of $2,286,000, or 3.3 percent above the FY 1999 enacted level of funding which will be used to fund employee pay raises. Energy and mineral resources generate the highest commercial values among the various uses of public lands. Of the $1.1 billion in annual revenues from the public lands, energy and mineral development generated nearly $1 billion though rents, royalties, bonuses, sales and fees. The public lands produce 33 percent of the Nations coal, 11 percent of its natural gas and 5 percent of its oil. These lands also produce a large portion of the Nation's fertilizer minerals, mineral materials, gold, silver, and other metals. During 1998, BLM administered 370 coal leases, 46,000 oil and gas leases—although only 20,000 are actually in production. During that time, BLM also oversaw production of more than 15 million cubic yards of sand, gravel and other mineral materials. Of particular note in this area, is the effort to revise the outdated surface management rules for hard rock mining.
    I look forward to hearing the testimony of our witnesses on this important subject.

    Mrs. CUBIN. Congressman Walden, do you have an opening statement?
    Mr. WALDEN. No, thank you.
    Mrs. CUBIN. Congressman Rahall?

STATEMENT OF HON. NICK J. RAHALL, II, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WEST VIRGINIA
    Mr. RAHALL. Thank you, Madam Chair. I appreciate your making the exception and allowing me to give an opening statement.
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    While the budgets and programs of all four of the agencies that we are reviewing today are important, I wanted to take just a moment to make a few comments on matters involving the Office of Surface Mining.
    This has been a very troubling year in the coal fields of southern West Virginia. With mountaintop removal mining operations becoming increasingly larger—perhaps more so than the law ever originally envisioned—both OSM and the Corps of Engineers, which issues section 404 permits, were unprepared and unable to cope with the regulatory demands operations of this nature placed upon them. OSM's oversight of the State regulatory program in this area was found to be non-existent.
    Post-mining land uses were being permitted that were a violation of the letter or, if not that, certainly the intent of section 515(c) of SMCRA and OSM by perhaps every account other than its own failed to provide adequate guidance on one of the most critical reclamation standards of the law, and that is: What constitutes approximate original contour?
    While OSM avoided being the subject of a major lawsuit on these matters, litigation against the State regulatory authority and the Corps of Engineers has resulted in a Justice Department brokered settlement agreement. As a result, the EPA, Fish and Wildlife Service, the Corps, and OSM are now working to implement an improved regulatory program, focusing in West Virginia and then Kentucky.
    Over the years, I have been OSM's most staunch supporters in the Congress. But I have also been one of its critics as well when it has dropped the ball on major issues such as this one. For her part, Director Karpan inherited the problems, which were made public last year. And I appreciate her leadership, know that she has had experience here on the Hill working for a good colleague of ours on this Committee, Representative Teno Roncalio. And her background is extensive and well-placed. It is now, however, incumbent upon Director Karpan, in my opinion, to display the type of leadership necessary to swiftly correct deficiencies in the mountaintop removal mining regulatory program.
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    This is no laughing matter in the hills and hollows of the State that I represent. While the regulatory program remains unsettled, citizens lives and homes are being disrupted, miners face the possibility of layoff, and the economy in places like Logan, Mingo, and Boone Counties, which is so dependent on coal, swings in the balance.
    Our dream when enacting section 515(c) of the Act was to leave people in the coal fields with viable economic development opportunities, once the coal ran out, as a trade-off for allowing a variance for mountaintop removal mining. And I recall well working my first year in the Congress on this Committee and in the conference committee and working through these trade-offs. SMCRA is more than an environmental law; it is also social legislation.
    I have not given up hope for this dream and will not. But for it to become a reality, it is incumbent upon agencies like OSM to do the job that Congress has entrusted it with. The eyes of Appalachia, Director Karpan, are upon you and your agency. Thank you, Madam Chair.
    [The prepared statement of Mr. Rahall follows:]
STATEMENT OF HON. NICK RAHALL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WEST VIRGINIA
    While the budgets and programs of the four agencies we are reviewing today are all important, I wanted to take this opportunity to make a few comments on a matter involving the Office of Surface Mining.
    This has been a very troubling year in the coalfields of southern West Virginia.
    With mountaintop removal mining operations becoming increasingly larger, both OSM and the Corps of Engineers, which issues section 404 permits, were unprepared and unable to cope with the regulatory demands operations of this nature placed on them.
    OSM's oversight of the State regulatory program in this area was found to be non-existent.
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    Post-mining land uses were being permitted that were a violation of the letter, or if not that, certainly the intent of section 515(c) of SMCRA and OSM by perhaps every account but its own failed to provide adequate guidance on one of the most critical reclamation standards of the law; what constitutes approximate original contour.
    While OSM avoided being the subject of a major lawsuit on these matters, litigation against the State regulatory authority and the Corps of Engineers has resulted in a Justice Department brokered settlement agreement.
    As a result, the EPA, Fish and Wildlife Service, the Corps and OSM are now working to implement an improved regulatory program focusing in West Virginia and then Kentucky.
    Over the years, I have been OSM's most staunchest supporter in the Congress. But I have also been one of its critics as well when it has dropped the ball on major issues such as this one.
    For her part, Director Karpan inherited the problems which were made public last year. It is now, however, incumbent upon her to display the type of leadership necessary to swiftly correct deficiencies in the mountaintop removal mining regulatory program.
    This is no laughing matter in the hills and hollows of West Virginia. While the regulatory program remains unsettled, citizens lives and homes are being disrupted, miners face the possibility of layoff, and the economy in places like Logan, Mingo and Boone Counties which is so dependent on coal swings in the balance.
    Our dream when enacting section 515(c) of the Act was to leave people in the coalfields with viable economic development opportunities once the coal ran out as a trade-off for allowing a variance for mountaintop removal mining.
    SMCRA is more than an environmental law; it is also social legislation.
    I have not given up hope for this dream, and will not.
    But for it to become a reality is it incumbent upon agencies like the Office of Surface Mining to do the job Congress has entrusted with it. The eyes of Appalachia, Director Karpan, are upon you.
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    Thank you.

    Mrs. CUBIN. Certainly. Before I recognize Dr. Groat for his testimony, let me remind the witnesses that, under our Committee rules, your entire testimony will be submitted in the record, but we ask that you keep your oral testimony to five minutes. So, with that—excuse me, the boss just said they gave—it is 10. So, Dr. Groat, if you could please stay within 10 minutes in your oral testimony.

STATEMENT OF CHARLES GROAT, DIRECTOR, U.S. GEOLOGICAL SURVEY, U.S. DEPARTMENT OF THE INTERIOR
    Dr. GROAT. Thank you, Madam Chairman. I will shoot for five.
    Madam Chairman and Members of the Subcommittee, I am going to just give you a brief overview of my written testimony and hit a few highlights. You are correct; I am brand-new at this. My previous experience as a state person, a colleague and a client of the USGS has kind of turned the tables, so I am happy to be here to present what the U.S. Geological Survey sees as a couple of its success stories from the past year that are guiding our budget submittal for the Year 2000.
    I want to highlight three or four things that we feel are significant accomplishments that give you some indication of not only where we have been, but where we are going in Fiscal Year 2000. One of our highest priorities is reducing the effects of natural disasters and then mitigating those effects once they have occurred.
    And I am sure you will all remember the torrential El Niño rains we had in 1998 and the fact that they caused, in many cases, flooding and landsliding. Back in 1982, we had a significant El Niño event as well. Landsliding and flooding occurred then, but in the case of 1982, we had 25 deaths from landsliding. In the intervening years, as part of its hazards program, USGS increased its ability to map landslides and also to predict where landslides would occur and to give advance warning. As a result of that, in the 1998 El Niños, there were no deaths from landslides in the San Francisco Bay area. We don't claim all the credit for that, but certainly some of our technology had an impact on that effect.
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    Another thing that I think is significant that you all would be interested in—and I was, particularly coming from the Southwest, having come to this job from El Paso where water is an extremely valuable and diminishing resource—was our five-year report on water consumption in the United States, which many managers use to predict use in the future. We found out, in our report for 1995, that actual per capita water consumption from 1990 had actually decreased, despite the fact that our economy is booming and the fact that our population is growing, which is an encouraging sign that conservation efforts to encourage Americans across the country to use less water are having some effect, not only as individuals, but as industries. And this is information that I think is both encouraging and useful.
    We are also concerned, as is everyone across the country, about how the American population is expanding into areas that have been used for other purposes. Not only in urban areas that we are familiar with in the East and in the Midwest, but in Western lands as well where town are seeing ranchette developments spring up and non-rural people move into rural settings. The ability to predict that and determine what the impacts are going to be on agriculture, on forestry, on grazing, and on the other uses of the land are extremely important, not only on Federal lands, but on private lands as well.
    We have been able to map and describe with our base inventory of information—100-year archive of historic maps and 30-year archive of satellite data—where these things not only have occurred, but where the projection are that they will occur. And this is another case where planners have advanced warning of expansion that they need to be concerned about.
    And, finally, as an accomplishment, I would like to point out that some of the models and data that we provide for the Forest Service, for the BLM, and the Park Service have been used to develop a watershed-based strategy to clean up abandoned mine lands, particularly in the West. One of the concerns that the mining industry faces, and those that manage the lands that they are on, is how we remediate areas where there have been problems.
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    One of the things we have been able to help understand is the relative severity of those problems and what is commonly misunderstood is that many of those areas had natural contributions of mineral matter anyway, before there was any mining. This baseline information is extremely important in understanding what kind of remediation is appropriate and necessary. And we think we have assisted those other bureaus in the Department of the Interior and other partners in understanding that and in developing sound restoration strategies based on our scientific understanding of what is going on there. Those are just a few examples, Madam Chairman and Members, where I think we have been helpful.
    In the Fiscal Year 2000 budget, we are requesting $838.5 million, an increase of about 5 percent, over our budget for 1999. And we hope that this budget, as in the past, will allow us to deliver relevant products, not only regarding hazards, but regarding resources and applications of science that are useful to all of our customers in the year 2000.
    We work very closely, historically, with the Park Service, with BLM, the Fish and Wildlife Service, and other Interior bureaus in providing scientific information that they can use in their land and resource management responsibilities. In fact, over 20 percent of our budget goes to those purposes.
    In the year 2000, we are adding and requesting $15 million of additional money to bring integrated science to their service. Through direct consultation with them, we will develop science strategies that involve geology, biology, land imagery information, as well as water resource information, to meet more integrated science needs. That is a new feature of our budget request for the year 2000 and we and the other agencies are working very closely to identify what the needs are.
    We are also requesting an increase in our ability to deal with natural disasters. Fifty billion dollars a year is the neighborhood cost for the impact of natural disasters on this country. Clearly, usable scientific information to warn people of disasters and then to deal with their effects is of increasing value as we urbanize and as we seem to gather our populations in areas where natural disasters are more prevalent.
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    The fact that we had three devastating hurricanes in 1998—Bonnie, George, and Mitch—gave us an excellent opportunity to see where we were in dealing with those disasters and where we could improve. Sticking to Hurricane Mitch, we were able to deliver significant information in support of other Federal agencies assisting Central America that could be used to mitigate the disasters, which has many applications in this country as well as in Central America.
    We learned in that process that putting information together with all of the technology we have these days is not the big challenge. It is putting the information in a form where it can be used. And so we learned that we need protocols and data standards before it can be used in decisionmaking. So, in the year 2000, we are requesting additional money, $8 million, to develop and further refine a disaster information system that will allow that kind of information to be useful not only in predicting disasters, but also in dealing with the effects of those disasters.
    We are also requesting $5.5 million to upgrade our ability to anticipate natural disasters, to improve our stream gauging network, and to improve our seismic monitoring network so that we can warn and inform before disasters occur.
    And, finally, in this vein, information is the name of the value we provide to communities and agencies that need to predict and deal with the disasters. There is a $10 million request in our budget through the Community and Federal Information Partnership to improve our ability to give this information to local communities, to State agencies, and others. Two-thirds of that will go out of the Bureau in grants and contracts to those organizations to make our information and that of other agencies available to them. It will create their resource-related data bases that they need for that. That is part of the $39.5 million administration effort in the whole partnership program.
    I want to conclude with some comments on restructuring. Our budget has been modified in the year 2000 to make a truer representation of what money is going for science and programs and what money is being used for administrative purposes, such as facilities and science support costs. So if you look at our budget, you will see many program lines that look like they have been decreased. The fact is that in most of those lines the science money remains the same; the money that has been taken out has been put in lines to identify what it is is used for: administrative monies and facilities monies.
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    So now you will see what you are getting. We will have a clearness in budgeting program that we think will serve not only those of you that have to look at our programs, but also those who we are dependent as partners and customers as they work with us and have some true feel for where their money is being invested. We think this is a significant step, along with our ability to integrate our science to better serve our customers.
    We are also looking forward, Madam Chairman, to working with this Subcommittee as we deal with adjustments to the National Geologic Mapping Act, which we think is a great success story in our partnership with the States, to make sure that the States continue to receive the appropriate funding for their efforts. We are also looking forward to working with your colleagues on the House Science Subcommittee to reauthorize the National Earthquake Hazards Reduction Act, which is authorized through 1999, but which needs reauthorization after that.
    So, with those comments, Madam Chairman, I will close and let the others go ahead and be, of course, willing to answer questions when my turn comes.
    [The prepared statement of Dr. Groat may be found at the end of the hearing.]

    Mrs. CUBIN. Thank you very much, Dr. Groat. The Chair recognizes Nina Hatfield for her testimony.

STATEMENT OF NINA HATFIELD, DEPUTY DIRECTOR, BUREAU OF LAND MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR
    Ms. HATFIELD. Thank you, Madam. Madam Chairman and members of the Subcommittee, I appreciate this opportunity to appear before you today to discuss the Fiscal Year 2000 budget request for the Bureau of Land Management energy and minerals programs. I would like to share with you some examples of how the BLM continues to try to improve its minerals programs so that we can provide better service to producers who operate on the public land, while ensuring that environmentally sound recovery of mineral resources takes place.
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    To support these goals, the President's Fiscal Year budget proposes about $1.2 billion for the BLM, including funds for the operation of the Bureau, payments in lieu of taxes, construction and facilities maintenance, land acquisition, as well as hazardous materials and firefighting activities across the entire Department of the Interior. Of that $1.2 billion, $107 million of it are devoted to energy and mineral activity.
    Our workload is considerable and continues to grow. At the end of 1998, there were over 20,000 producing oil and gas leases; 128 producing coal leases; and about 768 leases of other mineral resources. From these activities, the States received revenues totaling about $550 million in 1998. Federal royalties from these mineral activities are projected to increase in the year 2000, totaling about $1.2 million, which would result in payments to the States of over $600 million.
    I would like to highlight just several of the programs and activities that we are focusing on. In December, the BLM proposed comprehensive oil and gas regulations to consolidate and streamline our current BLM oil and gas regulations. These regulations had the effect, we believe, of giving operators greater flexibility in meeting certain agency requirements and ensuring that appropriate bond amounts covered costs such as reclamation. In response to public requests and to allow an optimal time to analyze and comment on the proposed regulation, the comment period has recently been extended to June 4 of 1999.
    On February 9, BLM published its proposed hard rock mining surface management or 3809 regulations. These are intended to prevent unnecessary or undue degradation of public land resources by mining operations and improve the clarity and organization of BLM's existing 3809 surface mining regulations. A series of public hearings are planned throughout the West and in Washington, DC, to gather comment on the rules. No final regulations will be published before October 1, 1999, in accordance with congressional mandates.
    In BLM, we expect that exploration for coalbed methane will increase greatly over the next few years, especially in Wyoming and the Rocky Mountain States. Operators in BLM are awaiting the Supreme Court's decision about whether the ownership of coalbed methane gas adheres to the ownership of the coal, rather than to the ownership of the oil and gas. We are working diligently within BLM towards trying to develop solutions to handle the flood of applications for permits to drill that we are expecting that will follow the court's decision.
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    Recognizing that oil prices are as low as they have been since 1975 and that operators were threatened with not being able to continue production on properties with low production, BLM has implemented a two-year policy of granting a suspension on leases with stripper oil properties, those being properties that average 15 barrels or less of production per day. In addition, our existing regulations will allow us to make a case-by-case determination about whether to grant a suspension for other operators.
    We continue to pursue measures that would increase our efficiency, as well as promoting environmentally sound recovery of mineral resources. And we look forward to continuing to work with members of the Subcommittee, the public, the States, and the industry to improve our program. And I would look forward to answering any questions that the Committee might have.
    [The prepared statement of Ms. Hatfield may be found at the end of the hearing.]

    Mrs. CUBIN. Thank you very much. The Chair now recognizes Dr. Kitsos.

STATEMENT OF THOMAS KITSOS, ACTING DIRECTOR, MINERALS MANAGEMENT SERVICE, U.S. DEPARTMENT OF THE INTERIOR
    Dr. KITSOS. Thank you, Madam Chairman and members of the Subcommittee. I want to submit for the record, through your Committee clerk, a copy of a report entitled, ''A Road Map to the 21st Century.'' This report discusses in some detail the Bureau's rationale for and approach to reengineering our royalty management program, which is one of our top priorities for Fiscal Year 2000.
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    [The information may be found at the end of the hearing.]

    Dr. KITSOS. As you know, Madam Chairman, the Minerals Management Service really has important missions for managing our nation's OCS in an environmentally sound manner and collecting, verifying, and distributing mineral revenues in a timely manner, revenues generated from Federal leases onshore and offshore in Indian lands.
    In carrying out this mission, MMS programs account for about 27 percent of the natural gas produced in the United States and about 20 percent of the oil produced in the United States. From an economic standpoint, in Fiscal Year 2000, MMS, we estimate, will collect about $4 billion in Federal mineral receipts. And of that $4 billion, the distribution goes something like this: $611 million in mineral revenue payments to onshore States; $106 million in shared OCS oil and gas receipts with coastal States; $150 million to Indian tribes and individual mineral owners, Indian mineral owners; $897 million transferred to the Land and Water Conservation Fund; $479 million to the Reclamation Fund; and the remainder, about $1.9 billion, to be deposited in miscellaneous receipts in the Federal Treasury.
    In the last five years, MMS, we think, has had a very sound record. We have streamlined our operations. We have reduced overall personnel by 12 percent and supervisory positions by 23 percent. We have reengineered many of our operations. We have received the Vice President's Hammer Award twice and numerous other environmental awards. We have held 14 offshore lease sales, including three record-breaking sales in the Gulf. We have grossed over $4 billion in bonus bids for the Federal Government.
    We are conducting pilots on Royalty-in-Kind in Wyoming and for oil and royalty offshore gas in Texas. We have built a consensus on offshore leasing issues, making it possible to consider a lease sale in one controversial area, the eastern Gulf of Mexico and to actually hold a lease sale in another, the Cook Inlet in Alaska. We have worked hard on settling royalty claim disputes. We have fulfilled our trust responsibility to Indian tribes by working closely with BIA and BLM on a joint laboratory in Farmington, New Mexico, creating more cooperative programs and internships with Indian tribes and resolving a number of long-festering policy disputes.
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    We have also assisted in the passage of legislation important to our programs. Most of that legislation came out of this Subcommittee and this Committee: the Deep Water Royalty Relief Act; the Royalty Fairness and Simplification; amendments to the Oil Pollution Act of 1990. We have worked with the Senate on ratification of the U.S.-Mexico boundary treaty, which affects deep water tracts in the Gulf of Mexico. And, in the 105th Congress, the Small Refiner Ratification Act.
    We have collected, in the last 5 years, through audit and compliance collections, as much as we had collected in the first 11 years of MMS's existence, about $1 billion.
    While we are proud of these accomplishments, we are not without remaining challenges. These challenges include: implementing the substantial pending effort to reengineer royalty management; studying the likely consequences of continued low natural gas and oil prices; gaining a better understanding to respond intelligently to the challenges presented by deep water OCS operations; regulating an industry that is complex and has become increasingly global in scope; and supporting increasing needs by States, localities, and other agencies for access to OCS sand and gravel for beach restoration and shoreline protection projects.
    With respect to our budget for Fiscal Year 2000, we are asking for $240.2 million to carry out our responsibilities. This is $16.2 million above the 1999 enacted level. However, the requested increase is covered by raising the cap on offsetting receipts from $100 million to $124 million. Because we are able to fund part of our operating budget—actually more than half—with offsetting receipts and because of programmatic reductions in several areas, MMS's request for direct appropriations is $116.2 million, or a decrease, of direct appropriation of $7.8 million from the Fiscal Year 1999 level.
    The investments we are proposing in 2000 will be directed into three primary areas. By investments, I mean increases over the enacted Fiscal Year 1999 appropriation. We are asking for an additional $10 million for the royalty reengineering effort; $1.4 million to support Gulf of Mexico activities; and $250,000 for our international organization activities.
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    I would like to briefly discuss each one of these. The royalty management program's reengineering effort was first funded in Fiscal Year 1999 at $5 million and continues to be MMS's number one priority in Fiscal Year 2000. The initial reengineering effort actually began in 1997, and it is designed to prepare the royalty management program for the challenges of today and the future.
    This new system will be organized around two core business processes: the ''financial management'' process, which will focus on financial accounting and the receipt and distribution of revenues, and the ''compliance and asset management'' process, which will focus on the entire realm of activities related to producing properties. Although the effort will take several years to fully implement, it is necessary because of new legislative mandates, changing energy markets, the need for more cost-effective operations, and outdated computer systems.
    We believe that this initiative is an excellent investment for several reasons: (1) because it will improve the timeliness and accuracy of payments to States and tribes; (2) it will save the minerals industry millions in operating and administrative costs by streamlining reporting requirements by 40 percent; (3) shorten the compliance cycle from 6 years to 3 years, aligning the processes more closely with industry's processes; and (4) it will improve information access and sharing capabilities. We also feel that, when we are fully implemented in our reengineering program, we will have reduced our administrative costs by about $3.5 million.
    The offshore program in the Gulf of Mexico remains active, despite low oil prices. We are asking for an increase of $1.4 million in this category. In these times of declining oil prices and cutbacks in the oil and gas industry, it may seem unusual to ask for increased funding for the Gulf. However, the fact is that the Gulf of Mexico workload continues to grow. In the past few years alone, MMS has issued over 4,400 leases, which not only represents a substantial number of new leases to industry's inventory, but a dramatic increase in MMS responsibility.
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    Industry appears committed to continue exploration and development activities in the Gulf, with continued industry interest in exploring and developing sub-salt areas in the shallow waters of the OCS and, especially, in deep water OCS areas where there have been over 125 wells drilled in the past year. There is an increase in demand on MMS to fulfill its regulatory responsibilities in a timely manner. We are currently responsible for regulating and inspecting nearly 8,000 leases, about 3,900 platforms, and over 20,000 miles of pipeline in the Gulf of Mexico. The tremendous benefits of the OCS program justify, we believe, the request for a slight increase in funding Gulf activities, and it will be an excellent investment in our future.
    Finally, let me just note that, to ensure that the United States is a factor at the international table, we need to vigorously pursue involvement and participation in international organizations that oversee mineral exploration/development. This will support U.S. policy objectives and provide assistance for U.S. industry interests and also continue to advance our commitment to safe and environmentally sound offshore oil and gas management.
    Currently, we are involved with a number of countries in developing cooperative information sharing arrangements, such as Norway and the United Kingdom. We are providing some technical assistance to countries interested in developing the Caspian Sea. We are working with Kazahkstan and Turkmenistan on regulatory regimes. We believe that this work is very important not only internationally, but for our domestic industry so that we have a level playing field with respect to their investment overseas. So we are asking for an increase of $250,000 in that category.
    This concludes my opening remarks. I will be happy to answer any questions, Madam Chairman.
    [The prepared statement of Dr. Kitsos may be found at the end of the hearing.]
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    Mrs. CUBIN. Thank you very much. Ms. Karpan.

STATEMENT OF KATHY KARPAN, DIRECTOR, OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT, U.S. DEPARTMENT OF THE INTERIOR
    Ms. KARPAN. Thank you very much, Madam Chairwoman. Nice to see you again and renew a longstanding friendship and working relationship.
    We have submitted testimony for the record and I will be very brief in highlighting what is in our budget, since there is very little that has changed from Fiscal Year 1999. For Fiscal Year 2000, we are asking for $305,824,000 with 640 full-time total employees. That represents $27 million more than we requested and received in 1999.
    Two million dollars of that goes to uncontrollables in both the Abandoned Mine Land program in Title 5—and I should stop and say for members of the Committee that may not be as familiar with our program. Basically our agency administers one Act, the Surface Mining Control and Reclamation Act of 1977, and it operates under two titles. Title 5 has to do with active mining. Title 4 has to do with the reclamation of sites that were mined and then abandoned prior to the passage of the Act.
    The one remarkable thing in our budget request this year is the $25 million increase in money for abandoned mine land funding. And I remember, Madam Chairwoman, you offered and last year did send word to the House Appropriations Committee or your support for more funding. I know that Congressman Rahall has supported increased funding and as have other members of the Committee, and we appreciate it very much.
    But even more important than this significant increase, which is 10 times the increase we had last time, is that the administration is going on record in this budget as saying it wants to build up in its budget request to the point where in 2003 we would have what would be called ''full funding.'' That is, the amount of our request would equal the revenue from the abandoned mine land fees. And that is a goal that has been fervently sought for many years by the States and tribes and we are very excited about it because we believe that this will accelerate the important clean up work that is going on in literally hundreds of sites around the country.
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    If I could, Madam Chairwoman, with the balance of my time, I would like to respond, albeit too briefly, to Congressman Rahall's comments, which I take very much to heart. Congressman, you have been a very good friend to our agency over the years. We appreciate that and we hope that we will merit your support in the future.
    You know, when I worked for Congressman Roncalio, I didn't last long enough to see SMCRA passed, which tells you how many years that struggle went on. But I remember when our office was right down the hall in room 1315. We realized there were all kinds of trade-offs involved in the passage of that statute and, as the years go on, the way you weigh and balance those trade-offs changes. And I believe that the public has come to demand more and more of us in the mine regulation business.
    And I have asked myself, how is it that the mountaintop mining issue seemed to explode on the scene as it did and, unfortunately, right as I took over the helm at the Office of Surface Mining? And we went back and looked and it is not because we have had big equipment in the hills of West Virginia only recently. Some of the biggest equipment at the Hobet Mine has been there since 1983.
    But what we saw happen is, in the last three or four years, a dramatic spike upward in the amount of acreage that has been affected by mountaintop removal mining. And I think that is a function of the Clean Air Act encouraging companies to go after low-sulphur coal and the economies of scale caused by companies wanting to save money at a time when coal prices are declining. But what has happened is that the public is seeing these large valley fills and, in addition to all the other impacts of mining, has begun to ask questions of us about ''how big is too big?'' ''Do you understand all of the impacts on terrestrial life and aquatic life?'' And I believe that the public has rightly asked us to lift the bar, to raise the bar, in the level of scrutiny and the degree of regulation that we apply to these issues.
    We immediately began discussions with West Virginia, more than a year ago, and we have been working to remediate many of the problems that you have identified. We have talked with other Federal agencies and had discussions underway to conduct an environmental impact statement, even in advance of this past July, when, of course, we had the litigation commence in West Virginia where the West Virginia Highlands Conservancy sued, not us, but sued the State of West Virginia DEP and the Corps of Engineers on two sets of issues: one, on the Clean Water Act questions; one on the SMCRA questions.
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    We have seen a partial settlement of that litigation, the Clean Water Act part, but the SMCRA issues have yet to be settled. And we will work with the State. We think there is more to be done there.
    Two things we want to tell you about what is coming out of the settlement. First, in terms of righting the regulations, of correcting where correction is needed. This programmatic environmental impact statement will involve four Federal agencies, as well as the State of West Virginia. We will have our agency, the Environmental Protection Agency, National Fish and Wildlife Service, and the Corps of Engineers. What we want to do is to understand how the Clean Water Act, SMCRA, the permitting of the Corps, the Endangered Species Act and other acts can be best coordinated to achieve better protection and better regulation.
    At the end of that period of time, we may be coming to you for additional authorities. We may have regulatory changes to make. But we will have the science there to make those decisions.
    In the interim, we are in the process of negotiating a memorandum of understanding to deal with another question you raised, and that is the coal miners in West Virginia who are worried about being put out of work while these regulatory issues are being sorted out. The memorandum of understanding will set, if not exactly a bright line, a line where, if you have a permit that is in the pipeline process that involves a watershed with 250 acres or less, then, generally speaking, that is going to be allowed to be permitted by the Corps of Engineers, as it has traditionally been done, with a general permit. If it is above that size, then there will be an individual Corps permit required unless the company wishes to negotiate and downsize the size of that operation.
    We have 38 permits in the pipeline right now. Sixteen of them can go forward with a general permit. Six are smaller scale, but there are some questions being raised so they have got to be worked on. And 16 will require individual permits, though, as we say, the coal companies are working on them.
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    Finally, I want to say that we have produced for the Congress, at the request of the House Appropriations Committee, a report on mountaintop mining that has been subject to extensive comment. And I believe it could be summarized, briefly, in this way: We agree with you in two general areas of concern. Approximate original contour was not being enforced as it should be. We have a formula that we have discussed with not only West Virginia, but the States of Kentucky and Virginia that we believe will give us a site-specific, statutory-based way of making sure that the size of the valley fills is minimized by maximizing the amount of excess soil that must go back on the mountaintop, consistent with the statute.
    As for the post-mining land uses, we have had some unauthorized uses that may have been approved and we are reviewing those. We believe additional guidance is necessary and that is work is underway. And, in fact, in our report, we do have an action plan that will specify that in great detail.
    But, in conclusion, Madam Chairman, I want to assure the Committee that this subject has been at the top of my agenda throughout my tenure. We are working on it. We believe we are making real progress. And we would be glad to come up and brief you and discuss this issue at any time. And I thank you and I will welcome additional questions.
    [The prepared statement of Ms. Karpan may be found at the end of the hearing.]

    Mrs. CUBIN. Thank you very much. I will begin the questioning with Ms. Hatfield. I want to talk about coalbed methane a little bit. As you referred to, coalbed methane development in the Powder River Basin in Wyoming will increase significantly over the next five years. In fact, there are approximately 1,500 applications, APDs, to be filed with the BLM each year. And, due to staff limitations in 1998, Buffalo, Wyoming's resource office only approved about 350 out of 450 applications received. So there is a backlog for 1998 already. The BLM is scheduled to complete an EIS for this southeastern portion of the Powder River Basin in the summer of 1999. And once that is done, there will be another huge number of APDs that will be filed. Does your Fiscal Year 2000 budget contain additional resources to cover this huge increase?
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    Ms. HATFIELD. No, it does not. We recognize that there is a tremendous potential here for a huge workload that we are trying to deal with. Currently we are trying to use our existing resources in terms of trying to move people to where the APDs are going to need to be reviewed and issued. And we anticipate that, given our current staffing level, we could probably do as many as 400 APDs in this year.
    But we also have a problem in the fact that issuing each one of those APDs really has some downstream costs for us and we are trying to make sure that the environmental requirements are met, that we can do the appropriate review once they are in operation. So it is not just a one-year issue for us. We are looking at this influx probably coming over five years with additional downstream costs there.
    In terms of our Fiscal Year 2000 budget we are really trying to make decisions about priorities. We are also looking at an increase in grazing permits that we have to issue and making adjustments to our wild horse and burro program. We have not made significant progress in meeting our AMLs there. So we really are just trying to look at how we can adjust priorities.
    Mrs. CUBIN. Well, what absolutely does not compute to me is that coalbed methane could mean a big boon to the Federal Treasury, in which case we could afford to hire the people that we need in years to come for monitoring and whatnot. And I can't understand why not one extra person has been sent to Wyoming to deal with 1,500 applications a year when you even project yourself you can only do 400 in a year and that is more than you did in 1998. This doesn't make any sense.
    Ms. HATFIELD. Well, we would anticipate that we would probably need as much as $2.5 million in each year of the next 5 years to accommodate this number of APDs.
    Mrs. CUBIN. Well, why did you not ask for that?
    Ms. HATFIELD. As I say, it is really just a matter of trying to deal with our workload. In every single program that we have, our budget has been flat. We have reduced our number of FTE about 10 percent over the last 5 years in an effort to try to move as much resource as we can to actual on-the-ground work. But in every single program we have, we are suffering with an increased workload, increased visitation to the public lands and it just really is a matter of trying to make the dollars that are available to us stretch over our many responsibilities.
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    Mrs. CUBIN. But you have to understand that, maybe, investing where income could come back to you ought to be a priority. But I am going to tell you that the longer I have served on this Committee, the more convinced I am that Federal land managers do not have enough money to do the job that they—they do not have the resources that they are required by statute to do. And I am currently looking at alternative ways to fund management of Federal lands. For example, the Land and Water Conservation Fund now can only be used for land acquisition. And I can't understand why we would want to continue to acquire and acquire when we can't afford to manage what we have. So maybe we should consider using some of that money to help with land management as well.
    I want to follow up on these. Oh, gosh, I have too many questions, but are you going to change any staff allocations to help deal with this huge influx of permits? I mean, it just is not a tenable situation. We have to do something, whether it is hire contract people to come in to help those folks get those permits processed or something. We have to do something and I would just like your guidance on it. If we have to look at your budget and take it out of someplace else, then you need to tell me where to take it from. But we have to deal with this. And, you know, I think it is kind of cowardly—not your fault—but to not acknowledge that, to just leave it up to us to go ahead and put the money in there.
    Ms. HATFIELD. Well, I am trying not to be cowardly.
    Mrs. CUBIN. Fine.
    Ms. HATFIELD. I am trying to recognize the fact that we do, as you say—I would agree with you—that the job that we have in terms of managing the public lands on what has really been a flat budget over a number of years and trying to just struggle with uncontrollable increases as you deal with the management, that we are, as I say, trying to deal as best we can with competing priorities.
    Now, certainly, with the coalbed methane, we recognize that we have a serious problem to try to deal with. We are trying to shift some resources there. But we have to shift those resources within the appropriated dollars we get.
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    Mrs. CUBIN. Well, I just hear you saying you keep trying but I don't see any evidence of it either in your budget or in reallocation of resources, so, you know, I don't want to be argumentative and my time is up, but if the Committee will indulge me, I have one more question, either for you or for Dr. Kitsos. I am looking at the mineral revenue payments to the States projections. The actual, for Wyoming in 1998, is $236,883—I mean, million, excuse me. And then the estimate in 1999 is up to $254,392,000. And in 2000, $263,168,000.
    Now since the price of oil is down, the price of coal is down, the price of trona is down, the price of gas is down, I wonder what these rosy—I would love to believe it since Wyoming, you know, really benefits. But I just wonder what these projections are based on. Is it based on larger production of gas over in Sublette County or where do these projections come from?
    Ms. HATFIELD. I think that we are just looking at the fact that in the last few sales we have gotten an increased return on what has been put out there to be leased. So it is more of that kind of a projection, rather than the fact that the prices, in some cases, are going down, have gone down. But in terms of the recoveries that we have made in leases and projected royalties, we think it is going to go up slightly. It will not go up a great deal, but it may go up slightly.
    Mrs. CUBIN. I am really not sure that——
    Ms. HATFIELD. We would be glad to share—I would be glad to provide you some more details for the records, if that would help.
    [The information may be found at the end of the hearing.]

    Mrs. CUBIN. Yes, I do have other questions that I will submit and, hopefully, you can get the answers to us by March 5 because we are going to be doing our budgeting and I absolutely think we need more resources to do that coalbed methane.
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    [The information may be found at the end of the hearing.]

    Ms. HATFIELD. Certainly.
    Mrs. CUBIN. I really don't understand how you can base projections without considering the prices down but that is it, for another day. Mr. Underwood.
    Mr. UNDERWOOD. Thank you very much. Dr. Groat, I am very interested in your testimony where you talk about being a resource for sound science and you discuss a program called DOI Science Priorities, where you are going to provide sound impartial scientific information. This reminds me of I guess a series of issues that pertain to Guam, but it also pertains to many areas where there may be areas, as you well understand, where scientists disagree about the information and come to very different conclusions. But, in our case, we had the Biological Service at one time basically conclude that we had some endangered species on Guam as the result of an alien predator and the response was to declare a critical habitat and declare a wildlife refuge on our island.
    And I think this actual scientific information, in that instance, was ignored. And I think it was not utilized. I think that the intent all along was to acquire some Federal control over the property and, admittedly, there may be some evidence pointing in that direction, but it was not originally a problem of critical habitat. It was simply a problem of an alien predator.
    So my question to you is how do you propose to deal with issues like this when the scientific information, perhaps, points in one direction, but some of the agency subunits that you are servicing want to go in another direction?
    Dr. GROAT. Mr. Underwood, that is a question that the scientific community has to deal with often and it is a very harsh reality sometimes to learn that, while we may think the science is what should govern and direct the question—not only the question, but the answer—that there are many other pressures involved in the decision that go beyond science, whether it is economics, politics, morals, or whatever it happens to be. And we do find, at times, that what we consider good scientific information doesn't guide a decision in the direction we might think the science would take it.
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    So our response to that is, particularly through the DOI Science Initiative, is to work closely with those agencies that we are providing that science to and receive agreement that this is science they need and that they want to use so that we are all together from the beginning, not only on the science itself, but how it is going to be used. But, in many cases where we do make scientific studies and, while they are peer-reviewed by the scientific community, when they enter the decision process, then they do end up pushed aside, perhaps, in favor of either other views of the science or of other conditions. And it sounds like you have a case of that.
    Mr. UNDERWOOD. Yes, I think we have a clear case of that and it is very regrettable because we have had a series of policy problems that seem quite intractable as a result of that basic decision, which was to ignore the science,
which was how to deal with an alien predator.
    Which brings me to my next question. In this particular instance, we had a problem with the brown tree snake and, yet, some of the research money that is being now devoted—and I don't know how strongly your agency is involved in it. Much of the money that is being devoted to the brown tree snake is actually designed to do research on how to keep it on Guam, as opposed to going to Hawaii or other places with senators. So my question is what kind of resources are you devoting? And I am hoping to push you in the direction of actually trying to find ways to eradicate the snake.
    Dr. GROAT. Mr. Underwood, I can't give you specific numbers as to what we are still putting into the brown tree snake problem. I sympathize with a control strategy that intends to keep it one place rather than keeping it from spreading another place. And, certainly, the whole issue of invasive species, whether it be brown tree snakes in Guam or cheat grass in the Great Basin, we have got a tremendous problem to deal with. And we are faced all the time with where our limited resources for these kinds of purposes get spent. I would be happy to get back to you, for the record, on what amounts of money we are still spending on that problem, but we certainly haven't abandoned the general problem of invasive species.
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    [The information may be found at the end of the hearing.]

    Mr. UNDERWOOD. Please do. I would certainly like it for the record. I would certainly like to see what we can do in that regard and move towards the issue of trying to find a way to eradicate the snake.
    Lastly, what is your agency doing in terms of deep seabed mining? Are there any plans or——
    Dr. GROAT. To be honest with you, Mr. Underwood, deep seabed mining is not a terribly high priority within our minerals program at this time, largely as a result of the economics—the near-term economics—of whether those resources would be developed. As you probably know, we have had a long history in the resource assessment process and in the geology of deep sea areas to look at those resources. But I would have to say, at this time, it is not as high a priority as it was in years past.
    Mr. UNDERWOOD. Okay, well we would like to take another look at that and, hopefully, with the cooperation of the Chair, we will be able to take a closer look at that and, hopefully, have a hearing on it. Thank you.
    Mrs. CUBIN. Now if the Ranking Member wants it, I bet he will get it.
    Mr. UNDERWOOD. Thank you.
    Mrs. CUBIN. Mr. Thornberry.
    Mr. THORNBERRY. Thank you, Madam Chairman. Dr. Kitsos, in your written statement, you mentioned three pilot programs involving RIK related programs. It seems to me you might add a fourth and that is the recent announcement where part of our royalty oil from offshore in the Gulf is going to be used to begin to replenish the oil which has been sold out of the Strategic Petroleum Reserve. Can you tell me how the administration looks upon that decision and its affect on the budget? How have you worked that through OMB? How does it count it? Does that affect your budget or the General Treasury?
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    Dr. KITSOS. Well, it will affect the budget of the General Treasury. We expect that we will be taking royalty oil in both Fiscal Year 1999—because we expect to start fairly soon—and then, of course, in Fiscal Year 2000. The President's budget estimates that we will forego $170 million in Fiscal Year 1999 and $200 million in royalty payments in Fiscal Year 2000. Presumably, when that oil is sold sometime in the future, that will be recouped, but there will be a reduction.
    Mr. THORNBERRY. And what price of oil is the basis for that? Do you have that in front of you?
    Dr. KITSOS. My understanding is the price figures are $12.39 a barrel in Fiscal Year 1999, going up to $14.12 a barrel in Fiscal Year 2000.
    Mr. THORNBERRY. I hope it gets to $14 a barrel. It is nowhere close to $12 in my neck of the woods right now.
    Another of your pilot programs is you talk about the Texas 8(g) gas and, as a matter of fact, I understand that some of that gas, which is worked through the General Service Administration, actually heats the building that we are in now. The land commissioner in Texas has recently made a proposal of greatly expanding the amount of gas which the State would exchange for electricity, which would then be used to heat schools and government buildings. Have you all looked at something along that line, where Federal gas can be expanded and used for whatever, military installations or other government facilities, which can get you a better return on the gas and cheaper power prices?
    Dr. KITSOS. Yes. As you know, we have a cooperative agreement with the Texas GLO and that office, of course, has a long experience in taking natural gas from their State leases. They create value for the State by supplying State agencies with RIK gas. And we have worked with them and we are able to learn more about what they are doing. We are using the Texas model in partnership with the GSA and we will transfer RIK gas to GSA who will then, in turn, distribute it to Federal agencies to create value for the Federal Government. We are working with the Texas GLO to look for additional opportunities to expand this pilot.
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    Mr. THORNBERRY. But are you looking to expand it beyond just the gas you get from Texas and don't you think there is a potentially broader application for the Federal Government?
    Dr. KITSOS. Well, we are also beginning the early planning stages for a large gas pilot project in the Gulf of Mexico and that will certainly look beyond the scope of the Texas project.
    Mr. THORNBERRY. Let me ask you about something that has been in the papers a fair amount recently. There have been all sorts of articles about how the Department, not necessarily MMS, but the Department of the Interior is no longer even wanting to talk to the industry about oil valuation problems. Number one, is that true? Are you all not even able to talk anymore? Number two, you are a new person in the job, kind of, hopefully, a fresh approach. Do you think is ever going to be worked out or is this going to be a standoff where we call each other names in the paper and say ugly things about each other, as has happened recently?
    Dr. KITSOS. Well, I remain optimistic, Mr. Thornberry, that we are going to be able to work this out. The position of the Secretary is this: If the industry has some new ideas to resolve the three or four issues that still separate the Department and the oil and gas industry—new ideas that we haven't considered before—and can provide us some specific information in writing, we will take that under advisement, and we will explore the opportunity to pursue that. If those ideas are consistent with the requirements of the Department to obtain the best value for the American taxpayer, we would be happy to talk about that. And, in fact, I have put that in writing to members of the industry. I have talked with them on the phone. We are waiting for a reply. I believe that they are working on that.
    The Secretary has also made it clear that he does not want any of us to rehash the old issues, to revisit what has been discussed over the three years. And so that is sort of the dividing line. The door is not closed. We still think we have an opportunity. The issue is we don't want to go back and reinvent all those old arguments.
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    Mr. THORNBERRY. Well, it doesn't seem to me to be particularly helpful if you say everything we have argued about over the past, we are not going to discuss anymore. Now if you want something new to argue about, you can bring that, but nothing else we will talk about. And I have to say—and, again, this is not directed to you personally at all—but to have the kinds of comments, inflammatory comments, really, made in the press as have been made recently does not help anybody solve this problem. It only increases antagonism and that is too bad. Because when you start fighting with each other, we really lose sight of the taxpayers and what this is all supposed to be about. Thank you, Madam Chairman.
    Mrs. CUBIN. Thank you, Mr. Thornberry. Mr. Rahall.
    Mr. RAHALL. Thank you, Madam Chair. Ms. Hatfield, let me first congratulate BLM on issuing the proposed 3809 rules, despite all the roadblocks that Congress keeps throwing in your way and trying to prevent you from doing it. My personal view is that these regulations will accomplish much of the environmental title of my mining reform legislation. I just would like you to know that we will continue along with our friends, some of our friends, on both sides of the aisle in the Appropriations Committee to continue to resist riders to appropriations bills on this particular issue.
    Ms. HATFIELD. Thank you. We certainly think that it is an opportunity to try to update rules that were originally passed in 1980s to address current needs. We are certainly interested in the public comment. The public comment period is going on right now. We look forward to providing better public protection for the environment.
    Mr. RAHALL. And you have until October, did you say, of this year on those?
    Ms. HATFIELD. Right. Under the present mandate, we could not issue those regulations until after September 30. We are in the comment period now which is going to run until May. We would expect that we will have some significant public comments and a lot of comments to try to deal with in that intervening period.
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    Mr. RAHALL. Okay. Keep up the good work.
    Ms. HATFIELD. Thank you.
    Mr. RAHALL. Director Groat, let me also express appreciation for all that you do at the Survey. For the benefit and, perhaps, the amusement of the Chair as I told you before we started the hearings, I would like to note that the Association of American State Geologists have selected me to be this year's recipient of their pick and gavel award for my support of the geosciences in public policy.
    Mrs. CUBIN. I thought maybe you needed some dental fillings or something there.
    [Laughter.]
    Mr. RAHALL. We did spend a considerable amount of time on these issues when I was the subcommittee chair and it is nice to know that someone still remembers those struggles. I am sure you don't, Bill.
    [Laughter.]
    Director Karpan, OSM is proposing an increase in AML funding, as you have noted, and I know you have probably had to do much battle with the Office of Meddling and Bumbling to get it approved.
    [Laughter.]
    So I just wanted to congratulate you. Otherwise known as OMB. But, anyway, prior to the hearing, I submitted a number of questions to you and you were kind enough and fully respond to those in writing and I would ask that they be made a part of the record at this point.
    Mrs. CUBIN. Without objection.
    [The information may be found at the end of the hearing.]

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    Mr. RAHALL. I only have one follow-up question to those questions, Director Karpan. As you know, I am deeply concerned with how the approximate original contour reclamation standard was being construed within the context of mountain removal mining and you did touch upon this in your opening statement. Could you provide us with perhaps a bit more detail of what was in your written response on just exactly what this pilot AOC formula, to which you refer, consists of?
    Ms. KARPAN. Thank you very much, Mr. Rahall. We asked a gentleman named Mike Castle who, for 15 years, had mined in West Virginia, who has a degree in mining engineering as well as a law degree, to go back and take a look at the legislative history, including some of the very first versions of SMCRA. And what he came out with is, if you will, starting out with the whole mountain and saying, we will take the coal out and then we will have spoil and it will swell for a certain amount. And now we have got to figure out how much of that spoil, under the statute, should go back up on the hill.
    And it would be very site specific. Because, for example, to assure the stability of the slope, you might have a certain kind of configuration in one setting and a different in another, but that would be a key factor in how much, because you couldn't just put it all back steep. It would have to be in a way that would be stable, would not be subject to landslide or runoff and siltation in the streams. Then you would take a look at how much spoil would be needed for drainage, to construct your drainage; how much spoil would be needed for access and maintenance.
    The idea behind it would be that you would walk through each of these areas where the statute would indicate that you could dispose of your spoil in a certain way. And, up-front in the permitting process, before—you see, I think the problem in the past was, once they are out there reclaiming in a certain way, we could never enforce any actions. The judge would say it is too late. I think the beauty of this is you will run the numbers up-front. You will do the computer calculations up-front and then the company will know how small that bill has to be.
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    Now we have not yet put it to the test. That is happening right now. But in our preliminary discussions with engineers in West Virginia, Kentucky, and in Virginia, they seem to think this could work. And I would like to give it a try. It will be very site specific and I think it will provide some structure to evaluation that in the past has been, frankly, somewhat subjective.
    Mr. RAHALL. I think that sounds very good and I commend you for that. It is a little different then how I heard the story of one of our State DEP officials describing his definition of AOC before a judge. Looks at his knuckles and those that are leveled off, that is approximate original contour.
    On a separate issue, Director Karpan, one final comment, as I conclude. I do remain deeply concerned with the so-called AML enhancement rule. And we have discussed this in my office. I do not share your level of comfort that surface coal mining can be conducted outside of the auspices of Title 5 of the Act. Nor do I believe that OSM oversight will ensure that abuses do not occur. The only thing I can say at this point is that thank God we had the citizen's suit provisions of SMCRA. I have concluded my comments.
    Mrs. CUBIN. Well, Mr. Rahall, I just wanted to offer my support in working with you on keeping riders off the appropriations bill and I know you will want to support resisting that minerals patent rider moratorium. So I would love to work with you on that.
    Mr. RAHALL. I am sure we will be working together.
    Mrs. CUBIN. Yes, I am sure we will.
    [Laughter.]
    I am sure we will be working at the same time, anyway, won't we? I also ask unanimous consent to insert in the record a statement from the National Association of State Universities and Land Grant Colleges for this hearing.
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    [The information may be found at the end of the hearing.]

    Mrs. CUBIN. I just want to follow up Representative Thornberry's question. This is to Dr. Kitsos, of course, and we talked about this somewhat yesterday, but I do want to have it on the record. It doesn't make any sense to me that, as Mr. Thornberry said, that the Secretary says: Okay, I am not going to talk to you about this. That you have to come up with all the new ideas. This is to the oil companies regarding mineral valuation. You have to come up with something new or I am not going to talk to you. I mean, basically it seems to me that the Secretary's position is oil companies cook the books and I am not going to talk to them about it.
    We can have this game of who can outlast who, because I believe we can get a moratorium on implementing those regulations for as long as he is the Secretary of Interior. But that is not productive. That isn't what any of us want, because we all know we have a problem and we all want to solve it. So I implore you to pass on to the Secretary that I would really appreciate it if he would come back to the table with the companies.
    If I can in any way help facilitate that or contribute to that process, I would love to do that. I know any of my colleagues would. Mr. Rahall would. This is a problem that I don't think we can just slam the door and say I am not talking to you unless you do it my view. I am taking my ball and going home. This country is too great for that. So if you would just pass that on, I would appreciate it.
    Dr. KITSOS. I will. Thank you.
    Mrs. CUBIN. And I thank all of the witnesses for their testimony and please feel free to stay in touch with me, the Committee staff, if there is anything that comes up that we need to know or anything that we could do to help you do your job better. And certainly anything you could tell us to help us do ours. Oh, and one last thing, I will be sending written questions. If you would please respond to those, we will have the date on there. Thank you very much.
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    The Subcommittee stands adjourned.
    [Whereupon, at 3:18 p.m., the Subcommittee was adjourned.]
    [Additional material submitted for the record follows.]

STATEMENT OF DR. CHARLES G. GROAT, DIRECTOR, U.S. GEOLOGICAL SURVEY
    Madam Chairman and Members of the Subcommittee, I am pleased to be here today to present our overview of the U.S. Geological Survey's budget request for Fiscal Year 2000. While this is my first oversight hearing as the USGS Director, I hope to bring to this process an understanding from a customer's perspective having been a customer of and having worked with the USGS for many years.
    Today, I will tell you about recent successes and our highest-priority research areas for FY 2000 and explain how this research fits into the larger picture of science needs for the Department of the Interior (DOI) and the Nation. With extensive capabilities in natural science, the USGS is uniquely able to provide its customers with reliable and impartial scientific information on a wide range of issues. The challenge for the USGS in the 21st century will be to deliver relevant products and services to our customers in an efficient and timely manner.
    But before I move into the details of our budget request, I'd like to share with you what I feel are some very exciting recent results coming from USGS science that have had a direct effect on the lives of many American citizens.
    I'll start with last year's torrential rains of El Niño. While they affected much of the Nation, they hammered the West coast where they brought not only flooding, but the life-threatening hazard of landslides. The results of a similar battle with El Niño in 1982 caused 25 deaths in the 10-county San Francisco Bay region. In 1998, I am pleased to report that not one single death was caused by landslides in the same 10-county region, in part because of the landslide hazard area maps and real-time warnings of increased landslide risk that the USGS was able to provide the region's emergency workers.
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    Another very exciting result from last year comes out of USGS' National Water Use Program. We provide 5-year reports on national water use which water resource managers and planners nation-wide depend on to make critical planning decisions. The most recent survey, released last year, showed some excellent news—per capita water use has declined since 1990 in spite of continued population growth. This suggests that water conservation efforts across the Nation are succeeding in a significant way. Of course, we would have not been able to know this without the USGS' continuous collection and analysis of key natural science information.
    Population growth influences another area of USGS science—understanding the impacts of urban growth. The majority of Americans now live in or near expanding urban areas which is creating new pressures on the Nation's transportation systems and regional infrastructure. A critical question for local and regional planners is where will this growth spread to next? USGS science can help answer this question based on its 100-year archive of historic topographic maps and its 30-year archive of satellite image data.
    The USGS and university collaborators have already provided urban growth patterns in the San Francisco-Sacramento and Baltimore-Washington areas to local and regional officials. The USGS is currently working in the Greater New York; Philadelphia-Wilmington; Chicago-Milwaukee; and the Portland-Vancouver urban areas to provide this key information based on the Survey's long term databases.
    My last example takes us from urban growth to abandoned mine lands on or adjacent to the public lands administered by the U.S. Forest Service, Bureau of Land Management (BLM), and National Park Service (NPS). The USGS is working closely with these land management agencies in developing a watershed-based strategy to provide the scientific information needed for efficient and cost-effective cleanup of abandoned mine lands. This multidisciplinary effort is producing solid results by identifying both the largest sources of contamination and those that do not need attention. This enables efficient targeting of cleanup activities. USGS is also determining environmental conditions that existed before mining began in order to establish realistic cleanup goals. This activity will continue to be of increasing value as additional and more complete information is obtained.
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    These recent results of USGS science are only a few examples of the continuing and direct contributions made to the daily lives of the American public. They also demonstrate how the FY 2000 USGS budget, $838.5 million as requested by the President, will fund research to provide crucial scientific information for the Department's land managers along with other Federal, State and local decisionmakers, and for disaster mitigation and recovery efforts throughout government and private organizations.
    Our FY 2000 budget requests a $40.6 million net increase over FY 1999 enacted funding to expand USGS efforts to increase science support for informed land and resource management, improve hazard warning capability, and increase availability and accessibility of USGS data. The request continues to reflect the USGS's commitment to integrating our scientific disciplines into a unified approach for gathering information, analyzing data, and delivering scientific information to our customers.
    As the Department's science agency, the USGS works directly with NPS, BLM, the U.S. Fish and Wildlife Service, and other Interior bureaus to address their highest priority research needs. In FY 2000, the USGS is consolidating $15 million in current DOI support activities with a requested $15 million increase to focus science resources on the most urgent research priorities of these bureaus. This $30 million in DOI Science Priorities proposal brings the total USGS funding that directly supports Interior bureaus' science needs to well over 20 percent of our annually-appropriated budget.
    The DOI Science Priorities request will enable more high-priority multidisciplinary research to help DOI agencies address increasingly complex issues from a foundation of sound impartial scientific information. For example, for NPS, this initiative will focus an additional $2 million in science support as well as an additional $3 million on the Natural Resource Preservation Program. It will also complement the biologically-oriented support that will continue to be provided by our Biological Resources Division.
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    American communities need environmental and natural resources data to ensure a high quality of life and sustained economic growth. Two-thirds of the proposed $10 million Community/Federal Information Partnership would go to local communities through a competitive matching grant program. This will help them create and use geospatial data and associated technologies. The remaining funding proposed will allow USGS to improve public access to geospatial data through the National Spatial Data Infrastructure. This proposal is part of the Administration's $39.5 million Community/Federal Information Partnership within the comprehensive ''Livability Agenda.''
    Understanding complex ecological problems also requires long-term data. Because amphibians are considered good indicators of ecosystem health due to their sensitivity to many kinds of environmental stress, there is an urgent need to evaluate the severity and scope of their decline. The USGS is requesting an increase of $5.6 million for amphibian monitoring and research to determine the causes and scope of the amphibian population decline.
    Day in and day out, USGS streamgages, earthquake sensors, and other warning equipment are at work monitoring natural hazards to protect life and property throughout the Nation. As good as they are, with the passage of time, they need to be modernized to properly maintain their vigil. We are requesting a $5.5 million increase to accelerate the upgrade of our Nation's natural hazards networks and expand our real-time warning capabilities. This increase will also improve our ability to measure changes in the Earth's magnetic field, an area crucial to today's high dependency on electronic communications.
    Since 1992, natural disasters have cost this country an average of $50 billion a year. Useable, timely scientific information helps relief organizations and local governments save lives and reduce the costs of natural disasters. During the past year, the USGS provided its crucial scientific data for the Nation's response to three devastating hurricanes—Bonnie, Georges and Mitch. Providing our data in such a rapid-response mode aided the search and rescue efforts associated with these disasters, particularly Hurricane Mitch. These experiences have demonstrated the urgent need to deliver crucial information early and often to agencies responding to disasters in the U.S. and abroad. These disasters have also demonstrated an urgent need to establish protocols for collecting and sharing hazard data so that this information is available for decision making before disasters strike. The USGS has requested $8 million to contribute to an interagency effort to create a Disaster Information Network with common data standards and protocols capable of providing critical information when and where it is needed.
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    Additional FY 2000 increases include: $1 million for coral reef research; $1.1 million to study hypoxia in the Gulf of Mexico and for the study of native species in Hawaii; $1 million to begin next-generation work on the National Biological Information Infrastructure; $1.5 million for deferred maintenance of our many facilities, particularly those with health and safety problems of highest priority; and $2.5 million to expand our satellite data archive capacity for data from Landsat 7 which is scheduled for launch this April.
    Along with the budget highlights just mentioned, please note that our FY 2000 proposal takes a key step toward restructuring our budget to more clearly delineate science from the functions that support science. This restructuring consolidates appropriated facilities costs into an expanded Facilities line item, and all bureau-level administrative costs are consolidated into an expanded general administrative line item called Science Support. While it may appear that some programs have received a decrease in funding through this budget restructuring, most programs simply have had their administrative costs re-categorized, leaving the research funding intact.
    The restructure also establishes a new budget activity—Integrated Science—which brings a more unified scientific response to critical and emerging resource management issues and challenges. It includes $30 million for the previously-discussed DOI Science Priorities and a total $17.7 million for place-based studies in South Florida, Chesapeake Bay and Watershed, Great Lakes, Platte River, Greater Yellowstone Area, San Francisco Bay/Delta, Mojave Desert and Salton Sea. Funding for place-based studies includes a requested increase of $2.4 million over FY 1999.
    Emergency supplemental funding provided by the Congress to DOI in FY 1999 will allow the USGS to use $15 million to ensure that our computer systems, including those providing critical scientific data, will be Y2K compliant.
    In addition to these budget matters, we look forward to working with you on adjustments to the National Geologic Mapping Act to ensure that the States continue to receive appropriate funding for cooperative geologic mapping activities; and with your colleagues on the House Science subcommittee to reauthorize the National Earthquake Hazards Reduction Program which currently authorizes appropriations through FY 1999 for our earthquake program.
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    In closing, Madam Chairman, the USGS is striving to ensure that our customers get the science information they need, when they need it, in a form they can use. Thank you for your continued support and interest in the work of USGS to provide science for a changing world. I would be pleased to answer your questions.
   

STATEMENT OF NINA ROSE HATFIELD, DEPUTY DIRECTOR, BUREAU OF LAND MANAGEMENT
    Madam Chairman and members of the Subcommittee, I appreciate the opportunity to appear before you today to discuss the Fiscal Year 2000 Budget Request for energy and minerals programs administered by the Bureau of Land Management (BLM).

Budget Overview

    The President's Fiscal Year 2000 Budget proposes $1,268,700,000 for the BLM—including funds for operation of the Bureau, Payments in Lieu of Taxes, construction and facilities maintenance, land acquisition, as well as hazardous materials and firefighting activities across the Department of the Interior. Of the $641,100,000 requested in the Management of Lands and Resources Appropriation, the request for energy and minerals activities is $72,230,000. This is an increase of $2,286,000 or 3.3 percent above the FY 1999 enacted level of funding. The programmatic increase amounts to $450,000 or .6 percent over the 1999 enacted funding level after allowing for costs resulting from principally employee pay raises. The President's Budget also requests $33,529,000 for the administration of mining claims under the Mining Law of 1872. These costs are offset by the collection of mining claim maintenance fees. There is also a request for $2,147,000 for the assessment of mineral resources on Federal lands in Alaska.
    Funding for the major program activities within energy and minerals management are as follows:
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    • $55,326,000 for oil and gas management, which provides for the competitive and non-competitive leasing of oil and gas resources and for inspection and enforcement of active leases;
    • $7,527,000 for leasing and management of coal leases; and
    • $9,377,000 for other minerals management activities, which include leasing and management of potash, phosphate, sodium, geothermal and other mineral resources, including mineral materials.
    The energy and mineral resources of the public lands contribute enormously to the Nation's economic and social development. The public lands produce about 47 percent of the Nation's geothermal resources, 33 percent of its coal, 11 percent of its natural gas, and 5 percent of its oil. Today, BLM manages the resources on about 264 million acres of public land, and more than 500 million acres of federally-owned subsurface mineral estate. The BLM also provides technical assistance for management of minerals on Tribal and alloted lands. The scope and importance of BLM's management of energy and mineral resources is reflected by these statistics:

    • At the end of FY 1998, there were over 46,000 oil and gas leases in effect on 33 million acres, with 20,000 of those leases in producing status, and 3,900 producing leases managed by the BLM on Tribal lands;
    • In 2000, BLM expects to issue about 3,150 oil and gas leases covering about 3.9 million acres;
    • At the end of 1998, there were 128 producing coal leases, producing 348 million tons, there were also about 289,000 mining claim of record;
    • Also, at the end of 1998, there were a total of 768 leases of other mineral resources (such as phosphate, potash, sodium, geothermal and trona);
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    • And last year, the BLM managed the disposal of over 15 million cubic yards of sand, gravel and other mineral materials.
    From these activities, the states received revenues totaling $550,000,000 in 1998. With the increased filing of applications for permits to drill for oil, natural gas and coalbed methane, revenues from activities on Federal lands are projected to increase in 2000 with Federal royalties from these mineral activities totaling almost $1,200,000,000. Resulting payments to the states will total $611,000,000. A prime example of the vast amount of revenues generated from mineral activity on public land is the competitive coal lease sale held in Wyoming in October 1998. That sale brought a bonus bid of $158,000,000, of which $79,000,000 goes to the State of Wyoming. Royalties generated by the tract will be used for a variety of public benefits including highway construction, public schools, the University of Wyoming and local governments.
    Within the minerals division, we have continued to focus on programs and activities that best serve the public interest while maintaining a balanced approach to the management of public lands. Allow me to highlight several of those areas:

Revitalization of Indian Country

    The ''Revitalization of Indian Country'' budget proposal will be used to work with tribes to increase the effectiveness of their mineral development programs and to ensure a fair economic return to Indian mineral owners. Funding for this initiative totals $450,000 ($150,000 each for the oil and gas management, coal management and other minerals management subactivities) which would be used to initiate new contracts with additional tribes under the Indian Self-Determination Act (P.L. 93-638) and new agreements under Federal Oil and Gas Resource Management Act. The Indian Self Determination Act allows tribes to assume responsibility over their respective portions of the BLM's minerals programs. By law, the Secretary's trust responsibility is not diminished by contracting these functions out to the Tribes and, under the Indian Self-Determination Act, the BLM must continue to provide oversight of the contracted function. While the BLM believes these contracts and agreements will further its effort to meet its trust repsonsibility, budgetary concerns remain. The law provides that the Federal Government fund not only the direct costs associated with the contracted program, but also indirect and support costs, as well as startup costs. Contracting under the Act will allow BLM to assist tribes with their move towards self-sufficiency and management of their mineral resources with the potential to generate significant revenue increases for certain tribes through more diligent inspections and enforcement.
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Comprehensive Oil and Gas Regulations

    In December 1998, the BLM published its proposed comprehensive oil and gas regulations aimed at consolidating and streamlining current BLM oil and gas regulations, giving operators greater flexibility in meeting certain agency requirements, ensuring appropriate bond amounts cover costs such as reclamation, and simplifying the classification of regulatory violations. Originally, the proposed regulations carried a 120 day comment period, however, in response to public input and to allow optimum time to analyze and comment on the proposed regulations, that comment period was recently extended for an additional 60 days with a closing date of June 4, 1999. The BLM will hold a series of public hearings in areas convenient to the public.

3809 Regulations

    On February 9, 1999, the BLM published its proposed hardrock mining surface management or ''3809'' regulations. The proposed rule is intended to prevent ''unnecessary or undue degradation'' of public land resources by mining operations and improve the clarity and organization of the BLM's existing 3809 surface mining regulations. To gather comments on the proposed rule, a series of public hearings is planned throughout the West and in Washington, DC. The Bureau is awaiting the congressionally directed National Academy of Sciences study, due on July 31, 1999, which will determine the adequacy of existing regulations and, in accordance with Congressional mandates, no final regulations will be published before October 1, 1999.

Coalbed Methane
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    Exploration for coalbed methane is expected to increase greatly over the next few years, especially in Wyoming and other Rocky Mountain States. In the most recent court decision in the matter of Southern Ute v. Amoco. Tenth Circuit Court of Appeals, the appeals court decided ownership of the coalbed methane gas adheres to the ownership of the coal, rather than the ownership of the oil and gas. In order to provide an interim solution, Congress passed a measure (P.L. 105-277) which grandfathers in existing leases with respect to ownership of coalbed methane.

Suspension of Operations and Production Policy

    With oil prices as low as they have been since 1975, operators are threatened with not being able to continue production on properties with low production. The BLM has implemented a two-year policy of granting a suspension on leases with stripper oil properties which are qualified to receive or have already qualified for a stripper royalty rate reduction. Such properties are defined as those averaging 15 barrels or less of production per day. Allowing a suspension will enable operators to hold the lease and avoid premature abandonment of producible wells. Further, for those leases without properties that qualify for a stripper royalty rate reduction, we will determine on a case-by-case basis qualification for a suspension as authorized by existing regulations.

Other Initiatives

    Ensuring environmentally sound mineral exploration and production and reducing environmental effects of past mining practices will continue to be of primary concern to the BLM. Abandoned hardrock mine sites may impact public health and the environment due to releases of hazardous substances from waste materials and acid drainage. In accordance with the Department's Clean Water and Watershed Restoration initiative, BLM will continue to address abandoned mine land (AML) sites which are adversely affecting water quality. BLM coordinates its AML program with State reclamation agencies, the U.S. Forest Service (USFS) and the Environmental Protection Agency through an interagency agreement. During FY 1997, BLM and USFS commenced two pilot AML cleanup programs in Colorado and Montana. A third pilot was launched in Utah in FY 1998. In 1999, with additional funds appropriated by Congress, BLM will build on the success of the pilots by addressing water quality at AML sites in 12 states and 26 watersheds. BLM plans to continue its water quality based AML site cleanup activities during FY 2000.
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    As we continue to pursue measures which increase efficiencies as well as promote environmentally sound recovery of mineral resources, we will continue to work with members of this Subcommittee, the public, states and industry to improve the BLM's programs. This concludes my statement. I will be pleased to answer questions.
   

STATEMENT OF KATHY KARPAN, DIRECTOR, OFFICE OF SURFACE MINING RECLAMATION & ENFORCEMENT, U.S. DEPARTMENT OF THE INTERIOR
Madam Chairman and Distinguished Members of the Subcommittee:
    I am pleased to appear before you today to present the fiscal year (FY) 2000 budget request of the Office of Surface Mining Reclamation and Enforcement (OSM).
    When I appeared before the Subcommittee last year, I shared with you my vision for making OSM a model agency. We are now building on that vision. To better serve the States and Tribes, the coal industry, and most importantly, the citizens of the coal fields, OSM pledges to continue to strive for better Abandoned Mine Lands (AML) reclamation, better environmental protection, better customer service, and better program operations. Before I discuss the specifics of our FY 2000 budget request, I would like to share with you some reflections on these strategic goals.

Better Environmental Restoration

    Our goal is to repair, reclaim and restore as much land and water as possible that was degraded by past mining to provide America with cleaner and safer land and water and to provide employment and economic opportunities in depressed coal regions.
    Therefore, I am very excited to state this Administration's commitment to restoring the environment by aggressively accelerating the cleanup of abandoned mine lands resulting from past coal mining practices. To this end, we are proposing to implement a multi-year effort to fund the AML program at a level commensurate with receipts by 2003. This commitment will enable us to address the $2.5 billion of priority one and two sites that threaten the public health and safety of coalfield citizens and the $1.7 billion of priority three sites that are serious environmental hazards.
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    In our FY 2000 budget, we are requesting a $25 million increase to reclaim abandoned mine sites that pose significant threats to human safety and the environment. Of this sum, OSM will direct $22 million to State and Tribal AML reclamation grants that support the President's Clean Water Action Plan. The remaining $3 million increase will provide additional funding for the Appalachian Clean Streams Initiative to accelerate the cleanup of streams polluted with acid mine drainage caused by past coal mining practices.
    The AML reclamation program is one of the Nation's most successful environmental improvement programs. OSM carries out the AML program in a cooperative manner with the States and Tribes. While the States and Tribes have the lead responsibility for on-the-ground reclamation, OSM supports their programs by providing technical assistance and by conducting cooperative performance reviews of their programs. OSM also conducts the reclamation and the emergency programs for States and Tribes that do not operate their own programs. In FY 2000, the AML program will reclaim over 9,200 acres of abandoned mine sites. Additionally, the program will abate over 400 emergency hazards.
    Given the size of the AML problem, OSM recognizes the need to assure that resources are used in an optimal manner. Leveraging our funds is the very essence of the Appalachian Clean Streams Initiative. This initiative now has approximately 80 State and Federal agencies, local soil and water conservation districts, national conservation organizations, and private foundations working together formally to clean up acid mine drainage and to improve the aquatic environment and the quality of life for coal field citizens. In FY 2000, OSM will have more than double the number of newly begun cooperative projects since the program's inception in 1997. Further, the percentage of funds from outside sources for the initiative will exceed 60 percent.
    Additionally, our Enhanced AML Reclamation Initiative is now complete. This rulemaking was published in the Federal Register on February 12, 1999, and will be effective March 15, 1999. This will establish a mechanism to provide for the reclamation of abandoned mines that otherwise would not likely be reclaimed. For sites targeted by this rule, we expect that AML contractors will incorporate the anticipated sale of coal at the AML-eligible site in their lowered project bids. The lowered project bid will reduce the government's share of the total project cost. As a result, less public funding will be required for these sites to accomplish the same level of AML reclamation. Under this rule, the AML fund saves money, the contractor makes a profit, and additional sites are reclaimed.
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Better Environmental Protection

    Our goal is to improve the regulatory program for protecting the environment, people, and property during current mining operations and subsequent reclamation through cooperative results-oriented oversight and evaluation of State programs in safeguarding people and the environment.
    OSM works cooperatively with the States to assure that the environment is protected during coal mining and that operators adequately reclaim disturbed land after mining is completed. In addressing our protection goal, OSM strongly supports State primacy. OSM provides grants to the 24 primacy States to enable them to operate their own programs to regulate coal mining operations. We believe that the States have unique capabilities and knowledge to regulate the lands within their borders. As the States' programs have matured, OSM's oversight role has evolved. We are acting less like an overseer or supervisor and more as a dedicated resource to enable the States to properly fulfill their responsibilities. However, we stand firm as the regulator of last resort to assure that the citizens of the coal fields and the environment are properly protected during the mining process.
    We now focus on whether the public protection requirements and environmental protection standards in the Surface Mining Control and Reclamation Act (SMCRA) are achieved by focusing on the on-the-ground success of States in meeting environmental protection goals. This strategy has resulted in a more positive attitude and spirit of cooperation with the States, while still assuring operator compliance. An OSM team recently completed a report based on interviews with about 100 OSM inspectors and field staff involved in oversight. The team found the current oversight approach is taking hold and is providing an opportunity to work cooperatively to improve State program performance.
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    This program achieves results. For FY 2000, the program will increase the percentage of sites that are free of off-site impacts to protect the environment and public from current mining to 94 percent. Additionally, to show the progression of permitted acreage being successfully reclaimed, the program will release over 250,000 acres from certain performance bonding requirements.
    I would like to briefly touch on an issue that has received much attention recently—mountain top mining. We have heard and recognize the concerns expressed by coal field citizens, particularly in the State of West Virginia. We are working in a close cooperative manner with State officials and other Federal agencies in a review of mountain top mining practices. OSM, the Environmental Protection Agency, the Corps of Engineers, and the Fish and Wildlife Service are actively involved in multi-agency scientific studies and administrative discussions. By doing this, we can effectively carry out our respective responsibilities to protect the environment and provide quality service to coal field residents and the coal industry.

Better Service

    Our goal is to strengthen the capabilities of States, Tribes, and OSM staff to enforce the mining law effectively by improving service to OSM customers, partners, and stakeholders through open communications, technical assistance, and the transfer of technology.
    We view our role as providing the States and Tribes the tools necessary for them to implement SMCRA requirements effectively and efficiently. We provide technical assistance, technical training, and technology transfer. I would like to briefly discuss some of the more widely used tools that our stakeholders employ in implementing their regulatory and reclamation programs.
    Our nationwide technical training program is a prime example of how we are seeking to provide better service and technical assistance to the States. The training program seeks to develop and update the technical skills and professionalism of State, Tribal and Federal personnel. Our courses are developed to respond to customer needs. During FY 2000 OSM expects to offer about 50 courses and train about 900 students and to attain an 89 percent customer satisfaction rate.
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    Another important tool OSM uses to assist the States and Tribes is the Technical Information Processing System (TIPS). Among other uses, TIPS assists in mine permit reviews, the design of abandoned mine land projects, and the preparation of environmental assessments and environmental impact statements. It is also a key element in the implementation of the OSM Electronic Permitting Initiative on Federal and Tribal lands and in the States. For FY 2000, OSM expects to attain an 87 percent customer satisfaction rate among TIPS users.
    The Applicant Violator System (AVS) provides the State regulatory authorities with a tool to evaluate whether an applicant for a permit is eligible to receive the permit, or is blocked because of outstanding SMCRA violations. The States rely extensively on this system. During the 11 years of AVS operations, almost 57,000 permit applications or AML contractor recommendation requests have been acted upon. OSM recently attained a 97 percent customer service rate in the quality and timeliness of AVS provided services, thus already exceeding our FY 2000 goal of 86 percent.
    The ownership and control regulations support the AVS. As you know, the U.S. Court of Appeals invalidated OSM's prior ownership and control regulations on January 31, 1997. With extensive public outreach and much stakeholder input, OSM proposed rules to redesign the basis of permit eligibility decisions on coal mine operators. The revised rule was published on December 21, 1998.

Better Operations

    Our goal is to improve OSM operations through a more effective and efficient management of human and fiscal resources to facilitate the reclamation of abandoned mine lands to protect the environment, people, and property both during and after mining.
    OSM implements its financial management responsibilities through the fee compliance, revenue management, and grants management functions. I believe we do an excellent job in these areas. I am proud to say that we achieved record highs with a 99.4 percent compliance rate with over $273 million in total collections. Additionally, the Office of the Inspector General gave our financial statements an unqualified opinion for the eighth straight year. This means that the data we report is accurate in all material aspects and that we are safeguarding the taxpayers' money appropriately.
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    Similarly, we are investing in our human resources. To deal with the large number of employees eligible to retire within the next 5 to 10 years, as many as 50 percent, we are developing a succession planning effort. This effort will assist us in determining what types of employees and skill levels needed for our future.

Fiscal Year 2000 Budget Request

    To meet the goals I have just outlined, I would like to present some highlights of our FY 2000 budget proposal. For Fiscal Year 2000, OSM is requesting $305,824,000 and 640 full-time equivalent positions, an increase of $27.1 million over the FY 1999 enacted level. In addition, OSM is requesting $105 million to provide health benefits to retired coal miners, who worked for companies that have gone bankrupt or no longer exist, and their dependents. Of this sum, $63 million is required by permanent authority under the Energy Policy Act of 1992. As a result of a recent Supreme Court decision, the Administration is requesting legislative authority to provide the remaining $42 million so that the United Mine Workers of America Combined Benefit Fund may reimburse premiums paid by companies for beneficiaries who become redesignated by the Social Security Administration as unassigned to any specific company.
    As I previously discussed, I believe the singular highlight of the FY 2000 President's Budget is the Administration's proposal to implement a multi-year effort to fund the AML program at a level commensurate to fee receipts by 2003. This gradual, but significant, increase in project funding will result in a concurrent increase in reclaimed acreage over the next several years and will also provide a major beneficial impact to the citizens of the coal fields and the lands and waters in their communities.
    As I mentioned, we are requesting a $25 million increase in FY 2000 to reclaim abandoned mine sites that pose significant threats to human safety and the environment. Of this sum, we will target $22 million to State and Tribal grants that support the President's Clean Water Action Plan. The increase will be directed to those States and Tribes that are using AMI, funds to address environmental problems caused by historic abandoned coal and other mine sites. The increase will also focus on those States and Tribes that obligate all their AMI, funds. This will result in a State grant total approaching $170 million. The remaining $3 million increase will provide additional funding for the Appalachian Clean Streams Initiative to accelerate the cleanup of streams polluted by acid mine drainage resulting from past coal mining practices. We will now be funding the initiative at $10 million.
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    This increase in AML funding directly supports our strategic goal of better reclamation. The increase in grant funding will result in approximately 1,200 acres more being reclaimed than otherwise would be the case. The increase for the Appalachian Clean Streams Initiative will result in 42 new projects and will also result in funds leveraging such that 60 percent of funding will come from other sources.
    OSM's overall FY 2000 request includes $94.7 million for the Regulation and Technology appropriation and $211.1 million for the Abandoned Mine Reclamation Fund appropriation. This request provides a $27.1 million increase over FY 1999. As I have previously discussed, the preponderance of this increase—$25 million—will be directly translated into on-the-ground reclamation efforts. The remaining $2.1 million increase will cover uncontrollable increases in our fixed costs.
    This request will enable OSM to provide financial support for 24 State regulatory programs, and for the AML programs implemented by 23 States and three Tribes. It will also enable OSM to continue to directly administer Federal regulatory and reclamation programs in States that do not operate their own programs and on Federal and Tribal lands.
    Most of the funding appropriated to OSM is passed on to the States and Tribes in the form of regulation and reclamation grants. For FY 2000, our request includes $169.3 million for reclamation grants and $50.6 million for regulatory grants. These grants, coupled with emergency and high priority AML project funding, account for nearly 80 percent of OSM's budget. The remaining portion of the budget provides funding for OSM's internal operations including technical training and other forms of technical assistance to the States and Tribes.
    Let me now address the other component to our budget—the annual transfer payment to the United Mine Workers of America Combined Benefit Fund. This transfer, funded from interest on the AML fund, provides health benefits for certain retired coal miners and their dependents, when an employing company is no longer in business. For FY 2000 OSM is requesting $105 million in two components. Of this sum $63 million will be transferred to the Combined Benefit Fund for unassigned beneficiaries as required by the permanent authority of the Energy Policy Act of 1992. In addition, OSM is requesting a one-time increase of up to $42 million to help defray the costs associated with a recent U.S. Supreme Court decision, Eastern Enterprises v. Apfel, and related decisions. This Supreme Court decision stated that Eastern should not have been responsible for paying these health benefits. Thus, certain beneficiaries that were previously assigned to Eastern and similarly situated companies are now being redesignated as unassigned.
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Government Performance and Results Act

    OSM recognizes the importance that both the Administration and the Congress have placed on implementing the Government Performance and Results Act (GPRA). OSM's FY 2000 budget request fully addresses GPRA requirements. OSM established strategic goals and associated performance measures to justify its resource requirements. OSM first identified its major functions, or Business Lines. OSM then developed a Strategic Plan to carry out its mission, vision, and goals and implemented a new budget structure that allows OSM to relate resource requests to strategic goals in a more understandable way. OSM developed a business-line based accounting system to determine the cost of each program activity better, provide a mechanism for linking costs to performance outputs, and enhance OSM's management decision-making process.
    OSM's Business Lines are:

    • Environmental Restoration.
    • Environmental Protection.
    • Technology Development and Transfer.
    • Financial Management.
    • Executive Direction and Administration.
    Because OSM's new budget structure links directly to its strategic goals and measures, OSM has fully integrated its FY 2000 Annual Plan into its Budget Justifications to Congress.

Proposed Appropriation Language

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    OSM is also proposing certain appropriation language changes in its FY 2000 budget proposal. These changes will allow OSM to:

    • Specify that the Appalachian Clean Streams Initiative will be funded from the Federal expenses share of the Abandoned Mine Reclamation Fund;
    • Target the $22 million increase for State and Tribal reclamation grants to those States and Tribes that use AML funds to address problems caused by historic abandoned coal and other mine sites and obligate to grants all of their distributed portion of the FY 1999 AML appropriation.
    In closing, I thank the Subcommittee for providing this opportunity to present OSM's FY 2000 budget request and to summarize our recent accomplishments and to outline our vision for OSM's future. I believe this is a sound, fiscally responsible budget proposal that contains the resources necessary for OSM and the States and Tribes to implement SMCRA requirements effectively. I will now be happy to respond to any questions you may have.

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