[House Report 115-422]
[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 115-422
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MINNESOTA'S ECONOMIC RIGHTS IN THE SUPERIOR NATIONAL FOREST ACT
_______
November 21, 2017.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Bishop of Utah, from the Committee on Natural Resources, submitted
the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 3905]
[Including cost estimate of the Congressional Budget Office]
The Committee on Natural Resources, to whom was referred
the bill (H.R. 3905) to require congressional approval of any
mineral withdrawal or monument designation involving the
National Forest System lands in the State of Minnesota, to
provide for the renewal of certain mineral leases in such
lands, and for other purposes, having considered the same,
report favorably thereon without amendment and recommend that
the bill do pass.
Purpose of the Bill
The purpose of H.R. 3905 is to require Congressional
approval of any mineral withdrawal or monument designation
involving the National Forest System lands in the State of
Minnesota, and to provide for the renewal of certain mineral
leases in such lands.
Background and Need for Legislation
The Twin Metals Minnesota Project is a prospective
underground copper, nickel, platinum, palladium, gold and
silver mine operation.\1\ The world-class Maturi mineral
deposit is located near the cities of Ely and Babbitt,
Minnesota, in the Superior National Forest. Project proponents
seek to submit a formal mine plan proposal and formally begin
detailed environmental reviews required by State and federal
laws. Before this can occur, a pending court case between the
federal government and the project owners will need to be
resolved to determine the status of the project owner's mineral
rights.\2\
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\1\Twin Metals Minnesota, About the Project, http://www.twin-
metals.com/about-the-project/.
\2\Steve Karnowski, Feds seek to dismiss Twin Metals mineral rights
lawsuit, StarTribune, June 6, 2017, http://www.startribune.com/feds-
seeks-to-dismiss-twin-metals-mineral-rights-lawsuit/426796791/
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The Twin Metals project is expected to extract 20,000 tons
of mineralized ore per day from which marketable concentrates
are produced.\3\ This project is expected to create 650 direct
and 1,300 indirect jobs.\4\ In 2015 the average wage for a
mining job in Minnesota was $78,635, while the average wage in
Minnesota was $53,938.\5\ If approved, the project will
generate significant tax and royalty revenues for Minnesota.
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\3\Twin Metals Minnesota, Project Facts, http://www.twin-
metals.com/about-the-project/project-facts/.
\4\Id.
\5\Id.
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The Twin Metals project would consist of an underground
operation and a tailings storage facility.\6\ The mined out
workings of the mine would serve as permanent storage for waste
rock and tailings. This would minimize surface storage of these
byproducts. Sufficient underground space would be created to
contain 100% of the produced waste rock and 50% of the
processed tailings. The other 50% will be deposited in a
surface tailings storage facility.\7\ This facility is expected
to be located at an existing mine near Babbitt, Minnesota.
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\6\Id.
\7\Id.
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Unlike most mineral operations on federal lands, which are
governed by the Mining Law of 1872 (Sess. 2, ch. 152, 17 Stat.
91-96), the Weeks Act (16 U.S.C. 521a), which deals with
acquired lands and minerals, controls the Twin Metals
project.\8\ Leases of acquired minerals on federal land for
mineral exploration and extraction are not indefinite
agreements and periodically need to be renewed in 20-year
increments. The two leases for the mineral deposit in question
began in 1966 and were renewed in 1989 and 2004.\9\ These
leases have been transferred several times, most recently to
Antofagasta, a Chilean mining corporation. Upon acquisition,
Antofagasta took a renewed interest in exploratory and design
activities, spending more than $400 million in developing the
Twin Metals mine.\10\
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\8\Complaint, Franconia Minerals v. U.S. Dep't of the Interior,
Filed Sept. 12, 2016 (Dist. MN).
\9\Id.
\10\Twin Metals Minnesota, supra, note 3.
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However, the Obama Administration denied Antofagasta's
recent application to renew its leases, premising the denial on
an opinion (M-Opinion) by then-Interior Department Solicitor
Hilary Tompkins that concluded that the Bureau of Land
Management (BLM) had discretion to deny renewal of Twin Metals'
leases.\11\ On September 12, 2016, Twin Metals Minnesota filed
a lawsuit in federal district court in Minnesota to challenge
the M-Opinion, and to affirm and protect its long-standing
mineral rights in the Iron Range region of Northeast
Minnesota.\12\
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\11\U.S. Department of the Interior Solicitor Hilary Tompkins, M-
37036: Twin Metals Minnesota Application to Renew Preference Rights
Leases, https://www.doi.gov/sites/doi.gov/files/uploads/m-37036.pdf.
\12\Franconia Minerals v. U.S. Dep't of the Interior, supra note 8.
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On December 14, 2016, the U.S. Forest Service (USFS) denied
consent for the renewal of Twin Metals' leases, and on the
following day, BLM denied the renewal of the leases.\13\
Shortly thereafter, at the end of the Obama Administration,
USFS and BLM proposed to withdraw 235,000 acres of federal land
from mineral exploration and mining development for 20
years.\14\ The Twin Metals' leases were within the boundaries
of the withdrawal. USFS is now conducting an extensive
environmental review of the impacts of the proposed withdrawal.
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\13\U.S. Forest Service, Twin Metals Lease Renewal, https://
www.fs.usda.gov/detail/superior/landmanagement/resourcemanagement/
?cid=fseprd507250.
\14\Id.
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The Subcommittee on Energy and Mineral Resources held a
legislative hearing on a discussion draft for H.R. 3905 on July
27, 2017.
Section-by-Section Analysis
Section 1. Short title
This section provides a short title for the bill, the
Minnesota's Economic Rights in the Superior National Forest
Act.
Section 2. Condition on mineral withdrawal of National Forest System
lands in Minnesota
This section prohibits the withdrawal of minerals within
National Forest System lands (NFS lands) in the State of
Minnesota from disposition without Congressional approval.
Section 3. Condition on monument designation on National Forest System
lands in Minnesota
This section prohibits the establishment of national
monuments under the Antiquities Act (54 U.S.C. 320301 et seq.)
on NFS lands in the State of Minnesota without congressional
approval.
Section 4. Clarifying the nature of mineral rights on forest system
lands in Minnesota
This section clarifies that all mineral leases issued
within NFS lands in the State of Minnesota are indeterminate
right leases subject to automatic renewal if certain
requirements are met.
This section outlines specific instances when the Secretary
of the Interior may suspend operations under a lease.
This section authorizes the Secretary of the Interior to
issue permits for the use of surface lands, not included in the
lease, for purposes connected with exploration and development
of deposits.
This section clarifies the applicability of this
legislation's lease terms to leases in effect, leases not yet
in effect, and recently non-renewed hard rock mineral leases
for the Superior National Forest in Minnesota.
This section clarifies the applicability of the National
Environmental Policy Act of 1969 (U.S.C. 4321 et seq.) to
leases in effect, leases not yet in effect, and recently non-
renewed hard rock mineral leases. The section further clarifies
the time limit for completing the pending environmental
assessment for the hard rock mineral leases referred to in this
legislation.
Finally, this section clarifies this legislation should not
be construed to permit prospecting for development and
utilization of mineral resources within the Boundary Waters
Canoe Area Wilderness or Mine Protection Area.
Committee Action
H.R. 3905 was introduced on October 2, 2017, by Congressman
Tom Emmer (R-MN). The bill was referred to the Committee on
Natural Resources, and within the Committee to the
Subcommittees on Energy and Mineral Resources, and Federal
Lands. On November 7, 2017, the Natural Resources Committee met
to consider the bill. The two Subcommittees were discharged by
unanimous consent. No amendments were offered, and the bill was
ordered favorably reported to the House of Representatives by a
roll call vote of 17 ayes to 13 noes on November 8, 2017, as
follows:
Committee Oversight Findings and Recommendations
Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the Rules of the House of Representatives, the
Committee on Natural Resources' oversight findings and
recommendations are reflected in the body of this report.
Compliance With House Rule XIII and Congressional Budget Act
1. Cost of Legislation and the Congressional Budget Act.
With respect to the requirements of clause 3(c)(2) and (3) of
rule XIII of the Rules of the House of Representatives and
sections 308(a) and 402 of the Congressional Budget Act of
1974, the Committee has received the following estimate for the
bill from the Director of the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, November 21, 2017.
Hon. Rob Bishop,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3905, the
Minnesota's Economic Rights in the Superior National Forest
Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Jeff LaFave.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 3905--Minnesota's Economic Rights in the Superior National Forest
Act
Summary: H.R. 3905 would prevent federal agencies from
withdrawing certain federal land in northern Minnesota from use
for mining activities. The bill also would restore two mineral
leases that were canceled by the Bureau of Land Management
(BLM). CBO estimates that enacting the bill would increase
offsetting receipts, which are treated as reductions in direct
spending, by $2 million over the 2018-2027 period; therefore,
pay-as-you-go procedures apply. Enacting H.R. 3905 would not
affect revenues.
CBO estimates that enacting H.R. 3905 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2028.
H.R. 3905 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated Cost to the Federal Government: The estimated
budgetary effect of H.R. 3905 is shown in the following table.
The costs of this legislation fall within budget function 300
(natural resources and environment),
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By fiscal year, in millions of dollars--
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2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018-2022 2018-2027
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DECREASES IN DIRECT SPENDING
Estimated Budget Authority........................ * * * * * * * * * -2 * -2
Estimated Outlays................................. * * * * * * * * * -2 * -2
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Note: * = between -$500,000 and zero.
Basis of estimate: For this estimate, CBO assumes that H.R.
3905 will be enacted near the beginning of calendar year 2018.
Background
In 2012, BLM denied a request from Twin Metals, a mining
firm with operations in northern Minnesota, to renew two
mineral leases on federal land. Those leases expired in
December 2016, and the Forest Service subsequently announced
its intent to withdraw 234,000 acres of federal land from use
for commercial purposes, including the lands that were held
under Twin Metals' leases. No final decision on the withdrawal
has been announced. In addition, Twin Metals has sued the
federal government seeking to have its leases restored. That
litigation is ongoing.
Rents and royalties
H.R. 3905 would restore Twin Metals' leases. Based on an
analysis of information provided by the affected agencies and
Twin Metals, CBO estimates that Twin Metals would pay rents
totaling less than $5,000 a year over the 2018-2027 period.
Further, CBO expects that production from those leases would
begin in 2027 and we estimate that royalties would total $7
million in 2027. That estimate accounts for the possibility
that production would not occur until after 2027. About half of
the royalties ($3.5 million) would be paid to the State of
Minnesota. Because the outcome of the litigation between Twin
Metals and the federal government is uncertain, CBO assumes
there is a 50 percent chance that the firm will have the
affected leases restored under current law. Thus, we estimate
that enacting H.R. 3905 would increase net rents and royalties
by about $2 billion over the 2018-2027 period.
Because the Forest Service's proposed withdrawal would not
affect mineral producers with valid existing rights, and CBO
does not expect any of the other lands that may be withdrawn to
generate any receipts over the next 10 years, we estimate that
preventing the withdrawal of those lands from mining activities
would have no effect on the federal budget.
Pay-As-You Go Considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 3905, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON NATURAL RESOURCES ON NOVEMBER 8, 2017
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By fiscal year, in millions of dollars--
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2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018-2022 2018-2027
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NET DECREASE IN THE DEFICIT
Statutory Pay-As-You-Go Impact.................... 0 0 0 0 0 0 0 0 0 -2 0 -2
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Increase in long-term direct spending and deficits: CBO
estimates that enacting the legislation would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2028.
Mandates: H.R. 3905 contains no intergovernmental or
private-sector mandates as defined in UMRA.
Estimate prepared by: Federal costs: Jeff LaFave; Mandates:
Zach Bynum.
Estimate approved by: H. Samuel Papenfuss, Deputy Assistant
Director for Budget Analysis.
2. General Performance Goals and Objectives. As required by
clause 3(c)(4) of rule XIII, the general performance goal or
objective of this bill is to require Congressional approval of
any mineral withdrawal or monument designation involving the
National Forest System lands in the State of Minnesota, and to
provide for the renewal of certain mineral leases in such
lands.
Earmark Statement
This bill does not contain any Congressional earmarks,
limited tax benefits, or limited tariff benefits as defined
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of
the House of Representatives.
Compliance With Public Law 104-4
This bill contains no unfunded mandates.
Compliance With H. Res. 5
Directed Rule Making. This bill does not contain any
directed rule makings.
Duplication of Existing Programs. This bill does not
establish or reauthorize a program of the federal government
known to be duplicative of another program. Such program was
not included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-139
or identified in the most recent Catalog of Federal Domestic
Assistance published pursuant to the Federal Program
Information Act (Public Law 95-220, as amended by Public Law
98-169) as relating to other programs.
Preemption of State, Local or Tribal Law
This bill is not intended to preempt any State, local or
tribal law.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic, and existing law in which no change is
proposed is shown in roman):
TITLE 54, UNITED STATES CODE
* * * * * * *
SUBTITLE III--NATIONAL PRESERVATION PROGRAMS
* * * * * * *
CHAPTER 3203--MONUMENTS, RUINS, SITES, AND OBJECTS OF ANTIQUITY
* * * * * * *
Sec. 320301. National monuments
(a) Presidential Declaration.--The President may, in the
President's discretion, declare by public proclamation historic
landmarks, historic and prehistoric structures, and other
objects of historic or scientific interest that are situated on
land owned or controlled by the Federal Government to be
national monuments.
(b) Reservation of Land.--The President may reserve parcels
of land as a part of the national monuments. The limits of the
parcels shall be confined to the smallest area compatible with
the proper care and management of the objects to be protected.
(c) Relinquishment to Federal Government.--When an object is
situated on a parcel covered by a bona fide unperfected claim
or held in private ownership, the parcel, or so much of the
parcel as may be necessary for the proper care and management
of the object, may be relinquished to the Federal Government
and the Secretary may accept the relinquishment of the parcel
on behalf of the Federal Government.
(d) Limitation on Extension or Establishment of National
Monuments in Wyoming.--No extension or establishment of
national monuments in Wyoming may be undertaken except by
express authorization of Congress.
(e) Limitation on Extension or Establishment of a National
Monument in Minnesota.--No extension or establishment of
national monuments on National Forest System lands in the State
of Minnesota may be undertaken except by express authorization
of Congress.
* * * * * * *
DISSENTING VIEWS
We strongly oppose H.R. 3905 because it would risk the
health and vitality of the most visited wilderness area in
America, the Boundary Waters Canoe Area Wilderness in northern
Minnesota (BWCAW). The BWCAW and the neighboring Voyageurs
National Park power the economy of that region, supporting
22,000 jobs and $1.4 billion in visitor spending, all of which
are dependent on the unspoiled character of the more than 1,000
lakes in the area. This legislation would reverse recent
decisions by federal agencies and stop an environmental review
in its tracks in order promote a Chilean mining conglomerate's
proposed copper sulfide mine that would sit right at the edge
of the BWCAW.
During the markup, members from the Majority insisted that
this mine would be much ado about nothing, since it would be
located outside the BWCAW. That would be fine if acid mine
drainage--a key feature of copper sulfide mines--would also
stop at the boundary of the BWCAW, but it would not. The lakes
and streams in the vicinity of the mine flow into the BWCAW,
and the inevitable acid drainage from the mine would seep
through the wilderness area, harming aquatic and terrestrial
wildlife, negatively affecting soils and forests, and
potentially damaging human health, even in the absence of a
major pollution release from a dam failure or other incident.
H.R. 3905 would reverse a 2016 decision by the Bureau of
Land Management to adopt the recommendation of the U.S. Forest
Service and reject the renewal of two 50-year-old mining leases
in the Superior National Forest. The bill would also moot the
current U.S. Forest Service study into the appropriateness of
withdrawing the lands from potential mining activity for 20
years, a study that even the current Administration--which has
shown itself to be a great friend of mining interests--
supports.
Furthermore, the bill would amend the Antiquities Act to
eliminate the ability to protect sites in Minnesota, for no
obvious reason other than to ensure that this mine gets built.
We should not be making major adjustments to bedrock public
land laws just to allow individual mining projects to move
ahead.
This legislation and the potential mine is opposed by a
large majority of people in the state and a broad coalition of
local residents, local business owners, and conservationists
that treasure the pristine character of the Boundary Waters and
depend on the economic foundation that it provides. This
legislation subverts the will of the people and the U.S. Forest
Service, and threatens irreversible harm to a national
treasure, all for the benefit of a single mine being promoted
by an international mining outfit. It is one of the clearest
indications yet of whose side the Majority is on.
Raul M. Grijalva,
Ranking Member, Committee on
Natural Resources.
Alan Lowenthal,
Ranking Member, Subcommittee
on Energy and Mineral
Resources.
[all]