Obama Proposal to Alter Abandoned Mine Land Payments Not in Budget

By Beacon Staff

CHEYENNE, Wyo. – The Obama administration’s proposal to end hundreds of millions of dollars in coal-tax payments to states like Wyoming and Montana failed to make either the House or Senate versions of the federal budget, officials said Tuesday.

The Abandoned Mine Land program taxes coal production to raise money for cleaning abandoned coal mines and other projects. Obama’s budget called for providing “a better return to taxpayers from mineral development” by ending payments to coal-producing states that no longer need funds to clean up old coal mines.

With the House and Senate passing budgets last week that didn’t tinker with the AML program, Wyoming and Montana appear to be in position to continue spending the coal-tax money on projects of their choice.

Rep. Cynthia Lummis, R-Wyo., said she was “pleased that President Obama’s ill-conceived proposal to strip away Wyoming’s share of AML money was not included in the budget resolution passed by the House last week.”

“With that being said, I will continue to be vigilant in working with my House colleagues as well as (Wyoming) Sens. (Mike) Enzi and (John) Barrasso to make sure the president’s misguided AML proposal never sees the light of day and Wyoming receives the money we are owed,” Lummis said.

Wyoming has used AML funds for coal reclamation projects, but has also funneled millions of AML funds into other projects such as research on coal gasification and to fund the University of Wyoming School of Energy Resources.

In Montana, the state has been using AML funds for reclaiming both coal and hard-rock mining sites, said Sandi Olsen, administrator of the Montana Department of Environmental Quality Remediation Division.

“Our high-priority coal sites are done, which is why we’re working in part on our high-priority abandoned hard rock sites,” Olsen said. “The consequences of not doing this clean up are that we continue to have human health and environmental impacts from these abandoned properties, whether they’re coal or hard-rock.”

Wyoming has received about $600 million in AML funds and Montana about $117 million since Congress initiated the program in 1977 with passage of the Surface Mining Control and Reclamation Act. The federal government still collects a 35-cent tax on each ton of coal production for the AML fund.

In 2006, Congress renewed the act with a promise that the federal government would pay back AML funds it collected but never appropriated to the states, according to Wyoming’s congressional delegation.

Rick Chancellor, administrator of the Abandoned Mine Land Division at the Wyoming Department of Environmental Quality, has said Wyoming expects to receive at least $82.7 million in AML payments for each of the next five years, or more than $400 million, in addition to payments on future coal taxes through 2021.

Wyoming still has about $100 million worth of coal reclamation work to complete, Chancellor said.

That should be done by 2012, leaving hundreds of millions of dollars left over for other projects. This year, the Wyoming Legislature passed a 2010 supplemental budget including $100.6 million in AML-funded projects, $70 million of which was not for coal reclamation.

Olsen, of the Montana remediation division, said her state could lose $121 million over the next 12 years if Obama’s budget proposal were enacted.

Elly Pickett, spokeswoman for Wyoming Sen. Mike Enzi, said that while the Obama proposal was not included in either chamber’s budgets last week, budget negotiations were still not final.

“There were a few differences in the (House and Senate) versions, so it will go to a conference committee now,” Pickett said. “And anything can happen during a conference committee, so the process definitely isn’t over yet.”

Stay Connected with the Daily Roundup.

Sign up for our newsletter and get the best of the Beacon delivered every day to your inbox.