When God made the mountains of my home State of West Virginia, I truly believe he made a special breed of people to preside over them. He made a proud people, and we are indeed a proud people in West Virginia, Mr. Chairman. We are born of the mountains and hallow of our rugged terrain. Our State motto is "montani semper liberi-mountaineers are always free," and I would, on this occasion, present you with a token of our appreciation for your efforts to ensure the beauty of our mountains. It is a West Virginia mountaineer, Mr. Chairman, made of coal, and I have no doubt that this coal was mined under the Federal Surface Mining Act of 1977. [Applause.] The CHAIRMAN. Thank you, Nick. Those are very kind and moving thoughts, and I am proud to have this great prize. A young man was at a banquet getting an honor, and he was flustered, and he said, "I sure don't appreciate it, but I really do deserve it." It has been a long struggle, and you have been an important part of it these last 10 years, and I hope you are here another 10 after I am gone. Sooner or later, the law is going to work the way we want it to work, and I thought these hearings would be a good idea to bring us up to date, but thank you very much for your contribution over the years. The gentleman from Arizona? Mr. RHODES. Thank you, Mr. Chairman. I am sure that you do appreciate it, but there is no doubt in my mind that you also deserve it. Mr. Chairman, I am pleased to join you, and the witnesses who will be appearing before us today, as we mark the 10th anniversary of this act. As we all know, the office got off to a rocky start. The agency has encountered problems administering the Surface Mining Act of 1977. There have been six Directors or Acting Directors during the short life of the agency. I know that many of our early witnesses will tell us the agency is still in turmoil and not fulfilling its mission. Later witnesses will question whether there is a need for the agency at all. One question is likely to be prominent throughout this hearing, is simply this: Is the law of 1977 impossible to manage in a reasonable and effective manner with the resources at hand? In considering the economic and political realities in some of our States, will it ever be possible to entrust the enforcement of this law to the various States? I don't have the answer to all these questions, but after today's hearing, maybe we as a committee will be closer to arriving at some answers to some very meaningful questions. Our final witness today will be Jed Christensen, present Director of the Office, who I believe has done a good job in getting the agency on sound footing. He will tell us that considerable progress has been made in most every major problem area, and I think the record will show that is right. In the Congress sometimes we pass laws to correct existing problems and then expect our Federal agency to waive a magic wand and correct them overnight. Sometimes I think we even perceive problems that don't exist. At any rate, the Office is now 10 years old. I congratulate its leaders and those in the agency who have tried to do a job under difficult circumstances. I know the problem still exists, and we will be hearing plenty about them today. I look forward to hearing what the witnesses have to say, and I thank you for this opportunity, Mr. Chairman. The CHAIRMAN. The distinguished Congressman, Mr. Murphy of Pennsylvania, who has been a part of this, is recognized. Mr. MURPHY. Thank you very much, Mr. Chairman. Very briefly, so we can get on with the witnesses, I have been privileged to be a sponsor in the early 1960's in Pennsylvania, when we adopted the first stringent regulations for the strip mining of coal, and then when I came here as a new member of this committee led by you as also a sponsor of the 1977 act. I think the act has basically worked. I agree with you. I commend you, Mr. Chairman, for holding these hearings, because from time to time in the strip mining States, we hear that it is not being enforced well enough, that some regulation is too stringent, that some violations are made, bonds are not high enough, and I commend you, Mr. Chairman. I think these hearings will bring out the truth of how well in 10 years the act has worked. I look forward to sharing the opportunity with you. Thank you very much. The CHAIRMAN. Our first witness is Frank McCloskey, Representative from the great State of Indiana. Frank, you are recognized. [Prepared statement of Hon. Frank McCloskey, with attachment, may be found in the appendix.] STATEMENT OF HON. FRANK MCCLOSKEY, A U.S. Mr. MCCLOSKEY. Thank you so much, Mr. Chairman. My primary regret today is, as far as I know, Indiana has no mountains. I never felt more divided, but as you know, we have a wonderful place anyway, and indeed, it has much in common with West Virginia and several other States in that we do mine a lot of coal in southwestern Indiana. In effect, it is a major contribution, and 75 percent of the coal mining in Indiana is mined in my district. Mr. Chairman, I really do appreciate your eloquent remarks, and it posed a point of hope with me with your mention of possible expansion of the abandoned mines fund, and you will see what I am talking about in a moment. I have a formal statement. I would just ask that it be accepted for the record, and I think I can summarize my comments and concerns in 2 minutes, more or less, and I think they are very basic and forthright, but The CHAIRMAN. Without objection. Mr. MCCLOSKEY. I think-the gist of it is that in some six States, including Pennsylvania, West Virginia, Kentucky, Indiana, we have instances where in essence, at the same time both the mining companies and the surety bond companies are going bankrupt in effect simultaneously. It is obvious that with that happening at the time same that the bereaved landholder, the free holder is being left in location after location with mountainous slags, slag heaps of totally unusable land. I would note that there are some 3,700 acres of unreclaimed land, because of simultaneous bankruptcies of the surety firms and the mining companies in the Eighth District of Indiana, in Mr. Murphy's State of Pennsylvania. I am told there is about 22,000 acres and various experts since the last time I appeared before Mr. Rahall's committee on this have told me that with 11,000 acres and more suffering this condition in Kentucky. Kentucky can expect major or economic devastation as to this problem. Obviously, if we are going to continue healthy mining, particularly in an area that we all know is depressed and the different sizes of mine operators have different problems and feelings about the regulation. I would note that this primarily or almost exclusively involved smaller operators obviously of having degrees of stability and responsibility, but we do not want to regulate so much that only the larger mine operators are able to operate, but it does not help the mine operators of any size or overall economy to have this land left unreclaimed. So, Mr. Chairman, I would respectfully suggest that something has to be done involving possible State and almost definitely Federal action. Indiana, the last term or two in the General Assembly, has tried to handle some of it. They did deposit some more stringent regulations as to surety companies, and they also did have a mining reclamation fund from fines established. The Federal authorities have recently pointed out that only about 10 percent of mining infractions have been cited in Indiana, and that of those that have been cited only about 7 percent have been collected. So, it is a very serious problem. There are other concerns. For example, the problems of collateral; a lot of these surety firms require 80- to 100-percent collateral. Obviously, if they go bankrupt, their problems with the collateral responsibilities for the mining operators that are in contract with them, is often the case that these mining operators in effect have to pay double collateral. I would conclude with a hope for your continuing cooperation and continuing cooperation of everyone on the committee, as has already been essentially promised by Mr. Rahall, but again, I ask you to consider amending the law to apply to abandoned mines, which have developed after 1977. With that, I again thank you for being here and appreciate your cooperation and stand open to any questions or suggestions you may have. The CHAIRMAN. Thank you. Are there any questions? I think not. Thanks very much. Mr. MCCLOSKEY. Thank you, sir. The CHAIRMAN. Next witnesses are a panel, Thomas Galloway; Phil Begley; Wyona Coleman, Mark Squillace. We have a long witness list today, and I will make the usual admonition of the wit nesses to check in their statements for the record and summarize wherever you can. We are trying to save some time at the end of the day for Director Christensen, and we want to have time to ask him questions. So I would like to move along as rapidly as possible. I am going to have to be at the Rules Committee in a few minutes, but Mr. Rahall, who presides with great fairness and efficiency, will be taking my place in and out today. Who wants to go first? [Prepared statements of L. Thomas Galloway and Wyona Coleman, with attachments, may be found in the appendix.] PANEL CONSISTING OF L. THOMAS GALLOWAY, GALLOWAY AND Mr. GALLOWAY. Mr. Chairman, members of the subcommittee, my name is L. Thomas Galloway, and I am here on behalf of the National Wildlife Federation, which has long been active in the implementation of the Surface Mining and Control and Reclamation Act. The first panel today will address enforcement of the Surface Mining Act. I will address the overall issue; Mr. Squillace will discuss several current issues, including termination of enforcement authority after bond release; Mr. Begley will discuss the historical problems of enforcement in Kentucky and how the act has affected eastern Kentucky; Ms. Coleman will address bonding, the safety net Congress intended to ensure reclamation when enforcement fails. A regulatory statute is essentially useless without strong enforcement. Congress was well aware of this basic tenet in passing the Surface Mining Act. Indeed, the act, in my view, has the strongest enforcement scheme of any environmental or health and safety statute passed by Congress before or since. The act contains a comprehensive mandatory system well geared to implement the substantive provisions of the act. This committee, and the chairman particularly, deserve great credit for the long and tireless effort necessary to construct the tough but fair enforcement system which is now the law. The greatest testament to the act's enforcement system, and the skill and foresight reflected in that system, is that after 10 years of attack, no significant loophole in any enforcement sanction has been found. The problems with the enforcement of the act lie not in the enforcement provisions of the act, but with their use or lack of use. Now, the problems with the use of the enforcement system are legion; indeed, it is accurate to say, and I believe fair that there has been a fundamental breakdown in the enforcement of the Surface Mining Act. The litany of enforcement failures is well known to this committee. Half of all cessation orders by OSM were totally ignored by coal operators. OSM failed to collect over $200 million in penalties and fees assessed under the act. In the face of this massive resistance to the law, OSM did nothing about the problems until ordered to do so by a Federal judge, and then, in my judgment and numerous congressional reports and investigations completed, it bungled the job. OSM has refused to use certain enforcement sanctions provided by Congress. Because many of the worst abusers use shell corporations, the act provides for action directly against corporate officers and directors. Yet, until ordered to do so by another Federal judge, OSM used this sanction only two times nationwide, despite thousands of situations meeting the statutory standard. And when ordered to take action against corporate officials, OSM bungled the job not once, but twice, wasting millions of dollars. OSM has squandered more money though mismanagement of the civil penalty program than it has collected. The act also pierces the corporate veil by banning persons who own or control mines with outstanding violations from mining until the past violation is abated. Yet, OSM did not implement this sanction in any meaningful way until ordered to do so by a Federal judge. And while the results are not yet in, OSM appears on the brink of mishandling the permit block system. OSM also has failed miserably to stop the intentional and rampant abuse of the various exemptions contained in the act. Abuse of the 2-acre exemption is the best known; however, misuse of the onsite construction exemption, the coal exploration provision, and the 16% exemption have left thousands of other sites unreclaimed. The States' record in enforcement is, if anything, worse than that of OSM, at least in the major coal States. Several of the States have for years ignored far more violations than they have cited. Indeed, since 1978, the evidence indicates that States have ignored tens of thousands of violations. The States do not force bond forfeiture on sites abandoned for years. They do not collect civil penalties. Kentucky alone has a backlog of $60 million. They do not take alternative enforcement action when operators ignore cessation orders. Kentucky alone has over 2,000 unabated cessation orders. The States do not block permits to persons with outstanding violations of law, and in some cases, such as coal exploration and onsite construction, several of the States have intentionally condoned the abuse of exemptions. In short, in some States, the lax enforcement which characterized State enforcement of mining laws prior to the act has continued, and OSM has done little other than talk, wring its collective hands, and talk about deference to the States. The consequences of the breakdown in enforcement are as predictable as they are regrettable: Another generation of unreclaimed mines, by our count at least 6,000, with all that implies for the people and environment of the coalfields: Landslides, destroyed homes, destroyed water supplies, polluted streams and in some cases, ruined lives. The outlook for the future is mixed. There is some room for hope. A recent tentative settlement between NWF and the State of |