Dear Budget Committee Member, Taxpayers for Common Sense Action (TCS Action), a non-partisan budget watchdog, urges you to strip Subtitle B, the hardrock mining subtitle, from the House Resources Committee budget reconciliation bill. This subtitle would undermine true reform of the 1872 Mining Law and would result in a fire sale of federal lands.
Subtitle B requires the federal government to patent and sell public lands for $1,000 or “fair market value.” But the legislation’s definition of fair market value is woefully inadequate. The legislation states that when appraising public land for sale, fair market value “shall be exclusive of, and without regard to, the mineral deposits in the land.” This exclusion means that developers will be able to buy mineral-rich lands at rock-bottom prices, denying taxpayers the opportunity to profit from the natural resources that they own.
In 1994, the Toronto-based American Barrick Resources Corp. used the 1872 Mining Law to purchase land in Nevada for $9,765. This land contained an estimated $10 billion in gold. The fair market value exclusions in this bill leave taxpayers vulnerable to more multi-billion dollar rip-offs at the hands of foreign corporations.
We also object to the subtitle’s provision that bars the government from seeking mineral royalties on public lands made available for patents by the legislation. Royalties are an important user fee and a way to compensate taxpayers for use of public lands. This provision will deprive taxpayers of millions in revenues.
Vague language in the bill fails to ensure that land made available for purchase in this legislation must be used for mining purposes. The bill allows companies to purchase land for “sustainable economic development,” an imprecise term that could include the construction of residential or commercial properties. In 1979, a unanimous Supreme Court said that “the federal mining law surely was not intended to be a general real estate law.” This bill would change that. In addition, the bill does not prevent public lands purchasers from reselling their lands immediately at market value. This allows companies to reap a windfall profit from public lands, all at the taxpayer’s expense.
Again, TCS Action strongly urges you to strip Subtitle B from the House Resources Committee budget reconciliation bill. If you have any questions, please contact Evan Berger at (202) 546-8500 x111.
Sincerely,
Jill Lancelot
President / Co-Founder
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