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115th Congress   }                                     {        Report
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                     {       115-422

======================================================================



 
    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\
---------------------------------------------------------------------------
    \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/
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \3\Twin Metals Minnesota, Project Facts, http://www.twin-
metals.com/about-the-project/project-facts/.
    \4\Id.
    \5\Id.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \6\Id.
    \7\Id.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \13\U.S. Forest Service, Twin Metals Lease Renewal, https://
www.fs.usda.gov/detail/superior/landmanagement/resourcemanagement/
?cid=fseprd507250.
    \14\Id.
---------------------------------------------------------------------------
    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),

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  By fiscal year, in millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2018    2019    2020    2021    2022    2023    2024    2025    2026    2027   2018-2022  2018-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              DECREASES IN DIRECT SPENDING
 
Estimated Budget Authority........................       *       *       *       *       *       *       *       *       *      -2         *         -2
Estimated Outlays.................................       *       *       *       *       *       *       *       *       *      -2         *         -2
--------------------------------------------------------------------------------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  By fiscal year, in millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2018    2019    2020    2021    2022    2023    2024    2025    2026    2027   2018-2022  2018-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET DECREASE IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact....................       0       0       0       0       0       0       0       0       0      -2         0         -2
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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]