The Obama budget proposal does not assume final action to merger certain functions of OSM into Interior's Bureau of Land Management, but says work would continue on that potential consolidation.
On the AML proposal, Obama's recommendation has been dead on arrival at Congress, in large part because of opposition from Wyoming, the nation's top coal producing state. It goes against a compromise forged in 2006 that extended the coal production tax that funds AML cleanups. That legislation instituted some program reforms, but also allowed states that have completed their coal cleanups to continue using the money for other things.
In 2004, a Gazette series revealed that more than $1.3 billion of AML money had been funneled to other purposes, including reclamation of non-coal mines, road construction and even college campus expansions.
The largest diversion was to fund the troubled United Mine Workers retiree health-care plan. Continued use of AML money for UMW benefits would not be affected by the Obama proposal.
Under the AML program, coal operators nationwide pay a per-ton tax that funds the reclamation of mine sites that were abandoned before the federal strip-mine law was passed in 1977.
Also under the law, states that cleaned up all of their abandoned mines were to be "certified." Theoretically, they would then receive less money, and be able to use it for broader purposes. But some states that finished all of their cleanups were never formally certified. And others that were certified -- such as Wyoming -- continued to receive huge sums of AML money that they spent on projects that had nothing to do with coal.
Through the 2006 legislation, states like Wyoming lost an automatic 50 percent of future AML taxes paid by their coal industries. But, they continued to receive payments from their past AML taxes, and were given more leeway to spend the money however they wanted.
Under the Obama proposal, OSM would establish an advisory council to review and rank reclamation projects proposed by states and other parties, and recommend distribution of the funds to the highest priority sites. The Obama proposal would likely benefits states like West Virginia and Pennsylvania, which continue to have large inventories of abandoned mines that need cleaned up, but don't produce nearly as much coal as Wyoming.
The changes were recommended in December 2010 by the President's National Commission on Fiscal Responsibility and Reform, which was co-chaired by Alan Simpson, a former GOP senator from Wyoming.
Reach Ken Ward Jr. at kw...@wvgazette.com or 304-348-1702.