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Abandoned Mine Land Reclamation Program

The Abandoned Mine Land (AML) Reclamation Program uses fees paid by present-day coal mining companies to reclaim coal mines abandoned before 1977. This makes these areas safer for people and the environment. The Surface Mining Control and Reclamation Act (SMCRA) of 1977 created this program to use company fees to reclaim coal mines abandoned before 1977, to set standards for today’s coal companies as they reclaim areas contemporaneously with their mining, and to post bonds to cover the cost if companies are unable to reclaim current coal mines.

Abandoned mine land areas

Abandoned mines pose risks to people and the environment. They can contaminate ground water, emit toxic waste, and cause injury when unsteady infrastructures collapse.

State and tribal AML programs rate abandoned mine areas on a priority scale of 1 to 3, as defined by federal law. Mines rated 1 and 2 are high priority and should be addressed first, with a few exceptions.1

  • Priority 1: Protection of public health safety, and property from extreme danger of adverse effects of coal mining practices pre-1977, including restoration of land, water, and the environment
  • Priority 2: Protection of public health and safety from adverse effects of coal mining practices pre-1977, including restoration of land, water, and the environment
  • Priority 3: Restoration of land and water resources and the environment previously degraded by adverse effects of coal mining practices pre-1977

To date, coal mine companies have paid $9.2 billion in AML fees to reclaim coal-related AML areas. Those fees have earned $1.5 billion in interest, which has paid for a portion of the costs for health care plans for the United Mine Workers of America (UMWA).2

To see AML data by location, visit OSMRE’s data site and click on ‘Mapping’ in the navigation bar. To see data by completed, funded, and unfunded sites, click on ‘Summary.’ image of Office of Surface Mining Reclamation and Enforcement's data site.

Reclaimed AML areas

Since 1977, $3.9 billion has been spent on the construction of completed reclamation projects.3

When a state or tribe has reclaimed identified high priority coal sites, they may be eligible for “certification.”4 The source of their funds from the Department of the Interior’s Office of Surface Mining Reclamation and Enforcement (OSMRE) changes; instead of receiving funds sourced from AML fees, they receive funds sourced from the General Fund of the U.S. Treasury. These funds can be used for a wider range of purposes, including reclaiming abandoned hardrock mine sites. A certified state or tribe may still have abandoned coal mine areas to reclaim.

Five states and three tribes are considered certified: Wyoming, Montana, Texas, Louisiana, Mississippi, the Crow Tribe, the Hopi Tribe, and the Navajo Nation.5

AML areas undergoing or requiring reclamation

The federal AML Reclamation Program distributes funds for reclamation to the state and tribal AML programs with remaining Priority 1 and 2 sites.

State and tribal AML programs use funds to prepare for reclamation projects, including permitting processes, environmental assessments, site surveys, and the development of reclamation plans. After completing project preparation, funds are used for construction to reclaim the site.

Currently, there are $488M funded but not completed projects, encompassing 118,901 GPRA acres with an estimated outstanding $9.8 billion required to reclaim remaining coal-related AML areas.6

For more information:

AML funding and spending7

Chart shows the amount of total funds in the AML reclamation program in 2016, 10.7 billion. 8.2 billion of that total has been disbursed. 2.5 billion of that total has not been disbursed.

The AML database (e-AMLIS) only accounts for construction costs. It doesn’t include other work on which a state or tribe may spend AML funds that are necessary for the reclamation of a site, such as the costs of identification, site assessments, and contracting, nor does it include other types of spending, such as set-asides and emergency projects (30 U.S. Code § 1231 describes other types of spending).

AML revenue and disbursements

Fees paid by coal mine operators fund the AML Reclamation Program.

Companies pay a per-ton fee to OSMRE:8

  • $0.28/ton on surface mined coal
  • $0.12/ton on deep-mined coal (subsurface)
  • $0.08/ton on lignite

Congress set the current rates when the fee was extended in the Tax Relief and Health Care Act of 2006, lowering the rates 20% from the original amounts set in 1977.

Since 1978, the coal industry has contributed $9.2 billion to the AML fund, which has earned $1.5 billion in interest.9

Annual AML fee collection10

Chart shows annual AML fee collection since 1978.

Distribution to states

Since passage of the Tax Relief and Health Care Act of 2006, distribution of AML grants are mandatory. Prior to 2006, distribution was subject to Congress’ annual appropriations process.

The amount states and tribes receive each year in annual payments varies depending on the fees collected during the previous FY (e.g., FY 2014 fees fund FY 2015 grants).

The statute requires the government to distribute AML Reclamation Program funds collected during the previous FY as follows:11

  • State and tribal share grants: Non-certified states receive 50% of the AML revenue originating from coal production in their states. This accounts for 50% of overall distribution of AML fees in a given year. Certified states receive amounts equal to their respective share grant totals sourced from the Treasury’s General Fund.12
  • Historic coal grants: 30% of overall AML fees go toward Historic Coal Grants for non-certified states. OSMRE allocates Historic Coal grants based on each state’s percentage of coal tonnage produced prior to 1977. Congress created Historic Coal grants so that states with large numbers of abandoned mines, but little current coal production, would not be left without funds to reclaim them.13
  • Federal expenditures (including minimum program make-up grants): 20% of AML fees goes toward federal expenditures. These funds must first be used to fund Minimum Program Make-Up grants to non-certified states. These ensure that non-certified states receive at least $3 million a year or the amount necessary to reclaim their remaining high priority AML areas, whichever is lower. OSMRE uses the remaining amount to fund operations, emergency projects, and other efforts.14

The states that received the largest grants from OSMRE in FY 2016 were Wyoming, Pennsylvania, West Virginia, Kentucky, and Illinois.15

Chart shows the states that received the largest grants from the AML fund in FY 2016. Wyoming received $59.2 million, Pennsylvania received $43.0 million, West Virginia received $29.7 million, Kentucky received $17.1 million, and Illinois received $15.7 million.

For more information about grants, see OSMRE grant distribution reports.

State and tribal spending

State and tribal AML programs use funds to prepare for reclamation through an extensive permitting process, environmental assessments, site surveys, and the development of reclamation plans. Generally, states and tribes must reclaim all Priority 1 and 2 coal sites before using AML funds on Priority 3 coal sites, but a number of exceptions exist.

In addition to scheduled reclamation projects, states and tribes can use AML funds for related efforts, such as:16

  • Covering the costs of administering and enforcing their AML programs
  • Funding emergency AML reclamation projects
  • Setting aside annual funds (up to 30%) for projects related to acid mine drainage

OSMRE also maintains a list of contacts for states, Indian tribes, and OSMRE offices.

The AML fund

Prior to 2006, companies often paid more money into the AML fund each year than Congress chose to appropriate. A large, unappropriated balance grew over time.

Growth of the AML fund’s unappropriated balance17

Chart shows the growth of the AML fund's unappropriated balance from 1989 to 2015. It grew from around $0.5 to nearly $2.5 billion dollars.

Interest on the fund

In 1990, Congress authorized the federal government to invest the unappropriated balance in U.S. Treasury Securities. Since then, the unappropriated balance has earned $1.5 billion in interest. Since 1996, almost all of the interest on the AML fund has gone toward paying a portion of the cost for some health care plans for the United Mine Workers of America.18

Grants to states and tribes

By 2007, the state and tribal share of the unappropriated balance had reached $1.34 billion.19

Congress resolved to pay states’ and tribes’ unappropriated balance out in the form of “Prior Balance Replacement Grants,” which pay states and tribes 50% of what companies operating in their jurisdictions paid into the AML Fund from 2008–2014. Payments were made over 7 years in equal, annual installments.20

OSMRE paid states and tribes a collective total of $1.3 billion in roughly equal installments over the course of seven years. This money did not come directly from the AML Fund, but was sourced directly from the Treasury’s General Fund.

The fund today

As of November 2015, the fund’s balance stood at $2.5 billion.21 The reauthorization for AML fees expires in FY 2021. The unappropriated balance has been divided into different allocations to be used starting in FY 2023, as follows:

Allocation of unappropriated balance22

Chart shows the division of allocations in the unappropriated part of the AML reclamation fund. 60.4% is meant for historic coal grants. 16.9% is meant for federal expenses, which are subject to congressional appropriation. 4.7% is meant for a reserve for UMWA health care plans and retirement funds. 18% is meant for states and tribes.

Congress is currently considering multiple proposals that would reallocate money away from the AML fund toward economic revitalization in areas of significant need with a history of coal mining.

Notes

  1. Legal Information Institute, 30 U.S.C. §1233(a)

  2. Office of Surface Mining Reclamation and Enforcement, FY 2017 Budget Justifications and Performance Information (PDF), 2016

  3. e-AMLIS generated report “Cost Summary National;” includes all priorities and problem types; generated February 10, 2016

  4. Legal Information Institute, 30 U.S.C. §1240(a)

  5. Office of Surface Mining Reclamation and Enforcement, FY 2016 AML Grant Distribution (PDF), 2016

  6. Under the Government Performance and Results Act (GPRA) of 1993, OSMRE is required to report measurable goals to Congress. One of their key measures is the number of abandoned mine land acres reclaimed. However, many reclamation projects are reported in units other than acres, such as feet of highwalls. These non-acre measures are converted to GPRA acres to provide a standard unit with which to measure program performance. Sources: e-AMLIS generated report “Problem Type Unit & Cost (State) w/ GPRA,” includes all priorities and problem types, generated February 10, 2016; e-AMLIS generated report “Cost Summary National,” includes all priorities and problem types, generated February 10, 2016; e-AMLIS generated report “Cost Summary National,” including only Priority 1 and Priority 2 and all problem types, generated February 10,2016.

  7. Source for total collected fees: FY 2017 Budget Justifications and Performance Information (PDF); Source for interest total: FY 2017 Budget Justifications and Performance Information (PDF); Source for funds disbursed — Construction of funded or completed reclamation projects: $4.3 billion figure is the sum of total “funded cost” plus total “completed cost” in the e-AMLIS report, “Cost Summary National,” generated on February 10, 2016, including all priorities and problem types. Source for other disbursements: $2.5 billion figure equals (“cumulative appropriated balance” – sum of “transfers to UMWA health & retirement funds”) – (total “funded cost” + total “completed cost”). Source for funds disbursed to UMWA health care plans: FY 2017 Budget Justifications and Performance Information (PDF); Source for funds and interest not yet disbursed: FY 2017 Budget Justifications and Performance Information (PDF); unappropriated interest figure equals (sum of “interest earned” - sum of “transfers to UMWA health and retirement funds”).

  8. Legal Information Institute, 30 U.S.C. §1232

  9. Office of Surface Mining Reclamation and Enforcement, FY 2017 Budget Justifications and Performance Information (PDF), 2016

  10. Ibid.

  11. Ibid.

  12. Ibid.

  13. Ibid.

  14. Ibid.

  15. Ibid.

  16. Legal Information Institute, 30 U.S.C. §1231(c)

  17. Office of Surface Mining Reclamation and Enforcement, FY 2017 Budget Justifications and Performance Information (PDF), 2016

  18. Ibid.

  19. Office of Surface Mining Reclamation and Enforcement, FY 2008 AML Grant Distribution (PDF), 2008

  20. Office of Surface Mining Reclamation and Enforcement, FY 2016 AML Grant Distribution (PDF), 2016

  21. Ibid. This figure includes interest earned but not appropriated.

  22. Ibid.