On Tuesday, October 25, 2011, the House is scheduled to consider H.R. 1904 under a rule.  The rule provides for one hour of general debate equally divided and controlled by the chair and ranking minority member of the Committee on Natural Resources.  The rule also self-executes the Manager’s Amendment and provides ten minutes of debate for the other three amendments made in order, and one motion to recommit with or without instructions.

The bill was introduced by Rep. Paul Gosar (R-AZ) on May 13, 2011, and referred to the Committee on Natural Resources.

H.R. 1904 would authorize a land exchange which Congress finds to be in the public interest and in order to further certain public objectives, including: promoting job and other economic opportunities; facilitating development of a world class copper deposit; enhancing federal, state and local revenue collections; securing federal ownership of lands with important public values; assisting more efficient Federal land management; providing opportunity for community expansion; and protecting Apache Leap.

The bill would direct the exchange of federal for non-federal lands and would set forth title approval standards for land conveyed by Resolution Copper Mining, LLC (Resolution Copper) to the U.S. in the exchange.  H.R. 1904 would require “government to government” consultation with Indian tribes on issues related to the land exchange.

H.R. 1904 would require standard appraisals for the exchange lands and would require preparation of an income capitalization approach appraisal scenario for the federal land for use in calculating any payments.

The bill would require that the exchange be an equal value exchange and would set forth equalization options if the federal and non-federal land values are not equal.  The bill would waive any cash equalization payment by the United States to Resolution Copper if the non-federal lands appraise higher than the federal land, and provides for a donation of any excess value by Resolution Copper in lieu thereof.

The bill would allow for mineral exploration on or under the 760 acre Oak Flat Withdrawal Area, subject to certain limiting conditions and would provide that Resolution Copper will pay for all costs associated with the exchange that are agreed to by the Secretary.

H.R. 1904 would provide that the federal land conveyed to Resolution Copper will be available for mining and related activities in accordance with federal, state and local laws, rules and regulations applicable to mining on privately owned land.

The bill would state that it is the intent of Congress for the land exchange to be completed within one year of the bills enactment, and would require that all exchanges be in compliance with the National Environmental Policy Act.

H.R. 1904 would identify the eight parcels of non-federal land, totaling approximately 5,344 acres, to be conveyed to the United States in the exchange, and would require that Resolution Copper surrender any rights to commercially extract minerals under Apache Leap.

The bill would set forth annual reporting requirements on the amount of minerals produced from the land conveyed to Resolution Copper in the land exchange.  H.R. 1904 would provide for a value adjustment payment to the United States in the event the amount of minerals produced from the land conveyed to Resolution Copper in the exchange ever exceeds the amount anticipated in the appraisal scenario, and would require that such a payment be put into a U.S. Treasury account for use to maintain, repair and rehabilitate Forest Service and Bureau of Land Management (BLM) assets.

The bill would require that the 822 acre Apache Leap area will be permanently managed by the Forest Service to preserve its natural character and archeological and cultural resources and would establish a three year public process for the Forest Service to prepare a plan to manage and protect Apache Leap.

H.R. 1904 would provide for the possible conveyance of certain National Forest lands, and a federal reversionary interest, to the Town of Superior, Arizona at market value.

Before now, Democrats have held up domestic copper mining, allowing over 30 percent of our copper needs to come from overseas exports.  The project authorized in H.R. 1904 could facilitate the creation of 3,700 jobs, equating to $220.5 million in annual wages.  According to a recent economic study, the total economic impact of the project is estimated to be over $61.4 billion, or nearly $1 billion per year, and another $20 billion in federal, state, county and local tax revenue.  The legislation could yield these economic benefits without taxpayers footing the bill.  In short, H.R. 1904 costs the federal government nothing but returns much in the form of raw copper ore, jobs and revenues. 

According to the House Committee on Natural Resources House Report 112-246,

Resolution Copper Mining LLC (Resolution Copper) is a subsidiary of Rio Tinto and BHP-Billiton.  The company owns land and holds mining claims near the Town of Superior, in southeastern Arizona.  In the late 1990s, Resolution Copper's exploratory activities revealed the existence of a very large copper deposit on its claims, located between 4,500 to 7,000 feet below the surface.  Resolution Copper is interested in developing a large underground mine where the ore would be extracted and removed.

The Oak Flat Campground, part of the Tonto National Forest, is located in the center of Resolution Copper's land holdings and mining claims.  Approximately 760 acres of National Forest lands in and around the Oak Flat Campground were withdrawn from the mining laws in 1955. See Public Land Order 1229 (Sept. 27, 1955); 20 Fed. Reg. 7336-37 (Oct. 1, 1955).  Resolution Copper has proposed a land exchange to allow it to acquire the campground and adjacent withdrawn National Forest lands so that it can proceed with development of the mine.  The Secretary of Agriculture would convey to Resolution Copper certain lands and interests in the Tonto National Forest, Arizona, in exchange for private lands of environmental and archeological significance in the State of Arizona for management by the U.S. Forest Service and the Bureau of Land Management (BLM). The Town of Superior, Arizona, will also acquire lands.

The four-part land exchange would occur under H.R. 1904, as follows:

U.S. Forest Service acquisition of land from Resolution Copper.  The Forest Service would acquire a total of 1,194 acres from five different locations.  These include Resolution Copper lands located within Coconino (640 acres), Gila (147 acres), Maricopa (149 acres), Pinal (110 acres) and Yavapai (148 acres) Counties.  These lands contain riparian habitats and sensitive cultural areas within the Tonto National Forest. Several hundred acres contain habitat for endangered species and archeological sites.

BLM acquisition of land from Resolution Copper.  BLM would acquire a total of 4,150 acres from three separate locations. Three thousand fifty acres would be acquired from the lower San Pedro River area, which includes one of the largest mesquite bosque (dense forest) left in Arizona, critical habitat for several endangered species, and critical bird habitat.  This would fully complete the San Pedro Conservation area.  BLM would also acquire 160 acres in Gila County and 940 acres in Santa Cruz County.

Resolution Copper acquisition of land from Forest Service. Resolution Copper will acquire the 2,422 acre `Oak Flat' parcel, which is checker-boarded within Resolution Copper's lands.  Resolution Copper already has unpatented mining claims that cover about 75% of the parcel, including the culturally sensitive Apache Leap area.  This exchange will provide more protection for Apache Leap since the conveyance will prohibit any type of extraction activity and transfer this land to the federal government indefinitely.

If the land received by Resolution Copper exceeds the value of the lands received by the federal government, Resolution Copper may provide additional lands to equal the exchange or provide a monetary payment.  Any cash payment will be deposited in a fund established under the Sisk Act and the proceeds used to buy additional forest land for the National Forest System nationally and maintain existing federal facilities.

Town of Superior, Arizona, acquisition of land from Forest Service.  The Town of Superior would acquire a 30 acre parcel of land currently being used as a cemetery, a reversionary interest and reserved mineral rights in a 265 acre parcel, and 250 acres near the Superior Airport.

Enactment of this land exchange would allow for development of the mine while adding other important lands to Federal management.  The mine could provide up to one-quarter of the nation's estimated annual copper needs. Resolution Copper estimates that the total economic impact of the mine will exceed $60 billion and support 3,700 jobs annually.

Based on information provided by the affected agencies, the Congressional Budget Office (CBO) estimates that discretionary costs to implement H.R. 1904 would total less than $500,000 annually.  Those costs would include preparing management plans to facilitate the exchange and administering new lands received in exchange for federal land.  Enacting the bill would have no significant net effect on direct spending and no effect on revenues.

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues.  CBO estimates that enacting H.R. 1904 would affect direct spending, but the net effects would be negligible for each year.

The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would impose no costs on state, local, or tribal governments.

Manager’s Amendment No. 1—Rep. Hastings (R-WA): The amendment would make technical corrections to the bill to bring it into compliance with clause 4 of rule XXI.    

Amendment No. 2—Reps. Grijalva (D-AZ), Garamendi (D-CA): The amendment would require that Resolution Copper agree to:

1. Locate and maintain the remote operation center for mining operations on the conveyed federal land in the town of Superior, Arizona for the duration of operations;
2. Actively recruit and provide an employment preference for qualified applicants who reside in the state as of the date of the consummation of the land exchange for employment positions related to mining operations on the conveyed federal land;
3. Ensure that all locatable minerals produced in commercial quantities from the conveyed federal land remain in the U.S. for processing and use; and
4. Ensure that all equipment used to mine or support mining activities on the conveyed federal land is made in the U.S.

Amendment No. 3—Rep. Lujan (D-NM): The amendment would exempt all Native American sacred and cultural sites from the land conveyance.

Amendment No. 4—Rep. Markey (D-MA): The amendment would require, as a condition of the land exchange authorized by the bill, that Resolution Copper pay an eight percent royalty to the United States on all locatable minerals produced in commercial quantities from the federal land the company receives in the exchange.  The amendment would also require that Resolution Copper submit to the Secretary of the Interior an annual report indicating the quality of locatable minerals produced in commercial quantities from the federal land conveyer to them.