Abandoned Mine Land Fund

History of AML Funds
In the mid-1970s, there were an estimated 1.1 million acres of abandoned coal mine sites in the United States and the sites numbered in the thousands. In Rock Springs, streets collapsed into sinkholes, the results of developing a municipality over old coal mine shafts, and Rock Springs was definitely not alone.

In response, congress passed the Surface Mining Control and Reclamation Act of 1977 (SMCRA) which was designed to regulate the environmental impacts of coal mining which is still in effect today. The law also created the Abandon Mine Reclamation Fund (AML) to finance the clean-up of abandoned mine sites.

What is the Abandoned Mine Reclamation Fund (AML)?
AML is a federal fund that requires coal extraction industries to pay an extraction fee to the AML fund. The revenue from this fee is used to recover old, abandoned coal mines throughout the United States. The funds are allocated to the states based on need and each state is entitled to 50 percent return of the money that their mining industry has paid to the national fund. This 50 percent is referred to as the state’s share. A 1990 amendment to SMCRA stated that states who have certified completion of known coal mining problems can use their state share funds for non-coal reclamation through other associated, federally approved projects (Public Law 95-87-403, 404, 405(c)).

What is the fee structure?

Mine Type Fee (per ton)
Surface-mined Coal 31.5 cents
Underground Coal 15 cents
Lignite Coal 10 cents

When are the funds set to end?
It was originally set to expire in 1992. It has been reauthorized by Congress seven times and the legislation was scheduled to remain alive until 2021. On June 31, 2012, Congress took a vote to limit the total annual payments of AML funds to $15 million per year. This will cause Wyoming to lose the $700 million in historical payments still owed to the state over the next 10 years.

How much does Wyoming pay to AML Funds?
AML funds are a big issue in Wyoming because currently, we are the nation’s number one coal producer and thus, we pay the most money into this fund. Since inception, Wyoming producers have paid $2.4 billion into the AML fund. The year that the AML fund came into existence, 1977, Wyoming producers mined 44.4 million tons of coal; in 2008, Wyoming’s top year for surface coal production, we mined 462,723,209 million tons of surface oil and 3,501,140 of underground oil. In 2010 Wyoming mined 438,751,440 tons of surface coal, and 3,984,675 tons of underground coal.

In 2000 the AML corpus had reached $1.5 billion and had become one of Congresses largest funds.

How much does Wyoming receive in AML Funds?
Since 1977 the state of Wyoming has been promised to receive $1.2 billion but we have only received $618 million which leaves $578 million in funds owed to Wyoming. Of the nearly $369 million distributed from the fund in the 2011 fiscal year, Wyoming received $133 million- over 33%. Wyoming has spent $164 million reclaiming more than 1,051 coal and non-coal mine sites alone.

The Wyoming Legislature directly controls the allocation of AML funds with a minimum of $30,000,000 being directed to WYAML, and the balance being allocated to research and mineral related projects of Legislative choice. The 2012 General Session passed HB0121 as the current allocation of AML funds for the state.

What are historical payments?
As of 2011, Wyoming coal mines have contributed $3 billion to the AML fund since 1977; the state has received just roughly one-third of what they put in.

Nonetheless, Wyoming is still not receiving its mandatory 50 percent state-share. A 2006 amendment to SMCRA guaranteed that Wyoming (and all other certified states) would receive its state share (totaling $578 million for Wyoming alone) which Wyoming coal producers had put into the fund prior to 2006. Starting in 2008, these “historical payments” would be paid over the next seven years in equal payments of $82.7 million. As part of the agreement, this negotiation included the foregoing of the guaranteeing that state share funds paid after 2006 would be returned to the state.  In addition, Wyoming would also receive an additional $59.5 million annually, earmarked specifically for mineral reclamation projects until 2021.

Although AML funds are paid out “mandatorily”, Wyoming must fill out a grant application for every project.

Source: Annual Evaluation Summary Report for the Wyoming Abandoned Mine Land Reclamation Program Evaluation Year 2011.

 

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