Dennis Myers

Digging Deep

On May 10, 1872, U.S. Sen. William Stewart of Nevada, a mining lawyer and mine owner, got something called the General Mining Law enacted by Congress. The law was a product of the corrupt Congresses that marked what Charles Warner and Mark Twain called the Gilded Age.

This law still governs mining on the public's land in the United States, which makes it central to the economy of Nevada's small counties. A mention of it to anyone who knows about mining will produce strong reactions. The mining industry regards it as Holy Scripture. Critics like former U.S. Sen. Dale Bumpers of Arkansas call it a license to steal.

John Kerry and George Bush stand in similar opposing postures.

The law allows the industry to claim and mine minerals on the public's land at rock-bottom rates. A patenting provision transfers the land itself for the 1872 price – $2.50 to $5 an acre. No royalties are required on the ore mined, which can include (in Nevada) copper, silver, and gold and (in other states) platinum.

During the Clinton administration, Interior Secretary Bruce Babbitt broke his pick trying to change the law. Each year, he announced a particularly egregious example of the law's workings. In 1995, for instance, it was mineral deposits valued at nearly $3 billion that cost ASARCO Inc. $1,745 to obtain with no royalties to the public. The copper and silver deposits were located on 347 acres in the Coronado National Forest.

Authors Mark Zepezauer and Arthur Naiman wrote in 1996, "A Canadian mining company called American Barrick is in the process of extracting more than $10 billion in gold – $8.75 billion so far – from land in Nevada it paid $5,190 for. The Chevron and Manville corporations hope to lay their hands on about $4 billion worth of platinum and palladium; to patent the Montana acre where the minerals are found, they'll pay about $10,000."

Proponents of the law like to portray it as helping the traditional bewhiskered miner with a burro and a pick – but they also oppose efforts to limit the benefits of the law to small independent miners.

Nevada Mining Association Director Russ Fields says, "The General Mining Law of 1872 has served the nation well as a means for miners to gain access to public lands for the purpose of developing minerals. It has been amended many times over the years as new requirements for developing minerals were identified by Congress."

Fields says the mining law has allowed the creation of thousands of mining jobs, and while the mining industry agrees that some change might be good, it's not entirely the industry's fault it hasn't happened.

"Over many years, decades, in fact, the Congress has worked on various approaches to changing the mining law – called reform," he said. "The mining industry agrees there are issues that should be reformed or added, including addressing the patenting process, a form of royalty, and funding for mitigating historic abandoned mine sites, to name a few. While changes including the foregoing have nearly occurred more than once, the law itself has not changed much during these years due to significant differences of opinion in what constitutes responsible reform. Meanwhile regulations, including holding fees and those governing environmental protection, have changed and continue to change."

Fields also says the 1872 act is a mining law, not an environmental law, and the two should not be confused.

The "patent" provisions have been under a moratorium since 1994, so the transfer of land from public to private hands has been slowed.

In Nevada, the General Mining Law of 1872 was considered sacrosanct in the days when the state's population was small and the mining industry dominated. Today, the state is one of the nation's most urban (more than 90 percent live in two metropolitan areas), and there are many who consider the law sacrilegious. In Nevada today, there are groups like Great Basin Mine Watch that support reform of the law, something that would have been unheard of in the old days. And for taxpayer groups, changes in the law represent a rich lode of royalties.

During Kerry's Senate career, he has repeatedly voted for changes in the law, and as a presidential candidate he has said he wants the changes in order to raise money to pay for national parks. In fact, he does not call it mining law reform; he calls it a parks plan: "Instead of allowing the archaic 1872 Mining Law to continue to distort the minerals market and cause environmental destruction of public lands, a Kerry-Edwards administration will modernize the sale of mineral rights and use the revenue generated to increase the operations budget of our national parks."

Kerry made that pledge a centerpiece of his photo-op at the Grand Canyon on Aug. 9.

Bush launched an effort in 2002 to change the old law, but it came to little, and it didn't represent dramatic change in the law's provisions. In other ways, he has been supportive of the mining industry's stance of using the law – including one case very familiar to residents of the Truckee Meadows.

Local residents who organized a grassroots campaign against a cat litter plant northeast of Reno and were making headway in winning the support of local officials were jolted when the Bush administration stepped in, telling county officials they had no authority to deny permits for the plant because the 1872 law prevents local communities from stopping mining. That dispute was later cited by U.S. Rep. Nick Rahall of West Virginia, sponsor of changes in the law, in remarks on the House floor last year.

In another dispute, the Clinton administration had delayed an open-pit gold mine proposal by a Canadian corporation in Imperial County, Calif., because it was located in a delicate environmental site that was also a center of religious, cultural and historical resources for the Quechan tribe. The Bush administration reversed that finding.

Tracey Schmitt, a western regional spokesperson for candidate Bush, says, "President Bush opposes John Kerry's job-killing tax on America's mining industry. Kerry's policy would have a devastating impact on Nevada's economy and is one more reason he is wrong for the state."

Democracy Run Amok?

Nevada Senate Republican floor leader William Raggio says he hopes all initiative petitions – those sponsored by liberals and those sponsored by conservatives – are defeated by the voters.

And, in a surprising move, the Progressive Leadership Alliance of Nevada (PLAN) has withheld support for an initiative petition that seeks increased education funding in the state.

Raggio's comments before the Reno Downtown Rotary came in a wide-ranging speech on political affairs in which he was critical of both parties.

"I'm disappointed in this national election because I think it's the most disharmonious, acrimonious election I've ever seen in the history of this country. It shouldn't be. I think a lot of this rhetoric can be toned down. And I see some of that on our local level as well. We've got a lot of initiative petitions flying around. Certainly it's a constitutional privilege, and everybody has a right to do that, but I stand back and hope that all of them don't pass because, I'll tell you, we will have some real problems."

Raggio said he was not endorsing or opposing any of the ballot measures, but he discussed the complications they can create when legislators are trying to put together a budget. Sweeping initiatives can cost money voters never dreamed of or gum up the works of public programs in ways they wouldn't have approved if they had understood the implications, he explained.

One measure could cost both the taxpayers and private businesses money, he said.

"You know, I don't want to take sides on them. That isn't my purpose here today. But raising the minimum wage – that may qualify [for the ballot]. Both public and private [payrolls] could be costly."

Discussing an initiative petition requiring that education be funded ahead of other needs, Raggio said that, like other lawmakers, he is not certain how it would work in the real budget process.

In one scenario, he said later, the lawmakers could be forced to fund education before receiving revenue estimates from the Nevada Economic Forum, which lawmakers are required to use but which don't arrive until May, three months into the legislative session. If that happened, it could well mean that education would be harmed because legislators would be building a budget without knowing how much money was available. Acting in the dark, Raggio said, legislators would be super-cautious in appropriating money and so would cut back school funding.

"If we had to pass the education budget before we got the final figures from the Economic Forum, then I think it would cost the schools some money," he said.

In another scenario, the lawmakers could build the budget as they always have but keep the formal votes until the end and hold all votes at once, with the education vote first. That would technically satisfy the requirements of the initiative but would also render it meaningless.

"You've got one [initiative] on education first, funding education first. Sounds good, you know, but what does it mean? It means that we'll divide the budget up, and when the education budget is ready, we'll pass that and five minutes later or ten minutes later we'll pass the next one."

In comments after his speech, Raggio made clear he was not condemning the initiative and referendum process, but that he thinks it is overused and often does not produce good law. In some cases, he pointed out, a public vote on a law locks it into the law books so it can't be changed without another vote of the public.

"Over experience of time, we know we should modify, favorably for the taxpayer, [Nevada's sales tax law], but you can't do it because it needs a vote of the people." The sales tax law was placed on the ballot by referendum petition in 1956 and approved, so any changes to it must also be voted on by the public. (This applies to the statutory provisions creating the sales tax, not the level at which it is set.)

AFL/CIO state director Danny Thompson, himself a former state legislator, says he agrees with Raggio that legislation by referendum is not always the best way to go, but his group is being forced to action on minimum wage.

"I just left the growth task force meeting, and people aren't just being forced out of the housing market, they're being forced out of the apartment market or even made homeless... I don't see the legislature introducing any bills to change that, which has led us to the initiative process."

In the case of the education funding initiative, the coalition of organizations that make up the Progressive Leadership Alliance of Nevada met and chose to take no position on the initiative petition sponsored by the state teachers group, the Nevada State Education Association.

This was even more surprising because NSEA is a member of PLAN. However, many of the board members, such as PLAN Director Bob Fulkerson and Nevada Legal Services Director Jon Sasser, believed that if the initiative requiring that Nevada fund schools at the national average were approved by voters, the money for it would come out of other human services such as Medicaid.

PLAN official Jan Gilbert said the initiative does not designate a funding source to pay for bringing Nevada to the national average.

"Most of the people in our group support the concept. It was how the money was raised that concerned people. If that money had to be taken from other parts of the human resources budget, that's no gain for anyone."

No representatives of the teachers attended the meeting at which PLAN decided its stance on the initiative, but American Civil Liberties Union representative Richard Siegel spoke in favor of the initiative, saying he thinks it is "a sad day" when progressives fail to support education.

"A progressive coalition has a choice – seeing things as a zero-sum game or moving forward in both areas. ..." Siegel said. "They may be right that the money will come out of the hide of Nevada Medicaid. But I would rather see it pass and have us fight for human services and hope that human services maintains its share and perhaps a percent or two more or gain in the natural growth of revenues. I'm an optimist, and I bet on the come and I bet we can grow human services together with education."


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