As in recent years, President Barack Obama’s FY 2016 budget, unveiled last week, proposes major measures harmful to mining, according to the National Mining Association (NMA).

The “dirt tax” has been proposed on “the volume of material displaced” by metal and uranium mines. Revenues estimated at $180 million annually would be applied to mine reclamation activities. A new leasing system is proposed for locatable minerals on private and public lands, together with a 5% gross royalty and higher rental or claim maintenance fees. No additional monies are allocated for improving the mine permitting process.

On the energy side, the budget proposes to again end the percentage depletion allowance for coal and other fossil fuels, among other features, but extends tax credits for renewables. It asks Congress to approve an increase in the coal Abandoned Mine Lands (AML) fee despite the AML fund’s current balance of $2.5 billion. The Environmental Protection Agency (EPA) would receive $4 billion of new money to encourage states to accelerate or exceed CO2 targets called for in the Clean Power Plan. To further entice state cooperation, the president asks for $25 million in grants to help states develop implementation plans. At the Department of Energy, the Clean Coal Technology Program would be scrapped and carbon capture research funding reduced.

The administration proposes a fee on mine operators to fund the Mine Safety and Health Administration’s rock dust sampling and analyses. It asks Congress to fork over $474 million to support the EPA’s Clean Air and Global Climate Change program, including $175 million for Clean Power Plan implementation. This request is despite a proposed cut of $300 million in the agency’s overall budget that will likely come from reductions in state and local water program funding.

The U.S. Geological Survey would see a $41.3 million boost over its 2014 enacted level, but it isn’t clear if additional monies would be available for critical minerals initiatives as the emphasis appears to be on ecosystem restoration, sustainable energy development, climate resilience, etc., the NMA said.

The next step is for the House and Senate Budget Committees to release their federal spending blueprints for consideration by both houses. The result will be a budget resolution for guiding the appropriations process. NMA is already working with congressional appropriators to explore legislative amendments to spending bills needed to keep federal agencies running in the new fiscal year.

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