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MINING INDUSTRY ANNOUNCES SUPPORT FOR CRAIG BILL

 WASHINGTON, May 3 /PRNewswire/ -- The mining industry Monday announced its support for Sen. Larry Craig's (R-Idaho) legislation to modify the Mining Law.
 "The Craig bill provides a reasoned approach to raising federal revenue without crippling the mining industry and costing thousands of Americans their jobs," said John A. Knebel, president of the American Mining Congress (AMC), the principal trade association for the U.S. mining industry.
 "We believe that Senator Craig's proposal strikes a good balance between preserving jobs and raising revenue for the federal government -- the very balance missing from other proposals currently on the table," Knebel said.
 The Craig bill (S. 775) would place a 2 percent net royalty on minerals at the mine mouth. Two other legislative proposals now pending in Congress would impose an 8 percent royalty on gross mining revenues and would have a devastating economic impact on the western mining states, according to a new study released Monday.
 The study, by the international accounting firm of Coopers & Lybrand and the law firm of Morrison & Foerster, showed that the Craig bill is the only one of the three proposals that would raise revenue for the federal government. The two other bills -- S. 257 by Sen. Dale Bumpers (D-Ark.) and H.R. 322 by Rep. Nick J. Rahall (D-W.Va.) -- would result in hundreds of millions of dollars in lost tax revenue, the study found.
 "The mining industry appreciates the fact that the Craig bill is the only one that answers the administration's call for increased revenue," Knebel said.
 The Craig bill also recognizes that mining operations are already governed by scores of federal and state environmental laws, Knebel noted. "On the other hand, bumpers and Rahall would unnecessarily duplicate environmental laws and regulations that are already on the books," he said.
 The new study examined the economic impact of the royalty and fee provisions in three legislative proposals. It showed that imposing gross royalties on hardrock mining would cost up to 47,000 jobs and as much as $6.1 billion in lost economic output in 12 western mining states. Hardest hit would be Nevada, Colorado, Wyoming, California, Montana and Washington.
 Stephen D. Alfers, co-author of the study, said the study clearly demonstrates that the method in which royalties are imposed makes a significant difference in the net impact on jobs and revenue.
 "Imposing a royalty on the value of a finished product, as the Bumpers and Rahall proposals do, would have a devastating economic impact," said Alfers, a partner with Morrison & Foerster.
 Highlights include:
 Job Losses
 The various proposals would create major job losses:
 -- Bumpers (8 percent gross royalty): 47,000 jobs lost;
 -- Rahall (8 percent gross royalty): 44,000 jobs lost;
 -- Craig (2 percent net royalty): 4,900 jobs lost
 Reduced Economic Output
 The study also finds that these negative legislative proposals would significantly reduce economic output.
 -- Bumpers: $6.1 billion in annual losses;
 -- Rahall: $5.7 billion in annual losses;
 -- Craig: $627 million in annual losses.
 Lost Earnings
 The study concludes that each proposal would also result in significant loss of earnings:
 -- Bumpers -- $1.2 billion in lost earnings;
 -- Rahall -- $1.2 billion in lost earnings;
 -- Craig -- $129 million in lost earnings.
 Revenue Impact
 The Craig proposal is the only one of the three bills that would raise revenue for the government:
 -- Bumpers -- $443 million in annual lost federal revenue;
 -- Rahall -- $422 million in annual lost federal revenue;
 -- Craig -- $53 million in annual federal revenue raised.
 The study's findings are consistent with the results of two earlier studies, which also examined the economic impact of Mining Law reform legislation.
 Alfers is scheduled to testify Tuesday, May 4, at a hearing on the royalty provisions before the Senate Subcommittee on Mineral Resource Development and Production.
 -0- 5/3/93
 /CONTACT: Robert Webster of the American Mining Congress, 202-861-2891/


CO: American Mining Congress ST: District of Columbia IN: MNG SU: LEG

MH-TW -- DC023 -- 3835 05/03/93 13:02 EDT
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Date:May 3, 1993
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