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F I S C A L I M P A C T R E P O R T

SPONSOR Harrison

ORIGINAL DATE

LAST UPDATED

2-5-07

HB 1062

SHORT TITLE Close Black Jack Mine in McKinley County

SB

ANALYST Woods

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

652.5

Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Energy, Minerals and Natural Resources Department (EMNRD)

New Mexico Environment Department (NMED)

SUMMARY

Synopsis of Bill

House Bill 1062 seeks to appropriate $652,500 from the general fund to the Energy, Minerals

and Natural Resources Department for expenditure in fiscal year 2008 to close the abandoned

Black Jack mine in McKinley County. Any unexpended or unencumbered balance remaining at

the end of fiscal year 2008 shall revert to the general fund.

FISCAL IMPLICATIONS

To achieve the goal of mine reclamation within the one year timeframe of the appropriation,

EMNRD will likely fund the project through a contract or joint powers agreement.

SIGNIFICANT ISSUES

As background, the Energy, Minerals and Natural Resources Department (EMNRD) advises that

the Black Jack Mine was operated as an underground uranium mine between 1959 and 1964 and

produced over a million pounds of uranium. After the mine was closed, the shaft was sealed and

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2

most structures were removed. However, considerable surface disturbance remains, including

concrete pads and a large waste rock pile. Measurements of soil and air indicate high levels of

radionuclides remain. These materials may be hazard to the residents of the Smith Lake

community, to grazing activities in the area, and, potentially, to the ground water which is used

by the community. EMNRD suggests that the site needs a final reclamation treatment with

contaminated materials either removed or encapsulated and the surface restored. The department

points out the following considerations:

1. The uranium mining “boom" from the 1950s to the 1980s left behind hundreds of

sites with significant disturbances and environmental and health impacts. Many of

these sites, particularly the larger mines and mills, have been reclaimed, or are being

reclaimed, under the authority of various state, federal and tribal authorities.

However, a number of sites have not been reclaimed. These include older sites,

particularly those located in the checkerboard area of mixed federal, state and tribal

jurisdiction. The Black Jack Mine is one of those sites that remains to be fully

reclaimed.

2. The reclamation of the Black Jack Mine may present some jurisdictional questions

because it appears the site is located on tribal trust land. EMNRD is willing to work

with the Navajo Nation to conduct and to complete the closure of the site. If

necessary, a joint powers agreement could be employed. It is also possible

Environmental Protection Agency would be involved. If so, a joint powers

agreement could again be used.

The New Mexico Environment Department (NMED) notes that abandoned uranium mines in the

northwestern portion of the state pose a variety of safety and health concerns, including threats to

public safety from the hazards of open shafts, threats to public health from public exposure to

windblown uranium soils onto neighboring residential properties and threats to groundwater

quality from leaching of uranium contaminated soils into underlying underground sources of

drinking water. Abandoned uranium mines have caused soil and groundwater contamination at a

number of sites in New Mexico. Further, that the Black Jack mine is an unreclaimed former

uranium mine located near Smith Lake between Thoreau and Crownpoint, New Mexico. The

mine operated from approximately 1959 to 1964. Most of the structures on the site were razed.

The mine site contains a vertical shaft, three subsidence areas and a large volume of uranium

mine waste on the surface and remains of concrete structures. The mining area is approximately

1.5 miles upgradient of a Navajo Housing Authority complex. Surface water runoff eventually

leaves the mine site area and is deposited in nearby Smith Lake, a source of livestock watering.

Site inspections and sampling of air, water and soils at the site by NMED in the 1980s and 1990s

showed downwind air containing three times the upwind concentrations of radon and

radionuclides in soils on-site that are three times the background concentrations. NMED

concludes that there is the potential for radionuclides to leach from the site and cause

groundwater to become contaminated, and that funding of remedial activities at the Black Jack

Mine site will reduce threats to public safety, public health and enable the state to better protect

and preserve water quality and enhance potable supplies in nearby communities.

PERFORMANCE IMPLICATIONS

EMNRD indicates that the department’s Mining and Minerals Division seeks to reclaim land

impacted by past mining activity. Other federal and tribal agencies have similar goals.

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3

However, the cleanup of the Black Jack Mine has eluded these agencies. Because mining ceased

in 1964, this mine falls outside the jurisdiction of the New Mexico Mining Act. Both New

Mexico and the Navajo Nation receive federal grants for abandoned mine reclamation; however,

limits on those grants imposed by federal law have prevented each program from reclaiming this

site. This appropriation, EMNRD opines, will allow the State of New Mexico, working with the

Navajo Nation, to overcome these barriers and reclaim the Black Jack Mine.

NMED indicates that it will need to coordinate with EMNRD to ensure that the remedial closure

activities conducted conform with New Mexico Water Quality Control Commission regulations

for protection of groundwater and surface water resources. However, there is already a program

for coordination of those types of activities between NMED and EMNRD, which would make

the overall work impacts minimal.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

EMNRD indicates that a capital outlay request by Senator Linda Lovejoy seeks $652,500 for the

Indian Affairs Department to “plan, design, and construct mine reclamation in Smith Lake

Chapter". Based on discussions with Navajo Nation officials, EMNRD indicates it believes that

request is also for the closure of the Black Jack Mine.

TECHNICAL ISSUES

EMNRD notes the bill uses the term “close" in a slightly confusing manner. In this bill, “close"

means to reclaim or remediate or cleanup the site, not to cease operating the mine. The mine

ceased operating in 1964, but is in need of further work to restore and protect the area.

OTHER SUBSTANTIVE ISSUES

NMED indicates that threats to water quality and the need to protect water resource supplies

through abatement of existing sources of water pollution are becoming increasingly significant

concerns as the state’s population continues to grow. This funding will enhance the protection of

water quality and limit future public health threats from exposed uranium mine wastes.

EMNRD notes the appropriation is only available for one fiscal year. The requirements for an

effective environmental cleanup may extend beyond one year; therefore, it would be helpful to

extend the appropriation into 2009. This may be necessary to allow time for jurisdictional issues

to be worked out.

ALTERNATIVES

EMNRD suggests that the Legislature could choose to fund this work through the capital outlay

request of Senator Lovejoy.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

EMNRD states, “The Black Jack Mine will remain a hazard to the nearby community at least for

the near future."

NMED agrees, noting that, “The Black Jack Mine site will continue to pose a hazard to public

House Bill 1062 – Page

4

health from windblown raidonuclides and surface water runoff and leaching of contaminants at

the site will have the potential to migrate radionuclides into state water resources. Consequently,

degradation of water quality and public health could result, potentially hindering economic

growth."

AMENDMENTS

EMNRD suggests that, if necessary for clarification, on line 18, strike “close" and insert

“reclaim". To extend the appropriation to address possible need for more than one year to

complete reclamation, on line 18 change “fiscal year 2008, to fiscal years 2008 and 2009; and

line 21, change 2008 to 2009.

BFW/mt