Senate Bill No. 600
(By Senators Green, Deem, McCabe, Foster, Kessler and Plymale)
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[Introduced March 16, 2009; referred to the Committee on Energy,
Industry and Mining; and then to the Committee on Finance.]
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A BILL to amend and reenact §22-3-11 of the Code of West
Virginia, 1931, as amended, relating to continuing and
reimposing the special reclamation tax on clean coal mined;
providing for legislative review of the tax every five
years; and taking out the additional tax on clean coal.
Be it enacted by the Legislature of West Virginia:
That §22-3-11 of the Code of West Virginia, 1931, as
amended, be amended and reenacted to read as follows:
ARTICLE 3. SURFACE COAL MINING AND RECLAMATION ACT.
§22-3-11. Bonds; amount and method of bonding; bonding
requirements; special reclamation tax and funds;
prohibited acts; period of bond liability.
(a) After a surface mining permit application has been
approved pursuant to this article, but before a permit has been
issued, each operator shall furnish a penal bond, on a form to be
prescribed and furnished by the secretary, payable to the State of West Virginia and conditioned upon the operator faithfully
performing all of the requirements of this article and of the
permit. The penal amount of the bond shall be not less than
$1,000 nor more than $5,000 for each acre or fraction of an acre:
Provided, That the minimum amount of bond furnished for any type
of reclamation bonding shall be $10,000. The bond shall cover:
(1) The entire permit area; or (2) that increment of land within
the permit area upon which the operator will initiate and conduct
surface mining and reclamation operations within the initial term
of the permit. If the operator chooses to use incremental
bonding, as succeeding increments of surface mining and
reclamation operations are to be initiated and conducted within
the permit area, the operator shall file with the secretary an
additional bond or bonds to cover the increments in accordance
with this section:
Provided, however, That once the operator has
chosen to proceed with bonding either the entire permit area or
with incremental bonding, the operator shall continue bonding in
that manner for the term of the permit.
(b) The period of liability for bond coverage begins with
issuance of a permit and continues for the full term of the
permit plus any additional period necessary to achieve compliance
with the requirements in the reclamation plan of the permit.
(c)(1) The form of the bond shall be approved by the
secretary and may include, at the option of the operator, surety bonding, collateral bonding (including cash and securities),
establishment of an escrow account, self-bonding or a combination
of these methods. If collateral bonding is used, the operator
may elect to deposit cash or collateral securities or
certificates as follows: Bonds of the United States or its
possessions of the Federal Land Bank or of the Homeowners' Loan
Corporation; full faith and credit general obligation bonds of
the State of West Virginia or other states and of any county,
district or municipality of the State of West Virginia or other
states; or certificates of deposit in a bank in this state, which
certificates shall be in favor of the department. The cash
deposit or market value of the securities or certificates shall
be equal to or greater than the penal sum of the bond. The
secretary shall, upon receipt of any deposit of cash, securities
or certificates, promptly place the same with the Treasurer of
the State of West Virginia whose duty it is to receive and hold
the deposit in the name of the state in trust for the purpose for
which the deposit is made when the permit is issued. The
operator making the deposit is entitled, from time to time, to
receive from the State Treasurer, upon the written approval of
the secretary, the whole or any portion of any cash, securities
or certificates so deposited, upon depositing with him or her in
lieu thereof cash or other securities or certificates of the
classes specified in this subsection having value equal to or greater than the sum of the bond.
(2) The secretary may approve an alternative bonding system
if it will: (A) Reasonably assure that sufficient funds will be
available to complete the reclamation, restoration and abatement
provisions for all permit areas which may be in default at any
time; and (B) provide a substantial economic incentive for the
permittee to comply with all reclamation provisions.
(d) The secretary may accept the bond of the applicant
itself without separate surety when the applicant demonstrates to
the satisfaction of the secretary the existence of a suitable
agent to receive service of process and a history of financial
solvency and continuous operation sufficient for authorization to
self-insure.
(e) It is unlawful for the owner of surface or mineral
rights to interfere with the present operator in the discharge of
the operator's obligations to the state for the reclamation of
lands disturbed by the operator.
(f) All bond releases shall be accomplished in accordance
with the provisions of section twenty-three of this article.
(g) The Special Reclamation Fund previously created is
continued. The Special Reclamation Water Trust Fund is created
within the State Treasury into and from which moneys shall be
paid for the purpose of assuring a reliable source of capital to
reclaim and restore water treatment systems on forfeited sites. The moneys accrued in both funds, any interest earned thereon and
yield from investments by the State Treasurer or West Virginia
Investment Management Board are reserved solely and exclusively
for the purposes set forth in this section and section seventeen,
article one of this chapter. The funds shall be administered by
the secretary who is authorized to expend the moneys in both
funds for the reclamation and rehabilitation of lands which were
subjected to permitted surface mining operations and abandoned
after August 3, 1977, where the amount of the bond posted and
forfeited on the land is less than the actual cost of
reclamation, and where the land is not eligible for abandoned
mine land reclamation funds under article two of this chapter.
The secretary shall develop a long-range planning process for
selection and prioritization of sites to be reclaimed so as to
avoid inordinate short-term obligations of the assets in both
funds of such magnitude that the solvency of either is
jeopardized. The secretary may use both funds for the purpose of
designing, constructing and maintaining water treatment systems
when they are required for a complete reclamation of the affected
lands described in this subsection. The secretary may also
expend an amount not to exceed ten percent of the total annual
assets in both funds to implement and administer the provisions
of this article and, as they apply to the Surface Mine Board,
articles one and four, chapter twenty-two-b of this code.
(h)(1) For tax periods commencing on and after July 1,
two
thousand eight 2009, every person conducting coal surface mining
shall remit a special reclamation tax
as follows: (A) For the
initial period of twelve months, ending the thirtieth day of
June, two thousand nine, seven of fourteen and four-tenths cents
per ton of clean coal mined, the proceeds of which shall be
allocated by the secretary for deposit in the Special Reclamation
Fund and the Special Reclamation Water Trust Fund.
(B) an
additional seven cents per ton of clean coal mined, the proceeds
of which shall be deposited in the Special Reclamation Fund. The
tax shall be levied upon each ton of clean coal severed or clean
coal obtained from refuse pile and slurry pond recovery or clean
coal from other mining methods extracting a combination of coal
and waste material as part of a fuel supply.
The additional
seven-cent Beginning with the tax period commencing on July 1,
2014, and every five years thereafter, the special reclamation
tax shall be reviewed
and, if necessary, adjusted annually by the
Legislature
upon recommendation of the council pursuant to the
provisions of section seventeen, article one of this chapter to
determine whether the tax should be continued:
Provided, That
the tax may not be reduced until the Special Reclamation Fund and
Special Reclamation Water Trust Fund have sufficient moneys to
meet the reclamation responsibilities of the state established in
this section.
(2) In managing the Special Reclamation Program, the
secretary shall: (A) Pursue cost-effective alternative water
treatment strategies; and (B) conduct formal actuarial studies
every two years and conduct informal reviews annually on the
Special Reclamation Fund and Special Reclamation Water Trust
Fund.
(3) Prior to
the December 31, 2008, the secretary shall:
(A) Determine the feasibility of creating an alternate
program, on a voluntary basis, for financially sound operators by
which those operators pay an increased tax into the Special
Reclamation Fund in exchange for a maximum per-acre bond that is
less than the maximum established in subsection (a) of this
section;
(B) Determine the feasibility of creating an incremental
bonding program by which operators can post a reclamation bond
for those areas actually disturbed within a permit area, but for
less than all of the proposed disturbance and obtain incremental
release of portions of that bond as reclamation advances so that
the released bond can be applied to approved future disturbance;
and
(C) Determine the feasibility for sites requiring water
reclamation by creating a separate water reclamation security
account or bond for the costs so that the existing reclamation
bond in place may be released to the extent it exceeds the costs of water reclamation.
(4) If the secretary determines that the alternative
program, the incremental bonding program or the water reclamation
account or bonding programs reasonably assure that sufficient
funds will be available to complete the reclamation of a
forfeited site and that the Special Reclamation Fund will remain
fiscally stable, the secretary is authorized to propose
legislative rules in accordance with article three, chapter
twenty-nine-a of this code to implement an alternate program, a
water reclamation account or bonding program or other funding
mechanisms or a combination thereof.
(i) This special reclamation tax shall be collected by the
State Tax Commissioner in the same manner, at the same time and
upon the same tonnage as the minimum severance tax imposed by
article twelve-b, chapter eleven of this code is collected:
Provided, That under no circumstance shall the special
reclamation tax be construed to be an increase in either the
minimum severance tax imposed by said article or the severance
tax imposed by article thirteen of said chapter.
(j) Every person liable for payment of the special
reclamation tax shall pay the amount due without notice or demand
for payment.
(k) The Tax Commissioner shall provide to the secretary a
quarterly listing of all persons known to be delinquent in payment of the special reclamation tax. The secretary may take
the delinquencies into account in making determinations on the
issuance, renewal or revision of any permit.
(l) The Tax Commissioner shall deposit the moneys collected
with the Treasurer of the State of West Virginia to the credit of
the Special Reclamation Fund and Special Reclamation Water Trust
Fund.
(m) At the beginning of each quarter, the secretary shall
advise the State Tax Commissioner and the Governor of the assets,
excluding payments, expenditures and liabilities, in both funds.
(n) To the extent that this section modifies any powers,
duties, functions and responsibilities of the department that may
require approval of one or more federal agencies or officials in
order to avoid disruption of the federal-state relationship
involved in the implementation of the Federal Surface Mining
Control and Reclamation Act, 30 U.S.C. §1270 by the state, the
modifications will become effective upon the approval of the
modifications by the appropriate federal agency or official.
NOTE: The purpose of this bill is to continue and reimpose
the special reclamation tax, provide for periodic legislative
review, and remove the additional tax on clean coal.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.