ENROLLED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 751
(Senator McCabe, original sponsor)
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[Passed March 6, 2008; to take effect July 1, 2008.]
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AN ACT to amend and reenact §22-3-11 of the Code of West Virginia,
1931, as amended, relating generally to the special
reclamation tax; continuing the Special Reclamation Fund;
establishing the Special Reclamation Water Trust Fund;
continuing and reimposing a tax on clean coal mined for
deposit into both funds; providing for the investment of
moneys thereby deposited; requiring the secretary to look at
alternative programs; and authorizing secretary to promulgate
legislative rules implementing the alternative programs.
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 one
thousand dollars nor more than five thousand dollars for each acre
or fraction of an acre
: Provided, That the minimum amount of bond
furnished for any type of reclamation bonding shall be ten thousand
dollars. 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 the third
day of August, one thousand nine hundred seventy-seven, 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 the first day
of July, two thousand eight, 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 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 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
: 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 thirty-first day of December, two thousand
eight, 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.