H. B. 3236
(By Delegates Michael and Kominar)
[Introduced March 25, 2005; referred to the
Committee on Finance.]
A BILL to amend and reenact §22-3-11 and §22-3-32 of the Code of
West Virginia, 1931, as amended, all relating to the special
reclamation tax and special tax on coal production; providing
that both of these taxes apply to production of thin seam
coal; providing that the special reclamation is subject to the
West Virginia Tax Crimes and Penalties Act and the West
Virginia Tax Procedure and Administration Act.
Be it enacted by the Legislature of West Virginia:
That §22-3-11 and §22-3-32
of the Code of West Virginia, 1931,
as amended, be amended and reenacted, all 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 fund;
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 thereof: 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 such 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 same 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 herein specified having value equal to or greater than the sum of the bond.
(2) The Secretary may approve an alternative bonding system if
it will: (1) 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 (2) 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 moneys accrued in the fund, including interest, are
reserved solely and exclusively for the purposes set forth in this
section and section seventeen, article one of this chapter. The
fund shall be administered by the Secretary who is authorized to
expend the moneys in the fund 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 the fund of such
magnitude that the solvency of the fund is jeopardized. The
Secretary may use the special reclamation fund 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
the fund 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) Prior to the first day of January, two thousand two, every
person conducting coal surface mining operations shall contribute
into the fund a sum equal to three cents per ton of clean coal
mined. For tax periods commencing on and after the first day of
January, two thousand two, every person conducting coal surface
mining shall contribute into the fund as follows: (1) For a period
not to exceed thirty-nine months, seven cents per ton of clean coal
mined; and (2) an additional seven cents per ton of clean coal mined. 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 on or after the
first day of January, two thousand two. 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 has sufficient moneys to meet the reclamation
responsibilities of the state established in this section.
(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 taxes imposed by
article thirteen thirteen-a of said chapter: Provided, however,
That it is the intent of the Legislature to clarify that from the
date of its enactment, the special reclamation tax is not to be
construed as being a decrease in, or in lieu of, the minimum
severance tax or any of the severance taxes imposed by said article
thirteen-a, including the reduced severance tax rate for coal mined
by underground methods based on seam thickness in section three of article thirteen-a.
(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 fees collected with
the Treasurer of the State of West Virginia to the credit of the
special reclamation fund. The moneys in the fund shall be placed
by the Treasurer in an interest-bearing account with the interest
being returned to the fund on an annual basis.
(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 the fund.
(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.
(o) General procedure and administration. -- Each and every provision of the "West Virginia Tax Procedure and Administration
Act" set forth in article ten, chapter eleven of the code applies
to the special tax imposed by this section with like effect as if
such act were applicable only to the special tax imposed by this
section and were set forth in extenso in this article,
notwithstanding the provisions of section three of said article
ten.
(p) Tax crimes and penalties. -- Each and every provision of
the "West Virginia Tax Crimes and Penalties Act" set forth in
article nine of said chapter eleven applies to the special tax
imposed by this section with like effect as if such act were
applicable only to the special tax imposed by this section and set
forth in extenso in this article, notwithstanding the provisions of
section two of said article nine.
ARTICLE 3. SURFACE COAL MINING AND RECLAMATION ACT.
§22-3-32. Special tax on coal production; mines and minerals
operations fund.
(a) Imposition of tax. -- Upon every person in this state
engaging in the privilege of severing, extracting, reducing to
possession or producing coal for sale, profit or commercial use,
there is hereby imposed an annual tax equal to two cents per ton of
coal produced by such person for sale, profit or commercial use
during such person's taxable year. The special tax imposed by this
section is in addition to all other taxes levied by law. In no event may a ton of coal be taxed more than once under the
provisions of this section.
(b) Payment and collection of tax. -- The tax imposed by this
section shall be collected by the 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 this
tax be construed to be an increase in either the minimum severance
tax imposed by said article twelve-b or the severance tax taxes
imposed by article thirteen thirteen-a of said chapter eleven:
Provided, however, That it is the intent of the Legislature to
clarify that from the date of its enactment, the special tax on
coal production is not to be construed as being a decrease in, or
in lieu of, the minimum severance tax or any of the severance taxes
imposed by said article thirteen-a, including the reduced severance
tax rate for coal mined by underground methods based on seam
thickness in section three of article thirteen-a. Every person
liable for payment of this special tax shall pay the amount due
without notice or demand for payment. The Tax Commissioner shall
provide to the Director a quarterly listing of all persons known to
be delinquent in payment of the special tax. The Director may take
such delinquencies into account in making determinations on the
issuance, renewal or revision of any permit.
(c) Mining and Reclamation Operations Fund. -- The special
fund previously created in the State Treasury known as the "Mines and Minerals Operations Fund" is renamed the "Mining and
Reclamation Operations Fund". The Tax Commissioner shall, at least
quarterly, deposit into the fund the net amount of tax collected
under this section, including any additions to tax, penalties and
interest collected with respect thereto. The Treasurer shall
deposit all moneys deposited in or credited to this fund in an
interest-bearing account, with the amount of interest earned being
credited to this fund as it is earned. The moneys in this special
fund shall be expended solely for the purposes of carrying out
those statutory duties relating to the enforcement of environmental
regulatory programs for the coal industry as imposed by this
chapter and the federal Surface Mining Control and Reclamation Act
of 1977 and any amendments thereto. Expenditures from the fund are
not authorized from collections but are to be made only in
accordance with appropriations by the Legislature and in accordance
with the provisions of article three, chapter twelve of this code
and upon fulfillment of the provisions set forth in article two,
chapter five-a of this code.
(d) General procedure and administration. -- Each and every
provision of the "West Virginia Tax Procedure and Administration
Act" set forth in article ten, chapter eleven of the code applies
to the special tax imposed by this section with like effect as if
such act were applicable only to the special tax imposed by this
section and were set forth in extenso in this article,
notwithstanding the provisions of section three of said article ten.
(e) Crimes and penalties. -- Each and every provision of the
"West Virginia Tax Crimes and Penalties Act" set forth in article
nine of said chapter eleven applies to the special tax imposed by
this section with like effect as if such act were applicable only
to the special tax imposed by this section and set forth in extenso
in this article, notwithstanding the provisions of section two of
said article nine.
(f) Effective date. -- The special tax imposed by this section
applies to all coal produced in this state after the thirtieth day
of September, one thousand nine hundred ninety-one.
Finance Committee Title Amendment
H. B. 3236 -- "A BILL to amend the Code of West Virginia, 1931, as
amended, by adding thereto a new section designated §22-3-11a; and
to amend and reenact §22-3-32 of said Code, all relating to the
special reclamation tax and special tax on coal production;
providing that both of these taxes apply to production of thin seam
coal; and providing that the special reclamation is subject to the
West Virginia Tax Crimes and Penalties Act and the West Virginia
Tax Procedure and Administration Act.".
Finance Committee Amendment Pending
The Committee on Finance moves to amend the bill on page one, following the enacting clause, by striking out the remainder of the
bill and inserting in lieu thereof the following:
"That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §22-3-11a, and to amend
and reenact §22-3-32 of said Code, all to read as follows:
ARTICLE 3. SURFACE COAL MINING AND RECLAMATION ACT.
§22-3-11a.
(a) It is the intent of the Legislature to clarify that from
the date of its enactment, the special reclamation tax imposed
pursuant to the provisions of section eleven of this article is not
to be construed as being a decrease in, or in lieu of, the minimum
severance tax or any of the severance taxes imposed by said article
thirteen-a, including the reduced severance tax rate for coal mined
by underground methods based on seam thickness in section three of
article thirteen-a.
(b) Notwithstanding any other provisions of section eleven of
this article to the contrary, 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
taxes imposed by article thirteen-a of said chapter.
(c)
General procedure and administration. -- Each and every
provision of the "West Virginia Tax Procedure and Administration
Act" set forth in article ten, chapter eleven of the code applies
to the special tax imposed by section eleven of this article with
like effect as if such act were applicable only to the special tax imposed by said section eleven and were set forth in extenso in
this article, notwithstanding the provisions of section three of
said article ten.
(p)
Tax crimes and penalties. -- Each and every provision of
the "West Virginia Tax Crimes and Penalties Act" set forth in
article nine of said chapter eleven applies to the special tax
imposed by section eleven of this article with like effect as if
such act were applicable only to the special tax imposed by said
section eleven and set forth in extenso in this article,
notwithstanding the provisions of section two of said article nine.
§22-3-32. Special tax on coal production; mines and minerals
operations fund.
(a)
Imposition of tax. -- Upon every person in this state
engaging in the privilege of severing, extracting, reducing to
possession or producing coal for sale, profit or commercial use,
there is hereby imposed an annual tax equal to two cents per ton of
coal produced by such person for sale, profit or commercial use
during such person's taxable year. The special tax imposed by this
section is in addition to all other taxes levied by law. In no
event may a ton of coal be taxed more than once under the
provisions of this section.
(b)
Payment and collection of tax. -- The tax imposed by this
section shall be collected by the 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 this
tax be construed to be an increase in either the minimum severance
tax imposed by said article twelve-b or the severance
tax taxes
imposed by article
thirteen thirteen-a of said chapter eleven:
Provided, however, That it is the intent of the Legislature to
clarify that from the date of its enactment, the special tax on
coal production is not to be construed as being a decrease in, or
in lieu of, the minimum severance tax or any of the severance taxes
imposed by said article thirteen-a, including the reduced severance
tax rate for coal mined by underground methods based on seam
thickness in section three of article thirteen-a. Every person
liable for payment of this special tax shall pay the amount due
without notice or demand for payment. The Tax Commissioner shall
provide to the Director a quarterly listing of all persons known to
be delinquent in payment of the special tax. The Director may take
such delinquencies into account in making determinations on the
issuance, renewal or revision of any permit.
(c)
Mining and Reclamation Operations Fund. -- The special
fund previously created in the State Treasury known as the "Mines
and Minerals Operations Fund" is renamed the "Mining and
Reclamation Operations Fund". The Tax Commissioner shall, at least
quarterly, deposit into the fund the net amount of tax collected
under this section, including any additions to tax, penalties and
interest collected with respect thereto. The Treasurer shall deposit all moneys deposited in or credited to this fund in an
interest-bearing account, with the amount of interest earned being
credited to this fund as it is earned. The moneys in this special
fund shall be expended solely for the purposes of carrying out
those statutory duties relating to the enforcement of environmental
regulatory programs for the coal industry as imposed by this
chapter and the federal Surface Mining Control and Reclamation Act
of 1977 and any amendments thereto. Expenditures from the fund are
not authorized from collections but are to be made only in
accordance with appropriations by the Legislature and in accordance
with the provisions of article three, chapter twelve of this code
and upon fulfillment of the provisions set forth in article two,
chapter five-a of this code.
(d)
General procedure and administration. -- Each and every
provision of the "West Virginia Tax Procedure and Administration
Act" set forth in article ten, chapter eleven of the code applies
to the special tax imposed by this section with like effect as if
such act were applicable only to the special tax imposed by this
section and were set forth in extenso in this article,
notwithstanding the provisions of section three of said article
ten.
(e)
Crimes and penalties. -- Each and every provision of the
"West Virginia Tax Crimes and Penalties Act" set forth in article
nine of said chapter eleven applies to the special tax imposed by
this section with like effect as if such act were applicable only to the special tax imposed by this section and set forth in extenso
in this article, notwithstanding the provisions of section two of
said article nine.
(f) Effective date. -- The special tax imposed by this section
applies to all coal produced in this state after the thirtieth day
of September, one thousand nine hundred ninety-one.