H. B. 3003
(By Delegates Argento, Eldridge, Shaver,
Kominar, Varner, Ross and Barker)
[Introduced March 9, 2009; referred to the
Committee on the Judiciary then Finance.]
Be it enacted by the Legislature of West Virginia:
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.
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:
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:
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
(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
necessary, adjusted annually
by the Legislature
of the council pursuant to the provisions of section seventeen,
article one of this chapter to determine whether the tax should be
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
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
(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
(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:
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