ENROLLED
Senate Bill No. 5003
(By Senators Tomblin, Mr. President, and Sprouse, By Request of the
Executive)
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[Passed September 15, 2001; in effect from passage.]
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AN ACT to amend article one, chapter twenty-two of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, by
adding thereto a new section, designated section seventeen;
and to amend and reenact sections eleven and twelve, article
three of said chapter, all relating to surface coal mining and
reclamation; creating a special reclamation fund advisory
council; providing for eight members of the council;
authorizing the governor to appoint five members with the
advice and consent of the Senate; providing for six-year terms
for the appointed members; providing that the secretary of the
department of environmental protection will serve as an ex
officio, nonvoting member; establishing the requirements of appointed members; authorizing payment of compensation and
expenses of members; requiring the council to meet a minimum
of twice a year; establishing the study requirements and
responsibilities of the council; requiring the council to
report to the governor and the Legislature annually;
establishing issues the reports must address; correcting
nomenclature; removing the twenty-five percent limitation on
funds available for water treatment; clarifying applicable
minimum and maximum bond requirements; clarifying that
abandoned mining sites that qualify for federal reclamation
funds do not qualify for certain state funds; increasing the
per ton of coal mined special reclamation tax from three cents
per ton to fourteen cents per ton beginning the first day of
January, two thousand two; providing that the fourteen cents
per ton will be reduced to seven cents per ton after
thirty-nine months; providing that the tax may be adjusted by
the Legislature based on recommendation of the council;
prohibiting reduction of tax if the special reclamation fund
does not have sufficient capital to meet the reclamation
needs; removing requirement that reclamation-related
liabilities must exceed accrued amount in reclamation fund
before reclamation fund tax is collected; recognizing the need for federal approval of certain modifications to the
reclamation program; and removing rule-making and reporting
provisions which are no longer applicable.
Be it enacted by the Legislature of West Virginia:
That article one, chapter twenty-two of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section
seventeen; and that sections eleven and twelve, article three of
said chapter be amended and reenacted, all to read as follows:
ARTICLE 1. DIVISION OF ENVIRONMENTAL PROTECTION.
§22-1-17. Special reclamation fund advisory council.
(a) There is hereby created within the department of
environmental protection a special reclamation fund advisory
council. The council's purpose is to ensure the effective,
efficient and financially stable operation of the special
reclamation fund. The special reclamation advisory council shall
consist of eight members, including the secretary of the department
of environmental protection or his or her designee, the treasurer
of the state of West Virginia or his or her designee, the director
of the national mine land reclamation center at West Virginia
university and five members to be appointed by the governor with the advice and consent of the Senate.
(b) Each appointed member of the council shall be selected
based on his or her ability to serve on the council and effectuate
its purposes. The governor shall appoint, from a list of three
names submitted by the major trade association representing the
coal industry regulated under article three of this chapter, a
member to represent the interests of the industry. The governor
shall appoint, from a list of three names submitted by
organizations advocating environmental protection, one member to
represent the interest of environmental protection organizations.
The governor shall appoint, from a list of four names submitted by
the coal mining industry and the organizations advocating
environmental protection, one member who, by training and
profession, is an actuary or an economist. The governor shall
appoint, from a list of three names submitted by the united mine
workers of America, one member to represent the interests of coal
miners. The governor shall appoint a member to represent the
interests of the general public.
(c) The terms of all members shall begin on the first day of
July, two thousand two. The secretary shall be an ex officio,
nonvoting member and serve as chairperson of the council. The terms of the governor's appointees shall be for six years.
Appointees may be reappointed to serve on the council. The terms
of the appointed members first taking office are to be expired as
designated by the governor at the time of the nomination, two at
the end of the second year, two at the end of the fourth year and
one at the end of the sixth year. As the original appointments
expire, each subsequent appointment will be for a full six-year
term. Any appointed member whose term has expired shall serve
until a successor has been duly appointed and qualified. Any
person appointed to fill a vacancy is to serve only for the
unexpired term.
(d) Appointed members of the council shall be paid the same
compensation and expense reimbursement as is provided for members
of the Legislature pursuant to sections six and eight, article
two-a, chapter four of this code. Council members who are state
employees or officials shall be reimbursed for expenses in
accordance with the applicable agency's policy.
(e) The council shall meet at the call of the chairperson or
his or her designee, but not less than once every six months. The
secretary shall provide funds for necessary administrative and
technical services for the council from the special reclamation fund.
(f) The council shall, at a minimum:
(1) Study the effectiveness, efficiency and financial
stability of the special reclamation fund with an emphasis on
development of a financial process that ensures long-term stability
of the special reclamation program;
(2) Identify and define problems associated with the special
reclamation fund, including, but not limited to, the enforcement of
federal and state law, regulation and rules pertaining to
contemporaneous reclamation;
(3) Evaluate bond forfeiture collection, reclamation efforts
at bond forfeiture sites and compliance with approved reclamation
plans as well as any modifications;
(4) Provide a forum for a full and fair discussion of issues
relating to the special reclamation fund;
(5) Contract with a qualified actuary who shall make a
determination as to the special reclamation fund's fiscal
soundness. This determination shall be completed on the thirty-
first day of December, two thousand four, and every four years
thereafter. The review is to include an evaluation of the present
and prospective assets and liabilities of the special reclamation fund; and
(6) Study and recommend to the Legislature alternative
approaches to the current funding scheme of the special reclamation
fund, considering revisions which will assure future proper
reclamation of all mine sites and continued financial viability of
the state's coal industry.
(g) On or before the first day of January, two thousand three,
and every year thereafter, the council shall submit to the
Legislature and the governor a report on the adequacy of the
special reclamation tax and the fiscal condition of the special
reclamation fund. The report shall, at a minimum, contain:
(1) A recommendation as to whether or not any adjustments to
the special reclamation tax should be made considering the cost,
timeliness and adequacy of bond forfeiture reclamation, including
water treatment;
(2) A discussion of the council's required study issues as set
forth in subsection (f) of this section; and
(3) The availability of federal abandoned mine lands funds for
West Virginia reclamation projects.
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 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 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.
§22-3-12. Site-specific bonding; legislative rule; contents of
legislative rule; legislative intent.
(a) Notwithstanding the provisions of section eleven of this
article, the secretary may establish and implement a site-specific
bonding system in accordance with the provisions of this section.
(b) A legislative rule proposed or promulgated pursuant to
this section must provide, at a minimum, for the following:
(1) The penal amount of a bond shall be not less than one
thousand dollars nor more than five thousand dollars per acre or
fraction thereof.
(2) Every bond, subject to the limitations of subdivision (1)
of this subsection, shall reflect the relative potential cost of
reclamation associated with the activities proposed to be
permitted, which would not otherwise be reflected by bonds
calculated by merely applying a specific dollar amount per acre for
the permit.
(3) Every bond, subject to the provisions of subdivision (1)
of this subsection, shall also reflect an analysis under the
legislative rule of various factors, as applicable, which affect
the cost of reclamation, including, but not limited to: (A) The
general category of mining, whether surface or underground; (B)
mining techniques and methods proposed to be utilized; (C) support
facilities, fixtures, improvements and equipment; (D) topography and geology; and (E) the potential for degrading or improving water
quality.
(c) A legislative rule proposed or promulgated pursuant to the
provisions of this section may, in addition to the requirements of
subsection (b) of this section, provide for a consideration of
other factors determined to be relevant by the secretary. For
example, the rule may provide for the following:
(1) A consideration as to whether the bond relates to a new
permit application, a renewal of an existing permit, an application
for an incidental boundary revision or the reactivation of an
inactive permit;
(2) A consideration of factors which may result in
environmental enhancement, as in a case where remining may improve
water quality or reduce or eliminate existing highwalls, or a
permitted operation may create or improve wetlands; or
(3) An analysis of various factors related to the specific
permit applicant, including, but not limited to: (A) The prior
mining experience of the applicant with the activities sought to be
permitted; and (B) the history of the applicant as it relates to
prior compliance with statutory and regulatory requirements
designed to protect, maintain or enhance the environment in this or any other state.
(d) It is the intent of the Legislature that a legislative
rule proposed or promulgated pursuant to the provisions of this
section shall be constructed so that when the findings of fact by
the division of environmental protection with respect to the
proposed mining activity and the particular permit applicant
coincide with the particular factors or criteria to be considered
and analyzed under the rule, the rule will direct a conclusion as
to the amount of the bond to be required, subject to rebuttal and
refutation of the findings by the applicant. To the extent
practicable, the rule shall limit subjectivity and discretion by
the secretary and the division in fixing the amount of the bond.
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