Senate Bill No. 5003
(By Senators Tomblin, Mr. President, and Sprouse, By Request of
the Executive)
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[Introduced September 10, 2001; referred to the Committee on
Finance.]
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A BILL 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 three 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; authorizing the
governor to issue a proclamation stating either that any necessary federal approval of modifications to state law has
been received or is not necessary; 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.
(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; and
(4) Provide a forum for a full and fair discussion of issues
relating to the special reclamation fund.
(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
director 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
director secretary an additional bond or bonds to cover
such 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.
Provided, however, That the minimum amount of bond furnished shall be ten thousand dollars
(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
director
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
division 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
director secretary
shall, upon receipt of any
such 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
director 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) (d) The
director secretary may approve an alternative
bonding system if it will:
(A) (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
(B) (2) provide a substantial
economic incentive for the permittee to comply with all reclamation
provisions.
(d) (e) The
director secretary may accept the bond of the
applicant itself without separate surety when the applicant
demonstrates to the satisfaction of the
director 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) (f) 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) (g) All bond releases shall be accomplished in accordance
with the provisions of section twenty-three of this article.
(g) (h) 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
subsection section and section seventeen, article one of this
chapter. The fund shall be administered by the
director secretary
and he or she 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
such 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
director 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
director
secretary may use
an amount, not to exceed twenty-five percent of
the annual amount of the fees collected, 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
director 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
articles two and four of
this chapter and, as they apply to the surface mine board, articles
one and four, chapter twenty-two-b of this code.
(i) Every 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 coal
severed or clean coal obtained from refuse pile and slurry pond
recovery or other mining methods extracting a combination of coal and waste recovery 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.
(j) This
fee 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
this the special
reclamation tax be construed to be an increase in either the
minimum severance tax imposed by
said article twelve-b or the
severance tax imposed by article thirteen of
said chapter eleven.
(k) Every person liable for payment of
this the special
reclamation tax shall pay the amount due without notice or demand
for payment.
(l) The tax commissioner shall provide to the
director
secretary a quarterly listing of all persons known to be delinquent
in payment of the special
reclamation tax. The
director secretary may take
such the delinquencies into account in making
determinations on the issuance, renewal or revision of any permit.
Such tax shall be collected whenever the liabilities of the state
established in this subsection exceed the accrued amount in the
fund
(m) 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.
(n) At the beginning of each quarter, the
director secretary
shall advise the state tax commissioner and the governor of the
assets, excluding payments, expenditures and liabilities, in the
fund.
(o) 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 become effective upon a proclamation by the governor
stating either that the final approval of the modifications has been given by the appropriate federal agency or official or that
final approval of the modifications is not necessary to avoid
disruption of the federal-state relationship under which the
regulatory programs are implemented.
§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
director secretary may establish and implement a
site-specific bonding system in accordance with the provisions of
this section.
(b) Such site-specific bonding system shall be established by
a legislative rule proposed by the director. The rule shall be
proposed for promulgation in accordance with the provisions of
article three, chapter twenty-nine-a of this code, except as the
provisions of this section otherwise direct. The notice of the
proposed promulgation and the text of the proposed rule shall be
filed in the state register in compliance with the requirements of
section five, article three, chapter twenty-nine-a of this code:
Provided, That such filing shall be made on or before the thirtieth
day of June, one thousand nine hundred ninety-two: Provided,
however, That a period for receiving public comment on the merits
of such rule shall be afforded, which period shall extend for not less than sixty days next following the filing of the proposed rule
in the state register. The notice establishing the period for
public comment shall also fix a date, time and place for a hearing
for public comment at which both written and oral presentations may
be made and such hearing shall be held after the thirtieth day of
the public comment period, but before the forty-sixth day of such
comment period. The provisions of section nine, article three,
chapter twenty-nine-a of this code to the contrary notwithstanding,
after the close of the public comment period, the director shall
proceed to agency approval and final adoption of the rule,
including any amendments made by the director prior to such final
adoption, without further hearing or public comment. No such
amendment may change the main purpose of the rule. Such final
adoption shall occur on or before the first day of November, one
thousand nine hundred ninety-two, and such rule shall become
effective and have the full force and effect of law on and after
the first day of December, one thousand nine hundred ninety-two,
without submission to the Legislature. Such rule shall continue in
effect until the first day of May, one thousand nine hundred
ninety-three, or until sooner modified, codified or abrogated by
the Legislature. Such rule shall not be promulgated as an
emergency legislative rule.
(c) (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)
Any such Every bond, subject to the limitations of
subdivision (1) of this subsection, shall reflect
a the relative
potential cost of reclamation associated with the activities
proposed to be permitted, which
cost would not otherwise be
reflected by bonds calculated by merely applying a specific dollar
amount per acre for
all permits the permit.
(3)
Such 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.
(d) (c) A legislative rule proposed or promulgated pursuant to
the provisions of this section may, in addition to the requirements of subsection
(c) (b) of this section, provide for a consideration
of other factors
deemed determined to be relevant by the
director
secretary. For example,
such 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.
(e) (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
director secretary and the division in fixing the amount of the
bond.
(f) On or before the thirty-first day of December, one
thousand nine hundred ninety-one, and every ninety days thereafter,
the director shall report in writing to the joint committee on
government and finance of the Legislature or its designated
subcommittee as to the progress of the division in developing or
implementing, as the case may be, the provisions of this section.
NOTE: The purpose of this bill is to provide sufficient
funding for reclamation of mine sites for which the reclamation
bond has been forfeited. In the short term this will be
accomplished by increasing the special reclamation tax to fourteen
cents. The goal of long term financial solvency will be met by
creating a council to study funding and other issues related to the
special reclamation fund. The council must develop a process that
will ensure the long term stability of the fund. The council is
required to make recommendations to the Governor and the Legislature on its progress and the condition of the fund.
§22-1-17 is new, therefore, strike throughs and underscoring
have been omitted.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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