Senate Bill No. 665
(By Senators Bailey, Fanning, Love, Hunter, McCabe and Weeks)
[Introduced March 21, 2005; referred to the Committee
A BILL to amend and reenact §22-3-11 of the Code of West Virginia,
1931, as amended, relating to the special reclamation tax.
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 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 April, two thousand five, every person
conducting coal surface mining shall contribute into the fund as
follows: (1) For a period not to exceed thirty-nine twenty-four
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.
NOTE: The purpose of this bill is to extend the temporary
special reclamation tax for an additional twenty-four months.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would