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Engrossed Version Senate Bill 747 History

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ENGROSSED

Senate Bill No. 747

(By Senators Helmick, Sharpe, Chafin, Plymale, Prezioso,

Edgell, Love, Bailey, Bowman, McCabe, Unger, Minear,

Boley, Facemyer, Yoder, Guills and Sprouse)

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[Originating in the Committee on Finance;

reported March 25, 2005.]

_____________

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 special reclamation tax and special tax on coal production; clarifying that both those taxes apply to production of thin seam coal; clarifying that special reclamation is subject to West Virginia Tax Crimes and Penalties Act and West Virginia Tax Procedure and Administration Act; making technical corrections; and deleting obsolete language.

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 to read as follows:
ARTICLE 3. SURFACE 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, including the reduced severance tax rate for coal mined by underground methods based on seam thickness in section three of said article.
(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 this 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, chapter eleven of this 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 set forth in extenso in this article, notwithstanding the provisions of section two, article nine of said chapter.
§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 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 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, including the reduced severance tax rate for coal mined by underground methods based on seam thickness in section three of said article. 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 this 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, article ten of said chapter.
(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.
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