H. B. 2138
(By Delegates Mezzatesta, Cann and Williams)
[Introduced January 13, 1999; referred to the
Committee on the Judiciary then Finance.]
A BILL to amend and reenact sections eleven and twelve, article
three, chapter twenty-two of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, all relating
to surface coal mining and reclamation; removal of
requirement that reclamation related liabilities of state
have to exceed accrued amount in reclamation fund before
reclamation fund tax is collected; and providing removal of
five thousand dollar per acre limit for bonding.
Be it enacted by the Legislature of West Virginia:
That sections eleven and twelve, article three, chapter
twenty-two of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted, all 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 director, 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 one thousand
dollars for each acre or fraction thereof. 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 an
additional bond or bonds to cover such the increments in
accordance with this section: Provided, 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 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. 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
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,
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 director 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 director may accept the bond of the applicant itself
without separate surety when the applicant demonstrates to the
satisfaction of the director 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 subsection. The fund shall be administered by the director,
and he or she 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. The director
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 may use an amount, not to exceed twenty-five percent of
the annual amount of the fees collected, 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 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.
Every person conducting coal surface-mining operations shall
contribute into the fund a sum equal to three cents per ton of
clean coal mined. This fee 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 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. 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. Such tax shall be
collected whenever the liabilities of the state established in this subsection exceed the accrued amount in the fund. 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. At the beginning of
each quarter, the director shall advise the state tax
commissioner and the governor of the assets, excluding payments,
expenditures and liabilities, in the fund.
§22-3-12. Site-specific bonding; legislative rule; contents of
legislative rule; legislative intent; expiration of
rule; reporting.
(a) Notwithstanding the provisions of section eleven of this
article, the director 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 the 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 that 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 the hearing
shall be held after the thirtieth day of the public comment
period but before the forty-sixth day of such the 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 the
final adoption, without further hearing or public comment. No
such amendment may change the main purpose of the rule. Such The
final adoption shall occur on or before the first day of
November, one thousand nine hundred ninety-two, and such the 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 The 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 The rule shall may not be
promulgated as an emergency legislative rule.
(c) 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 bond, subject to the limitations of subdivision
(1) of this subsection, shall reflect a 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.
(3) Such Any 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) A legislative rule proposed or promulgated pursuant to
the provisions of this section may, in addition to the
requirements of subsection (c) of this section, provide for a
consideration of other factors deemed considered relevant by the
director. 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) 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 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 remove the requirement
that the reclamation related liabilities of the state have to
exceed the accrued amount in the reclamation fund before the
reclamation fund tax is collected from surface coal mine
operators and to remove the five thousand dollar per acre limit
for bonding.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language that would be added.