Senate Bill No. 735
(By Senators Wooton, Ross, Fanning, Snyder,
Kessler, Caldwell, Minard, Hunter and Mitchell)
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[Originating in the Committee on the Judiciary;
reported April 6, 2001.]
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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 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. 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 The 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: Provided, That the bond amount may exceed five
thousand dollars
per acer or fraction thereof when the director
determines it will not be sufficient to complete reclamation.
(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 to 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 give the director the discretion to increase the five
thousand dollar per acre limit for bonding when it will not be
sufficient to meet reclamation requirements.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.