Coal Cleanup Taxpayer Protection Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 4435 To amend the Surface Mining Control and Reclamation Act of 1977 to protect taxpayers from liability associated with the reclamation of surface coal mining operations, and for other purposes. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 20, 2019 Mr. CARTWRIGHT (for himself, Mr. GRIJALVA, Mrs. DINGELL, Mrs. NAPOLI- TANO, Mr. RASKIN, Mr. LOWENTHAL, and Ms. LEE of California) intro- duced the following bill; which was referred to the Committee on Natural Resources A BILL To amend the Surface Mining Control and Reclamation Act of 1977 to protect taxpayers from liability associated with the reclamation of surface coal mining operations, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Coal Cleanup Taxpayer 4 Protection Act of 2019’’. 5 VerDate Sep 11 2014 02:08 Sep 28, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4435.IH H4435 SSpencer on DSKBBXCHB2PROD with BILLS 2 •HR 4435 IH SEC. 2. SURFACE COAL MINING BONDING. 1 Section 509 of the Surface Mining Control and Rec- 2 lamation Act of 1977 (30 U.S.C. 1259) is amended— 3 (1) by striking subsection (c) and inserting the 4 following: 5 ‘‘(c) ALTERNATIVE BONDING SYSTEM.— 6 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 7 the Secretary may approve as part of a State or 8 Federal program an alternative system that will— 9 ‘‘(A) achieve the objectives and purposes of 10 the bonding program pursuant to this section; 11 and 12 ‘‘(B) result in no greater risk of financial 13 liability to the Federal Government or a State 14 government than the bonding program under 15 this section. 16 ‘‘(2) REPORT REQUIRED.—The Secretary may 17 only approve an alternative bonding system for a 18 State under paragraph (1) if such State submits a 19 report to the Secretary that provides the following 20 information: 21 ‘‘(A) A history of bond forfeitures and rec- 22 lamation costs in such State in the seven-year 23 period ending on the date on which the report 24 is submitted, including— 25 VerDate Sep 11 2014 02:08 Sep 28, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4435.IH H4435 SSpencer on DSKBBXCHB2PROD with BILLS 3 •HR 4435 IH ‘‘(i) in the case of any bond forfeiture, 1 whether the money collected to make up 2 the difference between the bond and rec- 3 lamation cost was sufficient to complete 4 the reclamation as specified in the permit; 5 and 6 ‘‘(ii) an engineer’s estimate of the cost 7 to complete reclamation of mines for which 8 such State has not yet determined the cost 9 of reclamation. 10 ‘‘(B) A five-year forecast proving the pro- 11 posed bond pool will be financially sound based 12 on— 13 ‘‘(i) the proposed annual or per ton 14 fees paid by mining operators; 15 ‘‘(ii) the past and anticipated financial 16 performance of participating mining opera- 17 tors; 18 ‘‘(iii) market projections for the five- 19 year period beginning on the date of the 20 submission of such report; 21 ‘‘(iv) the anticipated number of min- 22 ing operators participating in each year; 23 and 24 VerDate Sep 11 2014 02:08 Sep 28, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4435.IH H4435 SSpencer on DSKBBXCHB2PROD with BILLS 4 •HR 4435 IH ‘‘(v) anticipated reclamation costs, in- 1 cluding known reclamation costs and an 2 engineer’s estimate of costs not yet 3 known.’’; and 4 (2) by adding at the end the following: 5 ‘‘(f) SELF-BONDING.— 6 ‘‘(1) FEDERAL PROGRAMS.— 7 ‘‘(A) IN GENERAL.—Effective on the date 8 of enactment of this subsection, the Secretary— 9 ‘‘(i) may not accept the bond of the 10 applicant itself (referred to in this sub- 11 section as a ‘self-bond’); and 12 ‘‘(ii) may accept a separate surety or 13 collateral bond, consistent with subsection 14 (b). 15 ‘‘(B) EXISTING SELF-BONDS.—For coal 16 mining operations covered by a self-bond ac- 17 cepted by the Secretary prior to the date of en- 18 actment of this subsection, the permittee shall 19 replace the self-bond with another form of bond 20 acceptable to the Secretary under this section 21 by not later than the earlier of— 22 ‘‘(i) the date of renewal of the permit 23 under section 506(d); and 24 VerDate Sep 11 2014 02:08 Sep 28, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4435.IH H4435 SSpencer on DSKBBXCHB2PROD with BILLS 5 •HR 4435 IH ‘‘(ii) the date of any major permit 1 modification under section 506. 2 ‘‘(2) STATE PROGRAMS.—Not later than 90 3 days after the date of enactment of this subsection, 4 the Secretary shall notify all State regulatory au- 5 thorities that allow applicants to self-bond that the 6 approved regulatory programs of the State regu- 7 latory authority must be amended— 8 ‘‘(A) to remove the authority for applicants 9 to self-bond; and 10 ‘‘(B) to require coal mining operations cov- 11 ered by a self-bond accepted by the State regu- 12 latory authority prior to the date of enactment 13 of this subsection to replace the self-bond with 14 another form of bond acceptable under this sec- 15 tion by not later than the earlier of— 16 ‘‘(i) the date of renewal of the permit 17 under section 506(d); and 18 ‘‘(ii) the date of any major permit 19 modification under section 506. 20 ‘‘(g) BONDS ISSUED BY SURETY.— 21 ‘‘(1) IN GENERAL.—Not later than 1 year after 22 the date of enactment of this subsection, the Sec- 23 retary shall issue rules establishing limitations on 24 surety bonds accepted under this section to minimize 25 VerDate Sep 11 2014 02:08 Sep 28, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4435.IH H4435 SSpencer on DSKBBXCHB2PROD with BILLS 6 •HR 4435 IH the risk of financial liability to the Federal Govern- 1 ment or a State government, including rules regard- 2 ing— 3 ‘‘(A) the maximum quantity of corporate 4 surety bonds issued by any 1 corporate surety 5 as a percentage of the total quantity of coal 6 mine reclamation bonds in any 1 State; 7 ‘‘(B) the minimum percentage of surety 8 bonds unrelated to activities regulated pursuant 9 to this Act required to reinsure corporate surety 10 bonds; 11 ‘‘(C) the minimum collateralization re- 12 quired for corporate surety bonds; and 13 ‘‘(D) the minimum amount of cash assets 14 required to be held by a corporate surety as a 15 percentage of coal mine reclamation bonds 16 issued by the corporate surety. 17 ‘‘(2) EXISTING CORPORATE BONDS.—Corporate 18 surety bonds in existence on the date of enactment 19 of this subsection must be modified or replaced as 20 necessary by not later than 1 year after the date on 21 which the rule is issued under paragraph (1). 22 ‘‘(h) COLLATERAL REQUIREMENTS.— 23 ‘‘(1) REAL PROPERTY.—Real property posted 24 as collateral for a bond may not include— 25 VerDate Sep 11 2014 02:08 Sep 28, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4435.IH H4435 SSpencer on DSKBBXCHB2PROD with BILLS 7 •HR 4435 IH ‘‘(A) coal; 1 ‘‘(B) a coal mine; 2 ‘‘(C) land that includes a coal mine; 3 ‘‘(D) land that is located above a coal 4 mine; 5 ‘‘(E) a coal processing facility; 6 ‘‘(F) a coal waste disposal site; 7 ‘‘(G) coal mining equipment unlikely to re- 8 tain salvage or resale value; or 9 ‘‘(H) any other property determined by the 10 Secretary. 11 ‘‘(2) RE-EVALUATION.— 12 ‘‘(A) The Secretary shall re-evaluate the 13 value of any nonliquid collateral, as that term 14 is defined in subparagraph (B), 3 years after 15 such collateral is posted for a bond and every 16 three years thereafter. 17 ‘‘(B) In this paragraph, ‘nonliquid collat- 18 eral’ has the meaning given to it by the Sec- 19 retary, except that such term— 20 ‘‘(i) includes the first lien interests in 21 real estate and equipment; and 22 ‘‘(ii) does not include— 23 ‘‘(I) cash; 24 ‘‘(II) letters of credit; 25 VerDate Sep 11 2014 02:08 Sep 28, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4435.IH H4435 SSpencer on DSKBBXCHB2PROD with BILLS 8 •HR 4435 IH ‘‘(III) certificates of deposit; 1 ‘‘(IV) Federal, State, or munic- 2 ipal bonds; and 3 ‘‘(V) investment grade securities. 4 ‘‘(i) EXECUTIVE COMPENSATION.—The Secretary 5 may require the inclusion of executive compensation, in- 6 cluding salaries and bonuses of officers and executives, of 7 an applicant under this section, and any affiliated com- 8 pany, as collateral for a bond under this section.’’. 9 Æ VerDate Sep 11 2014 02:08 Sep 28, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H4435.IH H4435 SSpencer on DSKBBXCHB2PROD with BILLS