US Senators Ron Wyden, of Oregon, and Tom Udall, of New Mexico, have introduced a new bill to enable taxpayers in the country to receive royalties for the full value of coal produced on public lands.
The legislation will put an end to an accounting loophole that allowed coal companies underpay fees to mine on federal lands, the senators said.
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Under the proposed ‘Coal Royalty Fairness Act’, the US Interior Department is required to collect royalties for coal mined on public lands based on actual market value.
According to the senators, some private mining companies are currently selling coal to their own affiliated companies at a lower cost than market value.
The companies are also paying federal royalties based on the cheaper, first point of sale.
Wyden said: "American taxpayers are getting ripped off by coal companies under the current, broken coal royalties system.
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By GlobalData"Instead of subsidising private coal companies, it’s time to put this money back where it belongs, into rural communities and the pockets of taxpayers."
While boosting transparency within the federal coal programme, the bill would require the Government Accountability Office to review the programme every three years.
Udall said: "Our bill makes a simple change that will ensure taxpayers get their fair share of royalties on coal mined from public lands.
"Like many other western states, New Mexico depends on mineral royalties to help pay for things like public education, and fixing our broken royalty programme will give our schools a much-needed funding boost."
A Headwaters Economics report estimates the American public loses approximately $140m a year based on the current system of royalty valuation.
Image: The new law requires the US Interior Department to collect royalties for coal mined on federal lands. Photo: courtesy of SOMMAI/ FreeDigitalPhotos.net.
