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Bush continues, but cuts abandoned mine tax

The Bush administration on Thursday proposed to continue — but cut by 75 percent — the coal tax that funds the federal Abandoned Mine Land program.

Under the U.S. Office of Surface Mining plan, the tax would raise $69 million next year to continue required payments to the United Mine Workers’ health care plan.

But the new OSM proposal, like the administration’s initial plan to extend the mine cleanup program, does not fix the UMW plan’s long-term financial woes.

“Unfortunately, the administration has been AWOL on the coal miner health care issue,” said Rep. Nick J. Rahall, D-W.Va. “Its AML proposal does not address the matter.”

More than a decade ago, Rahall tapped the nearly $1.6 billion AML trust fund to stave off financial collapse of the UMW health care system.

Rahall did so after then-President George H.W. Bush vetoed 1992 legislation to create a separate coal tax to fund miners’ health care.

Created by Congress in 1977, the AML program charges coal operators a per-ton tax to fund reclamation of mines abandoned before federal strip mine rules were adopted.

Without congressional action, OSM’s authority to tax coal companies for reclamation projects would expire on Sept. 30.

But, the law also requires OSM to continue to charge the tax at a rate sufficient to continue interest transfers to the UMW health care plan.

Various proposals to continue the entire AML tax, including the reclamation program, have gotten little attention from the Republican leadership in Congress.

If Congress doesn’t act, OSM could still use the $1.6 billion balance in the AML fund to clean up abandoned mines. But, federal officials project that amount is $3 billion less than what is needed for coalfield cleanups.

Earlier this week, Sen. Robert C. Byrd, D-W.Va., attached a nine-month extension of the program to next year’s proposed budget for the Interior Department. That measure still needs the approval of the full Senate and the House.

Today, OSM plans to publish its plan to continue the AML tax, for health care benefits only, in the Federal Register.

Under the plan, surface mine operators would pay 8.8 cents per ton of coal and underground mine operators 3.8 cents per ton. That’s compared to the current rates of 35 cents for surface mines and 15 cents for underground mines.

Over the last two years, OSM has repeatedly promised to publish a proposal for continuing the tax, but then not done so.

In today’s Federal Register notice, OSM will publish both a proposed and final rule for the tax.

“Because of the urgent need to have a rule in place before the date that the current reclamation fee rates expire, OSM is invoking the ‘good cause’ exemptions of the Administrative Procedures Act and is adopting the rules immediately on a final basis without prior notice or opportunity for public comment,” OSM said in a news release.

OSM said it would accept public comment, and then revise the final rule if necessary.

Also, OSM said it would publish new AML tax rates every year before the start of the federal budget year Oct. 1.

The UMW program provides health care benefits for about 45,000 retired miners and their families.

Under Rahall’s legislation, OSM must transfer interest on the AML fund to the miners’ health care plan.

In 1992, Congress passed the Coal Industry Retiree Health Benefit Act to ensure long-term health benefits for coal miners. The law required operators to keep their historic promise of cradle-to-grave health care for miners. It also set up a mechanism to fund health care for miners whose last known employers had gone out of business.

But, lawsuits by coal operators and firms that have purchased former coal companies have chipped away at the 1992 law, creating periodic financial emergencies.

Current law continues to transfer money from interest on the AML fund to the UMW fund. But, it allows interest transfers only to be used to finance orphaned miners — those whose last employer went out of business.

UMW officials want to eliminate that restriction, but the Bush administration has not proposed to do so.

Rahall, along with Rep. Barbara Cubin, R-Wyo., has proposed to allow AML transfers to eliminate any deficit in the union health care fund. Rep. Shelley Moore Capito, R-W.Va., signed on to co-sponsor the Rahall-Cubin bill.

“For nearly two years, the UMWA and other concerned parties have been asking the OSM to tell us what the agency’s plan was to fund coal miner health care in the event of a failure by Congress to reauthorize the AML program,” said UMW President Cecil Roberts. “Now, two weeks before the expiration, OSM has finally acted.

“However, today’s OSM announcement does not resolve the coal act’s funding problems, and a long-term solution is still desperately needed,” Roberts said. “It’s time for legislative action to match the political rhetoric.”


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