Rep. Cartwright Introduces Legislation to Eliminate Coal Royalty Loophole

Press Release

U.S. Representative Matt Cartwright introduced the Coal Royalty Fairness and Communities Investment Act of 2018, a bill that would provide $70 million to struggling historic coal communities to help build economic resilience, diversify industries, and promote new job creation opportunities; ensure fair returns on publicly owned coal; and improve the transparency of the federal coal program.

Communities across America have built their economies and livelihoods around the extraction, transportation, and manufacturing of natural resources. However, economies and industries change, often leaving these communities struggling in the wake. Significant decreases in demand for coal power generation have negatively impacted workers and communities that have relied on the coal industry for decades.

This bill allocates $70 million to help coal communities build economic resilience, diversify industries, and promote new job creation. In addition, $5 million dollars will be allocated towards funding the design, construction, and operation of large-scale projects to capture and store carbon dioxide emissions from industrial sources.

"Significant decreases in demand for coal power generation have negatively impacted workers and communities that have relied on the coal industry for decades," Rep. Cartwright said, member of the House Appropriations Committee. "This legislation will close loopholes that the coal industry is taking advantage of while assisting struggling coal communities overcome the challenges associated with changing natural resources markets."

The legislation pays for the investments by closing loopholes in the federal coal royalty payment system. Currently, by selling to their own subsidiaries at below market rates, coal companies often cut corners and avoid paying fair royalty costs on coal extracted from federal land.

"The federal coal program is rigged with loopholes that cost taxpayers millions of dollars a year in lost revenues and unfairly disadvantage Appalachian coal communities," said Nicole Gentile, deputy director for Public Lands at Center for American Progress. "This measure will help fix major flaws in the federal coal leasing program and create a significant new revenue stream for local communities that are working to expand opportunities and diversify their economies."

Reports have previously found that coal sales to subsidiaries and other non-competitive activities cost the federal government as much as $139 million in royalty payments every year. Thus, this bill would be both deficit positive and provide additional funding to historic coal communities that need it most.

The Coal Royalty Fairness and Communities Investment Act of 2018 has been endorsed by the following organizations:

Appalachian Voices

Center for American Progress

The Mountain Pact

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