I 

114TH CONGRESS 

1ST SESSION H. R. 3303 

To amend the Mineral Leasing Act to improve coal royalties, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 29, 2015 

Mr. CARTWRIGHT (for himself, Mr. RYAN of Ohio, Mr. LOWENTHAL, and Mr. 

GRIJALVA) introduced the following bill; which was referred to the Committee on Natural Resources, and in addition to the Committees on Energy and Commerce, Transportation and Infrastructure, and Financial 

Services, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Mineral Leasing Act to improve coal royalties, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Coal Royalty Fairness and Communities Investment Act 

6 of 2015’’. 

7 (b) TABLE OF CONTENTS.—The table of contents of 

8 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

TITLE I—VALUATION OF FEDERAL COAL FOR PURPOSES OF 

ROYALTIES 

Sec. 101. Valuation of coal royalties. 

TITLE II—PROGRAMS TO REINVEST IN COAL-IMPACTED 

COMMUNITIES 

Sec. 201. Definitions. 

Sec. 202. Establishment of Fund. 

Sec. 203. Federal economic and workforce development assistance programs. 

Sec. 204. Carbon capture and sequestration. 

Sec. 205. Additional Federal agency participation. 

1 TITLE I—VALUATION OF FED2 ERAL COAL FOR PURPOSES 

3 OF ROYALTIES 

4 SEC. 101. VALUATION OF COAL ROYALTIES. 

5 Section 7 of the Mineral Leasing Act (30 U.S.C. 207) 

6 is amended— 

7 (1) in subsection (a), by striking the fourth sen8 tence; and 

9 (2) by adding at the end the following: 

10 ‘‘(d) ROYALTIES.— 

11 ‘‘(1) DEFINITIONS.—In this subsection: 

12 ‘‘(A) ASSESSMENT VALUE.— 

13 ‘‘(i) IN GENERAL.—The term ‘assess14 ment value’, with respect to Federal coal, 

15 means— 

16 ‘‘(I) the price of Federal coal 

17 paid by the purchaser at final sale; or 

18 ‘‘(II) a price imputed by the Sec19 retary based on the coal price index. 


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1 ‘‘(ii) EXCLUSIONS.—The term ‘assess2 ment value’ does not include, as deter3 mined and to the extent determined to be 

4 appropriate by the Secretary— 

5 ‘‘(I) transportation costs, as de6 termined in accordance with the 

7 transportation cost index; or 

8 ‘‘(II) the cost of coal washing. 

9 ‘‘(B) BROKER.—The term ‘broker’ means 

10 a person that resells Federal coal. 

11 ‘‘(C) COAL PRICE INDEX.—The term ‘coal 

12 price index’ means the schedule of average mar13 ket prices of Federal coal (in United States dol14 lars) at final sale, based on the quality and type 

15 of the Federal coal, as determined by the Sec16 retary, in consultation with the Administrator 

17 of the Energy Information Administration. 

18 ‘‘(D) PURCHASER.— 

19 ‘‘(i) IN GENERAL.—The term ‘pur20 chaser’ means a person that— 

21 ‘‘(I) purchases or contracts to 

22 purchase Federal coal— 

23 ‘‘(aa) directly from a coal 

24 mine operator; or 


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1 ‘‘(bb) indirectly from a 

2 broker; and 

3 ‘‘(II) uses that Federal coal in 

4 any industrial or energy conversion 

5 process. 

6 ‘‘(ii) EXCLUSION.—The term ‘pur7 chaser’ does not include— 

8 ‘‘(I) a coal broker; or 

9 ‘‘(II) any other third-party inter10 mediary. 

11 ‘‘(E) QUALITY.—The term ‘quality’, with 

12 respect to Federal coal, means the quality of 

13 Federal coal measured in British thermal units, 

14 sulfur, moisture, and other criteria determined 

15 to be appropriate by the Secretary. 

16 ‘‘(F) SECRETARY.—The term ‘Secretary’ 

17 means the Secretary of the Interior. 

18 ‘‘(G) TRANSPORTATION COST INDEX.—The 

19 term ‘transportation cost index’ means the 

20 transportation cost index established under 

21 paragraph (7). 

22 ‘‘(H) TYPE.—The term ‘type’, with respect 

23 to Federal coal, means a general category of 

24 coal, such as metallurgical coal or steam coal, 

25 as determined by the Secretary. 


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1 ‘‘(2) PAYMENT RATE.— 

2 ‘‘(A) IN GENERAL.—Except as provided in 

3 subparagraph (B), a lease shall require pay4 ment of a royalty in such amount as the Sec5 retary shall determine of not less than 12.5 per6 cent of the assessment value of Federal coal, as 

7 determined under paragraph (3). 

8 ‘‘(B) EXCEPTION.—In lieu of the royalty 

9 payment rate described in subparagraph (A), 

10 the Secretary may establish such lower royalty 

11 payment rate as the Secretary determines to be 

12 appropriate in the case of Federal coal recov13 ered by an underground mining operation. 

14 ‘‘(3) VALUATION FOR ROYALTIES.—Not later 

15 than 1 year after the date of enactment of this sub16 section, the Secretary shall establish, as the valu17 ation for Federal coal royalties, the assessment value 

18 of Federal coal. 

19 ‘‘(4) ADMINISTRATION.— 

20 ‘‘(A) REPORTING.—The purchaser of Fed21 eral coal shall annually submit to the Secretary 

22 a report containing such information as the 

23 Secretary determines to be necessary to carry 

24 out this subsection. 


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1 ‘‘(B) AUDITS.—To carry out this sub2 section, the Secretary may examine the records 

3 of any person engaged in the purchase, sale, 

4 transportation, or marketing of Federal coal. 

5 ‘‘(5) COAL PRICE INDEX.— 

6 ‘‘(A) IN GENERAL.—The Secretary shall 

7 compile the assessment values of coal by type 

8 and quality of coal in a coal price index. 

9 ‘‘(B) PUBLICATION.—Not less frequently 

10 than quarterly, the Secretary shall publish the 

11 coal price index, along with a methodological 

12 description, including— 

13 ‘‘(i) the method of calculation; 

14 ‘‘(ii) the data used to calculate the 

15 coal price index in an aggregate manner 

16 that does not reveal proprietary informa17 tion; and 

18 ‘‘(iii) any other information the Sec19 retary considers appropriate to ensure 

20 transparency. 

21 ‘‘(C) OTHER INFORMATION.—If a person 

22 believes that the coal price index does not accu23 rately reflect the assessment value of the coal 

24 produced by the person, the person may peti25 tion the Secretary to use information supplied 


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1 by the person in lieu of the coal price index, in2 cluding all information the Secretary requires 

3 to accurately determine the assessment value 

4 and audit the records of the person. 

5 ‘‘(6) EXPORTS.— 

6 ‘‘(A) IN GENERAL.—In assessing royalties 

7 for the export of Federal coal under this sub8 section, the Secretary may obtain from the ex9 porter of the Federal coal such information as 

10 the Secretary determines to be necessary to 

11 carry out this subsection. 

12 ‘‘(B) ASSESSMENT VALUE OF EXPORTED

13 COAL.—Subject to subparagraph (C), in deter14 mining the assessment value of Federal coal 

15 that is exported, the Secretary shall— 

16 ‘‘(i) use the price of coal free on board 

17 the marine vessel used to transport the 

18 coal overseas at the port of origin; and 

19 ‘‘(ii) limit any deductions that apply 

20 to the assessment value of the Federal coal 

21 to costs incurred prior to being free on22 board the vessel. 

23 ‘‘(C) UNCERTAIN EXPORT PRICE.—If the 

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1 ported coal in accordance with subparagraph 

2 (B), the Secretary shall— 

3 ‘‘(i) assess royalties under this sub4 section based on the coal price index for 

5 coal of a similar quantity and type; and 

6 ‘‘(ii) limit any deductions that apply 

7 to the assessment value of the Federal coal 

8 to costs incurred within the contiguous 

9 United States. 

10 ‘‘(7) TRANSPORTATION COST INDEX.— 

11 ‘‘(A) IN GENERAL.—Subject to the other 

12 provisions of this paragraph, the Secretary, in 

13 consultation with the Secretary of Energy and 

14 the Secretary of Transportation (in consultation 

15 with the Surface Transportation Board and 

16 others), shall— 

17 ‘‘(i) compile in a transportation cost 

18 index the average costs of transporting 

19 coal; and 

20 ‘‘(ii) determine the amount of any 

21 transportation cost deduction under this 

22 subsection, on the basis of the transpor23 tation cost index. 

24 ‘‘(B) UNIT OF MEASUREMENT.—The 

25 transportation cost index shall be based on the 


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1 average transportation costs per ton of coal or 

2 another unit of measurement determined by the 

3 Secretary. 

4 ‘‘(C) DIFFERENCES IN TRANSPORTATION

5 COSTS.—The transportation cost index shall 

6 take into consideration differences in the costs 

7 of transportation, as determined by the Sec8 retary, based on— 

9 ‘‘(i) the mode of transportation; 

10 ‘‘(ii) the geographic region, and 

11 ‘‘(iii) other characteristics of the 

12 transportation industry that the Secretary 

13 considers to be necessary to calculate a 

14 fair, transparent, and accurate transpor15 tation cost index. 

16 ‘‘(D) EXCLUSIONS.—The transportation 

17 cost index shall not include costs associated 

18 with, as determined by the Secretary— 

19 ‘‘(i) take-or-pay contract penalties; 

20 ‘‘(ii) liquidated damages; 

21 ‘‘(iii) the speculative aspects of trans22 portation transactions; or 

23 ‘‘(iv) any other costs that are not di24 rectly associated with moving Federal coal 

25 from 1 location to another location. 


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1 ‘‘(E) PUBLICATION.—Not less than twice 

2 annually, the Secretary shall publish the trans3 portation cost index, along with a methodo4 logical description, including— 

5 ‘‘(i) the method of calculation; 

6 ‘‘(ii) the data used to calculate the 

7 transportation cost index, in an aggregate 

8 manner that does not reveal proprietary in9 formation; and 

10 ‘‘(iii) any other information the Sec11 retary considers to be appropriate to en12 sure transparency. 

13 ‘‘(F) OTHER INFORMATION.—If a person 

14 believes that the transportation cost index does 

15 not accurately reflect the transportation costs 

16 of the person, the person may petition the Sec17 retary to use information supplied by the per18 son (other than costs descried in subparagraph 

19 (D)) in lieu of the transportation cost index, in20 cluding all information the Secretary requires 

21 to accurately determine cost and audit the 

22 records of the person. 

23 ‘‘(8) REVIEWS.— 

24 ‘‘(A) IN GENERAL.—To ensure a trans25 parent, fair, and efficient administration of the 


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1 Federal coal program, and to ensure that citi2 zens of the United States receive a fair return 

3 on Federal coal, not later than 3 years after the 

4 date of enactment of this subsection and every 

5 3 years thereafter during the 15-year period be6 ginning on that date of enactment, the Comp7 troller General of the United States shall sub8 mit to Congress a report that describes a review 

9 of the Federal coal program, including the ad10 ministration of this subsection. 

11 ‘‘(B) CONSULTATION.—In conducting a re12 view under this paragraph, the Comptroller 

13 General shall consult with— 

14 ‘‘(i) the Secretary; 

15 ‘‘(ii) the Director of the Bureau of 

16 Land Management; 

17 ‘‘(iii) the Secretary of Transportation; 

18 and 

19 ‘‘(iv) the Secretary of Energy. 

20 ‘‘(C) INCLUSIONS.—A review under this 

21 paragraph shall include a review of— 

22 ‘‘(i) the total volume of coal produc23 tion from Federal land; 

24 ‘‘(ii) the total volume of remaining 

25 coal reserves on Federal land; 


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1 ‘‘(iii) the total revenues generated 

2 from the Federal coal program, itemized 

3 by type of revenue, including lease bonus 

4 payments and royalties; 

5 ‘‘(iv) market prices for coal; 

6 ‘‘(v) market prices for transportation 

7 costs and any other deductible costs; and 

8 ‘‘(vi) the appropriateness of royalty 

9 rates. 

10 ‘‘(D) FORMAT.—The Comptroller General 

11 shall report information in a review under this 

12 paragraph— 

13 ‘‘(i) in the aggregate for the United 

14 States; and 

15 ‘‘(ii) categorized by State for at least 

16 the top 10 Federal coal-producing States, 

17 as determined by the Comptroller Gen18 eral.’’. 

19 TITLE II—PROGRAMS TO REIN20 VEST IN COAL-IMPACTED 

21 COMMUNITIES 

22 SEC. 201. DEFINITIONS. 

23 In this title: 

24 (1) COAL ECONOMY.—The term ‘‘coal econ25 omy’’ means the complete supply chain of coal reliVerDate Sep 11 2014 00:44 Aug 04, 2015 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H3303.IH H3303

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1 ant industries, including coal mining, coal-fired 

2 power plants, and related transportation, logistics, 

3 and manufacturing. 

4 (2) COVERED PROGRAM.—The term ‘‘covered 

5 program’’ means any of the following: 

6 (A) The Assistance to Coal Communities, 

7 Economic Adjustment Assistance, and Partner8 ship Planning program of the Economic Devel9 opment Administration of the Department of 

10 Commerce. 

11 (B) The Dislocated Worker National 

12 Emergency Grants program of the Employment 

13 and Training Administration of the Department 

14 of Labor. 

15 (C) The Regional Innovation Clusters and 

16 Growth Accelerators program of the Small 

17 Business Administration. 

18 (D) The Technical Assistance and Dem19 onstration Projects program of the Appalachian 

20 Regional Commission. 

21 (3) FUND.—The term ‘‘Fund’’ means the Coal 

22 Area Economic Revitalization Fund established by 

23 section 202(a). 

24 (4) IMPACTED COMMUNITY.—The term ‘‘im25 pacted community’’ means a community or Indian 


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1 tribe (as defined in section 4 of the Indian Self-De2 termination and Education Assistance Act (25 

3 U.S.C. 450b)) in the United States that has been 

4 negatively impacted by changes in the coal economy. 

5 (5) PARTICIPATING AGENCY.—The term ‘‘par6 ticipating agency’’ means a Federal agency that has 

7 primary authority over a covered program. 

8 SEC. 202. ESTABLISHMENT OF FUND. 

9 (a) ESTABLISHMENT.—There is established in the 

10 Treasury of the United States a separate account, to be 

11 administered by the Secretary of Commerce (acting 

12 through the Economic Development Administration), to be 

13 known as the ‘‘Coal Area Economic Revitalization Fund’’. 

14 (b) DEPOSITS.—Of the amount of royalty revenues 

15 collected by the United States for each fiscal year from 

16 coal leases under section 7 of the Mineral Leasing Act (30 

17 U.S.C. 207) (as amended by section 101(2)), to the extent 

18 the revenues are available, there shall be deposited in the 

19 Fund $105,000,000. 

20 (c) AVAILABILITY OF AMOUNTS.—Subject to sub21 section (d) and notwithstanding any other provision of 

22 law, for each fiscal year, of the amounts deposited in the 

23 Fund under subsection (b), there shall be made available, 

24 without further appropriation, the following or a pro rata 

25 amount: 


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1 (1) $100,000,000 to the Secretary of Commerce 

2 to provide grant assistance under covered programs, 

3 in accordance with section 203. 

4 (2) $5,000,000 to the Secretary of Energy to 

5 provide funding for large-scale projects to capture 

6 and store carbon dioxide emissions from industrial 

7 sources, in accordance with section 204. 

8 (d) ADMINISTRATIVE EXPENSES.—A participating 

9 agency may not use not more than 2 percent of the 

10 amount the agency receives for each fiscal year to cover 

11 the administrative expenses of the participating agency in 

12 carrying out the covered program. 

13 (e) PERIOD OF AVAILABILITY.—The amounts depos14 ited in the Fund shall be available without fiscal year limi15 tation. 

16 SEC. 203. FEDERAL ECONOMIC AND WORKFORCE DEVELOP17 MENT ASSISTANCE PROGRAMS. 

18 (a) IN GENERAL.—The Secretary of Commerce, act19 ing through the Economic Development Administration 

20 (referred to in this section as the ‘‘Secretary’’), shall use 

21 the amounts made available to carry out this section under 

22 section 202(c)(1) to provide grant assistance under cov23 ered programs for eligible projects described in subsection 

24 (e). 


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1 (b) PURPOSE.—The purpose of this section is to pro2 vide funding to impacted communities by targeting Fed3 eral economic and workforce development assistance pro4 grams that seek— 

5 (1) to diversify regional, State, tribal, and local 

6 economies; 

7 (2) to create jobs in new and existing indus8 tries; 

9 (3) to attract new sources of job-creating in10 vestment; and 

11 (4) to provide a range of workforce services and 

12 skills training, including work-based learning oppor13 tunities, resulting in industry-recognized credentials 

14 for high-quality, in-demand jobs. 

15 (c) ALLOCATION OF FUNDS FOR COVERED PRO16 GRAMS.— 

17 (1) IN GENERAL.—The Secretary shall— 

18 (A) allocate amounts made available to 

19 carry out this section among the covered pro20 grams in accordance with the criteria described 

21 in paragraph (2); and 

22 (B) provide public notice of the availability 

23 of grant assistance under this section through 

24 a Federal Funding Opportunity announcement. 


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1 (2) ALLOCATION CRITERIA.—The Secretary 

2 shall establish and publish criteria for the allocation 

3 of funds to carry out this section among the covered 

4 programs in a manner that carries out the purpose 

5 described in subsection (b), as determined by the 

6 Secretary. 

7 (d) COVERED PROGRAMS.— 

8 (1) IN GENERAL.—On allocation by the Sec9 retary of amounts from the Fund for a covered pro10 gram under this section, the head of the applicable 

11 participating agency shall manage grant selection 

12 (including eligibility requirements), awards, and exe13 cution of projects with respect to those amounts. 

14 (2) TERMS AND CONDITIONS.—Except as other15 wise provided in this section, projects receiving grant 

16 assistance under this section shall be subject to the 

17 eligibility rules, permitted activities, and reporting 

18 requirements of the covered program under which 

19 the grant is made. 

20 (e) ELIGIBLE PROJECTS.— 

21 (1) PROJECT PURPOSES.—A project shall be el22 igible for assistance under this section if the purpose 

23 of the project is to assist impacted communities— 

24 (A) to organize community stakeholders, 

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1 ate needs and resources, and develop com2 prehensive economic development strategic 

3 plans; 

4 (B) to undergo in-depth labor market anal5 ysis and workforce development and dislocated 

6 worker planning associated with the provision 

7 of training and employment services; 

8 (C) to implement linked economic and 

9 workforce development strategies to develop 

10 high-potential industry clusters; 

11 (D) to accelerate job creation by leveraging 

12 local assets; 

13 (E) to train and place workers in family14 supporting, high-demand jobs (including reg15 istered apprenticeship and other on-the-job 

16 training models); 

17 (F) to create linkages that drive regional 

18 economic growth; or 

19 (G) to carry out other purposes approved 

20 by the Secretary. 

21 (2) PRIORITY.—In selecting projects to receive 

22 assistance under this section, the head of a partici23 pating agency shall— 

24 (A) give priority to project applications 

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1 posed project and the means by which the 

2 project will result in local economic growth and 

3 diversification, job creation, and job training 

4 and reemployment for dislocated workers, as 

5 described in a broader economic and workforce 

6 development strategy, without regard to any 

7 formula used by a participating agency to dis8 burse other funds; and 

9 (B) consult directly with impacted commu10 nities to determine the greatest needs of the im11 pacted communities and give priority to projects 

12 that address those needs. 

13 (3) SPECIFIC ACTIVITIES AND COSTS TO BE

14 CONSIDERED.—In providing assistance under this 

15 section for projects for economic diversification, the 

16 head of a participating agency shall give consider17 ation, at a minimum, to the following activities and 

18 costs: 

19 (A) Analysis activities that build from stra20 tegic economic development plans, including— 

21 (i) economic and workforce data col22 lection; and 

23 (ii) supply chain and industry cluster 

24 analysis. 


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1 (B) Outreach and targeted assistance to 

2 economic development organizations, unions, 

3 workers, and other stakeholders. 

4 (C) Remediation and redevelopment of coal 

5 economy sites, as appropriate. 

6 (D) Provision of business planning and 

7 market exploration services. 

8 (E) Development of business incubator 

9 programs. 

10 (F) Facilitation of access to private capital 

11 investment and capacity building to effectively 

12 use capital investment. 

13 (G) Promotion of exports from entities in 

14 the impacted area. 

15 (H) Workforce training and dislocated 

16 worker services and supports for impacted 

17 workers. 

18 (I) Costs associated with registered ap19 prenticeship and on-the-job training models. 

20 (J) Temporary or short-term relocation or 

21 commuting costs for available jobs in other 

22 parts of the applicable State or region. 

23 (K) Staffing, operating, and administrative 

24 costs for the recipient organization. 

25 (L) Comprehensive strategies that— 


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1 (i) integrate all of the activities and 

2 costs described in subparagraphs (A) 

3 through (K); and 

4 (ii) leverage other investments from 

5 the applicable participating agency and 

6 other Federal agencies. 

7 (f) COORDINATION OF ACTIVITIES.—The Secretary 

8 shall— 

9 (1) with respect to grant assistance under this 

10 section, manage— 

11 (A) the Federal Funding Opportunity an12 nouncement under subsection (c)(1)(B); and 

13 (B) the overall process of competitive solic14 itation; 

15 (2) provide a single staff point of Federal con16 tact (with staffing assistance from other partici17 pating agencies, as needed) for grants awarded 

18 under this section; and 

19 (3) coordinate cross-agency activities at the re20 gional level that direct additional Federal resources 

21 to impacted communities. 

22 SEC. 204. CARBON CAPTURE AND SEQUESTRATION. 

23 The Secretary of Energy shall use the amounts made 

24 available to carry out this section under section 202(c)(2) 

25 to provide financial assistance for the design, construction, 


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1 and operation of large-scale projects to capture and store 

2 carbon dioxide emissions from industrial sources. 

3 SEC. 205. ADDITIONAL FEDERAL AGENCY PARTICIPATION. 

4 (a) IN GENERAL.—The Federal departments and 

5 agencies described in subsection (b) shall provide to im6 pacted communities technical assistance and educational 

7 outreach to fund partnerships, in coordination with avail8 able resources. 

9 (b) DESCRIPTION OF DEPARTMENTS AND AGEN10 CIES.—The Federal departments and agencies referred to 

11 in subsection (a) are— 

12 (1) the Rural Business-Cooperative Service of 

13 the Department of Agriculture; 

14 (2) the Office of Solid Waste and Emergency 

15 Response of the Environmental Protection Agency; 

16 (3) the Department of Energy; 

17 (4) the Community Development Financial In18 stitutions Fund of the Department of the Treasury; 

19 (5) SelectUSA and the National Institute of 

20 Standards and Technology—Manufacturing Exten21 sion Partnerships of the Department of Commerce; 

22 (6) the Corporation for National and Commu23 nity Service; and 


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1 (7) the Office of Surface Mining Reclamation 

2 and Enforcement of the Department of the Interior. 

Æ 


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