Coal Royalty Fairness and Communities Investment Act of 2015

To amend the Mineral Leasing Act to improve coal royalties, and for other purposes. 1. Short title; table of contents (a) Short title This Act may be cited as the Coal Royalty Fairness and Communities Investment Act of 2015 (b) Table of contents The table of contents of this Act is as follows: 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. I Valuation of Federal coal for purposes of royalties 101. Valuation of coal royalties Section 7 of the Mineral Leasing Act ( 30 U.S.C. 207 (1) in subsection (a), by striking the fourth sentence; and (2) by adding at the end the following: (d) Royalties (1) Definitions In this subsection: (A) Assessment value (i) In general The term assessment value (I) the price of Federal coal paid by the purchaser at final sale; or (II) a price imputed by the Secretary based on the coal price index. (ii) Exclusions The term assessment value (I) transportation costs, as determined in accordance with the transportation cost index; or (II) the cost of coal washing. (B) Broker The term broker (C) Coal price index The term coal price index (D) Purchaser (i) In general The term purchaser (I) purchases or contracts to purchase Federal coal— (aa) directly from a coal mine operator; or (bb) indirectly from a broker; and (II) uses that Federal coal in any industrial or energy conversion process. (ii) Exclusion The term purchaser (I) a coal broker; or (II) any other third-party intermediary. (E) Quality The term quality (F) Secretary The term Secretary (G) Transportation cost index The term transportation cost index (H) Type The term type (2) Payment rate (A) In general Except as provided in subparagraph (B), a lease shall require payment of a royalty in such amount as the Secretary shall determine of not less than 12.5 percent of the assessment value of Federal coal, as determined under paragraph (3). (B) Exception In lieu of the royalty payment rate described in subparagraph (A), the Secretary may establish such lower royalty payment rate as the Secretary determines to be appropriate in the case of Federal coal recovered by an underground mining operation. (3) Valuation for royalties Not later than 1 year after the date of enactment of this subsection, the Secretary shall establish, as the valuation for Federal coal royalties, the assessment value of Federal coal. (4) Administration (A) Reporting The purchaser of Federal coal shall annually submit to the Secretary a report containing such information as the Secretary determines to be necessary to carry out this subsection. (B) Audits To carry out this subsection, the Secretary may examine the records of any person engaged in the purchase, sale, transportation, or marketing of Federal coal. (5) Coal price index (A) In general The Secretary shall compile the assessment values of coal by type and quality of coal in a coal price index. (B) Publication Not less frequently than quarterly, the Secretary shall publish the coal price index, along with a methodological description, including— (i) the method of calculation; (ii) the data used to calculate the coal price index in an aggregate manner that does not reveal proprietary information; and (iii) any other information the Secretary considers appropriate to ensure transparency. (C) Other information If a person believes that the coal price index does not accurately reflect the assessment value of the coal produced by the person, the person may petition the Secretary to use information supplied by the person in lieu of the coal price index, including all information the Secretary requires to accurately determine the assessment value and audit the records of the person. (6) Exports (A) In general In assessing royalties for the export of Federal coal under this subsection, the Secretary may obtain from the exporter of the Federal coal such information as the Secretary determines to be necessary to carry out this subsection. (B) Assessment value of exported coal Subject to subparagraph (C), in determining the assessment value of Federal coal that is exported, the Secretary shall— (i) use the price of coal free on board the marine vessel used to transport the coal overseas at the port of origin; and (ii) limit any deductions that apply to the assessment value of the Federal coal to costs incurred prior to being free onboard the vessel. (C) Uncertain export price If the Secretary cannot determine the value of exported coal in accordance with subparagraph (B), the Secretary shall— (i) assess royalties under this subsection based on the coal price index for coal of a similar quantity and type; and (ii) limit any deductions that apply to the assessment value of the Federal coal to costs incurred within the contiguous United States. (7) Transportation cost index (A) In general Subject to the other provisions of this paragraph, the Secretary, in consultation with the Secretary of Energy and the Secretary of Transportation (in consultation with the Surface Transportation Board and others), shall— (i) compile in a transportation cost index the average costs of transporting coal; and (ii) determine the amount of any transportation cost deduction under this subsection, on the basis of the transportation cost index. (B) Unit of measurement The transportation cost index shall be based on the average transportation costs per ton of coal or another unit of measurement determined by the Secretary. (C) Differences in transportation costs The transportation cost index shall take into consideration differences in the costs of transportation, as determined by the Secretary, based on— (i) the mode of transportation; (ii) the geographic region, and (iii) other characteristics of the transportation industry that the Secretary considers to be necessary to calculate a fair, transparent, and accurate transportation cost index. (D) Exclusions The transportation cost index shall not include costs associated with, as determined by the Secretary— (i) take-or-pay contract penalties; (ii) liquidated damages; (iii) the speculative aspects of transportation transactions; or (iv) any other costs that are not directly associated with moving Federal coal from 1 location to another location. (E) Publication Not less than twice annually, the Secretary shall publish the transportation cost index, along with a methodological description, including— (i) the method of calculation; (ii) the data used to calculate the transportation cost index, in an aggregate manner that does not reveal proprietary information; and (iii) any other information the Secretary considers to be appropriate to ensure transparency. (F) Other information If a person believes that the transportation cost index does not accurately reflect the transportation costs of the person, the person may petition the Secretary to use information supplied by the person (other than costs descried in subparagraph (D)) in lieu of the transportation cost index, including all information the Secretary requires to accurately determine cost and audit the records of the person. (8) Reviews (A) In general To ensure a transparent, fair, and efficient administration of the Federal coal program, and to ensure that citizens of the United States receive a fair return on Federal coal, not later than 3 years after the date of enactment of this subsection and every 3 years thereafter during the 15-year period beginning on that date of enactment, the Comptroller General of the United States shall submit to Congress a report that describes a review of the Federal coal program, including the administration of this subsection. (B) Consultation In conducting a review under this paragraph, the Comptroller General shall consult with— (i) the Secretary; (ii) the Director of the Bureau of Land Management; (iii) the Secretary of Transportation; and (iv) the Secretary of Energy. (C) Inclusions A review under this paragraph shall include a review of— (i) the total volume of coal production from Federal land; (ii) the total volume of remaining coal reserves on Federal land; (iii) the total revenues generated from the Federal coal program, itemized by type of revenue, including lease bonus payments and royalties; (iv) market prices for coal; (v) market prices for transportation costs and any other deductible costs; and (vi) the appropriateness of royalty rates. (D) Format The Comptroller General shall report information in a review under this paragraph— (i) in the aggregate for the United States; and (ii) categorized by State for at least the top 10 Federal coal-producing States, as determined by the Comptroller General. . II Programs to Reinvest in Coal-Impacted Communities 201. Definitions In this title: (1) Coal economy The term coal economy (2) Covered program The term covered program (A) The Assistance to Coal Communities, Economic Adjustment Assistance, and Partnership Planning program of the Economic Development Administration of the Department of Commerce. (B) The Dislocated Worker National Emergency Grants program of the Employment and Training Administration of the Department of Labor. (C) The Regional Innovation Clusters and Growth Accelerators program of the Small Business Administration. (D) The Technical Assistance and Demonstration Projects program of the Appalachian Regional Commission. (3) Fund The term Fund (4) Impacted community The term impacted community Indian Self-Determination and Education Assistance Act 25 U.S.C. 450b (5) Participating agency The term participating agency 202. Establishment of Fund (a) Establishment There is established in the Treasury of the United States a separate account, to be administered by the Secretary of Commerce (acting through the Economic Development Administration), to be known as the Coal Area Economic Revitalization Fund (b) Deposits Of the amount of royalty revenues collected by the United States for each fiscal year from coal leases under section 7 of the Mineral Leasing Act ( 30 U.S.C. 207 (c) Availability of amounts Subject to subsection (d) and notwithstanding any other provision of law, for each fiscal year, of the amounts deposited in the Fund under subsection (b), there shall be made available, without further appropriation, the following or a pro rata amount: (1) $100,000,000 to the Secretary of Commerce to provide grant assistance under covered programs, in accordance with section 203. (2) $5,000,000 to the Secretary of Energy to provide funding for large-scale projects to capture and store carbon dioxide emissions from industrial sources, in accordance with section 204. (d) Administrative expenses A participating agency may not use not more than 2 percent of the amount the agency receives for each fiscal year to cover the administrative expenses of the participating agency in carrying out the covered program. (e) Period of availability The amounts deposited in the Fund shall be available without fiscal year limitation. 203. Federal economic and workforce development assistance programs (a) In general The Secretary of Commerce, acting through the Economic Development Administration (referred to in this section as the Secretary (b) Purpose The purpose of this section is to provide funding to impacted communities by targeting Federal economic and workforce development assistance programs that seek— (1) to diversify regional, State, tribal, and local economies; (2) to create jobs in new and existing industries; (3) to attract new sources of job-creating investment; and (4) to provide a range of workforce services and skills training, including work-based learning opportunities, resulting in industry-recognized credentials for high-quality, in-demand jobs. (c) Allocation of funds for covered programs (1) In general The Secretary shall— (A) allocate amounts made available to carry out this section among the covered programs in accordance with the criteria described in paragraph (2); and (B) provide public notice of the availability of grant assistance under this section through a Federal Funding Opportunity announcement. (2) Allocation criteria The Secretary shall establish and publish criteria for the allocation of funds to carry out this section among the covered programs in a manner that carries out the purpose described in subsection (b), as determined by the Secretary. (d) Covered programs (1) In general On allocation by the Secretary of amounts from the Fund for a covered program under this section, the head of the applicable participating agency shall manage grant selection (including eligibility requirements), awards, and execution of projects with respect to those amounts. (2) Terms and conditions Except as otherwise provided in this section, projects receiving grant assistance under this section shall be subject to the eligibility rules, permitted activities, and reporting requirements of the covered program under which the grant is made. (e) Eligible projects (1) Project purposes A project shall be eligible for assistance under this section if the purpose of the project is to assist impacted communities— (A) to organize community stakeholders, analyze and inventory community assets, evaluate needs and resources, and develop comprehensive economic development strategic plans; (B) to undergo in-depth labor market analysis and workforce development and dislocated worker planning associated with the provision of training and employment services; (C) to implement linked economic and workforce development strategies to develop high-potential industry clusters; (D) to accelerate job creation by leveraging local assets; (E) to train and place workers in family-supporting, high-demand jobs (including registered apprenticeship and other on-the-job training models); (F) to create linkages that drive regional economic growth; or (G) to carry out other purposes approved by the Secretary. (2) Priority In selecting projects to receive assistance under this section, the head of a participating agency shall— (A) give priority to project applications that establish a clear linkage between the proposed project and the means by which the project will result in local economic growth and diversification, job creation, and job training and reemployment for dislocated workers, as described in a broader economic and workforce development strategy, without regard to any formula used by a participating agency to disburse other funds; and (B) consult directly with impacted communities to determine the greatest needs of the impacted communities and give priority to projects that address those needs. (3) Specific activities and costs to be considered In providing assistance under this section for projects for economic diversification, the head of a participating agency shall give consideration, at a minimum, to the following activities and costs: (A) Analysis activities that build from strategic economic development plans, including— (i) economic and workforce data collection; and (ii) supply chain and industry cluster analysis. (B) Outreach and targeted assistance to economic development organizations, unions, workers, and other stakeholders. (C) Remediation and redevelopment of coal economy sites, as appropriate. (D) Provision of business planning and market exploration services. (E) Development of business incubator programs. (F) Facilitation of access to private capital investment and capacity building to effectively use capital investment. (G) Promotion of exports from entities in the impacted area. (H) Workforce training and dislocated worker services and supports for impacted workers. (I) Costs associated with registered apprenticeship and on-the-job training models. (J) Temporary or short-term relocation or commuting costs for available jobs in other parts of the applicable State or region. (K) Staffing, operating, and administrative costs for the recipient organization. (L) Comprehensive strategies that— (i) integrate all of the activities and costs described in subparagraphs (A) through (K); and (ii) leverage other investments from the applicable participating agency and other Federal agencies. (f) Coordination of activities The Secretary shall— (1) with respect to grant assistance under this section, manage— (A) the Federal Funding Opportunity announcement under subsection (c)(1)(B); and (B) the overall process of competitive solicitation; (2) provide a single staff point of Federal contact (with staffing assistance from other participating agencies, as needed) for grants awarded under this section; and (3) coordinate cross-agency activities at the regional level that direct additional Federal resources to impacted communities. 204. Carbon capture and sequestration The Secretary of Energy shall use the amounts made available to carry out this section under section 202(c)(2) to provide financial assistance for the design, construction, and operation of large-scale projects to capture and store carbon dioxide emissions from industrial sources. 205. Additional Federal agency participation (a) In general The Federal departments and agencies described in subsection (b) shall provide to impacted communities technical assistance and educational outreach to fund partnerships, in coordination with available resources. (b) Description of departments and agencies The Federal departments and agencies referred to in subsection (a) are— (1) the Rural Business-Cooperative Service of the Department of Agriculture; (2) the Office of Solid Waste and Emergency Response of the Environmental Protection Agency; (3) the Department of Energy; (4) the Community Development Financial Institutions Fund of the Department of the Treasury; (5) SelectUSA and the National Institute of Standards and Technology—Manufacturing Extension Partnerships of the Department of Commerce; (6) the Corporation for National and Community Service; and (7) the Office of Surface Mining Reclamation and Enforcement of the Department of the Interior.

Summary: Coal Royalty Fairness and Communities Investment Act of 2015 This bill amends the Mineral Leasing Act to require the coal lease royalty to be at least 12.5% of the assessment value of federal coal (currently, 12.5% of the value of coal as defined by regulation), which value shall be established by the Department of the Interior within one year after enactment of this Act. "Assessment value" means: (1) the price of federal coal paid by the purchaser at final sale, or (2) a price imputed by the Secretary based on the coal price index (the schedule of average market prices of federal coal at final sale). The purchaser of federal coal shall report annually information necessary to carry out this Act. Interior may examine the records of any person engaged in the purchase, sale, transportation, or marketing of federal coal. The bill prescribes requirements for: (1) determining and assessing royalties for the export of federal coal, (2) compiling in a transportation cost index the average costs of transporting coal, and (3) determining the amount of any applicable transportation cost deduction on the basis of such index. The bill also establishes in the Treasury a Coal Area Economic Revitalization Fund for the annual deposit of $105 million of royalty revenues collected by the United States from coal leases. The Economic Development Administration of the Department of Commerce shall use certain Fund amounts to issue grants under specified programs for projects to assist communities and Indian tribes negatively impacted by changes in the coal economy. The Department of Energy shall use certain Fund amounts to provide financial assistance for the design, construction, and operation of large-scale projects to capture and store carbon dioxide emissions from industrial sources. Specified federal departments and agencies shall provide impacted communities with technical assistance and educational outreach to fund partnerships.