[Congressional Record Volume 161, Number 121 (Wednesday, July 29, 2015)]
[Senate]
[Pages S6140-S6141]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN (for himself and Mr. Udall):
  S. 1891. A bill to amend the Mineral Leasing Act to improve coal 
royalties, and for other purposes; to the Committee on Energy and 
Natural Resources.
  Mr. WYDEN. Mr. President, today, I am proud to stand up for fairness 
by introducing legislation with my Senate colleague, Senator Tom Udall 
of New Mexico, to ensure American taxpayers receive the full value of 
coal produced on public lands.
  The Coal Royalty Fairness Act would require the Interior Department 
to collect royalties for coal mined on Federal lands based on the 
actual market value of coal. This bill is based on current successful 
practices in Montana--the Nation's second largest Federal coal-
producing State. Currently, some private mining companies sell coal to 
their own affiliated companies at a lower cost than market value, and 
pay Federal royalties based on the cheaper, first point of sale.
  American taxpayers are getting ripped off by coal companies under the 
current, broken coal royalties system. I raised concerns about this 2 
years ago, and today, Senator Udall and I are introducing legislation 
to get the public every penny owed by companies that may be taking 
advantage of a loose system. Instead of subsidizing private coal 
companies, it is time to put this money back where it belongs--into 
rural communities and the pockets of taxpayers.
  Our bill will require the Interior Department to collect royalties 
based on the actual market value of coal, not the below-market price 
they charge their own companies.
  Our bill will also bring some much-needed transparency to the Federal 
coal program by requiring the Interior Department to publish more 
information and calling for Government Accountability Office to review 
the program every 3 years.
  I urge my colleagues to join Senator Udall and me by cosponsoring and 
ultimately passing this important bill.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1891

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Coal Royalty Fairness Act of 
     2015''.

     SEC. 2. VALUATION OF COAL ROYALTIES.

       Section 7 of the Mineral Leasing Act (30 U.S.C. 207) is 
     amended--
       (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', with 
     respect to Federal coal, means--

       ``(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' does not 
     include, as determined and to the extent determined to be 
     appropriate by the Secretary--

       ``(I) transportation costs, as determined in accordance 
     with the transportation cost index; or
       ``(II) the cost of coal washing.

       ``(B) Broker.--The term `broker' means a person that 
     resells Federal coal.
       ``(C) Coal price index.--The term `coal price index' means 
     the schedule of average market prices of Federal coal (in 
     United States dollars) paid by the purchaser at final sale, 
     based on the quality and type of the Federal coal, as 
     determined by the Secretary, in consultation with the 
     Administrator of the Energy Information Administration.
       ``(D) Purchaser.--
       ``(i) In general.--The term `purchaser' means a person 
     that--

       ``(I) purchases or contracts to purchase Federal coal--

       ``(aa) directly from a coal mine operator; or

[[Page S6141]]

       ``(bb) indirectly from a broker; and

       ``(II) uses that Federal coal in any industrial or energy 
     conversion process.

       ``(ii) Exclusion.--The term `purchaser' does not include--

       ``(I) a coal broker; or
       ``(II) any other third-party intermediary.

       ``(E) Quality.--The term `quality', with respect to Federal 
     coal, means the quality of Federal coal measured in British 
     thermal units, sulfur, moisture, and other criteria 
     determined to be appropriate by the Secretary.
       ``(F) Secretary.--The term `Secretary' means the Secretary 
     of the Interior.
       ``(G) Transportation cost index.--The term `transportation 
     cost index' means the transportation cost index established 
     under paragraph (7).
       ``(H) Type.--The term `type', with respect to Federal coal, 
     means a general category of coal, such as metallurgical coal 
     or steam coal, as determined by the Secretary.
       ``(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 significantly deviates from 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 significantly deviates from 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.
       ``(9) Application.--This subsection--
       ``(A) applies to coal mined from Federal land; and
       ``(B) does not apply to coal mined from tribal land.''.
                                 ______