Sec. 101. Valuation of coal royalties
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Section 7 of the Mineral Leasing Act ( 30 U.S.C. 207 ) is amended— in subsection (a), by striking the fourth sentence; and by adding at the end the following: In this subsection: The term assessment value , with respect to Federal coal, means the gross proceeds accruing to the lessee or the affiliate of the lessee’s first arm’s length contract for the sale of Federal coal. If the Secretary cannot identify any arm’s length contract for the sale of Federal coal, then the assessment value means a price imputed by the Secretary based on the coal price index.
The term arm’s length contract means a contract, agreement, or transaction for the sale of Federal coal that is between parties that are independent of each other and that are not affiliates. The term affiliate , with respect to a lessee, means a party that controls, is controlled by, or is under common control with the lessee, and includes a parent or subsidiary company. The term coal price index means the schedule of average market prices of Federal coal (in United States dollars) 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.
The term Secretary means the Secretary of the Interior. Except as provided in subparagraph (B), a lease shall require payment of a royalty in such amount as the Secretary shall determine, which shall not be less than 12.5 percent of the assessment value of Federal coal. In the case of Federal coal recovered by an underground mining operation, the Secretary may establish such lower royalty payment rate as the Secretary determines to be appropriate in lieu of the royalty payment rate described in subparagraph (A).
The Secretary shall ensure that any 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. 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. The Secretary shall compile in a coal price index the assessment values of coal by type and quality of coal. Not less frequently than quarterly, the Secretary shall publish in the Federal Register and on a public website the coal price index, along with a methodological description, including— the method of calculation; the data used to calculate the coal price index in an aggregate manner that does not reveal proprietary information; and any other information the Secretary considers appropriate to ensure transparency.
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 for the purpose of determining the assessment value of the coal produced by such person, including all information the Secretary requires to accurately determine the assessment value and audit the records of the person. 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 the enactment of this subsection and every 3 years thereafter during the 15-year period beginning on such date, the Comptroller General of the United States shall submit to Congress a report containing the results of a review conducted by the Comptroller General of the Federal coal program, including the administration of this subsection.
In conducting a review under this paragraph, the Comptroller General shall consult with— the Secretary; the Director of the Bureau of Land Management; the Secretary of Transportation; and the Secretary of Energy. In conducting a review under this paragraph, the Comptroller General shall review— the total volume of coal production from Federal land; the total volume of remaining coal reserves on Federal land; the total amount of revenues generated from the Federal coal program, itemized by type of revenue, including lease bonus payments and royalties; market prices for coal; market prices for transportation costs and any other deductible costs; and the appropriateness of royalty rates.
The Comptroller General shall report information in a review under this paragraph— in the aggregate for the United States; and categorized by State for at least the top 10 Federal coal-producing States, as determined by the Comptroller General. The Secretary shall seek to enter into an agreement with the National Academy of Sciences to conduct a study to determine the most equitable method for valuation of coal produced on Federal lands for purposes of Federal coal leases. Not later than 18 months after the date of the enactment of this subsection, and every five years thereafter, the Secretary shall submit to Congress a report containing the findings, of such study. .
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Sec. 101
Valuation of coal royalties
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