Think coal companies should have to pay their fair share of royalties to governments for the coal they mine? Think the federal government should close a loophole that allows these companies to game the system and collude to artificially lower the royalties they pay?
Representative Zinke doesn’t. He wants to allow coal companies to continue underpaying their obligation through deceptive accounting.
ThinkProgress is reporting that Zinke is trying to attach a budget rider that would permit huge coal companies to continue to sell coal to subsidiary companies, avoiding royalty payments in the process.
Back in January, the Center for American Progress described the game companies are playing to avoid the payments:
“Increasingly, the major coal companies are selling Powder River Basin coal not on an open market but to an elaborate network of shell companies that they own and control,” said Matt Lee-Ashley, a Senior Fellow and Director of the Public Lands Project at CAP. “This gaming of the system is costing federal and state governments millions of dollars in lost royalty payments and giving the Powder River Basin an unfair advantage over other U.S. coal-producing regions. While Interior’s proposed rule is a good first step toward preventing the worst abuses, clearly more must be done to modernize the royalty system and rein in the largest subsidies it provides.”
In May, former budget director Dan Bucks noted this abuse of the coal royalty system was costing Montana millions of dollars:
Experts estimate that from 2008 through 2012, coal companies underpaid their federal royalties on Montana coal to the tune of about $65 to $73 million. So the companies shorted Montana taxpayers more than $30 million in royalty revenues over these five years.
So why is Representative Zinke working to let coal companies not make royalty payments they owe? Because, as the Western Values Project notes, “coal companies can spend a little to back a Congressman who will protect their massive taxpayer-funded subsidies. That’s a good deal for coal companies and Rep. Zinke, but it’s bad for the rest of us.”
Unlike his imaginary amendment to the trade bill last week, this one is real, and posted on the Congressional site for everyone to see. Perhaps it’s time for the Montana media to demand an explanation from Representative Zinke, and ask him to explain why the needs of huge coal conglomerates are more important than the needs of Montana schools and taxpayers.