In a quiet procedural move, Montana U.S. Rep. Ryan Zinke has tried to keep a loophole open that will rob Montanans (and all citizens) of money that’s rightfully theirs.
The issue is how coal royalties are paid. That’s money coal companies owe the government for extracting coal on federal land — land owned by all of us. Currently, a loophole allows large coal companies to mine coal and then sell it to their own subsidiaries at a lesser rate, creating a tax loophole that saves them millions.
It’s a tax game.
Folks are going to want to make the legislation about coal, an easy target to villainize or martyr, depending on your outlook.
But the heart of the issue has nothing to do with coal. It’s about protecting the value of America’s most precious resource, its land.
Once mined, the coal is gone forever. With it, so is a part of the land’s value. Coal royalties ensure that Americans see some value for coal to offset the resource being lost.
There has been a debate about how to value coal. But, keeping this loophole would mean that citizens who own the land will continue to make less while coal companies make more on it. It should be noted that this deals with coal on federal lands only.
Here’s how it works: Coal companies sell the coal to their own subsidiaries at greatly depressed prices. That shortchanges Western states, like Montana and Wyoming. The solution is to have an independent third-party put a number on coal.
Zinke’s budget rider, a type of amendment usually put in quietly, would solidify this gap between the royalties big coal companies pay and a fair market value. It’s a bonus check codified by law that will ensure companies continue to game the tax system, and leave the taxpayers shortchanged.
We can almost hear Zinke and his fellow coal buddies now: The coal industry needs the help; it’s besieged by environmentalists and competition from other sources. Without generous tax breaks, coal will shut down.
However, citizens should not have the value of their land shortchanged just because it’s hard times for coal. The coal these companies get will never be part of the land again. It is a finite, valuable resource, even if its value is slumping today.
We hope the rest of Congress sees this for what it is: A shameless break for big companies who’ve created a way to pay less for resources we all have ownership of. These types of loopholes represent the worst of what Washington has to offer, appearing to give big breaks to big companies — all at our expense.
In fact, we pay for it twice. Taxpayers are shortchanged once when coal is undervalued and again when some of the funds that should go to fund the federal government have to be found in other places, like taxes. Either that or programs have to be reduced.
Requests for interviews on this subject by The Billings Gazette were declined by Zinke, who couldn’t find time to talk about the issue. Then again, maybe the legislation speaks for itself: Maybe it really is about giving breaks to his buddies.
According to the most recent campaign reports, oil and gas industries contributed more than $185,000 to Zinke during the 2013-14 election cycle. Energy and natural resource political action committees chipped in more than $50,000, according to Opensecrets.org.
Given the quiet nature of the budget rider, the lack of comment and the strong support Zinke has received from the well-heeled energy community, it looks like coal is getting a good return on its Zinke investment.
Unfortunately, it appears that the rest of us have gotten the shaft.