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House of Representatives
Session of 2019 - 2020 Regular Session


Posted: April 29, 2019 02:31 PM
From: Representative Kurt A. Masser
To: All House members
Subject: Extending the PA Coal Refuse Energy and Reclamation Tax Credit
In the near future, we will be introducing bipartisan legislation to incentivize the environmental remediation of coal refuse and support alternative energy jobs in the anthracite and bituminous coal regions of Pennsylvania. Coal refuse (also known as waste, gob, boney, or culm) is a legacy of the pre-1970’s coal mining industry that currently scars the land and pollutes waterways all across Pennsylvania. Coal refuse piles, which can spontaneously combust and leach acid mine water and other hazardous substances, are major sources of land, air, and water pollution and represent public health and safety hazards.

The Coal Refuse Energy and Reclamation Tax Credit was created in 2016 and currently provides tax credits to eligible facilities that generate electricity by beneficially using the coal refuse for power generation and remediating environmental issues by reclaiming mining-affected sites. This performance-based tax credit was intended to provide a $4 credit per ton of coal refuse reclaimed by these facilities, but due to the current program cap the amount received by the facilities is only about $1 per ton. While the program has worked mechanically, this amount has been insufficient to incentivize the remediation of additional coal refuse and prevent the closure of these facilities. For example, the Northeastern Power Company coal refuse to energy facility in McAdoo, PA closed last year and at least 3 other plants have scaled back operations and are at risk of closure in the near future.

We would amend the Tax Reform Code of 1971 to grant a 10-year extension of the Coal Refuse Energy and Reclamation Tax Credit to 2036. Our legislation would also increase the maximum amount of tax credits to $45,000,000 as originally proposed in the 2016 legislation to fully support the program.

As a provision under this legislation, if a federal tax credit program is later adopted, to the extent that it equals or exceeds the state program, the state program will be suspended and would relieve Pennsylvania of its entire budgetary impact.

The coal refuse to energy industry provides an option for removing polluting coal refuse piles from the environment without shifting these costs to public resources. Should that option become unavailable, the entire cost for removal and remediation would fall on taxpayers. The Pennsylvania Department of Environmental Protection (PADEP) has testified that such costs would reach billions of dollars and require over 500 years to accomplish. By partnering with private industry through this tax credit, the commonwealth receives environmental remediation of these polluted sites at a fraction of the cost.

According to Pennsylvania’s inventory of Abandoned Mine Land (AML) sites maintained by the PADEP’s Bureau of Abandoned Mine Reclamation (BAMR), approximately 766 coal refuse banks covering 8,244 acres remain unreclaimed. The estimated amount of coal refuse in these banks is nearly 217 million tons of material potentially suitable for being reclaimed by coal refused to energy facilities. Other studies have projected the amount of coal refuse placed on lands in the anthracite and bituminous coal fields of Pennsylvania approaches 1 or 2 billion tons.

Thousands of people are directly or indirectly employed by the coal refuse to energy industry, and live, along with their children, families, and extended families, in communities within close proximity of these alternative energy plants. The surrounding communities, lands, and streams have experienced vast environmental and economic improvements due mainly to the decades of hard work and dedication these workers and the coal refuse to energy industry have provided, in addition to the downstream environmental benefit of improved water quality in Delaware, Susquehanna, and Ohio River Watersheds. To date, the industry in Pennsylvania has removed more than 230 million tons of coal refuse, restored over 1,200 miles of impaired streams, and reclaimed more than 7,000 miles of polluted mining affected land.

There are currently 13 plants operating in Pennsylvania. Four of these facilities are currently operating on a seasonal basis, leading to reduced jobs and less reclamation work performed. Two plants have already closed, and another will convert to another fossil fuel source later this year. At full capacity this industry can remove over 10 million tons of coal refuse from the environment and reclaim approximately 200 acres of mining-affected land in Pennsylvania each year, but since 2016 the industry has removed only about 8 million tons of coal refuse per year and that amount will continue to decline if more facilities close. If we do not support the environmentally beneficial efforts of these facilities and allow them to remain open, not only will family sustaining jobs be lost but the massive environmental problem of abandoned coal refuse piles and pits will continue to scar our land and pollute our air and waterways for generations to come.

Please call my office at 717-260-6134 with any questions.

Introduced as HB1481