Federal Coal Mining Program Cheats Taxpayers, Needs Reforms

Loopholes and exemptions in the rules governing companies that mine coal on public lands cheat taxpayers out of millions of dollars in revenue each year, the Project On Government Oversight (POGO) told Department of Interior leadership today. POGO is urging the Interior Department’s Bureau of Land Management to change these outdated rules.

Companies extracting coal from public lands often pay far less than their fair share due to loopholes and exemptions. During a public forum on changing coal regulations, POGO investigator Mia Steinle told Bureau of Land Management officials that these loopholes cheat taxpayers.

Currently, the coal royalty rate for surface mining on public land is 12.5 percent of the value of production. However, mining companies paid on average only 4.9 percent from 2008 to 2012, as estimated by independent analyst Headwaters Economics. This gross underpayment of the statutory royalty rate is permitted because there are so many allowable deductions.

“It's crucial that the public speaks up to let the Interior Department know that the rules governing federal coal are outdated and are costing taxpayers millions of dollars in revenue," Steinle said. 

Today’s public forum is the first of five on the federal coal program being held across the country through the Bureau of Land Management.

“That Secretary of the Interior Sally Jewell scheduled public forums on modernizing the federal coal programs shows that real momentum is building to change these outdated rules,” Steinle said.

For more information about POGO’s analysis of the changes needed to the federal coal program, go here.

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO’s investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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