US House Republicans seek coal credit, tax extensions

Republicans in the US House of Representatives are seeking to temporarily revive the handful of tax credits for the coal industry that expired last year while also extending required payments to the Black Lung Disability Trust Fund.

Tucked in House Ways and Means Committee chairman Kevin Brady's (R-Texas) proposal yesterday to extend certain tax provisions that expired at the end of 2017 is a measure that would that would allow coal producers on Indian land to take a $2/short ton credit through the end of this year. Brady's proposal would also allow companies to write off some of the cost of advanced mine safety equipment installed this year and continue to take a credit for mine rescue team training.

The House Committee on Rules was scheduled to consider Brady's bill today. Republicans hope to get the package, which also includes provisions addressing the California forest fires and Hurricanes Florence and Michael, passed before the congressional term ends and Democrats regain majority control of the chamber next year.

Representative Richard Neal (D-Massachusetts), who is ranking member on the Ways and Means committee, did not immediately return a request for comment.

The proposed one-year extensions are the only credits in the bill that expired last year and directly involve the coal industry. Brady is also proposing making permanent a credit railroads take on certain maintenance as well as some renewable energy incentives.

US mine operators produced 13.9mn st (12.6mn metric tonnes) of coal off of tribal lands in 2016, according to the latest data from the Interior Department's Office of Natural Resources Revenue. Nearly all of the output is in the western US, including Peabody Energy's Kayenta mine, which is on Navajo and Hopi lands in Arizona.

But the industry is more concerned about the extension of taxes paid to the Black Lung Disability Trust Fund. Brady's proposal would force companies to continue paying $1.10/st on underground production and 55¢/st on surface coal through the end of next year.

The trust fund taxes currently are due to revert to pre-1986 levels of 50¢/st for underground mining and 25¢/st for surface mining on 1 January 2019.

Going back to the old tax rates "will be sufficient to cover benefit costs for the fund," the National Mining Association said. "We strongly object to this unnecessary and ill-advised effort to raise taxes on the industry at a time when it is working to stabilize after years of decline."

Others disagree. The Government Accountability Office released a study in June showing that the trust fund has had to borrow money from the US Treasury nearly every year of its existence and is in danger of incurring more debt going forward.