The Senate passed SB1 on Wednesday, legislation that would create the Mining Mutual Insurance Company to serve as security against potentially massive mine reclamation liability for West Virginia in the future.
If the legislation completes and receives adequate future funding, the state would be insured against the possibility that the financial troubles of coal companies could render these entities unable to meet their obligations to reclaim the land they have mined. Currently, the state’s Special Reclamation Fund is set up to cover any shortfall, but the concern is that fund could quickly be exhausted by future obligations.
This bill would establish the insurance company with later legislation potentially allocating $50 million in initial funding. If there were to be a crisis in the future, the $50 million would likely be inadequate and federal grants could be used to fund the company. However, it must be established before then, and lawmakers and insurance experts believe the initial seed money accomplishes that.
Senate President Craig Blair (R- Berkeley, 15) came down from the podium to speak in favor of the legislation Wednesday.
“This is the most important bill. If we were sitting here looking at a $4 billion deficit, a $2 billion deficit, it would set us back from the course we’re trying to set ourselves on,” Blair said.
West Virginia is subject to federal requirements to have enough money available to complete reclamation for any areas where mining companies default.
The bill establishing the insurance company specifies that it would not be considered a department or agency of the state. Rather, it would be a company governed by five directors. The chairman would be appointed by the Governor, with the remaining members being named by state officials.
The motivation for the bill came from a recent legislative audit concluding that West Virginia could be on the hook for hundreds of millions of dollars in mine reclamation costs if the companies holding bonds go bankrupt or cannot meet their obligations for other reasons.
The bill now heads to the House of Delegates for consideration.
The Senate is adjourned until tomorrow at 11 a.m.
Agriculture and Rural Development will meet at 2 p.m. in 208W.
Pensions will meet at 2 p.m. in 451M.
Judiciary will meet at 3 p.m. in 208W.
Finance will meet at 3 p.m. in 451M.
