HB 58 Summary

• Reduces coal lease royalty terms from 20 years to 10 years and establishes royalty rates of 5% for noncompetitive leases or 5-12% for competitive leases based on adjusted gross value of coal sold or disposed.

• Increases annual rental for mining claims and leases to $1.65 per acre for the first five years and $3.30 per acre thereafter, with adjustments at 10-year intervals based on the Consumer Price Index (January-June 2005 baseline).

• Establishes new mining license requirement for persons engaged in mining after December 31, 2011, with applications due by May 1 or within 30 days of mining commencement.

• Changes mining tax from exemption to 3.5-year deferral period for new mining operations, with deferred taxes payable in 10 equal annual installments without interest; reduces production royalty rate from 5 cents per ton to 3% of net smelter return or gross value at point of production.

• Effective date: January 1, 2012; applies to coal leases entered into or renegotiated after December 31, 2011.