Republican Representative Ryan Zinke of Montana submitted a rider to a budget bill that would stop the Obama administration from ensuring that coal companies pay the proper royalties for mining on public lands.

The increase is slated to happen as a result of the Interior Department closing a longstanding loophole that allows coal companies to sell to subsidiaries “at intentionally depressed prices to avoid royalty payments,” according to ClimateProgress. Called “captive transactions,” the deals between coal companies and their subsidiaries have cause states to receive less revenue from the federal government for the coal mined in their jurisdictions.

“When coal companies underpay their federal royalties, state and local governments suffer nearly half that loss,” Dan Bucks, former director of the Montana Department of Revenue, said in May. “That is because the federal government shares its royalty receipts from Montana coal with the state of Montana, and the state splits its share with the counties where the production occurs.”

This would change under the Interior Department’s rule mandating coal companies pay royalties based on the price at which they sell coal to an independent, third-party purchaser.

Zinke has received almost $10,000 in contributions since 2013 from three coal company political action committees, according to the Western Values Project.

-Noel Brinkerhoff

To Learn More:

Congressman Tries To Quietly Preserve Coal Loophole (by Nicole Gentile, ClimateProgress)

Coal Producers: Obama Royalty Reform May Shut Us Down (by Mark Drajem, Bloomberg)

Coal Companies Gain Federal Subsidies by Selling Coal to Themselves (by Noel Brinkerhoff and Danny Biederman, AllGov)