Coal Royalty Hearing Information

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When a coal company extracts coal from federal lands, they are required to make a royalty payment based on the value of the coal. To keep their royalties low, the coal companies sell the coal to themselves at a price way below market value. This is where the royalties are calculated. They then turn around and sell the coal on the real market for a much higher price, since the royalty is already calculated, the coal companies don’t have to pay taxes on the actual market value.

Currently, coal companies pay an average effective royalties rate of 4.9% (with up to 1.7% in additional royalty payments.) This is about half of the statutory rate. Studies by Headwaters Economics show that by keeping the same tax rate and simplifying the structure of royalty payments could solve the problem, netting Montanans their fair share of the royalty payments.

Get involved

There will be a listening session in Billings, Montana on August 11, 2015 from 1:00-4:00 pm MST at the Hampton Inn, Lewis and Clark Conference Center, 5001 Southgate Drive, Billings, MT 59101 (PLEASE NOTE THERE HAS BEEN A CHANGE IN VENUE TO THIS NEW ADDRESS).

View the agency hearing announcement about change in venue HERE.

For More Information about these issues and to read the studies for yourself: 

From Institute for Energy Economics and Financial Analysis:

From Headwaters Economics: