Vulnerable Mine Reclamation Bond Concerns Has W.Va. Senate Planning To Be Proactive
Concerns over vulnerable mine reclamation bonds in West Virginia has the Senate attempting to be proactive according to Senate President Craig Blair (R-Berkeley) who introduced Senate Bill 1, “Creating a Mining Mutual Insurance Company” on the first day of the 2022 legislative session.
Blair spoke during the Senate Finance Committee Thursday.
The bill passed through the finance committee unanimously. It will be reported for approval to the full Senate.
“We don’t have a lick of coal in the Eastern Panhandle, but I recognize how important it is to the state of West Virginia,” said Blair, an eastern panhandle resident. “I was around for workers comp. It took us a decade to get out of that mess.”
Blair suggested that drawing Procter & Gamble to invest in building its facility in the state may not have happened if the workers comp issues weren’t previously addressed.
The P&G facility broke ground in 2015 on its $500 million, 2.5 million square foot facility near Martinsburg and went into production in 2018. It now has more than 1,400 employees.
“P&G wouldn’t be here if we didn’t get out of that (workers comp) mess,” Blair said. “I propose we be proactive this time.”
At the annual Legislative Lookahead meeting Jan. 7, Blair said one company holds about 60 percent of the mine reclamation bonds and if anything would happen to that company it could cost the state between $1 billion and $8 billion, according to estimates.
“We need to ensure some stability and protect ourselves as much as possible,” Blair added.
“We’re hoping to take a $50 million loan, just as we did for workers comp and physicians mutual and make it so that these coal companies that choose to have their own mutual, that they can have their own mutual that they can get the mine reclamation bonds through there,” Blair explained during the annual Legislative Lookahead sponsored by the West Virginia Press Association Jan. 7.
“My confidence in this bill is strong,” Blair said. “I’m making an exception in sponsoring bills. It will provide an insurance policy for the state of West Virginia and the mining industry in this state. This isn’t a bailout. It’s an insurance policy of $50 million to protect us from an exposure of between $2-4 billion. We can’t afford to let that happen.”
None of the funds will come from the mine reclamation fund, Blair said.
“There’s other places to find the $50 million,” he stated.
Blair introduced David Rader, whom Blair said, “He’s coming out of retirement to help us with this.”
Rader was appointed to the board of directors of BrickStreet Mutual in 2006 when it became a private company and served on its board until 2017. He retired in 2011 as president and CEO of West Virginia Mutual Insurance Company, the largest medical professional liability insurer in the state.
“I’m here to help if you want to do this,” Rader told the committee. “I’m making myself available and glad to do that. I love West Virginia.”
Sen. Ron Stollings (D- Boone) asked Rader of the $50 million base, “How will it help us?”
“No one knows how bad it will be,” Rader answered. “In case there’s a crisis, you have to have a minimum to start with. It’s critical.”
Sen. Stephen Baldwin (D- Greenbrier) asked, “We don’t know the source (of the $50 million)?”
“That’s this committee’s responsibility,” Rader answered. “It’s something (Sen. Finance Chair Eric) Tarr is working on. To pass this bill without the $50 million, we have nowhere to go. Until we can show that surplus, there’s no reason to apply for insurance. They won’t talk to me.
Tarr (R-Putnam) said there are “several options” for the $50 million base.
“This will be a loan,” he said. “It’ll likely come from surplus.”
Rader said the base would permit the state to write about $200 million in bonds.
“$50 million is a good number to start,” he said. “I’m optimistic that even in a worst case scenario – it’s still a win-win. It’s a benchmark, not knowing what it’s going to be. My goal is to establish stability.”
Sen. Robert Plymale (D-Wayne) voiced approval, saying “What is being designed can be of great benefit to the people of West Virginia."