On May 11, Tennessee Gov. Bill Lee enacted a significant law, SB 808 – HB 993, that temporarily halts the state’s pursuit of primacy. Primacy refers to a state’s right to petition the federal government to become the primary authority in issuing surface mine permits and implementing associated regulations. Tennessee had previously made a bid to obtain primacy with the passage of SB 686 in 2018.
SB 808 – HB 993 essentially freezes efforts to acquire primacy until the following conditions are fulfilled:
- The surface coal mining industry in Tennessee can sustain a state-operated program independently, where fees and taxes generated from the industry are expected to cover all costs of maintaining the state program.
- The state has allocated sufficient funds to cover any present or future costs related to surface coal mining and reclamation operations that may arise due to insufficient bonding.
If the state fails to secure primacy by July 1, 2028, the efforts to do so will be discontinued. Although the law doesn’t prohibit primacy outright, the industry’s current state indicates it’s unlikely to recover within the next five years. With the sole exception of one quarter in 2022, coal production has plummeted to zero since 2020.
During the bill’s introductions, it was pointed out that the state’s expenses for maintaining primacy were approximately $1.1 million in 2024, while the expected revenue from the industry was a mere $90,000. These figures align with our coalition’s predictions from last year, where we estimated that program revenue would cover, at most, 20% of the costs, given the decline in new mining permits in the state.
The new law also revises fees and bonding requirements. The minimum bond for an applicant to a permit under the act has been raised from $10,000 to $75,000, and changes have been made to the fee structure. While the bill was being introduced, it was also stated that s mines in Tennessee were underfunded and the state could potentially face over $33 million in bonding liabilities should it achieve primacy.
Tennessee Department of Environmental Conservation is the regulatory agency slated to assume primacy, but should it fail to inform the speaker of the Senate and the speaker of the House of Representatives by July 1, 2028 that the program is self sufficient, the state will no longer be required to pursue exclusive jurisdiction over surface coal mining and reclamation operations in Tennessee.
The bill is seen as a necessary measure to reflect the economic realities of the coalfields. Despite a recent uptick in coal prices, coal mining has not made a comeback in Tennessee, making it highly unlikely that the state will be able to achieve primacy. This bill was a prudent move by the lawmakers and its passage was also a fiscally responsible action.