CHARLESTON — West Virginia Attorney General J.B. McCuskey is speaking out against a bill before Maryland lawmakers that would target out-of-state coal producers.
In a letter to Maryland House and Senate leaders, McCuskey asks them to table the bill he says raises serious constitutional questions as well as would drive up costs.
“This bill inappropriately targets and extracts large sums of money from energy suppliers to bankroll Maryland’s budget,” McCuskey wrote in the March 10 letter. “It does so by nearly doubling the cost of sending coal to or through Maryland. …
“Though West Virginia supports Maryland’s efforts to solve its internal problems, a state cannot fill its coffers at the expense of hard-working Americans miles away in other states who work to keep our lights on and houses warm. … The bill inappropriately targets and extracts large sums of money from energy suppliers to bankroll Maryland’s budget.”
McCuskey sent the letter to Maryland Senate President Bill Ferguson and House Speaker Adrienne A. Jones.
“The bill’s disregard of other states in turn disregards our Constitution and its prohibition on state-by-state regulations on matters of interstate importance,” McCuskey wrote. “The bill uses Maryland’s unique position as a major coal export hub to extract significant funds from coal-producing states.”
He cites the Constitution’s Commerce Clause, which gives Congress the power to regulate commerce between states, with foreign countries and with Native American tribes. The clause also prohibits states from interfering with interstate commerce.
“The Commerce Clause supports the ‘solidarity and prosperity of this nation,’” McCuskey wrote. “States must instead ‘sink or swim together’; unity, ‘not division,’ maintains our nation’s long-term ‘prosperity and salvation.’ … The Commerce Clause is also offended when a state places a burden on interstate commerce that is excessively out-of-balance with any ‘putative local benefits.’”
He says that while the bill may bring some public benefit to Maryland, a carrier transporting coal through the state will pay nearly double its average transportation costs. He says this is “a significant burden hindering the interstate flow of coal.”
“Higher costs will upend national and international energy markets, engender state hostility, and raise energy costs throughout the nation while Maryland extracts money for its fund,” McCuskey wrote.
He also says the Commerce Clause prohibits states from interfering with the interstate commerce of natural resources.
The Coal Transportation Fee and Fossil Fuel Mitigation Fund (Coal Dust Cleanup and Asthma Remediation Act, SB 882) recently was introduced in the Maryland General Assembly. On average, transporting coal costs $18.77 per short ton. McCuskey says the bill would nearly double that cost by imposing an additional $13-per-ton fee on all coal transported into Maryland.
Maryland doesn’t produce much of its own coal, but the Port of Baltimore is the second-largest coal exporting port in the country. The bill would ensure that all coal would be subject to this added fee, driving up costs and particularly hurting coal producing states such as West Virginia.
If the bill is passed, nearly all the money raised from the new law would go to fill Maryland’s Fossil Fuel Mitigation Fund. Just 2 percent would be set aside to address asthma treatment for communities impacted by coal.
McCuskey’s letter explains why the bill likely would not withstand judicial scrutiny.
“If the fee does disadvantage out-of-state commerce (as opposed to purely in-state commerce), then the fee is not internally consistent and is discriminatory — meaning it cannot stand under the Commerce Clause,” McCuskey wrote. “The bill would subject railroad carriers to about $373 million in fees. Truck carriers, on the other hand, would pay about $9.7 million.
“In other words, railroad carriers would pay about 97% of the total fees and pay virtually 100% of the fees for coal exports. So even though this may be a neutrally applied fee scheme, this type of disparate impact is discriminatory.
“Either way, federal law preempts most, if not all, of the bill’s fee scheme.”
West Virginia currently is leading the fight against similar legislation in New York.