Commissioners Approve Tax Repayment Agreement

A load of coal ambles up the haul road and Eagle Butte Sept. 30. Photo courtesy of Taylor Helton.

The Campbell County Commissioners approved a payment plan agreement outlining the terms at which the Eagle Specialty Materials will pay back taxes owed by Blackjewel and Contura. Commissioner Mark Christensen was the only dissenting vote.

“At this point with the proposed [sale] closing this Friday, Oct. 4, it seems to me that we have this agreement to the best-case scenario for the county,” said newly appointed Administrative Director Carol Seeger, who has played a vital role in negotiations as legal counsel for the commissioners.

Seeger said Blackjewel currently owes Campbell County an estimated $17.5 million in 2019 taxes for Eagle Butte and Belle Ayr coal mines. As part of the payment plan, Eagle Specialty Materials has agreed to pay half of the Blackjewel debt over a five-year period.

Moving forward, the new mine owner offered to pay half of Blackjewel’s tax debt until the sale is final, at which point Eagle Specialty Materials will pay 100 percent of their taxes to Campbell County on a monthly basis, much like severance taxes are collected.

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Seeger explained to the commissioners that Blackjewel has paid all of their 2018 taxes, except their coal production tax, which is estimated around $15 million and held in the name of Contura Energy, as they still hold the permits for both mines. Contura has agreed to pay Campbell County $13.5 million of that debt.

That is the sticking point for Christensen.

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“Contura is making record profits and screwing us for $1.5 million,” he said, adding that the current tax lien has been the source of strength supporting recent negotiations.

Chairman Rusty Bell pointed out that delaying passage of the payment plan could disrupt Friday’s projected closing.

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Commissioner DG Reardon echoed that he’d like to see Blackjewel and Contura out of Campbell County as quickly as possible.

Eagle Specialty Materials is a subsidiary of Kentucky-based FM Energy, LLC, and was created for the sole purpose of purchasing the two Powder River Basin mines.

In the end, the commissioners passed the agreement by a 3-1 vote.

The terms of the sale, according to Bell, also include $1.8 million to address the back pay for mine employees.