PRINTER'S NO. 1683
No. 1429 Session of 1999
INTRODUCED BY SOLOBAY, DeWEESE, VEON, YUDICHAK, MANN, BELFANTI,
TRELLO, ROONEY, COSTA, GRUCELA, RUFFING, GEORGE, GIGLIOTTI,
TIGUE, LAUGHLIN, M. COHEN, STEELMAN, STABACK, EACHUS,
YOUNGBLOOD, FRANKEL, TANGRETTI, WALKO, KELLER, WOJNAROSKI,
HARHAI, SERAFINI AND TRICH, MAY 4, 1999
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
MAY 4, 1999
AN ACT
1 Amending the act of August 23, 1961 (P.L.1068, No.484),
2 entitled, as reenacted and amended, "An act to provide for
3 the creation and administration of a Coal and Clay Mine
4 Subsidence Insurance Fund within the Department of
5 Environmental Resources for the insurance of compensation for
6 damages to subscribers thereto; declaring false oaths by the
7 subscribers to be misdemeanors; providing penalties for the
8 violation thereof; and making an appropriation," further
9 providing for purpose, for definitions, for disbursements,
10 for inflation protection, for audits by the Insurance
11 Department and for subrogation; establishing the Mine
12 Subsidence Assistance Program; and making editorial changes.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. The title and sections 1, 2, 3, 4, 5, 7 and 9 of
16 the act of August 23, 1961 (P.L.1068, No.484), entitled, as
17 reenacted and amended, "An act to provide for the creation and
18 administration of a Coal and Clay Mine Subsidence Insurance Fund
19 within the Department of Environmental Resources for the
20 insurance of compensation for damages to subscribers thereto;
21 declaring false oaths by the subscribers to be misdemeanors;
1 providing penalties for the violation thereof; and making an
2 appropriation," reenacted and amended November 27, 1972
3 (P.L.1243, No.278), are amended to read:
4 AN ACT
5 To provide for the creation and administration of a Coal and
6 Clay Mine Subsidence Insurance Fund within the Department of
7 Environmental [Resources] Protection for the insurance of
8 compensation for damages to subscribers thereto; declaring
9 false oaths by the subscribers to be misdemeanors; providing
10 penalties for the violation thereof; and making an
11 appropriation.
12 Section 1. Purposes.--Whereas, the anthracite and bituminous
13 coal and clay mine areas have been faced with the grave problem
14 of subsidence for many years, and
15 Whereas, these problems are becoming more widespread, and
16 Whereas, these conditions cause undue hardship upon a
17 multitude of persons, and
18 [Whereas, studies reveal that the subsidence is traceable
19 primarily to mining of thirty or more years ago and not
20 necessarily to present day mining so that effective measures
21 cannot readily be taken at this late date for the elimination of
22 the problem, and]
23 Whereas, it would be to the advantage of residents of the
24 anthracite and bituminous coal and clay mining regions to form a
25 common bond to combat distress resulting from subsidence;
26 Now therefore, there shall be established a Coal and Clay
27 Mine Subsidence Insurance Fund and a Coal and Clay Mine
28 Subsidence Insurance Board with the powers and duties as herein
29 set out.
30 Section 2. [Terms.--The Coal and Clay Mine Subsidence
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1 Insurance Board is hereinafter called the board, the Coal and
2 Clay Mine Subsidence Insurance Fund is hereinafter called the
3 fund, and the Department of Environmental Resources is
4 hereinafter called the department.] Definitions.--The following
5 words and phrases when used in this act shall have the meanings
6 given to them in this section unless the context clearly
7 indicates otherwise:
8 "Board." The Coal and Clay Mine Subsidence Insurance Board
9 established in section 3.
10 "Department." The Department of Environmental Protection of
11 the Commonwealth.
12 "Dwelling." A structure the primary purpose of which is
13 residential.
14 "Fund." The Coal and Clay Mine Subsidence Insurance Fund
15 established in section 4.
16 "Mine subsidence." The lateral or vertical movement of the
17 earth resulting from past or present underground coal or clay
18 mining operations.
19 "Mine subsidence emergency." A condition in which a dwelling
20 sustains mine subsidence damage sufficient to render the
21 structure unsafe for human occupancy.
22 "Mine subsidence insurance policy." An insurance
23 certificate, an insuring agreement or an application for mine
24 subsidence insurance. The term includes an endorsement to the
25 certificate, agreement or application.
26 "Owner of structure." A person, corporation, organization or
27 association holding title to a structure within the anthracite
28 or bituminous coal or clay mine regions as defined by the board.
29 "Program." The Mine Subsidence Assistance Program
30 established in section 20.
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1 "Secretary." The Secretary of Environmental Protection of
2 the Commonwealth.
3 "Structure." A complete building which contains a roof,
4 walls and a foundation which firmly attaches the structure to
5 the earth.
6 Section 3. The Coal and Clay Mine Subsidence Insurance
7 Board.--The Coal and Clay Mine Subsidence Insurance Board is
8 hereby created consisting of the [Secretary of Environmental
9 Resources] secretary, as chairman, and the Commissioner of
10 Insurance and the State Treasurer.
11 Section 4. The Coal and Clay Mine Subsidence Insurance
12 Fund.--The premiums to be paid by owners of structures, as
13 hereinafter described, are hereby constituted a Coal and Clay
14 Mine Subsidence Insurance Fund, [hereinafter called fund,] for
15 the purpose of insuring from the moneys in the fund such owners
16 against the damages resulting from subsidence, of coal or clay
17 mines. Such fund shall be administered by a board without
18 liability on the part of the State except as hereinafter
19 provided beyond the amount thereof and shall be applied to the
20 payment of such damages.
21 Section 5. The Initial Source of Fund.--The expenses of the
22 administration of the fund shall after July 1, 1972, be paid out
23 of the general appropriation of the [Department of Environmental
24 Resources] department.
25 Section 7. Schedule of Premiums.--At any time during each
26 year, the [said] board shall prepare and publish a schedule of
27 premiums or rates of insurance for subscribers, which schedule
28 shall be printed and distributed free of charge to such persons
29 who shall make application therefor, and any such subscriber
30 may, at his option as hereinafter provided, pay to the fund the
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1 amount of premium appropriate, and upon payment thereof, shall
2 be insured, as hereinafter provided, for the year for which such
3 premium is paid, and such insurance shall cover all payments
4 becoming due for which said premium is paid. The premium is
5 fixed and shall be adequate to enable payment of all sums which
6 may become due and payable under the provisions of this act, and
7 adequate reserve sufficient to carry all policies and claims to
8 maturity. In fixing the premiums payable by any subscriber, the
9 board may take into account the condition of the premises of
10 such subscriber in respect to the possibility of subsidence as
11 shown by the report of any inspector appointed by the board or
12 by the department, and they may from time to time change the
13 amount of premiums payable by any of the subscribers as
14 circumstances may require and the condition of the premises of
15 such subscribers in respect to the possibility of subsidence may
16 justify, and they may increase the premiums of any subscriber
17 whose loss experience warrants such change. The insurance of any
18 subscriber shall not be effective until he shall have paid in
19 full the premium so fixed and determined.
20 Section 9. Investment of Surplus.--The [said] board may
21 invest any of the surplus or reserve belonging to the fund in
22 such securities and investments as are authorized for investment
23 by savings banks. All such securities or evidences of
24 indebtedness shall be placed in the hands of the State Treasurer
25 who shall be the custodian thereof. He shall collect the
26 principal and interest thereof when due and pay the same into
27 the fund. The State Treasurer shall pay for all such securities
28 or evidences of indebtedness by check issued upon requisition of
29 the board. All such payments shall be made only upon delivery of
30 such securities or evidences of indebtedness to the State
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1 Treasurer. To all requisitions calling upon the State Treasurer
2 to pay for any securities or evidences of indebtedness, there
3 shall be attached a certified copy of the resolution of the
4 board authorizing the investment. The [said] board may upon like
5 resolution sell any of such securities.
6 Section 2. Section 10 of the act, amended November 20, 1981
7 (P.L.350, No.127), is amended to read:
8 Section 10. Disbursements from Fund.--(a) Moneys from the
9 general appropriation of the [Department of Environmental
10 Resources] department are hereby made available for the expense
11 of administering the fund including the purchase through the
12 Department of General Services of surety bonds for such officers
13 or employes of the board as may be required to furnish them
14 supplies, materials, motor vehicles, workmen's insurance
15 covering the officers and employes of the board, and liability
16 insurance covering vehicles operated by the officers and
17 employes of the board.
18 (b) Moneys from the general appropriation of the [Department
19 of Environmental Resources] department shall also be available
20 [for payment, to the Insurance Department, of the cost incurred
21 by that department in examining and auditing the fund in such
22 amounts as the Insurance Department shall determine, and] for
23 payment, to the Treasury Department, of the cost of making
24 disbursements out of the fund on behalf of the fund at such
25 amounts as the Treasury Department, with the approval of the
26 Executive Board, shall determine.
27 (c) The board shall keep an accurate account of the money
28 paid in premiums by the subscribers and the disbursements on
29 account of damages to the premises thereof, and if at the
30 expiration of any year there shall be a balance remaining after
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1 deducting such disbursements, the unearned premiums on
2 undetermined risks and the percentage of premiums paid or
3 payable to create or maintain the surplus provided herein, and
4 after setting aside an adequate reserve, so much of the balance
5 as the board may determine to be safely distributable may either
6 be allocated to the cost of administering the fund or be
7 distributed among the subscribers in proportion to the premiums
8 paid by them and the proportionate share of such subscribers as
9 shall remain subscribers to the fund shall be credited to the
10 installment of premiums next due by them and the proportionate
11 share of such subscribers as shall have ceased to be subscribers
12 in the fund shall be refunded to them out of the fund in the
13 manner hereinafter provided.
14 Section 3. Sections 12 and 12.2 of the act, amended or added
15 July 10, 1984 (P.L.711, No.151), are amended to read:
16 Section 12. Application for Insurance; Terms of Insurance;
17 Penalty for False Statement.--(a) Any owner of a structure
18 located within the anthracite or bituminous coal or clay mine
19 region and who desires to become a subscriber to [said] the fund
20 for the purpose of insuring such a structure therein against
21 damages from coal or clay mine subsidences, shall make a written
22 request for an application for such insurance to the [said]
23 board or any of its agents. The board shall then send to the
24 owner of the structure an application in which application the
25 applicant shall state the name, address, date of ownership of
26 the premises to be insured, the condition of the premises, prior
27 subsidence experience, if any, nature of title whether it
28 includes any subsurface support, whether any agreement exists
29 concerning surface support. Thereupon, the board shall make such
30 investigation as may be necessary if such application complies
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1 with the rules and regulations of the board and within sixty
2 days after the request for an application is received shall
3 issue a certificate showing the acceptance of the application
4 and the amount of premium payable by such applicant for the year
5 for which premium is sought. Policies may be issued for one
6 year, for two years or for three years as the board may
7 establish. Except as provided in subsection (b), no insurance
8 shall become effective until the premiums have been paid. All
9 premiums shall be payable to the State Treasurer whereupon a
10 receipt shall be issued therefor. The receipt for premium
11 together with a certificate of the board shall be evidence that
12 the applicant has become a subscriber to the fund and is
13 insured.
14 (b) If the board fails to make the necessary investigations
15 or inspection and fails to approve or deny an application for
16 insurance within sixty days of receipt of the written request
17 for an application by the board or any of its agents, in
18 accordance with this section, the insurance requested by the
19 applicant shall be deemed granted. The insurance shall be
20 effective from the date the written request for an application
21 was received by the board or any of its agents, but the coverage
22 will be null and void if the applicant fails to remit the
23 premium payment within twenty days from the day the bill for the
24 premium was postmarked.
25 (1) The insurance may be subjected to later reductions, and
26 premiums adjusted accordingly, if the board determines that the
27 amount of insurance coverage requested is in excess of the
28 current market value of the structure or current statutory
29 limits, whichever is less.
30 (2) The insurance shall be void if, upon inspection of the
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1 structure, the board determines that either (i) mine subsidence
2 damage occurred prior to the request by the applicant for
3 insurance, or (ii) the applicant by his unreasonable actions or
4 in actions is responsible for the failure of the board to
5 inspect the structure within sixty days of receipt of the
6 written request for an application in accordance with this
7 section.
8 (c) Whoever shall knowingly furnish or make any false
9 certificate, application or statement herein required shall be
10 guilty of a misdemeanor, and upon conviction thereof, shall be
11 sentenced to pay a fine not exceeding one thousand five hundred
12 dollars ($1,500) and shall undergo imprisonment not exceeding
13 one year.
14 Section 12.2. Automatic Inflation Protection Increase.--(a)
15 The board shall make available to all subscribers an annual
16 inflation protection option on the anniversary date of each
17 policy to uniformly increase subscribers' coverage, and shall
18 allow thirty days for subscribers to elect this option. In any
19 case, the option shall not be made available more than once
20 annually[.], unless the board shall increase the maximum level
21 of insurance coverage available pursuant to subsection (b), in
22 which case, the board shall notify all subscribers of the
23 revised maximum level of insurance available and shall allow
24 thirty days for subscribers to apply for an increased level of
25 insurance. An application for an increased level of insurance
26 shall be governed by section 12.1. An inflation protection
27 increase shall not be subject to a reinspection of the
28 structure.
29 (b) The board shall annually review the premiums charged and
30 the maximum levels of insurance offered by the fund. If
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1 inflation, loss experience and other relevant factors indicate
2 that a change may be warranted in the amount of premiums charged
3 or in the maximum levels of insurance offered, the board shall
4 determine a revised schedule of premiums and establish new
5 maximum levels of insurance available and notify all
6 subscribers, within sixty days, of the revised schedule of
7 premiums and new maximum levels of insurance available.
8 Section 4. Sections 13, 14 and 17 of the act are amended to
9 read:
10 Section 13. Audit by Auditor General.--The Auditor General
11 through such agents as he may select shall, at least once each
12 year, make a complete examination and audit of the fund
13 including all receipts and expenditures, cash on hand and
14 securities, investments or property held representing cash or
15 cash disbursements, and for these purposes the Auditor General
16 is hereby authorized to employ such consultants, experts,
17 accountants or investigators as he may deem advisable.
18 The expense incurred in making said examination and audit
19 shall be certified to the fund by the Auditor General and shall
20 be paid from the general appropriation of the [Department of
21 Environmental Resources] department.
22 The first audit of such fund may, in the discretion of the
23 Auditor General, extend back to the creation of such fund or to
24 any other period in its life.
25 [Section 14. Audit by Insurance Department.--The Insurance
26 Department at least once each year shall make a complete
27 examination and audit of the affairs of the fund including all
28 receipts and expenditures, cash on hand and securities,
29 investments or property held representing cash or cash
30 disbursements to ascertain its financial condition and its
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1 ability to fulfill its obligations, whether the board in
2 managing the fund has complied with the provisions of law
3 relating to the fund and the equity of the board's plans and
4 dealings with its policyholders.
5 For the purpose of any examination and audit authorized by
6 this act, the Commissioner of Insurance, his deputy or his
7 examiners shall have free access to all the books, records and
8 papers pertaining to the fund, and all persons charged with the
9 management of the fund or connected therewith as employes are
10 hereby directed and required to give to the Commissioner of
11 Insurance, his deputy or officers the means, facilities and
12 opportunity for such examination and audit.
13 The expenses incurred by the Insurance Department in making
14 any examination and audit under the provisions of this act shall
15 be ascertained by the department, certified to the fund, and
16 paid from the general appropriation of the Department of
17 Environmental Resources.]
18 Section 17. Subrogation to Rights of Claimants.--Nothing
19 herein shall relieve any person, partnership, or corporation
20 otherwise liable therefor from any liability for damages
21 sustained; and the fund and the program shall be subrogated to
22 the rights of any property owners' insurance herein.
23 Section 5. The act is amended by adding sections to read:
24 Section 20. Program.--(a) If a homeowner believes that the
25 homeowner's dwelling has sustained mine subsidence damage,
26 except as provided in subsection (c), the homeowner may apply to
27 the department for mine subsidence assistance. The application
28 must be on a form prepared by the department and must provide
29 for inspection of the dwelling to determine the nature and
30 extent of the damage. Upon a determination that a dwelling has
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1 sustained mine subsidence damage, the department shall, to the
2 extent funds are made available, grant assistance, as follows:
3 (1) Grants may be awarded only to those homeowners whose
4 dwellings are unsafe for occupancy as a result of a mine
5 subsidence emergency and may be awarded to move persons whose
6 dwellings are destroyed or endangered until the homes are
7 repaired, until there is no further danger of subsidence or
8 until a new permanent residence is found.
9 (2) Loans may be approved at interest rates not to exceed
10 three percent for the repair or replacement of dwellings damaged
11 by mine subsidence. Loans shall be awarded on a priority basis
12 according to severity of damages sustained, but a dwelling need
13 not be rendered unsafe for human occupancy as a result of a mine
14 subsidence emergency to qualify for a loan. The loan shall be in
15 an amount sufficient to cover the cost of repairing the
16 structural damage to the dwelling, but in no event shall be
17 greater than the replacement cost of the dwelling as determined
18 by an appraiser, as provided for in regulations promulgated
19 under this act. Loans shall be administered by the department
20 and shall be secured by a lien upon the dwelling being repaired
21 or replaced.
22 (3) In addition to repairing or replacing structural damage
23 to a dwelling, loans may also be made to repair or replace
24 foundations, driveways, septic tanks, sidewalks, fences, sewer
25 laterals, water lines, gas lines, wells and inground pools,
26 located on the property on which the dwelling is located.
27 (4) Loans shall only be made for the amount not covered by
28 insurance or other sources of remuneration, including amounts
29 for which a mine operator is liable under the act of April 27,
30 1966 (1st Sp. Sess., P.L.31, No.1), known as "The Bituminous
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1 Mine Subsidence and Land Conservation Act," unless it is
2 determined that the operator is unable to meet his obligations
3 under that act.
4 (b) If a person receiving assistance under this section does
5 not have mine subsidence insurance, the person shall be required
6 to purchase a mine subsidence insurance policy when the
7 structural damage for which assistance was granted has been
8 repaired if it is deemed by the department that the dwelling is
9 in danger of further damage from mine subsidence.
10 (c) Subsection (a)(1) is not applicable to a homeowner
11 holding a mine subsidence insurance policy.
12 (d) Up to ten percent of the reserves in the fund, plus
13 repayment of principal and interest on loans under this section,
14 shall be used to fund assistance under this section.
15 Section 21. Department.--(a) The department may promulgate
16 regulations to administer this act.
17 (b) The department shall provide for public notice of the
18 program.
19 (c) The department shall make an annual report on the
20 program to the Environmental Resources and Energy Committee of
21 the Senate and the Environmental Resources and Energy Committee
22 of the House of Representatives.
23 Section 6. Sections 22 and 24.1 of the act are amended to
24 read:
25 Section 22. Employes of the Board to Be Part of the
26 Department [of Environmental Resources].--All employes of the
27 board shall be employed by and located in the [Department of
28 Environmental Resources] department and shall be subject to the
29 administrative jurisdiction and authority of the [Secretary of
30 Environmental Resources] secretary.
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1 Section 24.1. Appeals.--Any party aggrieved by an action of
2 the board [hereunder] shall have the right to appeal to the
3 Environmental Hearing Board.
4 Section 7. The addition of section 20 of the act shall apply
5 to mine subsidence damage incurred after December 31, 1998.
6 Section 8. This act shall take effect immediately.
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