PRINTER'S NO. 248
No. 240 Session of 2001
INTRODUCED BY STOUT, WAGNER, BOSCOLA, COSTA, WOZNIAK, MELLOW,
MUSTO, RHOADES, LOGAN, HUGHES AND KITCHEN, FEBRUARY 5, 2001
REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, FEBRUARY 5, 2001
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; providing for subsidence
13 insurance; and making editorial changes.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. The title and sections 1, 2, 3, 4, 5, 7 and 9 of
17 the act of August 23, 1961 (P.L.1068, No.484), entitled, as
18 reenacted and amended, "An act to provide for the creation and
19 administration of a Coal and Clay Mine Subsidence Insurance Fund
20 within the Department of Environmental Resources for the
21 insurance of compensation for damages to subscribers thereto;
22 declaring false oaths by the subscribers to be misdemeanors;
23 providing penalties for the violation thereof; and making an
1 appropriation," reenacted and amended November 27, 1972
2 (P.L.1243, No.278), are amended to read:
3 AN ACT
4 To provide for the creation and administration of a Coal and
5 Clay Mine Subsidence Insurance Fund within the Department of
6 Environmental [Resources] Protection for the insurance of
7 compensation for damages to subscribers thereto; declaring
8 false oaths by the subscribers to be misdemeanors; providing
9 penalties for the violation thereof; and making an
10 appropriation.
11 Section 1. Purposes.--Whereas, the anthracite and bituminous
12 coal and clay mine areas have been faced with the grave problem
13 of subsidence for many years, and
14 Whereas, these problems are becoming more widespread, and
15 Whereas, these conditions cause undue hardship upon a
16 multitude of persons, and
17 [Whereas, studies reveal that the subsidence is traceable
18 primarily to mining of thirty or more years ago and not
19 necessarily to present day mining so that effective measures
20 cannot readily be taken at this late date for the elimination of
21 the problem, and]
22 Whereas, it would be to the advantage of residents of the
23 anthracite and bituminous coal and clay mining regions to form a
24 common bond to combat distress resulting from subsidence;
25 Now therefore, there shall be established a Coal and Clay
26 Mine Subsidence Insurance Fund and a Coal and Clay Mine
27 Subsidence Insurance Board with the powers and duties as herein
28 set out.
29 Section 2. [Terms.--The Coal and Clay Mine Subsidence
30 Insurance Board is hereinafter called the board, the Coal and
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1 Clay Mine Subsidence Insurance Fund is hereinafter called the
2 fund, and the Department of Environmental Resources is
3 hereinafter called the department.] Definitions.--The following
4 words and phrases when used in this act shall have the meanings
5 given to them in this section unless the context clearly
6 indicates otherwise:
7 "Board." The Coal and Clay Mine Subsidence Insurance Board
8 established in section 3.
9 "Department." The Department of Environmental Protection of
10 the Commonwealth.
11 "Dwelling." A single-family structure the primary purpose of
12 which is residential.
13 "Dwelling requiring mine subsidence insurance." A dwelling
14 located above abandoned mine workings, which is within a one-
15 half mile radius of an area where mine subsidence has been
16 detected and which the department determines to be at risk for
17 mine subsidence damage.
18 "Fund." The Coal and Clay Mine Subsidence Insurance Fund
19 established in section 4.
20 "Mine subsidence." The lateral or vertical movement of the
21 earth resulting from past or present underground coal or clay
22 mining operations.
23 "Mine subsidence emergency." A condition in which a dwelling
24 sustains mine subsidence damage sufficient to render the
25 structure unsafe for human occupancy as determined by the
26 department.
27 "Mine subsidence insurance policy." An insurance
28 certificate, an insuring agreement, an application for mine
29 subsidence insurance and endorsements to the insurance policy.
30 "Owner of structure." A person, corporation, organization or
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1 association holding title to a structure within the anthracite
2 or bituminous coal or clay mine regions as defined by the board.
3 "Program." The Mine Subsidence Assistance Program
4 established in section 20.
5 "Secretary." The Secretary of Environmental Protection of
6 the Commonwealth.
7 "Structure." A complete building which contains a roof,
8 walls and a foundation which firmly attaches the structure to
9 the earth.
10 Section 3. The Coal and Clay Mine Subsidence Insurance
11 Board.--The Coal and Clay Mine Subsidence Insurance Board is
12 hereby created consisting of the [Secretary of Environmental
13 Resources] secretary, as chairman, and the Commissioner of
14 Insurance and the State Treasurer.
15 Section 4. The Coal and Clay Mine Subsidence Insurance
16 Fund.--The premiums to be paid by owners of structures, as
17 hereinafter described, are hereby constituted a Coal and Clay
18 Mine Subsidence Insurance Fund, [hereinafter called fund,] for
19 the purpose of insuring from the moneys in the fund such owners
20 against the damages resulting from subsidence, of coal or clay
21 mines. Such fund shall be administered by a board without
22 liability on the part of the State except as hereinafter
23 provided beyond the amount thereof and shall be applied to the
24 payment of such damages.
25 Section 5. The Initial Source of Fund.--The expenses of the
26 administration of the fund shall after July 1, 1972, be paid out
27 of the general appropriation of the [Department of Environmental
28 Resources] department.
29 Section 7. Schedule of Premiums.--At any time during each
30 year, the [said] board shall prepare and publish a schedule of
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1 premiums or rates of insurance for subscribers, which schedule
2 shall be printed and distributed free of charge to such persons
3 who shall make application therefor, and any such subscriber
4 may, at his option as hereinafter provided, pay to the fund the
5 amount of premium appropriate, and upon payment thereof, shall
6 be insured, as hereinafter provided, for the year for which such
7 premium is paid, and such insurance shall cover all payments
8 becoming due for which said premium is paid. The premium is
9 fixed and shall be adequate to enable payment of all sums which
10 may become due and payable under the provisions of this act, and
11 adequate reserve sufficient to carry all policies and claims to
12 maturity. In fixing the premiums payable by any subscriber, the
13 board may take into account the condition of the premises of
14 such subscriber in respect to the possibility of subsidence as
15 shown by the report of any inspector appointed by the board or
16 by the department, and they may from time to time change the
17 amount of premiums payable by any of the subscribers as
18 circumstances may require and the condition of the premises of
19 such subscribers in respect to the possibility of subsidence may
20 justify, and they may increase the premiums of any subscriber
21 whose loss experience warrants such change. The insurance of any
22 subscriber shall not be effective until he shall have paid in
23 full the premium so fixed and determined.
24 Section 9. Investment of Surplus.--The [said] board may
25 invest any of the surplus or reserve belonging to the fund in
26 such securities and investments as are authorized for investment
27 by savings banks. All such securities or evidences of
28 indebtedness shall be placed in the hands of the State Treasurer
29 who shall be the custodian thereof. He shall collect the
30 principal and interest thereof when due and pay the same into
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1 the fund. The State Treasurer shall pay for all such securities
2 or evidences of indebtedness by check issued upon requisition of
3 the board. All such payments shall be made only upon delivery of
4 such securities or evidences of indebtedness to the State
5 Treasurer. To all requisitions calling upon the State Treasurer
6 to pay for any securities or evidences of indebtedness, there
7 shall be attached a certified copy of the resolution of the
8 board authorizing the investment. The [said] board may upon like
9 resolution sell any of such securities.
10 Section 2. Section 10 of the act, amended November 20, 1981
11 (P.L.350, No.127), is amended to read:
12 Section 10. Disbursements from Fund.--(a) Moneys from the
13 general appropriation of the [Department of Environmental
14 Resources] department are hereby made available for the expense
15 of administering the fund including the purchase through the
16 Department of General Services of surety bonds for such officers
17 or employes of the board as may be required to furnish them
18 supplies, materials, motor vehicles, workmen's insurance
19 covering the officers and employes of the board, and liability
20 insurance covering vehicles operated by the officers and
21 employes of the board.
22 (b) Moneys from the general appropriation of the [Department
23 of Environmental Resources] department shall also be available
24 [for payment, to the Insurance Department, of the cost incurred
25 by that department in examining and auditing the fund in such
26 amounts as the Insurance Department shall determine, and] for
27 payment, to the Treasury Department, of the cost of making
28 disbursements out of the fund on behalf of the fund at such
29 amounts as the Treasury Department, with the approval of the
30 Executive Board, shall determine.
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1 (c) The board shall keep an accurate account of the money
2 paid in premiums by the subscribers and the disbursements on
3 account of damages to the premises thereof, and if at the
4 expiration of any year there shall be a balance remaining after
5 deducting such disbursements, the unearned premiums on
6 undetermined risks and the percentage of premiums paid or
7 payable to create or maintain the surplus provided herein, and
8 after setting aside an adequate reserve, so much of the balance
9 as the board may determine to be safely distributable may either
10 be allocated to the cost of administering the fund or be
11 distributed among the subscribers in proportion to the premiums
12 paid by them and the proportionate share of such subscribers as
13 shall remain subscribers to the fund shall be credited to the
14 installment of premiums next due by them and the proportionate
15 share of such subscribers as shall have ceased to be subscribers
16 in the fund shall be refunded to them out of the fund in the
17 manner hereinafter provided.
18 Section 3. Sections 12 and 12.2 of the act, amended or added
19 July 10, 1984 (P.L.711, No.151), are amended to read:
20 Section 12. Application for Insurance; Terms of Insurance;
21 Penalty for False Statement.--(a) Any owner of a structure
22 located within the anthracite or bituminous coal or clay mine
23 region and who desires to become a subscriber to [said] the fund
24 for the purpose of insuring such a structure therein against
25 damages from coal or clay mine subsidences, shall make a written
26 request for an application for such insurance to the [said]
27 board or any of its agents. The board shall then send to the
28 owner of the structure an application in which application the
29 applicant shall state the name, address, date of ownership of
30 the premises to be insured, the condition of the premises, prior
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1 subsidence experience, if any, nature of title whether it
2 includes any subsurface support, whether any agreement exists
3 concerning surface support. Thereupon, the board shall make such
4 investigation as may be necessary if such application complies
5 with the rules and regulations of the board and within sixty
6 days after the request for an application is received shall
7 issue a certificate showing the acceptance of the application
8 and the amount of premium payable by such applicant for the year
9 for which premium is sought. Policies may be issued for one
10 year, for two years or for three years as the board may
11 establish. Except as provided in subsection (b), no insurance
12 shall become effective until the premiums have been paid. All
13 premiums shall be payable to the State Treasurer whereupon a
14 receipt shall be issued therefor. The receipt for premium
15 together with a certificate of the board shall be evidence that
16 the applicant has become a subscriber to the fund and is
17 insured.
18 (b) If the board fails to make the necessary investigations
19 or inspection and fails to approve or deny an application for
20 insurance within sixty days of receipt of the written request
21 for an application by the board or any of its agents, in
22 accordance with this section, the insurance requested by the
23 applicant shall be deemed granted. The insurance shall be
24 effective from the date the written request for an application
25 was received by the board or any of its agents, but the coverage
26 will be null and void if the applicant fails to remit the
27 premium payment within twenty days from the day the bill for the
28 premium was postmarked.
29 (1) The insurance may be subjected to later reductions, and
30 premiums adjusted accordingly, if the board determines that the
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1 amount of insurance coverage requested is in excess of the
2 current market value of the structure or current statutory
3 limits, whichever is less.
4 (2) The insurance shall be void if, upon inspection of the
5 structure, the board determines that either (i) mine subsidence
6 damage occurred prior to the request by the applicant for
7 insurance, or (ii) the applicant by his unreasonable actions or
8 in actions is responsible for the failure of the board to
9 inspect the structure within sixty days of receipt of the
10 written request for an application in accordance with this
11 section.
12 (c) Whoever shall knowingly furnish or make any false
13 certificate, application or statement herein required shall be
14 guilty of a misdemeanor, and upon conviction thereof, shall be
15 sentenced to pay a fine not exceeding one thousand five hundred
16 dollars ($1,500) and shall undergo imprisonment not exceeding
17 one year.
18 Section 12.2. Automatic Inflation Protection Increase.--(a)
19 The board shall make available to all subscribers an annual
20 inflation protection option on the anniversary date of each
21 policy to uniformly increase subscribers' coverage, and shall
22 allow thirty days for subscribers to elect this option. In any
23 case, the option shall not be made available more than once
24 annually[.], unless the board shall increase the maximum level
25 of insurance coverage available pursuant to subsection (b), in
26 which case, the board shall notify all subscribers of the
27 revised maximum level of insurance available and shall allow
28 thirty days for subscribers to apply for an increased level of
29 insurance. An application for an increased level of insurance
30 shall be governed by section 12.1. An inflation protection
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1 increase shall not be subject to a reinspection of the
2 structure.
3 (b) The board shall annually review the premiums charged and
4 the maximum levels of insurance offered by the fund. If
5 inflation, loss experience and other relevant factors indicate
6 that a change may be warranted in the amount of premiums charged
7 or in the maximum levels of insurance offered, the board shall
8 determine a revised schedule of premiums and establish new
9 maximum levels of insurance available and notify all
10 subscribers, within sixty days, of the revised schedule of
11 premiums and new maximum levels of insurance available.
12 Section 4. Sections 13, 14, 15 and 17 of the act are amended
13 to read:
14 Section 13. Audit by Auditor General.--The Auditor General
15 through such agents as he may select shall, at least once each
16 year, make a complete examination and audit of the fund
17 including all receipts and expenditures, cash on hand and
18 securities, investments or property held representing cash or
19 cash disbursements, and for these purposes the Auditor General
20 is hereby authorized to employ such consultants, experts,
21 accountants or investigators as he may deem advisable.
22 The expense incurred in making said examination and audit
23 shall be certified to the fund by the Auditor General and shall
24 be paid from the general appropriation of the [Department of
25 Environmental Resources] department.
26 The first audit of such fund may, in the discretion of the
27 Auditor General, extend back to the creation of such fund or to
28 any other period in its life.
29 [Section 14. Audit by Insurance Department.--The Insurance
30 Department at least once each year shall make a complete
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1 examination and audit of the affairs of the fund including all
2 receipts and expenditures, cash on hand and securities,
3 investments or property held representing cash or cash
4 disbursements to ascertain its financial condition and its
5 ability to fulfill its obligations, whether the board in
6 managing the fund has complied with the provisions of law
7 relating to the fund and the equity of the board's plans and
8 dealings with its policyholders.
9 For the purpose of any examination and audit authorized by
10 this act, the Commissioner of Insurance, his deputy or his
11 examiners shall have free access to all the books, records and
12 papers pertaining to the fund, and all persons charged with the
13 management of the fund or connected therewith as employes are
14 hereby directed and required to give to the Commissioner of
15 Insurance, his deputy or officers the means, facilities and
16 opportunity for such examination and audit.
17 The expenses incurred by the Insurance Department in making
18 any examination and audit under the provisions of this act shall
19 be ascertained by the department, certified to the fund, and
20 paid from the general appropriation of the Department of
21 Environmental Resources.]
22 Section 15. Claims against Fund.--Any subscriber to the fund
23 must file with the board a true statement of his claim for any
24 subsidence and shall give to the board an opportunity to
25 investigate and to determine whether the board will pay the
26 claim. For any claim to be considered valid the department must
27 determine that a mine subsidence event occurred during the term
28 of the mine subsidence insurance policy.
29 Section 17. Subrogation to Rights of Claimants.--Nothing
30 herein shall relieve any person, partnership, or corporation
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1 otherwise liable therefor from any liability for damages
2 sustained; and the fund and the program shall be subrogated to
3 the rights of any property owners' insurance herein.
4 Section 5. The act is amended by adding sections to read:
5 Section 20. Program.--(a) If a homeowner believes that the
6 homeowner's dwelling has sustained mine subsidence damage, the
7 homeowner may apply to the department for mine subsidence
8 assistance. The application must be on a form prepared by the
9 department and must provide for inspection of the dwelling to
10 determine the nature, extent and time of the damage. Upon a
11 determination that a dwelling has sustained mine subsidence
12 damage and that an application for assistance was submitted to
13 the department within forty-five days of occurrence of the mine
14 subsidence event, the department shall, to the extent funds are
15 made available, grant assistance, as follows:
16 (1) Grants may be awarded only to persons whose dwelling are
17 unsafe for occupancy as a result of a mine subsidence emergency
18 and may be awarded to move and provide temporary housing for
19 persons whose dwellings are destroyed or endangered until the
20 homes are repaired, until there is no further danger of
21 subsidence or until a new permanent residence is found, provided
22 that grants shall not be used to pay for temporary housing for
23 more than one year and the total amount of a grant shall not
24 exceed twelve thousand dollars ($12,000).
25 (2) Loans may be approved at an interest rate equal to the
26 current rate of return being earned by the fund, or five
27 percent, whichever is lower for the repair or replacement of
28 dwellings damaged by mine subsidence. Loans shall be awarded on
29 a priority basis according to severity of damages sustained, but
30 a dwelling need not be rendered unsafe for human occupancy as a
20010S0240B0248 - 12 -
1 result of a mine subsidence emergency to qualify for a loan. The
2 loan shall be for a period of time not exceeding fifteen years
3 in duration and shall be in an amount sufficient to cover the
4 cost of repairing the structural damage to the dwelling, but in
5 no event shall be greater than the replacement cost of the
6 dwelling as determined by an appraiser, as provided for in
7 regulations promulgated under this act. Loans shall be
8 administered by the department and shall be secured by a lien
9 upon the dwelling being repaired or replaced.
10 (3) In addition to repairing or replacing structural damage
11 to a dwelling, loans may also be made to repair or replace
12 dwelling-related driveways, septic systems, sidewalks, fences,
13 sewer laterals, water lines, gas lines, wells and inground
14 pools, located on the property on which the dwelling is located,
15 provided that the damage has been caused by the same mine
16 subsidence that damaged the dwelling.
17 (4) Loans shall only be made for the amount not covered by
18 insurance or other sources of remuneration, including amounts
19 for which a mine operator is liable under the act of April 27,
20 1966 (1st Sp. Sess., P.L.31, No.1), known as "The Bituminous
21 Mine Subsidence and Land Conservation Act," unless it is
22 determined that the operator is unable to meet his obligations
23 under that act.
24 (b) If a person receiving assistance under this section does
25 not have mine subsidence insurance, the person shall be required
26 to purchase a mine subsidence insurance policy when the
27 structural damage for which assistance was granted has been
28 repaired. Persons receiving a loan under this section must
29 maintain mine subsidence insurance coverage for the duration of
30 the loan and persons receiving a grant under this section must
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1 maintain mine subsidence insurance coverage for as long as it is
2 determined by the department that the dwelling is in danger of
3 further damage from mine subsidence. If a person receiving mine
4 subsidence assistance fails to maintain the required mine
5 subsidence insurance, the person shall immediately pay the fund
6 the outstanding balance due on the loan or repay the amount of
7 grant assistance received under this section.
8 (c) Repairs for which grants or loans are provided under
9 this section must be completed within one year of the receipt of
10 grant or loan assistance, unless an extension is approved by the
11 department. If the department determines that repairs have not
12 been made within one year and that no extension should be
13 granted, the person who received the grant or loan assistance
14 shall repay the fund for the amount of the grant or loan not
15 expended on repairs for which the grant or loan was provided.
16 (d) Up to five percent of the money in the fund which is not
17 committed to reserves, claims or other fund expenses, plus
18 repayment of principal and interest on loans under this section,
19 shall be used to fund assistance under this section.
20 Section 20.1. Subsidence Insurance Purchase and Compliance
21 Requirements.--(a) Every purchaser of a dwelling requiring mine
22 subsidence insurance shall purchase subsidence insurance in an
23 amount at least equal to the appraised value of the dwelling
24 purchased or to the maximum amount of coverage available with
25 respect to the particular dwelling, whichever is less; provided,
26 however, that the amount of subsidence insurance required need
27 not exceed the outstanding principal balance of a loan against
28 the dwelling and need not be required beyond the term of the
29 loan.
30 (b) Notification of mortgage lending institution shall be as
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1 follows:
2 (1) The department shall notify mortgage lending
3 institutions in areas identified by the department as being
4 located above abandoned mine workings of the requirements for
5 subsidence insurance. Notified lenders shall direct persons
6 applying for loans for the purchase of dwellings in these areas
7 to contact the department to determine if the dwelling requires
8 mine subsidence insurance and to provide the lender with a
9 certificate from the department stating one of the following:
10 (i) That subsidence insurance is necessary under the
11 provisions of this section and has been obtained as a condition
12 of receiving and maintaining the loan.
13 (ii) That subsidence insurance may be necessary under the
14 provisions of this section but is not being provided for reasons
15 set forth in the certificate by the department.
16 (iii) That subsidence insurance is not necessary under the
17 provisions of this section.
18 (2) Each State agency participating in providing mortgage
19 loan assistance for the purchase of a dwelling in an area
20 identified by the department as being located above abandoned
21 mine workings shall, by regulations, require borrowers to obtain
22 subsidence insurance under the circumstances and in the manner
23 provided in subsection (a).
24 (c) Notwithstanding any other provision of this section,
25 subsections (a) and (b) shall not apply to any loan having an
26 original outstanding principal balance of $5,000 or less and a
27 repayment term of one year or less.
28 (d) If a lender subject to this act requires the escrowing
29 of taxes, insurance premiums, fees or any other charges for a
30 loan secured by a dwelling, then all premiums and fees for
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1 subsidence insurance for the dwelling shall be paid to the
2 lender or servicer for the loan in a manner sufficient to make
3 payments as due for the duration of the loan. Upon receipt of
4 the premiums, the lender or other servicer of the loan shall
5 deposit the premiums in an escrow account on behalf of the
6 borrower. Upon receipt of a notice from the department that
7 subsidence insurance premiums are due, the lender or servicer
8 shall pay from the escrow account to the department the amount
9 of insurance premiums owed. Escrow accounts established pursuant
10 to this subsection shall be subject to the provisions of section
11 10 of the Real Estate Settlement Procedures Act of 1974 (Public
12 law 93-533, 12 U.S.C. § 2609).
13 (e) Placement of subsidence insurance by lender shall be as
14 follows:
15 (1) If, at the time of origination or at any time during the
16 term of a loan secured by a dwelling requiring mine subsidence
17 insurance, a lender or servicer for the loan determines that the
18 dwelling is not covered by subsidence insurance or is covered by
19 such insurance in an amount less than the amount required for
20 the property pursuant to subsection (a), the lender or servicer
21 for the loan shall notify the borrower that the borrower should
22 obtain, at the borrower's expense, the required amount of
23 subsidence insurance for the term of the loan and provide the
24 lender or servicer for the loan with a certificate from the
25 department as provided in subsection (b)(1).
26 (2) If the borrower fails to purchase the required
27 subsidence insurance within forty-five days after notification
28 under paragraph (1), the lender or servicer for the loan shall
29 purchase the insurance on behalf of the borrower and may charge
30 the borrower for the cost of premiums and fees incurred by the
20010S0240B0248 - 16 -
1 lender in purchasing the insurance.
2 (3) Review of determination that subsidence insurance is
3 required:
4 (i) The borrower and lender for a loan secured by a dwelling
5 may jointly request the department to review a determination
6 that the dwelling requires mine subsidence insurance. The
7 request must be supported by technical information relating to
8 the dwelling and its location. Within forty-five days of
9 receiving the request for review, the department shall provide
10 the borrower and the lender with a written redetermination
11 stating whether or not the dwelling requires mine subsidence
12 insurance. The redetermination of the department shall be final.
13 (ii) If the department redetermines that the dwelling
14 securing the loan of the borrower does not require mine
15 subsidence insurance, the borrower shall not be obligated to
16 purchase subsidence insurance for the dwelling during the period
17 determined by the department, which shall be stated in the
18 redetermination under subparagraph (i) and shall begin on the
19 date on which the letter is provided.
20 (iii) The borrower shall not be required to purchase
21 subsidence insurance for the dwelling securing the loan until a
22 redetermination under subparagraph (i) is provided if a request
23 for redetermination is made under subparagraph (i) and the
24 department does not provide the redetermination before the later
25 of:
26 (A) the expiration of the time period under subparagraph
27 (i); or
28 (B) closing of the loan.
29 (iv) A lender or any servicer for a loan may charge the
30 borrower a reasonable fee for the costs of determining whether
20010S0240B0248 - 17 -
1 the dwelling securing the loan requires mine subsidence
2 insurance if any of the following apply:
3 (A) The determination is made pursuant to the making,
4 increasing, extending or renewing of the loan that is initiated
5 by the borrower.
6 (B) The loan for the dwelling may reasonably be considered
7 to require the determination.
8 (C) The determination results in the purchase of subsidence
9 insurance pursuant to paragraph (2).
10 (v) The purchaser or transferee of such a loan may be
11 charged the fee in the case of sale or transfer of the loan.
12 (f) Penalties for failure to require subsidence insurance
13 shall be as follows:
14 (1) Monetary penalty shall be as follows:
15 (i) The department may assess a penalty in the amount of
16 three hundred dollars ($300) for each violation against any
17 lender that fails to require subsidence insurance pursuant to
18 subsection (b)(1) or fails to notify a borrower of lack of
19 coverage pursuant to subsection (e)(1).
20 (ii) Each State agency providing mortgage loan assistance
21 for dwellings located above abandoned mine workings pursuant to
22 subsection (b)(2) may assess a penalty in the amount of three
23 hundred dollars ($300) for each violation against any lender
24 participating in the program that fails to require subsidence
25 insurance pursuant to agency regulations or fails to notify a
26 borrower of lack of coverage pursuant to subsection (e)(1).
27 (iii) This paragraph is subject to 2 Pa.C.S. Ch. 5 Subch. A
28 (relating to practice and procedure of Commonwealth agencies)
29 and Ch. 7 Subch. A (relating to judicial review of Commonwealth
30 agency action).
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1 (2) Any lender that purchases or renews subsidence insurance
2 on behalf of or as an agent of a borrower of a loan for which
3 subsidence insurance is required shall be considered to be in
4 compliance with this section.
5 (3) Sale or other transfer of a loan by a lender that has
6 committed a violation of this section which occurs subsequent to
7 the violation shall not affect the liability of the transferring
8 lender regarding any penalty under this subsection. A lender
9 shall not be liable for any violations by another lender that
10 previously held the loan.
11 (4) Penalties collected under this subsection shall be paid
12 into the fund.
13 (5) No penalty may be imposed under this subsection after
14 the expiration of the four-year period beginning on the date of
15 the violation for which the penalty is authorized under this
16 subsection.
17 (g) This section shall apply with respect to any loan made,
18 increased, extended or renewed on or after the effective date of
19 this section.
20 Section 21. Department.--(a) The department may promulgate
21 regulations to administer this act.
22 (b) The department shall provide for public notice of the
23 program and the requirements for mine subsidence insurance.
24 (c) The department shall make an annual report on the
25 program and on compliance and experience with mine subsidence
26 insurance requirements to the Environmental Resources and Energy
27 Committee of the Senate and the Environmental Resources and
28 Energy Committee of the House of Representatives.
29 Section 6. Sections 22 and 24.1 of the act are amended to
30 read:
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1 Section 22. Employes of the Board to Be Part of the
2 Department [of Environmental Resources].--All employes of the
3 board shall be employed by and located in the [Department of
4 Environmental Resources] department and shall be subject to the
5 administrative jurisdiction and authority of the [Secretary of
6 Environmental Resources] secretary.
7 Section 24.1. Appeals.--Any party aggrieved by an action of
8 the board [hereunder] shall have the right to appeal to the
9 Environmental Hearing Board.
10 Section 7. The addition of section 20 of the act shall apply
11 to mine subsidence damage incurred after December 31, 1998,
12 provided that mine subsidence damage which occurred between
13 January 1, 2001, and the effective date of this act and for
14 which mine subsidence assistance is applied must have been
15 reported to the department prior to the effective date of this
16 act, and an application for assistance for such damage must be
17 filed with the department within 90 days of the effective date
18 of this act.
19 Section 8. This act shall take effect as follows:
20 (1) The addition of section 20.1 of the act shall take
21 effect in 180 days.
22 (2) The remainder of this act shall take effect immediately.
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