PRINTER'S NO. 3101
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2089
Session of
2024
INTRODUCED BY KINKEAD AND GAYDOS, MAY 14, 2024
REFERRED TO COMMITTEE ON INSURANCE, MAY 14, 2024
AN ACT
Establishing the Coal and Clay Mine Subsidence and Landslide
Insurance and Assistance Program within the Department of
Environmental Protection; providing for related powers and
duties of the Department of Environmental Protection;
establishing and providing for the powers and duties of the
Coal and Clay Mine Subsidence and Landslide Insurance Board;
providing for duties of the Auditor General; establishing the
Coal and Clay Mine Subsidence and Landslide Insurance Fund
and the Coal and Clay Mine Subsidence and Landslide
Assistance Fund; imposing a penalty; making appropriations
and transfers; and making a repeal.
TABLE OF CONTENTS
Chapter 1. Preliminary Provisions
Section 101. Declarations.
Section 102. Definitions.
Chapter 3. Coal and Clay Mine Subsidence and Landslide
Insurance and Assistance Program
Section 301. Program goals.
Section 302. Coal and Clay Mine Subsidence and Landslide
Insurance and Assistance Program.
Section 303. Program authority.
Section 304. Land-use controls and rate structure.
Section 305. Coal and Clay Mine Subsidence and Landslide
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Insurance Board.
Chapter 5. Coal and Clay Mine Subsidence and Landslide
Insurance Fund
Section 501. Coal and Clay Mine Subsidence and Landslide
Insurance Fund.
Section 502. Expenses.
Section 503. State Treasurer custodian of insurance fund.
Section 504. Schedule of premiums.
Section 505. Surplus.
Section 506. Investment of surplus.
Section 507. Disbursements from insurance fund.
Section 508. Application for insurance, terms of insurance,
penalty for false statement and list of mining areas.
Section 509. Application for increase in insurance.
Section 510. Automatic inflation protection increase.
Section 511. Insurance for structures under construction.
Section 512. Claims.
Section 513. Audit by Auditor General.
Section 514. Claims against insurance fund.
Section 515. Defenses against claims, suits, procedure and
investigations of claims.
Section 516. Subrogation to rights of claimants.
Section 517. Insurance companies may cover this type of risk.
Chapter 7. Administration and Funding
Section 701. Rules and regulations.
Section 702. Escrow of premium payments.
Section 703. Properties in violation of State or local law.
Section 704. Department report.
Section 705. Employees of board shall be employees of
department.
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Section 706. Attorney General to be counsel for board.
Section 707. Appropriation.
Section 708. Appeals.
Section 709. Mitigation assistance.
Section 710. Coal and Clay Mine Subsidence and Landslide
Assistance Fund.
Section 711. Program funding.
Section 712. Reimbursement.
Section 713. Cost of administration.
Section 714. Administration.
Chapter 9. Miscellaneous Provisions
Section 901. Repeals.
Section 902. Continuation.
Section 903. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
CHAPTER 1
PRELIMINARY PROVISIONS
Section 101. Declarations.
The General Assembly finds and declares as follows:
(1) The anthracite and bituminous coal and clay mine
areas of this Commonwealth have been faced with the grave
problem of subsidence for many years.
(2) These problems are becoming more widespread.
(3) These conditions cause undue hardship upon a
multitude of persons.
(4) Geologists have studied with increasing concern the
underground movement of the geological formations in this
Commonwealth and its impeding effects on vertical and
horizontal natural and manmade surfaces.
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(5) Landslides have historically been the norm
throughout most parts of this Commonwealth.
(6) Landslides occur without regard for municipal
boundaries, ordinances, planning codes, politics and
economies, making it difficult for local officials to deal
effectively with the development and implementation of
methods and standards to control the devastation that these
natural forces can cause.
(7) Landslides have caused an enormous amount of damage
to homes and roadways in this Commonwealth, particularly the
southwestern region of the State.
(8) Landslides will continue to plague southwestern
Pennsylvania.
(9) Landslides affect every state in the nation, causing
an estimated $2,000,000,000 to $4,000,000,000 in damages per
year.
(10) Landslide damage caused by flooding is not covered
by the National Flood Insurance Program.
(11) Problems associated with landslide damage are
becoming more widespread.
(12) It would be to the advantage of residents of the
anthracite and bituminous coal and clay mining regions and
landslide prone regions of this Commonwealth to form a common
bond to combat distress resulting from mine subsidence and
landslide damage.
Section 102. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Anthracite and Bituminous Coal Mine Subsidence Fund Act."
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The former act of August 23, 1961 (P.L.1068, No.484), entitled
"An act to provide for the creation and administration of a Coal
and Clay Mine Subsidence Insurance Fund within the Department of
Environmental Protection for the insurance of compensation for
damages to subscribers thereto; declaring false oaths by the
subscribers to be misdemeanors; providing penalties for the
violation thereof; and making an appropriation."
"Assistance fund." The Coal and Clay Mine Subsidence and
Landslide Assistance Fund established under section 710.
"Board." The Coal and Clay Mine Subsidence and Landslide
Insurance Board established under section 305.
"Community." Either of the following:
(1) A political subdivision that has zoning and building
code jurisdiction over an area having coal and clay mine
subsidence or landslide features as determined by the
department.
(2) A political subdivision that is designated to
develop and administer a mitigation plan by the department.
"DCNR." The Department of Conservation and Natural Resources
of the Commonwealth.
"Department." The Department of Environmental Protection of
the Commonwealth.
"Extremely hazardous area." An area where the department
determines that multiple environmental factors contribute to
high risk of damage to structures from coal and clay mine
subsidence and landslide features.
"GIS." Geographic information systems.
"Insurance fund." The Coal and Clay Mine Subsidence and
Landslide Insurance Fund established under section 501.
"Landslide." A detached mass of soil, rock, earth or debris
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that moves down a slope and is of sufficient size to cause
damage.
"Landslide features." The term includes rockfall areas,
creep, red beds and historic landslides.
"Mitigation." An activity relative to landslides and coal
and clay mine subsidence that prevents an emergency from
occurring, reduces the likelihood of an emergency occurring or
lessens the damaging effects of unavoidable emergencies.
"Mitigation plan." A plan designed by a community that, when
implemented, provides mitigation.
"Program." The Coal and Clay Mine Subsidence and Landslide
Insurance and Assistance Program established under section 302.
"Secretary." The Secretary of Environmental Protection of
the Commonwealth.
CHAPTER 3
COAL AND CLAY MINE SUBSIDENCE AND
LANDSLIDE INSURANCE AND ASSISTANCE PROGRAM
Section 301. Program goals.
The goals of the program shall be to:
(1) Provide actuarially sound insurance coverage.
(2) Make program policies universally available and
competitively priced.
(3) Make use of the most effective scientific and
technological advances available, including, but not limited
to, technology such as GIS.
(4) Process claims promptly, fairly and consistently.
(5) Provide tools and incentives for coal and clay mine
subsidence and landslide loss reduction, including the
insurance fund.
(6) Collaborate with other organizations that operate in
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the public interest to assist in achieving the program's
goals.
Section 302. Coal and Clay Mine Subsidence and Landslide
Insurance and Assistance Program.
(a) Establishment.--The Coal and Clay Mine Subsidence and
Landslide Insurance and Assistance Program is established within
the department. The program shall be administered by the board.
(b) Program components.--The program shall consist of the
following components:
(1) A grant program.
(2) A revolving loan program.
(3) An insurance program.
(c) Purposes of program components.--The grant program under
subsection (b)(1) and the revolving loan program under
subsection (b)(2) are established for the purposes of mitigating
and repairing minor structural damage. The board shall use the
grant program and the revolving loan program as tools to aid in
the success of the insurance fund.
Section 303. Program authority.
(a) Intergovernmental cooperation.--The board shall:
(1) Work closely with Federal, State and local agencies
and any other government agencies, including those of other
states, to accomplish program goals.
(2) Create and implement a Statewide coal and clay mine
subsidence and landslide mitigation plan in accordance with
section 709 that would encourage and support local mitigation
efforts.
(3) Collaborate with DCNR to complete a survey of this
Commonwealth to investigate sites to define landslide
features and identify areas of this Commonwealth most at risk
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of landslide.
(4) Recommend legislation, regulations, ordinances and
zoning to mitigate slope instability contributed by
excavation and drainage.
(5) Work with local governments to evaluate the risks
associated with certain homesite development.
(6) Share the most up-to-date geological surveys in the
form of maps, GIS data or other useful forms and related
information free of charge to government agencies and
appropriate representatives of communities and at a
reasonable cost to all other persons. Receipts under this
paragraph shall be deposited into the assistance fund.
(7) Inform the Department of Transportation of which
highways are at greatest risk from coal and clay mine
subsidence and landslides.
(8) Notify local governments in areas with the greatest
risk from coal and clay mine subsidence and landslides.
(9) Have the authority to consult, receive information
and enter into any agreements or other arrangements in order
to identify and publish information with respect to all coal
and clay mine subsidence and landslide-prone areas, establish
or update coal and clay mine subsidence and landslide-risk
zone data and make estimates with respect to the rates of
probable coal and clay mine subsidence and landslide-caused
loss for the various coal and clay mine subsidence and
landslide-risk zones for each of these areas.
(10) Publish any change to coal and clay mine subsidence
and landslide insurance map panels.
(11) Ensure that the program is consistent in coal and
clay mine subsidence and landslide control, forecasting and
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damage prevention.
(b) Studies and investigations.--
(1) The board is authorized to carry out necessary
studies and investigations, utilizing to the maximum extent
practicable the existing facilities and services of other
Federal and State departments or agencies, local government
agencies and any other organizations, with respect to the
adequacy of State and local measures in landslide-prone areas
as to:
(i) Land management and use.
(ii) Coal and clay mine subsidence and landslide
control.
(iii) Zoning.
(iv) Coal and clay mine subsidence and landslide
damage prevention.
(2) The board may enter into any contracts, agreements
or other appropriate arrangements to carry out its authority
under this subsection. Studies and investigations under
paragraph (1) shall include analysis of the following:
(i) Laws.
(ii) Regulations.
(iii) Ordinances.
(iv) Zoning.
(v) Building codes.
(vi) Building permits.
(vii) Subdivision or other building restrictions.
(c) State and local measures.--On the basis of studies and
investigations under subsection (b) and other information as the
department deems necessary, the board shall develop
comprehensive criteria designed to encourage, where necessary,
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the adoption of adequate State and local measures which, to the
maximum extent feasible, will:
(1) Constrict the development of land that is exposed to
coal and clay mine subsidence and landslide damage, where
appropriate.
(2) Guide the development of proposed construction away
from locations that are threatened by coal and clay mine
subsidence and landslide features.
(3) Assist in reducing damage caused by coal and clay
mine subsidence and landslides.
(4) Otherwise improve the long-term land management and
use of coal and clay mine subsidence and landslide-prone
areas.
(d) Technical assistance.--The board shall work closely with
and provide any necessary technical assistance to State and
local government agencies to encourage the application of the
criteria and the adoption and enforcement of the measures under
this section.
Section 304. Land-use controls and rate structure.
A local government may adopt land-use controls for the
benefit of the local government's residents. The following shall
apply:
(1) No new coal and clay mine subsidence and landslide
insurance coverage shall be provided to new construction
without preapproval by an appropriate local public body,
which shall have the option of adopting adequate land use and
control measures with effective enforcement provisions.
(2) A community rating system shall be employed by the
board as an incentive for community coal and clay mine and
landslide management. The rating system shall consider where
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coal and clay mine subsidence and landslide damage is more
likely to occur and give higher ratings to those communities
that have lower risk of damage either due to low risk of the
damage occurring due to the natural characteristics of the
community or due to steps taken by the community to prevent
the damage. This rating system shall be reflected by the
rates assigned to communities.
(3) Rate structures shall provide incentives for
measures that reduce the risk of coal and clay mine
subsidence and landslide damage and evaluate the measures.
The program shall provide incentives in the form of credits
on premium rates for coal and clay mine subsidence and
landslide insurance coverage in communities that the
department determines have adopted and enforced measures that
reduce the risk of coal and clay mine subsidence and
landslide damage.
(4) A credit on premium rates for coal and clay mine
subsidence and landslide insurance coverage shall be based on
the estimated reduction in damage risks resulting from the
measures adopted by a community under the program. If a
community has received mitigation or other assistance under
the program, the credits may be used in a manner determined
by the department to recover the amount of assistance
provided for the community.
Section 305. Coal and Clay Mine Subsidence and Landslide
Insurance Board.
(a) Continuation and membership.--The Coal and Clay Mine
Subsidence and Landslide Insurance Board is established and
shall be a continuation of the Coal and Clay Mine Subsidence
Insurance Board established under section 3 of the Anthracite
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and Bituminous Coal Mine Subsidence Fund Act. The board shall
retain the structure and members of the Coal and Clay Mine
Subsidence Insurance Board and shall also include the following
additional members:
(1) The Director of the Pennsylvania Emergency
Management Agency or a designee.
(2) The Secretary of Conservation and Natural Resources
or a designee.
(3) The Insurance Commissioner or a designee.
(b) Additional programs.--
(1) The board shall establish the following programs:
(i) Coal and Clay Mine Subsidence Insurance Program.
(ii) Landslide Insurance Program.
(2) The following shall apply to each of the programs
established under paragraph (1):
(i) The department shall develop and administer each
program, including, but not limited to, assessing a
premium for participating in a program.
(ii) Payments for premiums assessed under
subparagraph (i) shall be deposited into the insurance
fund.
(iii) Money deposited into the insurance fund under
subparagraph (ii) shall only be used for the program for
which the premium was paid.
CHAPTER 5
COAL AND CLAY MINE SUBSIDENCE AND
LANDSLIDE INSURANCE FUND
Section 501. Coal and Clay Mine Subsidence and Landslide
Insurance Fund.
(a) Establishment.--The Coal and Clay Mine Subsidence and
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Landslide Insurance Fund is established and shall be a
continuation of the Coal and Clay Mine Subsidence Insurance Fund
established under section 4 of the Anthracite and Bituminous
Coal Mine Subsidence Fund Act.
(b) Purpose.--The insurance fund shall be used to insure
against damages resulting from coal and clay mine subsidence and
landslide damage.
(c) Claim or liability.--A claim against or a liability of
the insurance fund shall not be deemed to constitute a debt or
liability of the Commonwealth or a charge against the General
Fund.
Section 502. Expenses.
The expenses of the administration of the insurance fund
shall be paid out entirely from the insurance fund.
Section 503. State Treasurer custodian of insurance fund.
The State Treasurer shall be the custodian of the insurance
fund and all disbursements from the insurance fund shall be paid
by the State Treasurer by check upon request by the board. The
following shall apply:
(1) The State Treasurer shall not be required to audit
accounts from which the board requests payments.
(2) The State Treasurer shall not be liable for any
payment made under this act.
Section 504. Schedule of premiums.
(a) General rule.--At any time during each year, the board
shall prepare and publish on the department's publicly
accessible Internet website a schedule of premiums or rates of
insurance for subscribers for the Coal and Clay Mine Subsidence
Insurance Program and the Landslide Insurance Program, which
shall be determined and published separately. The following
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shall apply:
(1) The schedules shall be printed and distributed free
of charge to individuals who request a schedule.
(2) A subscriber may pay to the State Treasurer the
amount of premium appropriate, and upon payment, shall be
insured, in accordance with this act for the year for which
the premium is paid.
(3) The insurance acquired under paragraph (2) shall
cover all payments becoming due for which the premium is
paid.
(b) Amount of premium.-- The premium for each program is
fixed and shall be adequate to enable payment of all sums that
may become due and payable under the provisions of this act, and
adequate reserve sufficient to carry all policies and claims to
maturity.
(c) Fixing premiums.--In fixing a premium payable by a
subscriber, the board may:
(1) take into account the condition of the premises of
the subscriber in respect to the possibility of subsidence as
shown by the report of any inspector appointed by the board
or the department;
(2) annually assess the amount of the premium charged
and the needs of maintaining the insurance fund under this
act. In addition, the board may change the amount of premiums
payable by any subscriber as the condition of the premises of
the subscriber in respect to the possibility of subsidence
may justify; and
(3) increase the premiums of any subscriber whose loss
experience warrants the change.
(d) Effective date of insurance.--The insurance of any
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subscriber shall not be effective until the subscriber shall
have paid in full the premium fixed and determined under this
section.
Section 505. Surplus.
The following shall apply:
(1) The board shall set aside 5% of all premiums
collected under this act until the board determines that the
surplus is large enough to cover the catastrophe hazard of
all the subscribers to the insurance fund and to guarantee
the solvency of the insurance fund.
(2) If the board determines that the surplus is large
enough under paragraph (1), the board shall reevaluate the
set aside under paragraph (1) and investment of the surplus
and make a recommendation to the General Assembly.
Section 506. Investment of surplus.
(a) General rule.--The board may invest any of the surplus
or reserve belonging to the insurance fund in securities and
investments that are authorized for investment by savings banks.
(b) State Treasurer custodian.--The State Treasurer shall be
custodian of all securities and evidences of indebtedness under
subsection (a), and the following shall apply:
(1) The State Treasurer shall collect the principal and
interest on the principal when due and pay that amount into
the insurance fund.
(2) The State Treasurer shall pay for all securities or
evidences of indebtedness under subsection (a) by check
issued upon requisition of the board.
(3) All payments under paragraph (2) shall be made only
upon delivery of the securities or evidences of indebtedness
to the State Treasurer.
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(4) To all requisitions calling upon the State Treasurer
to pay for any securities or evidences of indebtedness, there
shall be attached a certified copy of the resolution of the
board authorizing the investment.
(5) The board may sell any security by resolution.
Section 507. Disbursements from insurance fund.
(a) Operation of insurance fund.--Money from the general
appropriation of the department shall be available for the
expense of administering the insurance fund, including the
purchase through the Department of General Services of surety
bonds for officers or employees of the board as may be required
to purchase supplies, materials, motor vehicles, provide for
administrative expenses, workmen's insurance covering the
officers and employees of the board and liability insurance
covering vehicles operated by the officers and employees of the
board.
(b) Treasury Department.--Money from the general
appropriation of the department shall also be available for
payment to the Treasury Department for the cost of making
disbursements out of the insurance fund on behalf of the
insurance fund at amounts as the Treasury Department, with the
approval of the board, shall determine.
(c) Accounting.--The following shall apply:
(1) For each program established under section 305(b),
the board shall keep an accurate and separate account of the
money paid in premiums by subscribers and the disbursements
on account of damages to the subscribers' premises.
(2) If at the expiration of any year there shall be a
balance remaining after deducting the disbursements, the
unearned premiums on undetermined risks and the percentage of
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premiums paid or payable to create or maintain the surplus as
required under this section, and after setting aside an
adequate reserve, the balance, as the board may determine to
be safely distributable, may be allocated to the cost of
administering the insurance fund or distributed among the
subscribers in proportion to the premiums paid by them.
(3) For the proportionate share of the subscribers who
remain subscribers to the insurance fund, the premiums
distributed to subscribers under paragraph (2) shall be
credited to the installment of premiums next due by the
subscribers. The proportionate share of the subscribers who
have ceased to be subscribers in the insurance fund shall be
refunded to them out of the insurance fund in the manner
provided under this chapter.
(d) One-time commission payment.--Money from the general
appropriation of the department shall also be available to pay a
one-time commission as determined by the board to insurance
producers who submit applications for mine subsidence and
landslide insurance to the board under this chapter if a policy
is issued pursuant to an application submitted by an insurance
producer. The amount of the commission shall be determined by
the board on an annual basis.
Section 508. Application for insurance, terms of insurance,
penalty for false statement and list of mining areas.
(a) Application for insurance.--The following shall apply:
(1) An owner of a structure located within the
anthracite or bituminous coal or clay mine region or an
extremely hazardous area who desires to become a subscriber
to the insurance fund for the purpose of insuring the
structure against damages from coal or clay mine subsidences
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or landslide damage shall make a complete application, as
prescribed by the board, to the board, its agents or
insurance producers.
(2) Upon receiving an application under paragraph (1),
the board shall:
(i) Make an investigation as may be necessary if the
application complies with the rules and regulations of
the board.
(ii) Within 60 days after receiving the application,
issue a certificate showing whether the board approved
the application and the amount of premium payable by the
applicant for the year for which the premium is sought.
(3) The amount of insurance coverage for which an
applicant is approved under paragraph (2) shall not exceed
the replacement cost of the insured structure or $150,000,
whichever is less. The maximum dollar amount of coverage
established under this paragraph shall be reviewed annually
by the department to determine whether the amount is
sufficient to compensate for loss of use and ability to
relocate or rebuild in a safer area of this Commonwealth.
(4) Policies issued under this chapter may be issued for
one year, for two years or for three years as the board may
establish.
(5) Except as provided under subsection (b), no
insurance shall become effective until the premiums have been
paid. All premiums shall be payable to the State Treasurer,
who shall issue a receipt for payment. The receipt for
premium together with a certificate of the board shall be
evidence that the applicant has become a subscriber to the
insurance fund and is insured.
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(b) Failure to approve or deny application.--If the board
fails to make the necessary investigations or inspection and
fails to approve or deny an application as required under
subsection (a), the insurance requested by the applicant shall
be deemed granted. The insurance shall be effective from the
date of the application's submission under subsection (a). The
following shall apply:
(1) The coverage shall be null and void if the applicant
fails to remit the premium payment within 20 days from the
day the bill for the premium was postmarked.
(2) The insurance may be subjected to later reductions,
and premiums adjusted accordingly, if the board determines
that the amount of insurance coverage requested is in excess
of the current replacement cost of the structure or the
maximum amount of coverage established by the insurance fund,
whichever is less.
(3) The insurance shall be void if, upon inspection of
the structure, the board determines that either:
(i) mine subsidence or landslide damage occurred
prior to the request by the applicant for insurance; or
(ii) the applicant, due to an unreasonable action or
inaction, is responsible for the failure of the board to
inspect the structure within 60 days of receipt of the
application in accordance with this section.
(c) Offense.--Whoever shall knowingly furnish or make any
false certificate, application or statement as required under
this section shall be guilty of a misdemeanor, and upon
conviction shall be sentenced to pay a fine not to exceed $1,500
and shall be sentenced to a term of imprisonment not to exceed
one year.
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(d) Identifying risk.--In order to assist insurance
producers and potential policyholders in identifying structures
that could be at risk from mine subsidence or landslide damage,
the board shall transmit the survey completed by DCNR under
section 303(a)(3) and the mitigation plan for coal and clay
mines created under section 303(a)(2) to the Legislative
Reference Bureau for publication in the next available issue of
the Pennsylvania Bulletin.
Section 509. Application for increase in insurance.
(a) General rule.--An application for an increase in the
amount of insurance, up to the allowable limits, may be made at
any time by the subscriber by submitting a written statement, as
determined by the board, to the board or to any of the board's
agents, except during a period when a claim filed by the
subscriber is open and pending investigation by the department.
(b) Approval of request.--The following shall apply:
(1) Upon receipt of the subscriber's written statement
under subsection (a), the board shall reinspect the structure
within 60 days.
(2) If reinspection under paragraph (1) occurs within
the 60-day period and the structure passes the reinspection,
the new amount of insurance shall be approved and shall be
effective from the date of the first premium payment after
reinspection.
(3) If reinspection under paragraph (1) does not occur
within the 60-day period, the new amount of insurance shall
be deemed approved by the board and shall be effective from
the date the subscriber's application for additional
insurance was received by the board under subsection (a), but
the additional coverage shall be null and void if the
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subscriber fails to remit the premium payment within 20 days
from the day the bill for additional premium is postmarked.
(c) Reduction in additional insurance.--The additional
insurance approved under this section may be reduced, with
premiums adjusted accordingly, if the board determines that the
subscriber's total amount of insurance exceeds the current
replacement cost of the structure or the maximum amount of
coverage established by the insurance fund, whichever is less.
(d) Voided additional insurance.--Additional insurance
approved under this section shall be void if, upon reinspection
of the structure, the board determines that either:
(1) mine subsidence or landslide damage occurred prior
to the request of the subscriber for additional insurance; or
(2) the subscriber's unreasonable action or inaction is
responsible for the board's failure to reinspect the insured
structure within 60 days of receipt of the application for
additional insurance under subsection (a).
Section 510. Automatic inflation protection increase.
The board shall make available to all subscribers an annual
inflation protection option on the anniversary date of each
policy to uniformly increase subscribers' coverage. A subscriber
must elect this option within 30 days. The option shall not be
made available more than once annually. An inflation protection
increase shall not be subject to a reinspection of the
structure.
Section 511. Insurance for structures under construction.
The board shall make available mine subsidence and landslide
insurance to owners of structures under construction. The
insurance under this section shall have a term of no more than
18 months, or until the structure is 80% complete, whichever is
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earlier.
Section 512. Claims.
A claim for payment due to loss for an insured under the Coal
and Clay Mine Subsidence Insurance Program or the Landslide
Insurance Program shall be on a form and manner established by
the department and made available on the department's publicly
accessible Internet website and by mail upon request. Claims
shall be for loss of use due to damage from landslide and
payment for claims shall be contingent upon inspection by the
department.
Section 513. Audit by Auditor General.
The following shall apply:
(1) The Auditor General or a designee shall at least
once each year make a complete examination and audit of the
insurance fund, including all receipts and expenditures, cash
on hand and securities and investments or property held
representing cash or cash disbursements.
(2) The Auditor General is authorized to employ
consultants, experts, accountants or investigators as
necessary to carry out this section.
(3) The expense incurred in making an examination and
audit under paragraph (1) shall be certified to the insurance
fund by the Auditor General and shall be paid from the
general appropriation of the department.
(4) The first audit of the insurance fund may, in the
discretion of the Auditor General, extend back to the
establishment of the insurance fund or to any other period in
the insurance fund's existence.
Section 514. Claims against insurance fund.
A subscriber to the insurance fund must file with the board a
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true statement of the subscriber's claim for any subsidence or
landslide damage and shall provide the board an opportunity to
investigate to determine whether the board must pay the claim.
Section 515. Defenses against claims, suits, procedure and
investigations of claims.
In each case where a claim is made against the insurance
fund, the insurance fund shall be entitled to every defense
against the claim under the policy and shall be subrogated to
every right of the subscriber arising out of accidents against
any third persons. The insurance fund may, in the name of the
insurance fund, sue or be sued to enforce any right given
against or to any subscriber or other persons under this act.
Section 516. Subrogation to rights of claimants.
Nothing in this act shall relieve any person, partnership or
corporation from any liability for damages sustained, and the
insurance fund shall be subrogated to the rights of any property
owners' insurance as provided under this chapter.
Section 517. Insurance companies may cover this type of risk.
An insurance company may issue policies covering the type of
risk covered under this act if the policy is approved by the
Insurance Commissioner as to policy form and rates.
CHAPTER 7
ADMINISTRATION AND FUNDING
Section 701. Rules and regulations.
The board may publish guidance and rules and promulgate
regulations to carry out the purposes of this act, including,
but not limited to, reasonable classification of risks eligible
for coverage under this act, limits of coverage and rules
covering the adjustment and settlement of claims.
Section 702. Escrow of premium payments.
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A mortgage lender that offers the purchase of insurance under
this act shall escrow the premium.
Section 703. Properties in violation of State or local law.
No new coal and clay mine subsidence and landslide insurance
coverage shall be provided for a property that the department
finds has been declared by a State or local zoning authority or
other authorized public body to be in violation of State or
local laws, regulations or ordinances that are intended to
discourage or otherwise restrict land development or occupancy
in areas that are prone to coal and clay mine subsidence or
landslides.
Section 704. Department report.
The department shall make an annual report on the program and
on experience with mine subsidence and landslide insurance sales
through producers to the chairperson and minority chairperson of
the Environmental Resources and Energy Committee of the Senate
and the chairperson and minority chairperson of the
Environmental Resources and Energy Committee of the House of
Representatives.
Section 705. Employees of board shall be employees of
department.
An employee of the board shall be employed by and located in
the department and shall be subject to the administrative
jurisdiction and authority of the secretary.
Section 706. Attorney General to be counsel for board.
The Attorney General shall, ex officio, be the general
counsel of the board and shall appoint any attorney as may be
deemed necessary to aid the board.
Section 707. Appropriation.
(a) General rule.--The sum of $2,500,000 is appropriated to
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the board for the purposes of this act and expenses of
organization and administration of the insurance fund as
provided under this act for fiscal year July 1, 2024, through
June 30, 2025.
(b) Additional transfer.--If, upon completion of an annual
examination and audit under section 513, the board determines
that the total asset value of the insurance fund is less than
$2,500,000, an additional sum as may be necessary to increase
the total asset value of the insurance fund to $2,500,000 shall
be transferred from the General Fund to the insurance fund for
the purposes of this act for the fiscal year immediately
following the examination and audit.
(c) Fund transfer.--The sum of $2,500,000, or as much
thereof as may be necessary, is transferred from the General
Fund to the insurance fund for the fiscal year July 1, 2024,
through June 30, 2025.
(d) Department.--Money in the insurance fund and in the
assistance fund is appropriated to the department in amounts as
may be determined annually by the Governor to be used for the
specified purposes of this act.
Section 708. Appeals.
A party aggrieved by an action of the board shall have the
right to appeal in accordance with 2 Pa.C.S. (relating to
administrative law and procedure).
Section 709. Mitigation assistance.
(a) Financial assistance generally.--The department shall
carry out a program to provide financial assistance to
communities and individuals for planning and carrying out
activities designed to reduce the risk of coal and clay mine
subsidence and landslide damage to structures covered under
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contracts for coal and clay mine subsidence and landslide
insurance. Financial assistance may be made available to
communities and individuals in the form of grants or revolving
loans for the carrying out of mitigation activities. Loans shall
carry an interest rate of no more than 3%.
(b) Grants.--The department may make grants under this
section to communities to assist in developing mitigation plans.
The grants shall come from the assistance fund as outlined in
section 710 and shall be made in amounts that the department
determines meets the goal of this section while prioritizing the
fiscal stability of the assistance fund.
(c) Eligibility.--The following shall apply:
(1) To be eligible to receive financial assistance under
this section, a community shall develop a mitigation plan
that describes the mitigation activities to be carried out
with assistance provided under this section.
(2) The mitigation plan under paragraph (1) shall be
consistent with:
(i) criteria as established by the department and
provide protection against coal and clay mine subsidence
and landslide losses to structures for which contracts
for flood insurance are available under this act; and
(ii) a comprehensive strategy for mitigation
activities for the area affected by the mitigation plan
that has been adopted by the community following a public
hearing.
(d) Procedure.--The department shall notify a community
submitting a mitigation plan of the approval or disapproval of
the plan no later than 120 days after submission of the plan. If
the department does not approve a mitigation plan submitted
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under this section, the department shall notify in writing the
community submitting the plan of the reasons for the
disapproval.
(e) Limitation.--Amounts provided under this section may be
used only for mitigation activities specified in a mitigation
plan approved by the department. The department may approve only
mitigation plans that specify mitigation activities that are
technically feasible, cost effective and cost beneficial.
(f) Approval.--The department shall approve funding for
mitigation plans based on criteria that include, but are not
limited to:
(1) Criteria under subsection (e).
(2) Proposed activities to address repetitive loss
structures and structures that have incurred substantial
damage.
(g) Matching funds.--The department may require a community
to match a grant received under this section.
(h) Oversight.--The department shall conduct oversight of
recipients of mitigation assistance to ensure that the
assistance is used in compliance with the approved mitigation
plans of the recipients and that any matching fund requirements
are fulfilled.
(i) Failure to comply.--If the department determines that a
community that has received mitigation assistance under this
section has not carried out the mitigation activities as
provided in the mitigation plan or has not secured required
matching funds, the department shall recapture any unexpended
amounts and redeposit the amounts in the assistance fund.
Section 710. Coal and Clay Mine Subsidence and Landslide
Assistance Fund.
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The Coal and Clay Mine Subsidence and Landslide Assistance
Fund is established as a fund in the State Treasury. The
assistance fund shall be administered by the department and
shall consist of money appropriated, transferred or otherwise
made available to the assistance fund for the purposes of this
chapter. All money in the assistance fund and any accrued
interest is appropriated to the department on a continuing basis
to carry out the provisions of section 709.
Section 711. Program funding.
The program shall be funded by the General Assembly through
an appropriation of money to the department until such time as
the insurance fund and assistance fund are deemed self-
sufficient by concurrent resolution adopted by the General
Assembly.
Section 712. Reimbursement.
The program shall reimburse any Commonwealth agency or
departments for agreed-upon costs of services that aid in
administering the program.
Section 713. Cost of administration.
The board shall keep an accurate account of money paid in
premiums by the subscribers and disbursements on account of
damages to structures. If, at the expiration of any year, there
is a balance remaining after deducting the disbursements, the
unearned premiums on undetermined risks and the percentage of
premiums paid or payable to create or maintain the surplus
provided under this act, and after setting aside an adequate
reserve, the board may determine to allocate the remaining money
to the cost of administering the insurance fund.
Section 714. Administration.
(a) Transfer of insurance fund.--Upon the effective date of
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this section, the department shall take immediate steps to
transition the Coal and Clay Mine Subsidence Insurance Fund to
the insurance fund.
(b) Administration of program.--The department shall begin
administering the program within two years of the effective date
of this section.
CHAPTER 9
MISCELLANEOUS PROVISIONS
Section 901. Repeals.
Repeals are as follows:
(1) The General Assembly declares that the repeal under
paragraph (2) is necessary to effectuate this act.
(2) The Anthracite and Bituminous Coal Mine Subsidence
Fund Act is repealed.
Section 902. Continuation.
Except as otherwise provided in this act, all activities
initiated under the Anthracite and Bituminous Coal Mine
Subsidence Fund Act shall continue and remain in full force and
effect and may be completed under this act. Orders, regulations,
rules and decisions which were made under the Anthracite and
Bituminous Coal Mine Subsidence Fund Act and which are in effect
on the effective date of this section shall remain in full force
and effect until revoked, vacated or modified under this act.
Contracts, obligations and collective bargaining agreements
entered into under the Anthracite and Bituminous Coal Mine
Subsidence Fund Act are not affected nor impaired by the repeal
of the Anthracite and Bituminous Coal Mine Subsidence Fund Act.
Section 903. Effective date.
This act shall take effect immediately.
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