PRINTER'S NO. 2396
No. 1940 Session of 1995
INTRODUCED BY S. H. SMITH, GEORGE, LYNCH, COLAIZZO, STEELMAN,
FARGO, LUCYK, SEMMEL, HUTCHINSON, HERMAN, WOZNIAK AND
JADLOWIEC, JUNE 29, 1995
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
JUNE 29, 1995
AN ACT
1 Amending the act of May 31, 1945 (P.L.1198, No.418), entitled,
2 as amended, "An act providing for the conservation and
3 improvement of land affected in connection with surface
4 mining; regulating such mining; providing for the
5 establishment of an Emergency Bond Fund for anthracite deep
6 mine operators; and providing penalties," further providing
7 for payment in lieu of bond and for reclamation bond credits.
8 The General Assembly of the Commonwealth of Pennsylvania
9 hereby enacts as follows:
10 Section 1. Sections 4.12 and 4.13 of the act of May 31, 1945
11 (P.L.1198, No.418), known as the Surface Mining Conservation and
12 Reclamation Act, added December 18, 1992 (P.L.1384, No.173), are
13 amended to read:
14 Section 4.12. [Payment in Lieu of Bond.--(a) The
15 Environmental Quality Board shall publish proposed regulations
16 within one hundred eighty (180) days of the effective date of
17 this act which shall constitute an interim program allowing
18 certain mine operators proposing to remine abandoned mine lands
19 to be eligible to make payments to the department in lieu of the
1 bond required by this act. The department shall review operator
2 requests to participate in the program on a case-by-case basis
3 and shall allow operator participation in the payment-in-lieu-
4 of-bond program only when the payment-in-lieu-of-bond special
5 account in the Remining Environmental Enhancement Fund is equal
6 to or exceeds the total reclamation obligation of the
7 Commonwealth which would be incurred under the payment-in-lieu-
8 of-bond program if all participants failed to complete their
9 reclamation obligations.] Financial Guarantees to Insure
10 Reclamation; Payments to the Remining Financial Assurance
11 Fund.--(a) The department is authorized under this section to
12 establish programs to provide financial guarantees for qualified
13 operators who reclaim abandoned mine lands through remining and
14 to assess and collect payments from qualified operators who
15 choose to purchase such financial guarantees. The financial
16 guarantees are to be supported by a special account in the
17 Remining Financial Assurance Fund. The department shall
18 determine the total amount of financial guarantees that can be
19 supported by the special account based on loss reserves
20 established by the application of the historical rate of mine
21 operator bond forfeitures plus a reasonable margin of safety.
22 The department shall establish underwriting methods which are in
23 keeping with the intent of this section. In promulgating
24 proposed and final regulations, the Environmental Quality Board
25 shall consider various factors, including, but not limited to,
26 site eligibility, such as environmental hazards, safety hazards
27 and the availability of coal reserves and operator eligibility,
28 such as financial tests and criteria for participation in the
29 program, including an operator's operating ratio, long-term
30 financial stability, denial of coverage by surety bond
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1 companies, financial ratio, compliance history, length of time
2 in business and any other factors indicative of an operator's
3 ability to complete reclamation and payments into the fund under
4 the program. Payments into the fund shall be equal to at least
5 fifty dollars ($50) per acre per year in the interim program and
6 may be modified by final regulations promulgated by the
7 Environmental Quality Board in order to assure the financial
8 stability of the [payment-in-lieu-of-bond] financial guarantees
9 program and to provide adequate funds in case of forfeiture but
10 will require no collateralization.
11 (b) Premium payments will be deposited into the Remining
12 Environmental Enhancement Fund and will be reserved in a special
13 account to be used in case of operator forfeiture. When the
14 special account becomes actuarially sound, excess payments may
15 be used pursuant to section 18(a.1) and (a.2).
16 (c) Payments under this subsection shall excuse the operator
17 from the requirement to post a bond under this act with respect
18 to the remining permit for which payment is made.
19 (d) The [payment-in-lieu-of-bond] financial guarantees
20 program may be discontinued immediately and notice published in
21 the Pennsylvania Bulletin if twenty-five per cent or greater of
22 the outstanding bond obligation for the [payment-in-lieu-of-
23 bond] financial guarantees program is subject to forfeiture. The
24 special account established in the Remining Environmental
25 Enhancement Fund for the [payment-in-lieu-of-bond] financial
26 guarantees program shall be the sole source of funds
27 underwriting the [payment-in-lieu-of-bond] financial guarantees
28 program, and the Commonwealth shall not be obligated to expend
29 any funds beyond the amount of the special account.
30 Section 4.13. Reclamation Bond Credits.--(a) A bond credit,
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1 financially backed by a special account for that purpose
2 established in section 18(a.2), in the form of a bond letter,
3 may be issued by the department to a licensed mine operator for
4 voluntary reclamation of abandoned mine lands as approved by the
5 department. The department shall in determining whether or not
6 to issue a bond credit:
7 (1) Where a coal mining activity permit is not required,
8 require a licensed mine operator to submit a proposal to the
9 department to reclaim a specific area, together with the
10 estimated cost of the reclamation based on current bonding
11 rates.
12 (2) Review the proposal and find in writing that the
13 operator's estimated cost of reclamation is accurate and that
14 the proposed location of the project is acceptable to the
15 department.
16 (3) Not issue any bond credits to an operator if any one or
17 more of the following apply:
18 (i) the operator has not fully completed reclamation of the
19 site to the standards set forth in the approved reclamation plan
20 for the site;
21 (ii) the operator, any related party or any person who is
22 directed or controlled by the operator or directs or controls
23 the operator bears any reclamation responsibility under Federal
24 or State law for an area proposed to be reclaimed, including,
25 but not limited to, obligations pursuant to a mining permit,
26 reclamation pursuant to section 18 or reclamation pursuant to
27 any contract with the department, including abandoned mine land
28 reclamation contracts; or
29 (iii) any other requirement of this section has not been
30 met.
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1 (b) An operator may apply bond credits which have been
2 issued to him by the department against any reclamation bond
3 obligation selected by the operator on unmined or previously
4 mined areas except as specified in this section.
5 (c) The department may approve utilization of a bond credit
6 in combination with conventional collateral or surety
7 agreements.
8 (d) The department may require as a condition of granting
9 the bond credit that the operator post a contract performance
10 bond to insure that the operator completes the reclamation
11 proposed to result in the bond credit. The performance bond is
12 to be at least in an amount necessary to ensure reclamation of
13 those areas proposed to be reclaimed and shall be released by
14 the department upon completion of the work described in the
15 approved reclamation plan.
16 (e) Bond credits are [not] transferable[.] to another
17 qualified operator approved by the department.
18 (f) The special account established in the Remining
19 Financial Assurance Fund for the bond credit program shall be
20 the sole source of funds underwriting the bond credit program,
21 and the Commonwealth shall not be obligated to expend any funds
22 beyond the amount of the special account.
23 (g) Bond credits earned by a qualified operator may be used
24 on a single permit or on multiple permits, whichever the
25 operator chooses. A bond credit may be used two times; however,
26 the bond credit cannot be used a second time until the
27 department releases the bond credit from its first use. Any bond
28 credit that is not used within five years from the date that it
29 is earned or released will expire, including bond credits that
30 have been transferred.
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1 Section 2. This act shall take effect in 60 days.
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