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§ 30.56. Bonding

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 52 P.S. Mines and Mining

Purdon's Pennsylvania Statutes and Consolidated Statutes
Title 52 P.S. Mines and Mining (Refs & Annos)
Chapter 2. Coal Refuse Disposal Control Act (Refs & Annos)
52 P.S. § 30.56
§ 30.56. Bonding
(a) Prior to commencing coal refuse disposal operations, the operator shall file with the department a bond for the land to be affected by the coal refuse disposal area on a form to be prescribed and furnished by the department, payable to the Commonwealth and conditioned that the operator shall faithfully perform all of the requirements of this act, the act of May 31, 1945 (P.L. 1198, No. 418),1 known as the “Surface Mining Conservation and Reclamation Act,” the act of June 22, 1937 (P.L. 1987, No. 394),2 known as “The Clean Streams Law,” the act of January 8, 1960 (1959 P.L. 2119, No. 787),3 known as the “Air Pollution Control Act,” the act of November 26, 1978 (P.L. 1375, No. 325),4 known as the “Dam Safety and Encroachments Act,” and where applicable, the act of July 31, 1968 (P.L. 788, No. 241),5 known as the “Pennsylvania Solid Waste Management Act” or the act of July 7, 1980 (No. 97),6 known as the “Solid Waste Management Act”: Provided, however, That an operator posting a bond sufficient to comply with this section of the act shall not be required to post a separate bond for the permitted area under each of the acts hereinabove enumerated. The foregoing proviso shall not, however, prohibit the department from requiring additional bond amounts for the permitted area should such an increase be determined by the department to be necessary to meet the requirements of this act. The amount of the bond required shall be in an amount determined by the secretary based upon the total estimated cost to the Commonwealth of completing the approved reclamation plan, or in such other amount and form as may be established by the department pursuant to regulations for an alternate coal bonding program which shall achieve the objectives and purposes of the bonding program. Said estimate shall be based upon the operator's statement of his estimated cost of fulfilling the plan during the course of his operation, inspection of the application and other documents submitted, inspection of the land area, and such other criteria as may be relevant, including but not limited to the probable difficulty of reclamation giving consideration to such factors as topography, geology of the site, hydrology, and vegetation potential, the proposed land use and the additional cost to the Commonwealth which may be entailed by being required to bring personnel and equipment to the site after abandonment by the operator, in excess of the cost to the operator of performing the necessary work during the course of his surface mining operations. When the plan involves reconstruction or relocation of any public road or highway, the amount of the bond shall include an amount sufficient to fully build or restore the road or highway to a condition approved by the Department of Transportation. No bond shall be filed for less than ten thousand dollars ($10,000). Liability under such bond shall be for the duration of the operation, and for a period of five full years after the last year of augmented seeding and fertilizing and any other work to complete reclamation to meet the requirements of law and protect the environment unless released in part prior thereto as hereinafter provided. Such bond shall be executed by the operator and a surety licensed to do business in the Commonwealth and approved by the secretary: And, provided further, That the operator may elect to deposit cash, automatically renewable irrevocable bank letters of credit which may be terminated by the bank at the end of a term only upon the bank giving ninety days prior written notice to the permittee and the department, or negotiable bonds of the United States Government or the Commonwealth of Pennsylvania, the Pennsylvania Turnpike Commission, the General State Authority, the State Public School Building Authority, or any municipality within the Commonwealth, with the department in lieu of a corporate surety. The cash deposit, amount of letter of credit, or market value of such negotiable bonds shall be equal at least to the sum of the bond. The secretary shall, upon receipt of any such deposit of cash, letter of credit or negotiable securities, immediately place the same with the State Treasurer, whose duty it shall be to receive and hold the same in the name of the Commonwealth, in trust, for the purposes for which such deposit is made. The State Treasurer shall at all times be responsible for the custody and safekeeping of such deposits. The operator making the deposit shall be entitled from time to time to demand and receive from the State Treasurer, on the written order of the secretary, the whole or any portion of any collateral so deposited, upon depositing with him, in lieu thereof, other collateral of the classes specified having a market value at least equal to the sum of the bond, and also to demand, receive and recover the interest and income from said negotiable bonds as the same becomes due and payable: And, provided further, That where negotiable bonds as the same becomes due and mature or are called, the State Treasurer, at the request of the permittee, shall convert such negotiable bonds into such other negotiable bonds of the classes herein specified as may be designated by the permittee: And provided further, That where notice of intent to terminate a letter of credit is given, the department shall give the permittee thirty days written notice to replace the letter of credit with other acceptable bond guarantees as provided herein, and if the permittee fails to replace the letter of credit within the thirty-day notification period, the department shall draw upon and convert such letter of credit into cash and hold it as a collateral bond guarantee; or the department, in its discretion, may accept a self-bond from the permittee, without separate surety, if the permittee demonstrates to the satisfaction of the department a history of financial solvency, continuous business operation and continuous efforts to achieve compliance with all United States of America and Pennsylvania environmental laws, and, meets all of the following requirements:
(1) The permittee shall be incorporated or authorized to do business in Pennsylvania and shall designate an agent in Pennsylvania to receive service of suits, claims, demands or other legal process.
(2) The permittee or if the permittee does not issue separate audited financial statements, its parent, shall provide audited financial statements for at least its most recent three fiscal years prepared by a certified public accountant in accordance with generally accepted accounting principles. Upon request of the permittee, the department shall maintain the confidentiality of such financial statements if the same are not otherwise disclosed to other government agencies or the public.
(3) During the last thirty-six calendar months, the applicant has not defaulted in the payment of any dividend or sinking fund installment or preferred stock or installment on any indebtedness for borrowed money or payment of rentals under long-term leases or any reclamation fee payment currently due under the Federal Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. § 1232, for each ton of coal produced in the Commonwealth of Pennsylvania.
(4) The permittee shall have been in business and operating no less than ten years prior to filing of application unless the permittee's existence results from a reorganization, consolidation or merger involving a company with such longevity. However, the permittee shall be deemed to have met this requirement if it is a majority-owned subsidiary of a corporation which has such a ten-year business history.
(5) The permittee shall have a net worth of at least six times the aggregate amount of all bonds applied for by the operator under this section.
(6) The permittee shall give immediate notice to the department of any significant change in managing control of the company.
(7) A corporate office of the permittee shall certify to the department that forfeiture of the aggregate amounts of self-bonds furnished for all operations hereunder would not materially affect the permittee's ability to remain in business or endanger its cash flow to the extent it could not meet its current obligations.
(8) The permittee may be required by the department to pledge real and personal property to guarantee the permittee's self-bond. The department is authorized to acquire and dispose of such property in the event of a default to the bond obligation and may use the moneys in the Coal Refuse Disposal Control Fund to administer this provision.
(9) The permittee may be required to provide third party guarantees or indemnifications of its self-bond obligations.
(10) The permittee shall provide such other information regarding its financial solvency, continuous business operation and compliance with environmental laws as the department shall require.
(11) An applicant shall certify to the department its present intention to maintain its present corporate status for a period in excess of five years.
(12) A permittee shall annually update the certifications required hereunder and provide audited financial statements for each fiscal year during which it furnishes self-bonds.
(13) The permittee shall pay an annual fee in the amount determined by the department of the cost to review and verify the permittee's application for self-bonding and annual submissions thereafter. Where the coal refuse disposal operation is reasonably anticipated to continue for a period of at least ten years from the date of application, the permittee may elect to deposit collateral and file a collateral bond as provided in the following phased deposit schedule. The permittee shall, prior to commencing coal refuse disposal operations, deposit ten thousand dollars ($10,000) or twenty-five per cent of the amount determined under this subsection, whichever is greater. The operator shall, thereafter, annually deposit ten per cent of the remaining bond amount for a period of ten years. Interest accumulated by such collateral shall become a part of the bond. The department may require additional bonding at any time to meet the intent of this section. The collateral shall be deposited, in trust, with the State Treasurer as provided in this subsection, or with a bank, selected by the department, which shall act as trustee for the benefit of the Commonwealth, according to rules and regulations promulgated hereunder, to guarantee the operator's compliance with this act and the statutes hereinabove enumerated. The operator shall be required to pay all costs of the trust. The collateral deposit, or part thereof, shall be released of liability and returned to the operator, together with a proportional share of accumulated interest, upon the conditions of and pursuant to the schedule and criteria for release provided in subsection (c) of this section.
(b) If the operator abandons the operation or fails or refuses to comply with the requirements of the act in any respect for which liability has been charged on the bond, the secretary shall declare the bond forfeited, and shall certify the same to the Department of Justice, which shall proceed to enforce and collect the amount of liability forfeited thereon, and where the operator has deposited cash or securities as collateral in lieu of a corporate surety, the secretary shall declare said collateral forfeited, and shall direct the State Treasurer to pay said funds into the Coal Refuse Disposal Control Fund, or to proceed to sell said securities to the extent forfeited and pay the proceeds thereon into the Coal Refuse Disposal Control Fund. Should any corporate surety fail to promptly pay, in full, a forfeited bond, it shall be disqualified from writing any further surety bonds under this act. Any operator aggrieved by reason of forfeiting the bond or converting collateral, as herein provided, may appeal to the Environmental Hearing Board in the manner provided by law, and from the adjudication of said board he may further appeal as provided by Title 2 of the Pennsylvania Consolidated Statutes (relating to administrative law and procedure). For the purposes of this subsection the standards for determining whether a coal refuse disposal operation has been abandoned shall be as prescribed by rules and regulations promulgated hereunder.
(c) Subject to the public notice requirements of section 5(i) of this act,7 if the department is satisfied that the reclamation covered by the bond or portion thereof has been accomplished as required by this act, the department may release in whole or in part the bond or deposit according to the following schedule:
(1) when the operator has completed the grading, planting and drainage control of a bonded area in accordance with his approved reclamation plan, the release of sixty per cent of the bond for the applicable permit area;
(2) when the vegetation has been established on the affected area in accordance with the approved reclamation plan, the department shall retain the amount of bond for the vegetated area which would be sufficient for the cost of the Commonwealth of reestablishing vegetation. Such retention of bond shall be for the duration of liability under the bond as prescribed in subsection (a) of this section. No part of the bond shall be released under this subsection so long as the lands to which the release would be applicable are contributing suspended solids to streamflow or runoff outside the permit area in excess of the requirement of law. Where a permanent impoundment is to be retained, the portion of bond may be released under this paragraph so long as provisions for sound future maintenance by the operator or the landowner have been made with the department; and
(3) When the operator has completed successfully all coal refuse disposal and reclamation activities, the release of the remaining portion of the bond, but not before the expiration of the period specified for operator responsibility in subsection (a) of this section: Provided, however, That bond shall not be fully released until all requirements of the act are met. Upon release of all or part of the bond and collateral as herein provided, the State Treasurer shall immediately return to the operator the amount of cash or securities specified therein.

Credits

1968, Sept. 24, P.L. 1040, No. 318, § 6. Amended 1980, Oct. 10, P.L. 807, No. 154, § 3, imd. effective.

Footnotes

52 P.S. § 1396.1 et seq.
35 P.S. § 691.1 et seq.
35 P.S. § 4001 et seq.
32 P.S. § 693.1 et seq.
35 P.S. §§ 6001 to 6017 (repealed).
35 P.S. § 6018.101 et seq.
52 P.S. § 30.55(i).
52 P.S. § 30.56, PA ST 52 P.S. § 30.56
Current through Act 4 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
End of Document