(a) General rule.--After a surface mining permit has been approved, but before the permit is issued, the applicant shall file, with the department, a bond for the land affected by each operation, on a form to be prescribed and furnished by the department, payable to the Commonwealth and conditioned that the permittee shall faithfully perform all of the requirements of this act and of the act of June 22, 1937 (P.L. 1987, No. 394), known as The Clean Streams Law;¹ the act of January 8, 1960 (1959 P.L. 2119, No. 787), known as the Air Pollution Control Act;² and, where applicable, the act of September 24, 1968 (P.L. 1040, No. 318), known as the Coal Refuse Disposal Control Act;³ the act of November 26, 1978 (P.L. 1375, No. 325), known as the Dam Safety and Encroachments Act;⁴ the act of July 31, 1968 (P.L. 788, No. 241), known as the Pennsylvania Solid Waste Management Act,⁵ or the act of July 7, 1980 (P.L. 380, No. 97), known as the Solid Waste Management Act;⁶ and the act of May 31, 1945 (P.L. 1198, No. 418), known as the Surface Mining Conservation and Reclamation Act.⁷

(b) Separate bonds not required.--An operator posting a bond sufficient to comply with this section shall not be required to post a separate bond for the permitted area under each of the acts enumerated in subsection (a). This subsection shall not 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.

(c) Amount of bond.--The amount of the bond required shall be in an amount determined by the department 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 under regulations for an alternate bonding program that shall achieve the objectives and purposes of the bonding program. The estimate shall be based upon the permittee'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, 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 permittee in excess of the cost to the permittee of performing the necessary work during the course of his surface mining operations. No bond shall be filed for less than $5,000 for the entire permit area. When the plan involves the reconstruction or relocation of any public road or highway and when the Department of Transportation has required a bond sufficient to fully build or restore the road or highway to a condition approved by that department, no additional bond for building or restoring the road or highway shall be required under this act.

(d) Duration of liability under bond.--Liability under the bond shall be for the duration of the surface mining at each operation and for a period of five 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 whole or in part prior thereto as provided in this act.

(e) Bond requirements; alternatives.--The bond shall be executed by the operator and a corporate surety licensed to do business in this Commonwealth and approved by the secretary. The permittee may elect to deposit with the department, in lieu of a corporate surety, 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 90 days prior written notice to the permittee and the department, or negotiable bonds of the Federal Government or of the Commonwealth, the Pennsylvania Turnpike Commission, the General State Authority, the State Public School Building Authority or any municipality within this Commonwealth. The cash deposit amount of the irrevocable letter of credit or market value of the securities shall be equal at least to the sum of the bond. Upon receipt of any such deposit of cash, letters of credit or negotiable bonds, the secretary shall immediately place the same with the State Treasurer, whose duty shall be to receive and hold the deposit in the name of the Commonwealth, in trust, for the purposes for which the deposit is made. The State Treasurer shall at all times be responsible for the custody and safekeeping of the deposits.

(f) Substitution for bond or other collateral.--The permittee 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 the State Treasurer, in lieu thereof, other collateral of the classes specified in this section having a market value at least equal to the sum of the bond or, to substitute a bond for the cash, automatically renewable irrevocable bank letters of credit or negotiable bonds and also to demand, receive and recover the interest and income from the negotiable bonds as it becomes due and payable. Where negotiable bonds, deposited as provided in this section, mature or are called, the State Treasurer, at the request of the permittee, shall convert the negotiable bonds into other negotiable bonds of the classes specified in this section as may be designated by the permittee. Where notice of intent to terminate a letter of credit is given, the department shall give the permittee 30 days' written notice to replace the letter of credit with other acceptable bond guarantees as provided in this section and, if the permittee fails to replace the letter of credit within the 30-day notification period, the department shall draw upon and convert the letter of credit into cash and hold it as a collateral bond guarantee.

(g) Self-bond may be accepted.--The department may accept a self-bond from the permittee, without separate surety, if the permittee demonstrates, to the satisfaction of the Insurance Department, a history of financial solvency, continuous business operation and continuous efforts to achieve compliance with all Federal and Pennsylvania environmental laws and Pennsylvania insurance laws, complies with other requirements as the Insurance Department may reasonably require by regulation and meets all of the following requirements:

(j) Release.--Subject to the public notice requirements in section 10,¹⁰ if the department is satisfied that the reclamation recovered by the bond portion thereof has been accomplished as required by this act, it may, upon request by the permittee, release, in whole or in part, the bond according to the reclamation schedule and criteria for release of bonds set forth in regulations promulgated hereunder. No bond shall be fully released until all requirements of this act are fully 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.