(b)(1) The department shall assess and collect premiums for land reclamation financial guarantees from qualified operators who choose to obtain such guarantees. The amount of the premium, to be determined by the department and established by regulation, shall be sufficient to assure the financial stability of the land reclamation financial guarantee program and to cover the department's costs to administer the program.

(2) A special account is established in the Surface Mining Conservation and Reclamation Fund to be known as the Land Reclamation Financial Guarantee Account. The account shall be used to support land reclamation financial guarantees. Premium payments shall be deposited into the account and to pay the cost of reclamation in the event of operator forfeiture.

(4) The department may transfer up to five hundred thousand dollars ($500,000) of the funds appropriated for the sum-certain financial guarantees authorized pursuant to section 213 of the “General Appropriation Act of 2001,” into the Remining Financial Assurance Fund for use in supporting remining financial guarantees issued by the department pursuant to section 4.12 of this act.²

(5) The department may transfer interest earned on the funds in the Land Reclamation Financial Guarantee Account into the Reclamation Fee O&M Trust Account established pursuant to 25 Pa. Code §§ 86.17 (relating to permit and reclamation fees) and 86.187 (relating to use of money) to be used to supplement the funding of the Reclamation Fee O&M Trust Account.

(6) Consistent with the requirement in this section to assure the financial stability of the land reclamation financial guarantee program, premiums collected and deposited in the Land Reclamation Financial Guarantee Account may be transferred by the department into the Reclamation Fee O&M Trust Account established pursuant to 25 Pa. Code §§ 86.17 and 86.187 to be used to supplement the funding of the Reclamation Fee O&M Trust Account.

(7) Beginning in fiscal year 2013-2014, up to two million dollars ($2,000,000) collected from the gross receipts tax on sales of electric energy in Pennsylvania authorized by Article XI of the act of March 4, 1971 (P.L. 6, No. 2),³ known as the “Tax Reform Code of 1971,” may be appropriated annually by the General Assembly to the department for transfer to the Reclamation Fee O&M Trust Account established pursuant to 25 Pa. Code §§ 86.17 and 86.187 to be used to supplement the funding of the Reclamation Fee O&M Trust Account. The authority to transfer funds under this clause expires June 30, 2039.

(1) The environmental and safety hazards of the site for which a guarantee is proposed.

(2) The availability of coal reserves at the site.

(3) The operator's long-term financial stability.

(4) The operator's prior denial of coverage, if any, by surety bond companies.

(5) The operator's length of time in business and compliance history.

(6) Any other factor the department considers indicative of an operator's ability to complete reclamation and pay required premiums under the program.

(d)(1) The department shall determine the total amount of financial guarantees that can be supported by the Land Reclamation Financial Guarantee Account based on loss reserves established by the application of the historical rate of mine operator bond forfeitures, plus a reasonable margin of safety to protect the account from the risk of forfeiture.

(2) The department shall establish, by regulation, underwriting methods adequate to insure the account against the risk of forfeiture of the guarantees.

(e)(1) The land reclamation financial guarantee program established by this section may be discontinued immediately upon publication of notice in the Pennsylvania Bulletin if twenty-five per cent or greater of the outstanding bond obligation for the land reclamation financial guarantees program is subject to forfeiture.

(2) The Land Reclamation Financial Guarantee Account shall be the sole source of funds underwriting the land reclamation financial guarantees program and the Commonwealth shall not be obligated to expend any funds beyond the amount in the Land Reclamation Financial Guarantee Account.