[38 Pa.B. 4742]
[Saturday, August 30, 2008]
[Continued from previous Web Page] § 86.187(a)(2)(iii), (A)--(C). (restrictions on ABS Legacy Sites Trust Account)
Section 86.187(a)(2)(iii) prohibits the Department from making any disbursements from the ABS Legacy Sites Trust Account until the account becomes actuarially sound. The conditions which must be met for the ABS Legacy Sites Trust Account to become actuarially sound are prescribed in this paragraph. Three conditions must be met before the ABS Legacy Sites Trust Account will be actuarially sound. First, financial guarantees sufficient to cover all reclamation costs must have been approved by the Department for all mine sites permitted under the primacy ABS. At the time of conversion to the CBS there were some surface coal mining sites, permitted under the primacy ABS, that were not being actively mined but had postmining pollutional discharges and the operators were continuing to treat the discharges. The bonds for these sites were not sufficient to cover the costs to perpetually treat the discharges. These sites remain part of the ABS legacy until the costs to treat the discharges in perpetuity are covered by fully-funded financial guarantees, at which time they will be full cost bonded under the conventional bonding system. The Department has been working to obtain fully-funded financial guarantees for these ABS-permitted discharge sites, but some of these continue to be underfunded. The operator may ultimately default on its obligation at some of these underfunded sites and such defaulted sites would become part of the class of ABS Legacy Sites for which the Department must assure long-term funding for discharge treatment. When financial guarantees sufficient to cover reclamation costs have been approved for all mine sites permitted under the primacy ABS, no additional sites will need to be added to the class of ABS Legacy Sites. Second, the Department must have completed construction of all necessary discharge treatment systems for all of the ABS Legacy Sites. Once the entire class of ABS Legacy Sites is known, and all necessary discharge treatment systems have been constructed for these sites, the Department will be able to ascertain the amount of annual operation and maintenance costs, including recapitalization costs, which will be necessary to treat all the discharges at all of the ABS Legacy Sites. Once this figure is known, the third condition precedent may be satisfied, that is, the ABS Legacy Sites Trust Account must contain funds which generate interest at a rate and amount sufficient to pay the annual operation and maintenance costs for treating all postmining pollutional discharges at all the ABS Legacy Sites. When the ABS Legacy Sites Trust Account becomes actuarially sound, the Department will always have sufficient funds on hand in the ABS Legacy Sites Trust Account to cover the costs of treating the discharges at all the ABS Legacy Sites, and the Commonwealth's bonding program will meet the requirements of 30 CFR 800.11(e) without the need for any revenue from the reclamation fee or the other revenue sources dedicated to the Reclamation Fee O&M Trust Account.
§ 86.187(a)(2)(iv). (transfer of remaining funds in Reclamation Fee O&M Trust Account to ABS Legacy Sites Trust Account)
Section 86.187(a)(2)(iv) provides for termination of the Reclamation Fee O&M Trust Account when the ABS Legacy Sites Trust Account becomes actuarially sound. This provision authorizes the Department to transfer the remaining funds in the Reclamation Fee O&M Trust Account into the ABS Legacy Sites Trust Account when that account, combined with the Reclamation Fee O&M Trust Account, contains sufficient funds to pay the annual operation and maintenance costs for the ABS Legacy Site discharges. At that point, the Reclamation Fee O&M Trust Account will no longer be necessary and will terminate. In addition, the reclamation fee (or an alternative permanent funding source established in lieu of the reclamation fee) will no longer be needed and will cease to be collected, and the deposit of civil penalty moneys into the Reclamation Fee O&M Trust Account under § 86.186(a)(1)(i) will also cease.
§ 86.283(c). (exception to paying reclamation fees for remining areas)
The proposed rulemaking would have deleted this subsection which provides an exception to requirement to the pay per-acre reclamation fees in § 86.17(e) for remining areas for mine operators approved to participate in the remining financial guarantees program. This change was proposed for consistency with the change proposed in § 86.17(e). The final-form rulemaking will retain this subsection in its current form, given that the Department has determined in response to public comments and the ruling of the Court in Kempthorne that the reclamation fee in § 86.17(e) should be retained. The exception for remining areas provided by this subsection is an incentive to remining in this Commonwealth which the Department believes should be continued.
F. Summary of Comments and Responses on the Proposed Rulemaking
The Board approved publication of the proposed amendments at its meeting on May 17, 2006. The proposed amendments were published at 36 Pa.B. 4200. Public comments were accepted from August 5, 2006, to September 5, 2006.
One organization, Citizens for Pennsylvania's Future, acting on behalf of a group of six organizations (including itself), submitted timely comments in response to the proposed rulemaking. The group of commentators included the Pennsylvania Federation of Sportsmen's Clubs, Inc., Pennsylvania Chapter Sierra Club, Pennsylvania Trout, Inc., Tri-State Citizens Mining Network, Inc., Mountain Watershed Association, Inc. and Citizens for Pennsylvania's Future. The Independent Regulatory Review Commission (IRRC) did not submit comments in regard to the proposed rulemaking.
The following is a summary of the comments received during the public comment period, organized according to subject matter.
1) Commentators Submitted Arguments They Presented to the United States Court of Appeals for the Third Circuit in Related Litigation as Comments on the Proposed Rulemaking.
(C) Of the group of six organizations that submitted comments, five are plaintiffs in a Federal lawsuit currently pending before the United States District Court for the Middle District of Pennsylvania called Pennsylvania Federation of Sportsmen's Clubs, Inc. et al. v. Kemp- thorne, et al., (No. 03-cv-0220) and a related case in the same court called Pennsylvania Federation of Sportsmen's Clubs, Inc. et al. v. McGinty, et al., (No. 99-cv-1791). The Kempthorne (previously called Norton) case names the Department of the Interior and OSM as defendants; the Department intervened as a defendant in this litigation. See Pennsylvania Federation of Sportsmen's Clubs, Inc. et al. v. Norton, et al., 413 F. Supp. 2d 358 (M.D. Pa. 2006). The United States District Court in Norton granted the joint motion of the Federal defendants and the Department requesting dismissal of the case, and the commentators appealed the decision to the United States Court of Appeals for the Third Circuit.
Commentators argued in the litigation that it was a violation of section 509 of FSMCRA (30 U.S.C.A. § 1259), and the regulations implementing FSMCRA issued by OSM, specifically 30 CFR 800.11(e)(1), for the Department to terminate its ABS when it converted to a CBS in 2001. Commentators also argued that, even if the ABS was lawfully terminated in 2001, the primacy ABS forfeited sites plus any additional sites whose reclamation costs are not fully covered by CBS bonds, remain subject to the requirements of 30 CFR 800.11(e)(1). As such, the commentators argued that the Commonwealth remains obligated to provide for the complete reclamation and treatment of the ABS Legacy Sites and their pollutional discharges by assuring the Department has available sufficient money to complete reclamation for these sites at any time. These commentators submitted the arguments in their brief filed with the Court of Appeals as comments on the proposed deletion of § 86.17(e).
(R) The Third Circuit decided commentators/appellants' appeal and issued an opinion on August 7, 2007 in which the Court reversed, in part, the district court and remanded the case for further proceedings in accordance with the appellate decision. See Pennsylvania Federation of Sportsmen's Clubs, Inc. v. Kempthorne, 497 F.3d 337 (3d Cir. 2007). The Third Circuit reached two essential conclusions. First, the appellate court agreed with the district court that the Commonwealth terminated its ABS in August 2001 and effectively converted to a CBS at that time, and that OSM did not abuse its discretion in approving that conversion. Kempthorne, 497 F.3d at 349. Second, the Third Circuit concluded that 30 CFR 800.11(e) continues to apply to the ABS Legacy Sites and ''that § 800.11(e) requires that Pennsylvania fulfill the obligations it voluntarily assumed to ensure that these sites are fully reclaimed.'' Kempthorne, 497 F.3d at 353. To meet the requirements of Federal law, the Commonwealth must assure (through a legally enforceable mechanism) that it will have sufficient money available at any time to complete the reclamation of all the ABS Legacy Sites, including the treatment of any postmining pollutional discharges at these sites.
The Department determined that the reclamation fee is an adjustable source of revenue that should be used to cover the costs of treating discharges at the ABS Legacy Sites and consequently decided not to delete the reclamation fee in § 86.17(e) as proposed. The final rulemaking restructures the reclamation fee as part of the Department's compliance with the mandate of the Third Circuit ruling and the requirements of 30 CFR 800.11(e). Further amendments to §§ 86.17(e) and 86.187 were made in the final rulemaking in response to these comments and the ruling of the Court in Kempthorne; these regulatory amendments will require the Department to dedicate certain identified funding sources to help pay the reclamation costs for ABS Legacy Sites. The final-form rulemaking will also establish a procedure for adjusting the reclamation fee amount. As a result of the amendments, this final rulemaking will establish an enforceable regulatory mechanism to address the remnants of the primacy ABS in a manner that meets the requirements of 30 CFR 800.11(e), the Third Circuit's application of the law to the Commonwealth's bonding program, and the OSM program amendment at issue in the litigation.
2) Eliminating the Reclamation Fee Required by 25 Pa. Code § 86.17(e) would Violate Federal Law.
(C) Commentators asserted that eliminating the per-acre reclamation fee in § 86.17(e) would violate Federal law because the fee is a necessary component of an active ABS in this Commonwealth and the Commonwealth must maintain an active ABS concurrently with the CBS until every site bonded under the ABS that remains permitted has completely converted to a CBS by posting reclamation guarantees covering the full cost of the remaining reclamation, including perpetual mine drainage treatment.
(R) The Department disagrees with commentators' broad assertion that the proposed deletion of § 86.17(e) would necessarily have violated Federal law. There is no specific requirement in Federal law for the Commonwealth to impose a per-acre reclamation fee for surface coal mining activities conducted in the Commonwealth. To maintain its jurisdiction over regulation of coal surface mining activities, the Commonwealth must maintain a State program in accordance with the requirements of FSMCRA. See 30 U.S.C.A. § 1253. State laws may not be inconsistent with the provisions of FSMCRA (30 U.S.C.A. § 1255(a)), and, in general, a State program must be at least as effective as the requirements in FSMCRA. See 30 U.S.C.A. § 1255. There is no specific provision in FSMCRA regarding imposition of a per-acre reclamation fee like that imposed by § 86.17(e). FSMCRA states a general requirement that before a coal mining permit is issued an operator must post a performance bond sufficient to assure completion of the reclamation plan if the work had to be performed by the regulatory authority. See 30 U.S.C.A. § 1259(a). Section 509 of FSMCRA also allows OSM to approve as part of a State program an ''alternative bonding system that will achieve the objectives and purposes of the bonding program pursuant'' to section 509 of FSMCRA. See 30 U.S.C.A. § 1259(c). The precise details of an acceptable ABS are not specified by Federal law; thus, a State's ABS is not specifically required by Federal law to include a per-acre reclamation fee of the type found in § 86.17(e), and it would not have been a violation of Federal law to eliminate the per-acre reclamation fee.
The Department also disagrees with commentators' assertion that the Commonwealth must maintain an active ABS concurrently with the CBS implemented in 2001. This question was resolved by the Third Circuit in Kempthorne when it decided that the Commonwealth terminated its active ABS in August 2001.
3) Discontinuing Collection of the 25 Pa. Code § 86.17(e) Reclamation Fee would be Unwise
(C) Commentators suggested that it would be unwise to discontinue collection of the per-acre reclamation fee imposed by § 86.17(e) because the revenue from the reclamation fee could be used to supplement the CBS. The revenue could be particularly helpful for any actively-mined permitted sites with long-term mine drainage treatment or substantial land-reclamation liabilities that are currently under-bonded, in the event that the sites are ultimately abandoned and the bonds forfeited.
(R) The Department disagrees with commentators that the reclamation fee should be used to supplement the CBS. The CBS internalizes the costs of mining and reclamation first and foremost on a site-by-site/operator-by-operator basis. The most equitable manner of implementing the CBS is to assure that the conventional bond for each individual permitted site will cover the cost for the Department to complete the site reclamation plan, including treatment of all postmining discharges in perpetuity. The Department has actively pursued this goal by undertaking frequent and continuous study of its methods for calculating conventional bonds. A refinement of Technical Guidance Document No. 563-2504-001, Conventional Bonding for Land Reclamation--Coal, was recently completed with input from the MRAB. See 36 Pa.B. 7178 (November 25, 2006).
(C) Commentators suggest that the Department should enhance the revenues which could be used to reclaim sites that were forfeited during administration of the ABS but have not been fully reclaimed because the sites have untreated postmining discharges. Referring to the list of 63 ABS primacy bond forfeiture sites with 99 long-term discharges found in the Department's 2003 Program Enhancements Document, commentators contend that maintaining the 25 Pa. Code § 86.17(e) reclamation fee could yield several hundred thousand dollars which could help pay the costs of long-term treatment facilities at the ABS bond forfeiture discharge sites. They further contend that the cost-benefit analysis included with the proposed rulemaking failed to account for the benefits to the Commonwealth and the public that would be lost by eliminating the reclamation fee.
(R) The Department agrees that revenues used for reclaiming the ABS Legacy Sites should be enhanced. The final rulemaking will greatly enhance the revenues available for reclaiming sites forfeited during administration of the primacy ABS that were not fully reclaimed because the sites have untreated postmining discharges. The provisions added to the final rulemaking are designed to ensure that the Department meets the requirements of 30 CFR 800.11(e), as applied by the Third Circuit and subject to OSM's oversight and enforcement.
The fee will be maintained at its current level of $100 per acre of operational area until December 31, 2009, and will then be annually adjusted as necessary to assure that the Department continually has sufficient funds to cover the operation and maintenance costs for treating discharges at all ABS Legacy Sites. The final-form rulemaking will also require, by enforceable regulation, that any interest earned by the reclamation fee moneys be used to pay operation and maintenance costs associated with treating discharges at ABS Legacy Sites.
4) The Department Has Improperly Applied the Reclamation Fee Regulation After Conversion to the CBS.
(C) Commentators contended that the Department drastically cut the amount of revenue generated by the $100 per-acre reclamation fee following conversion to the CBS because the Department unlawfully applied the reclamation fee only to the operational area of sites permitted under the CBS. They further contend that if the Department applied the reclamation fee to the entire permitted acreage of CBS permitted surface coal mine sites, the Department could be collecting $600,000 to $800,000 per year in reclamation fees imposed by 25 Pa. Code § 86.17(e).
(R) The Department disagrees with commentators' argument that the Department's application of § 86.17(e) in the context of the CBS is unlawful. Upon implementation of the CBS in late 2001, a question the Department encountered was how to apply § 86.17(e) to permits issued under the CBS. The text of § 86.17(e) provides no indication of how to apply the per-acre reclamation fee to permits issued under the CBS. Exercising its discretion in applying its own regulations, the Department decided that a reasonable method of applying the reclamation fee requirement to surface coal mine permits issued under the CBS was to impose the fee solely for the acreage of the operational area. The Department's application of § 86.17(e) in the context of the CBS is neither plainly erroneous nor unreasonable, and therefore is not unlawful. However, in order to squarely address the issue, the final rulemaking will amend the text of § 86.17(e) to expressly provide that the reclamation fee will be applied to the operational area. The final rulemaking will also include a definition for ''operational area'' in § 86.1 as further clarification.
With respect to the potential revenue that could be generated from the $100 per-acre reclamation fee, in fiscal year 2001-02, (the last year the reclamation fee was collected for all acreage permitted in surface mining permits), the Department collected $529,813. Following conversion to the CBS, and application of the reclamation fee solely to the operational area of permitted surface mining sites, the Department collected $148,936 in Fiscal Year 2002-03; $221,620 in Fiscal Year 2004-05; and $201,467 in Fiscal Year 2005-06. If the reclamation fee had been collected for all surface coal mine acreage permitted, the average yield would have been approximately $600,000 annually for the past 5 years.
5) The Department Should Retain the Reclamation Fee and Impose a Per-Ton Severance Fee Funding Mechanism for ABS Discharge Sites.
(C) Commentators assert that the Department has broad authority under PASMCRA to establish other revenue-generating mechanisms in addition to the per-acre reclamation fee, such as a fee for each ton of coal severed in the State. They recommend that the Department expand the ABS, concurrent with operation of the CBS, by retaining the reclamation fee in § 86.17(e) and by proposing a regulation that would impose a per-ton severance fee funding mechanism for treating discharges on ABS forfeiture sites. Commentators point to West Virginia as an illustrative example because West Virginia generated significant revenue for its ABS--approximately $94 million since January 2002 according to commentators--from a Special Reclamation Tax assessed on each ton of coal extracted in the State.
(R) The Department terminated the ABS and there is no need to continue to operate an ABS concurrently with the CBS that has been implemented in this Commonwealth. The question is how to address the remnants of this Commonwealth's ABS, such as, the ABS Legacy Sites. The Department considered whether a per-ton fee should be imposed as a funding mechanism for addressing mine discharges in this Commonwealth, and this option was discussed in public meetings with the MRAB in response to comments received on the proposed rulemaking. The Department has determined that the funding source structure established by the final rulemaking will enable the Department to meet the requirements of Federal law through an enforceable regulatory mechanism, as required by the Third Circuit ruling in Kempthorne and the program amendment issued by OSM concerning the Commonwealth's ABS.
6) Challenges to the Stated Rationale for Repeal of 25 Pa. Code § 86.17(e).
(C) Commentators challenged the rationales for eliminating the reclamation fee stated in the proposed rulemaking's preamble. They first challenge the Department's ''commitment'' to industry that, following conversion of actively-mined permitted surface coal mine sites to the CBS, the reclamation fee would be proposed for elimination. Commentators asserted that any ''commitment'' made by the Department to eliminate the reclamation fee is not legally binding on the Board.
(R) The Department agrees that the Board is not bound by any commitment the Department may make with respect to proposed rulemaking. Under the law, the Board is a separate legal entity from the Department, and the Board decides whether to promulgate regulations the Department has proposed.
The Department's ''commitment'' to propose the elimination of the reclamation fee was made in the overall context of the conversion from the ABS to the CBS--an enormous administrative undertaking. Financial analyses of the ABS found the system was in deficit and would inevitably fail. Because of the substantial costs for operators to convert to conventional bonds, an overnight conversion to a conventional bonding system would only have exacerbated the inadequate funding problems of the ABS. The Department's purpose in converting to the CBS was to find solutions to the problem of unreclaimed ABS surface coal mine sites--without bankrupting industry and thereby making this Commonwealth's mine reclamation problems worse.
Consequently, the conversion to a CBS required a complex approach by the Department in coordination with the Legislature and the mining industry. The main components of the approach included: (1) a comprehensive analysis by the Department of the existing ABS deficit for land reclamation; (2) appropriation of $5.5 million by the Legislature to cover that land reclamation deficit; (3) Department development of a conversion assistance financial guarantee program by which the Department effectively operates as a surety and provides part of the bonding for sites converted to conventional bonding, thus easing the transition for active operators to the CBS and thereby preventing bankruptcies or abandonment, or both, of sites; (4) appropriation of $7 million by the General Assembly to underwrite the conversion assistance financial guarantee program; (5) development of a detailed conventional bonding guidance document that set forth the mechanics of the conventional bonding process; (6) implementation of conventional bonding for all ABS actively-mined permitted surface coal mine sites; (7) development of a workable plan to address all postmining pollutional discharges on the ABS forfeiture sites--resulting in the Program Enhancement Document and the Discharge Abatement Workplan; (8) termination of the ABS; (9) a ''commitment'' to propose the elimination of the reclamation fee once the conversion of all actively-mined permitted surface coal mining sites to the CBS was completed; and (10) implementation of conventional bonding for under bonded sites that have a postmining pollutional discharge.
(C) Commentators asserted that the conversion to a CBS is not complete unless every ABS site permitted as of August 2001 has replaced its ABS bond coverage with financial guarantees covering the full cost of reclamation, including perpetual treatment of any postmining discharges. They contended that this condition has not been met and therefore the reclamation fee imposed by § 86.17(e) should not be eliminated.
(R) The Department disagrees with commentators' assertion that conversion to the CBS is not complete until every single site permitted as of August 2001, including sites with no active mining, have posted fully-funded financial guarantees. The ABS was discontinued and terminated in 2001 and the process of converting surface coal mining permits was undertaken. By 2002, all permitted surface coal mining sites actively mining coal were converted to the CBS through the posting of full-cost reclamation bonds. All new surface coal mining permits issued after August 2001 are part of the CBS and have posted conventional full-cost reclamation bonds. The Department has operated only a CBS--not a dual system of CBS and ABS--for surface coal mine sites since 2001, and the Third Circuit in Kempthorne agreed that the Department terminated the ABS in 2001.
7) Impact of Outstanding Litigation on the Proposed Rulemaking.
(C) Commentators contended that the reclamation fee in 25 Pa. Code § 86.17(e) should not be eliminated until after the United States Court of Appeals for the Third Circuit issues its decision in the PSFC v. Kempthorne case because the adequacy of funding of this Commonwealth's ABS is the main issue in that appeal.
(R) The Third Circuit rendered its decision in the Kempthorne case before the Department sought approval of the Board of the final-form rulemaking. The proposed elimination of the reclamation fee generated significant public comment. In response to comments raised, the recommendation of the MRAB, and the Third Circuit ruling in Kempthorne, the Department determined that the reclamation fee remains an adjustable funding source which should be used for the operation and maintenance costs associated with treating postmining pollutional discharges at ABS Legacy Sites. Consequently, the Department decided not to repeal the reclamation fee as proposed. The final rulemaking restructures the reclamation fee as part of the Department's compliance with the Third Circuit ruling in Kempthorne and 30 CFR 800.11(e).
F.1. Summary of Comments and Responses for the Advanced Notice of Final Rulemaking.
(C) The ANFR was presented to the MRAB for consideration at its January 10, 2008, meeting. The regulatory changes presented by the ANFR provided that the moneys received from the reclamation fee could only be used by the Department to pay construction, operation and maintenance and recapitalization costs associated with treating post mining pollutional discharges on ABS Legacy Sites. Various members of the MRAB commented that the amendments proposed with the ANFR did not do enough to ensure that the money being deposited into the Reclamation Fee O&M Account and the ABS Legacy Sites Account was not used for some other purpose. These MRAB members requested that the final-form rulemaking provide more protection to ensure the reclamation fee money was used for its intended purpose--treatment of mine drainage on ABS Legacy Sites.
(R) The Department revised the final rulemaking to address this concern of the MRAB. The final rulemaking now follows the example set by the General Assembly when it specified in PASMCRA and in The Clean Streams Law that certain types of collateral bonds posted by surface mine operators were to be held in trust. The final rulemaking creates two trust accounts. This final-form rulemaking serves as a declaration of trust which provides that funds held in the Reclamation Fee O&M Trust Account and in the ABS Legacy Sites Trust Account are held in trust by the Commonwealth. The Commonwealth includes the Department, other offices of the executive branch, the General Assembly and the State Treasurer. The money that is held in these two trusts is being held for the benefit of all of the people to effectuate their right to pure water and the preservation of natural and esthetic values of the environment as specified in Article I, § 27 of the Pennsylvania Constitution. The Commonwealth, collectively, will have a fiduciary duty to manage and use the moneys in the Reclamation Fee O&M Trust Account and in the ABS Legacy Sites Trust Account to treat pollutional mine drainage emanating from ABS Legacy Sites. If the Commonwealth ever violate this fiduciary duty by using or attempting to use the moneys for another purpose, any resident of this Commonwealth with an interest in pure water could initiate proceedings in the appropriate forum to enforce the terms of the trust.
(C) The MRAB commented on § 86.17(e)(2) of the ANFR that provided for adjusting the reclamation fee, but provided the reclamation fee could not be less than $50 per acre. The MRAB recommended the minimum of $50 be deleted as the MRAB did not think the fee should be collected if it was not needed for annual operation and maintenance treatment costs that year. Other commentators also made this recommendation.
(R) The Department has followed the MRAB's advice and deleted the $50 minimum reclamation fee provision. The final-form rulemaking now provides the fee will be adjusted annually based upon need and can be zero if the funding is not needed for that years' projected operation and maintenance costs.
(C) The MRAB wanted the regulation to specify that if, instead of the reclamation fee, an alternative source of funding to pay all of the annual costs covered by the Reclamation Fee O&M Account is established, the $100 reclamation fee will not be adjusted up or continue to be collected. Other commentators also made this recommendation.
(R) The Department followed the MRAB's advice. Section 86.17(e)(3) now contains express language that provides for the reclamation fee to be used until an alternative funding source in lieu of the reclamation fee is established to pay all of the costs covered by the Reclamation Fee O&M Trust Account.
(C) The MRAB recommended that § 86.187(a)(2)(i) be revised to limit the Department's authority to transfer funds from the Reclamation Fee O&M Account into the ABS Legacy Sites Trust Account. The MRAB wanted the regulation to specify that only excess funds could be transferred. Other commentators also made this recommendation.
(R) The Department followed the MRAB's advice. Section 86.187(a)(2)(i) of the final-form rule provides that the Department may, upon review and recommendation of the MRAB, transfer excess moneys from the Reclamation Fee O&M Trust Account into the ABS Legacy Sites Trust Account.
(C) The MRAB advised that the ANFR should be revised to provide that the ABS Legacy Sites Trust Account will be actuarially sound when the money in it, together with the money in the Reclamation Fee O&M Account, will generate enough interest to pay all ABS Legacy Sites treatment costs forever. The MRAB also recommended that the money in the Reclamation Fee O&M Account then be transferred into the ABS Legacy Sites Account, the Reclamation Fee O&M Account be closed, and, the reclamation fee be terminated.
(R) The Department followed the advice of the MRAB. A new subparagraph has been added as § 86.187(a)(2)(iv) which provides for the transfer of the money from the Reclamation O&M Trust Account into the ABS Legacy Sites Trust Account, termination of the Reclamation Fee O&M Trust Account, cessation of the reclamation fee, and cessation of the transfer of civil penalties into the Reclamation Fee O&M Trust Account.
(C) If the Legislature approves the use of premiums collected for conversion assistance financial guarantees for reclamation costs at ABS sites, then those funds should be deposited into the Reclamation Fee O&M Trust account and considered during the annual review of the reclamation fee amount.
(R) Section 86.187(a)(1)(iii) has been modified to allow for the deposit of the ''fees collected for sum-certain financial guarantees needed to facilitate full-cost bonding.''
(C) If a permanent alternate funding stream is approved, then that funding must be dedicated to cover the O&M costs at the ABS Legacy Sites.
(R) The final-form rulemaking has been modified to specify that an alternate funding source must provide ''sufficient revenues to maintain a balance in the Reclamation Fee O&M Trust Account of at least $3,000,000 and to pay the annual operation and maintenance costs for treating postmining pollutional discharges at all ABS Legacy Sites.'' See § 86.17(e)(3)(ii).
(C) The draft final-form regulations failed to guarantee that all discharges from all ABS Legacy Sites will be treated in perpetuity.
(R) The regulations are designed to address the Federal requirement for the Department to have available sufficient money to complete reclamation for the ABS Legacy Sites at any time. This rulemaking will provide sufficient funds to treat the discharges. The regulations establish a mandatory process to adjust the revenue stream to pay the cost of reclamation that could become due at any time. The Department does not have the authority to commit the full faith and credit of the Commonwealth to ''guarantee'' funding.
(C) The short-term, pay-as-you-go system of the Reclamation Fee O&M Account does not provide a guarantee of perpetual discharge treatment at all ABS Legacy Sites.
(R) The Department disagrees. The regulations will provide the Department with the money needed to meet the requirement to have sufficient money to complete reclamation for these sites at any time. The revenue stream is to be annually adjusted to pay the cost of treatment and a financial reserve will be maintained to pay unexpected treatment costs.
(C) The draft final-form rulemaking does not guarantee that the ABS Legacy Account will ever contain sufficient funds to be actuarially sound, or that it will remain solvent in perpetuity.
(R) The Federal regulations do not require a ''guarantee'' that the ABS Legacy Account will become actuarially sound but require the Department to have available sufficient money to complete reclamation. The regulations do provide for the Department to have the needed funds. The ABS Legacy Sites Trust Account is a tool that, once it contains sufficient money, can replace the pay-as-you-go approach.
(C) The funding for the Reclamation Fee O&M Account and the ABS Legacy Account must come from the coal mining industry.
(R) The Department disagrees. West Virginia was faced with a similar problem of how to fund the treatment for forfeited discharges. In the preamble for OSM's approval of their program amendment addressing this matter, OSM stated:
Congress was not specific on how alternative bonding programs such as West Virginia's should be financed. The only test applicable is whether the proposed alternative system achieves the objectives and purposes of a CBS as expressed in section 509 of SMCRA and as implemented by 30 CFR 800.11 (e). (60 FR 51901, October 4, 1995)The regulation meets this standard.
(C) The final regulations must include an enforceable commitment for timely construction of adequate treatment system at all ABS Legacy Sites currently lacking them.
(R) The regulations address the Federal requirement to have available sufficient money to complete reclamation for these sites at any time. While a purpose of Federal SMCRA is to ''assure that adequate procedures are undertaken to reclaim surface areas as contemporaneously as possible with the surface coal mining operations,'' there is no Federal requirement for a regulatory construction schedule.
(C) The regulation must specify in greater detail the standard for determining whether the ABS Legacy Account contains sufficient funds to be actuarially sound.
(R) The Department disagrees. The regulation provides a complete description of the concept of being actuarially sound. There is no need to specify in the regulation additional standards such as the suggestion to require an actuary with specific qualifications.
(C) The regulations must require, as a fourth condition for finding the ABS Legacy Account is ''actuarially sound,'' that all construction, recapitalization, and operation and maintenance costs at ABS Legacy Sites paid by Non- SMCRA government funding programs have been refunded from the Reclamation Fee O&M Account.
(R) The Department disagrees. The primary approach that the Department has taken to managing the treatment of abandoned and forfeited discharges is to utilize all available resources. The approach of this rulemaking is to protect the environment while meeting the requirements of the Federal regulation.
(C) The Department should delete the provision of the draft final-form rulemaking purporting to declare the Department's annual determination of the required amount of the reclamation fee to be appealable to the EHB.
(R) The Department disagrees. The Department is confident that the EHB will find that the determination of the reclamation fee amount is a final action of the Department as defined at § 1021.2 (relating to definitions).
(C) Where possible, the final-form rulemaking should use the active voice and the word ''will'' to express duties.
(R) The Department agrees and has made this change in various places in the final-form rulemaking.
(C) The definition of ''ABS Legacy Sites'' should be revised to delete the phrase ''and is sufficient to cover the cost of treating the discharge.''
(R) The Department disagrees with this comment. The entire definition is needed to be consistent with the concept of full cost conventional bonding and to avoid ambiguity.
(C) Definitions of ''operation and maintenance costs'' and ''OM&R'' should be added.
(R) The Department has added a definition for ''operation and maintenance costs.'' A definition of ''operation, maintenance and recapitalization'' costs is not needed.
(C) The specific date (August 4, 2001) should be added to the definition of the ''Primacy Alternate Bonding System.''
(R) The Department agrees and has made this change.
(C) The reclamation fee should apply to the entire permit area, not just the operational area, and should apply to permit transfers.
(R) The final rule addresses the application of the reclamation fee in a manner that is consistent with conventional bonding. Furthermore, it would be against the public interest to apply the fee to permit transfers because it could discourage a mine operator from accepting a transfer from a troubled firm which could then lead to bond forfeiture instead of the reclamation being completed by the transferee.
(C) The Department should retain the minimum reclamation fee rate in § 86.17(3), but should set the minimum rate at $100 per acre.
(R) Based upon the advice of the MRAB, the Department decided to eliminate the minimum fee amount and adjust the fee under the procedures established in the regulations.
(C) The Department should make clear that the $3 million minimum balance target for the reclamation fee O&M Account would have no effect on authorized expenditures for discharge treatment.
(R) The Department has concluded it is clear that there is no spending restriction in the regulation as it is written.
(C) The regulation does not account for inflation. Therefore, it is questionable whether the $3 million cushion and the Reclamation Fee O&M Account will cover the cost of treatment in the long term.
(R) The Department disagrees. The regulation contains provisions that require the revenue stream to be adjusted annually. The annual adjustment will enable the needed revenue to keep pace with inflation. It is not necessary for the $3 million reserve to be adjusted for inflation over the long term. The $3 million reserve is needed most for the short term to address unexpected operation and maintenance costs that might be incurred before the reclamation fee can be adjusted and to pay the cost of maintaining treatment at ABS sites that may be forfeited in the near future.
(C) The provisions that authorize the Department to deposit ''other moneys, including appropriations'' into the Reclamation Fee O&M Account and into the ABS Legacy Account go beyond the scope of the proposed rulemaking and should not appear in the regulations to help steer clear of a legal challenge that might unnecessarily interfere with the approval and implementation of the regulation as the costs should be borne by the industry.
(R) The Department disagrees. The final regulation is within the scope of the proposed regulation as it encompassed the funding mechanism for the former ABS and addresses the concerns raised by the commentators in comments submitted on the proposed rulemaking.
G. Benefits, Costs and Compliance
Benefits
Citizens of this Commonwealth will benefit from these amendments because the pollution from the Primacy ABS Legacy Sites will have a dedicated funding source to provide for the treatment of the postmining discharges.
Owners of coal mined lands where bonds have been forfeited and alternate reclamation plans have been approved will benefit by having their land restored to conditions for supporting the uses the mined land was capable of supporting prior to the mining, or to a higher or better use.
The amendments will also enable the Commonwealth to fulfill its primacy obligations, retain primary enforcement responsibility for coal mining operations, and to continue to receive the Federal abandoned mine land funds.
Compliance Costs
The final-form rulemaking may increase compliance costs on the regulated community if the per acre reclamation fee increases. The amended regulations will not result in increased costs to the regulated community through at least January 1, 2010. Until then, the reclamation fee will continue to be calculated in the same way it is under the current regulation. The amount of fees, and other dedicated funding sources, will be available for addressing postmining discharges on sites forfeited under the former ABS. After January 1, 2010, whether the fee increases, decreases or stays the same will be determined by the actual and projected costs of the treatment of the ABS discharges and whether other funding becomes available. It is not possible to determine how the fee will have to be adjusted in the future. It is possible that a substantial increase in the fee will be required. This would be the result of some unexpected circumstances (such as, many additional ABS forfeitures, dramatic increases in costs or erroneous estimates). Eventually, the reclamation fee can be eliminated, when adequate funds have accumulated to provide for the operation and maintenance costs.
The Department will incur additional cost in implementing this final rulemaking. To manage the funding sources, the Department must track revenues and expenses specifically related to the Primacy ABS discharge sites. This is expected to initially cost about $60,000 per year for personnel for the accounting of the revenues and expenses, with the cost increasing as personnel costs increase. This amount is in addition to the costs incurred as a result of the management of the completion of reclamation and treatment that the Department already performs.
Compliance Assistance Plan
The Department will provide written notification of the changes to the coal mining industry.
Paperwork Requirements
There are no paperwork requirements imposed on the regulated community by this final-form rulemaking. The Department will be required to prepare an annual report on actual and projected annual revenues and expenditures, and any proposed adjustment of the reclamation fee.
H. Pollution Prevention
The matters affected by this final-form rulemaking do not pertain to pollution prevention or control.
I. Sunset Review
This final-form rulemaking will be reviewed in accordance with the sunset review schedule published by the Department to determine whether the regulation effectively fulfills the goals for which it was intended.
J. Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. §§ 745.5(a)), on July 19, 2006, the Department submitted a copy of the notice of proposed rulemaking, published at 36 Pa.B. 4200, to the IRRC and the Chairpersons of the Senate and House Environmental Resources and Energy Committees (Committees).
Under section 5(c) of the Regulatory Review Act, IRRC and the Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing this final-form rulemaking, the Department has considered all public comments that it has received. These comments are addressed in the comment and response document and in Section F and F.1 of this order. IRRC and the Committees did not provide comments on the proposed rulemaking.
Under section 5.1(j.2) of the act (71 P. S. § 745.5a(j.2)), on July 9, 2008, the final-form rulemaking was deemed approved by the Committees. Under section 5.1(e) of the act (71 P. S. § 745.5a(e)), IRRC met on July 10, 2008, and approved the final-form regulation in accordance with section 5(c) of the Regulatory Review Act.
K. Findings of the Board
The Board finds that:
(1) Public notice of proposed rulemaking was given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and regulations promulgated thereunder in 1 Pa. Code §§ 7.1 and 7.2.
(2) A public comment period was provided as required by law, and all comments were considered.
(3) The regulations do not enlarge the purpose of the proposal published at 36 Pa.B. 4200.
(4) These regulations are necessary and appropriate for administration and enforcement of the authorizing acts identified in Section C.
L. Order of the Board
The Board, acting under the authorizing statutes, orders that:
(1) The regulations of the Department, 25 Pa. Code, Chapter 86, are amended by amending §§ 86.1, 86.17 and 86.187--86.190 to read as set forth in Annex A, with ellipses referring to the existing text of the regulations.
(2) The Chairperson of the Board shall submit this order and Annex A to the Office of General Counsel and the Office of Attorney General for review and approval as to legality and form, as required by law.
(3) The Chairperson of the Board shall submit this order and Annex A to the IRRC and the Committees as required by the Regulatory Review Act.
(4) The Chairperson of the Board shall certify this order and Annex A and deposit them with the Legislative Reference Bureau, as required by law.
(5) This order shall take effect immediately.
JOSEPH R. POWERS,
Acting Chairperson(Editor's Note: The proposal to amend § 86.283, included in the proposed rulemaking at 36 Pa.B. 4200, has been withdrawn. Section 86.1 was not proposed to be amended in the proposal at 36 Pa.B. 4200.)
(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 38 Pa.B. 4045 (July 26, 2008).)
Fiscal Note: 7-401. (1) General Fund; (2) Implementing Year 2007-08 is $60,000; (3) 1st Succeeding Year 2008-09 is $62,000; 2nd Succeeding Year 2009-10 is $64,000; 3rd Succeeding Year 2010-11 is $67,000; 4th Succeeding Year 2011-12 is $69,000; 5th Succeeding Year 2012-13 is $71,000; (4) 2006-07 Program--$36,868,000; 2005-06 Program--$37,049,000; 2004-05 Program--$37,594,000; (7) Environmental Program Management; (8) recommends adoption. Additional costs to the Environmental Program Management appropriation will be covered by augmentations from the Reclamation Fee O&M Trust Account.
Annex A
TITLE 25. ENVIRONMENTAL PROTECTION
PART I. DEPARTMENT OF ENVIRONMENTAL PROTECTION
Subpart C. PROTECTION OF NATURAL RESOURCES
ARTICLE I. LAND RESOURCES
CHAPTER 86. SURFACE AND UNDERGROUND COAL MINING: GENERAL
Subchapter A. GENERAL PROVISIONS § 86.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
ABS Legacy Sites--Mine sites, permitted under the Primacy Alternate Bonding System, that have a postmining pollutional discharge where the operator has defaulted on its obligation to adequately treat the discharge and, either the bond posted for the site is insufficient to cover the cost of treating the discharge, or a trust to cover the costs of treating the discharge was not fully funded and is insufficient to cover the cost of treating the discharge.
* * * * * Operational area--The maximum portion of the permitted area that the permittee is authorized to disturb at any specific time during the permit term in accordance with the approved mining and reclamation plan, including all of the land affected by mining activities that is not planted, growing and stabilized.
Operation and maintenance costs--Expenses associated with the day-to-day operation and maintenance of a conventional or a passive treatment facility, such as chemicals, electricity, labor, water sampling, sludge removal and disposal, maintenance of access roads, mowing, snow removal, inspecting facilities, repairing and maintaining all aspects of the treatment facility, equipment and buildings.
* * * * * Primacy Alternate Bonding System--The bonding system utilized by the Commonwealth from July 31, 1982, until August 4, 2001, for surface coal mines, coal refuse reprocessing facilities and coal preparation plants in which a central pool of money to be used by the Department for reclamation of forfeited sites was funded in part through imposition of a per-acre reclamation fee paid by operators of permitted sites.
* * * * * Recapitalization costs--The costs associated with replacing discharge treatment facility components or the costs to install treatment systems with lower operation and maintenance costs than the system being replaced.
* * * * *
Subchapter B. PERMITS
GENERAL REQUIREMENTS FOR PERMITS AND PERMIT APPLICATIONS § 86.17. Permit and reclamation fees.
(a) A permit application for coal mining activities shall be accompanied by a check for $250 payable to the ''Commonwealth of Pennsylvania.''
(b) A permit application for a coal preparation plant shall be accompanied by a check for $250 payable to the ''Commonwealth of Pennsylvania.''
(c) A renewal application, whether the site has not yet been activated or where coal is being extracted, shall be accompanied by a check for $250 payable to the ''Commonwealth of Pennsylvania.'' A renewal application for reclamation activities requires no application fee.
(d) A permit application for coal refuse disposal activities shall be accompanied by a check for $500 plus $10 per acre for acreage in excess of 50 acres payable to the ''Commonwealth of Pennsylvania.''
(e) In addition to the bond established under §§ 86.143, 86.145, 86.149 and 86.150 and subject to the exception provided for in § 86.283(c) (relating to procedures), the applicant for a permit or a permit amendment shall pay a per acre reclamation fee for surface mining activities except for the surface effects of underground mining. This reclamation fee will be assessed for each acre of the approved operational area and shall be paid by the applicant prior to the Department's issuance of a surface mining permit. If a permit amendment results in an increase in the approved operational area, the reclamation fee will be assessed on the increased acreage and shall be paid by the operator prior to the Department's issuance of the permit amendment.
(1) The reclamation fee will be deposited into a separate subaccount within the Surface Mining Conservation and Reclamation Fund called the Reclamation Fee O&M Trust Account, as a supplement to bonds forfeited from ABS Legacy Sites. The reclamation fee will be used by the Department to pay the construction costs and operation and maintenance costs associated with treating postmining pollutional discharges at ABS Legacy Sites, and the moneys may not be used for any other purpose. The interest earned on the moneys in the Reclamation Fee O&M Trust Account will be deposited into the Reclamation Fee O&M Trust Account and will be used by the Department to pay the construction costs and operation and maintenance costs associated with treating postmining pollutional discharges at ABS Legacy Sites. The interest may not be used for any other purpose. For purposes of this section, operation and maintenance costs include recapitalization costs.
(2) After the end of each fiscal year, the Department will prepare a fiscal-year report containing a financial analysis of the revenue and expenditures of the Reclamation Fee O&M Trust Account for the past fiscal year and the projected revenues and expenditures for the current fiscal year. Beginning with the report for fiscal year 2008-09, the report will include the Department's calculation of the required amount of the reclamation fee, and the proposed adjustment of the reclamation fee amount. The fiscal-year report will be submitted to the members of the Mining and Reclamation Advisory Board for their review and comment and will be published on the Department's web site. Notice of the report's availability will be published in the Pennsylvania Bulletin. The Department will review the fiscal-year report at a meeting of the Mining and Reclamation Advisory Board.
(3) The amount of the reclamation fee shall be $100 per acre until December 31, 2009. Commencing January 1, 2010, and continuing until either a permanent alternative funding source is established or the ABS Legacy Sites Trust Account is actuarially sound, the reclamation fee will be adjusted as necessary to ensure that there are sufficient revenues to maintain a balance in the Reclamation Fee O&M Trust Account of at least $3,000,000.
(i) The reclamation fee will be used until the ABS Legacy Sites Trust Account is actuarially sound unless an alternative permanent funding source in lieu of the reclamation fee is used to fund the Reclamation Fee O&M Trust Account.
(ii) Until the ABS Legacy Sites Trust Account is actuarially sound, the alternative permanent funding source must provide sufficient revenues to maintain a balance in the Reclamation Fee O&M Trust Account of at least $3,000,000 and to pay the annual operation and maintenance costs for treating postmining pollutional discharges at the ABS Legacy Sites. Funds that are not needed for annual operation and maintenance or to maintain the $3,000,000 balance may be deposited into the ABS Legacy Sites Trust Account.
(4) Commencing January 1, 2010, and continuing until the ABS Legacy Sites Trust Account is actuarially sound, the amount of the reclamation fee will be annually calculated and, if necessary, will be adjusted in multiples of $50 based on the following factors:
(i) The current balance in the Reclamation Fee O&M Trust Account.
(ii) The total amount of revenue into the trust account during the previous fiscal year from collection of the reclamation fee, the interest accrued by the Reclamation Fee O&M Trust Account, the deposits of civil penalties into the trust account and deposits from other sources of moneys into the trust account.
(iii) The amount of ongoing operation and maintenance costs incurred by the Reclamation Fee O&M Trust Account during previous fiscal years.
(iv) The projected number of acres subject to the reclamation fee during the current fiscal year.
(v) The projected amount of revenue into the Reclamation Fee O&M Trust Account during the current fiscal year from projected interest accrued by the trust account, projected deposits of civil penalties and projected deposits of moneys from other sources.
(vi) The projected expenditures of the Reclamation Fee O&M Trust Account for operation and maintenance costs for the current fiscal year.
(5) Following the Department's review of its calculation of the required reclamation fee amount at a public meeting of the Mining and Reclamation Advisory Board under paragraph (2), the Department will publish the adjustment in the required amount of the reclamation fee in the Pennsylvania Bulletin. Adjustments to the amount of the reclamation fee will become effective upon publication in the Pennsylvania Bulletin. The Department's determination of the required amount of the reclamation fee under paragraphs (3) and (4) will be a final action of the Department appealable to the EHB.
(6) The Department will cease to assess and collect the reclamation fee when the ABS Legacy Sites Trust Account established under § 86.187(a) (relating to use of money) becomes actuarially sound. The ABS Legacy Sites Trust Account will become actuarially sound when the following conditions are met:
(i) Financial guarantees sufficient to cover reclamation costs, including the costs to treat each discharge in perpetuity, have been approved by the Department for all mine sites permitted under the primacy alternate bonding system.
(ii) Construction of the necessary discharge treatment facilities has been completed at the ABS Legacy Sites.
(iii) The ABS Legacy Sites Trust Account, combined with the Reclamation Fee O&M Trust Account, contains funds which generate interest at a rate and in an amount sufficient to pay the annual operation and maintenance costs for treating postmining pollutional discharges at the ABS Legacy Sites.
Subchapter F. BONDING AND INSURANCE REQUIREMENTS BOND FORFEITURE § 86.187. Use of money.
(a) Moneys received from fees, fines, penalties, bond forfeitures and other moneys received under authority of the Surface Mining Conservation and Reclamation Act (52 P. S. §§ 1396.1--1396.31), and interest earned on the moneys, will be deposited in the Fund.
(1) Moneys received from the reclamation fees required by § 86.17(e) (relating to permit and reclamation fees), and the interest accrued on these monies, will be deposited into a separate subaccount within the fund called the Reclamation Fee O&M Trust Account.
(i) The Department will deposit into the Reclamation Fee O&M Trust Account, up to $500,000 in a fiscal year, the moneys collected from civil penalties assessed by the Department under the Surface Mining Conservation and Reclamation Act less the percentage of those penalty moneys due the Environmental Education Fund under section 8 of the Environmental Education Act (35 P. S. § 7528). If the amount of penalty moneys collected exceeds $500,000 during a fiscal year, the Department may deposit the amount collected in excess of $500,000 into the fund and use the excess amount in accordance with paragraph (3).
(ii) The Department may deposit into the Reclamation Fee O&M Trust Account a portion, to be determined at the Department's discretion, of the interest earned on other moneys in the fund.
(iii) The Department may deposit other moneys into the Reclamation Fee O&M Trust Account, including appropriations, donations, or, the fees collected for sum-certain financial guarantees needed to facilitate full-cost bonding in accordance with applicable law.
(iv) The moneys deposited in the Reclamation Fee O&M Trust Account will be used to pay construction costs and operation and maintenance costs associated with treating postmining pollutional discharges at ABS Legacy Sites, and the moneys may not be used for any other purpose. For purposes of this section, operation and maintenance includes recapitalization costs. Moneys in the Reclamation Fee O&M Trust Account will be held by the Commonwealth in trust for the benefit of all the people to protect their right to pure water and the preservation of the values of the environment. The State Treasurer will manage the investment of the funds in the Reclamation Fee O&M Trust Account with the advice of the Department.
(2) Moneys received from the forfeiture of bonds will be used only to reclaim land and restore water supplies affected by the surface mining operations upon which liability was charged on the bond, except as otherwise provided in this section and in § 86.190 (relating to sites where reclamation is unreasonable, unnecessary or impossible; excess funds). Interest accrued on these moneys will be used only to reclaim land and restore water supplies affected by surface mining operations for which the Department has forfeited bonds, as a supplement to bond forfeiture funds.
(i) Moneys received from bonds forfeited on ABS Legacy Sites, and the interest accrued on the moneys, will be deposited into a separate subaccount in the Fund called the ABS Legacy Sites Trust Account. The Department may, upon review and recommendation of the Mining and Reclamation Advisory Board, transfer excess moneys from the Reclamation Fee O&M Trust Account into the ABS Legacy Sites Trust Account. The Department may deposit other moneys into the ABS Legacy Sites Trust Account, including appropriations, donations, or interest earned on other moneys in the fund.
(ii) Moneys in the ABS Legacy Sites Trust Account, including the interest accrued by the trust account, will be used to pay the operation and maintenance costs associated with treating postmining pollutional discharges at ABS Legacy Sites, and the moneys may not be used for any other purpose. Moneys in the ABS Legacy Sites Trust Account will be held by the Commonwealth in trust for the benefit of all the people to protect their right to pure water and the preservation of the values of the environment. The State Treasurer will manage the investment of the funds in the ABS Legacy Sites Trust Account with the advice of the Department.
(iii) The Department may not make disbursements from the ABS Legacy Sites Trust Account until that trust account becomes actuarially sound. The ABS Legacy Sites Trust Account will become actuarially sound when the following conditions are met:
(A) Financial guarantees sufficient to cover reclamation costs, including the costs to treat each discharge in perpetuity, have been approved by the Department for all mine sites permitted under the Primacy Alternate Bonding System.
(B) Construction of the necessary discharge treatment facilities has been completed at the ABS Legacy Sites.
(C) The ABS Legacy Sites Trust Account, combined with the Reclamation Fee O&M Trust Account, contains funds which generate interest at a rate and in an amount sufficient to pay the annual operation and maintenance costs for treating postmining pollutional discharges at the ABS Legacy Sites.
(iv) When the ABS Legacy Sites Trust Account becomes actuarially sound the Department will transfer the moneys in the Reclamation Fee O&M Trust Account into the ABS Legacy Sites Trust Account and the Reclamation Fee O&M Trust Account will terminate. At that time, the reclamation fee or the alternative permanent funding source, whichever is in place, will cease and the deposit of civil penalty moneys under paragpraph (l)(i) will also cease.
(3) Other moneys deposited in the Fund may be used to reclaim land affected by surface mining operations and for other conservation purposes consistent with the purposes of the Fund, including restoration of water supplies affected by surface mining operations. The Department may also use the money in the Fund, other than the monies described in paragraphs (1) and (2), for necessary administrative expenses, including the purchase, lease or rental of vehicles, equipment, office space, laboratory supplies or other supplies, materials or services and personnel and overhead expenses.
(b) The Department, after notifying and consulting with the landowner, will expend the funds to reclaim the land affected by the operation in a manner which completes the approved reclamation plan of the licensed mine operator whose bonds were forfeited for the reclamation site or an alternative reclamation plan completed under subsection (c). The Department will expend the funds to reclaim the land affected by the operation in a manner which completes an alternative reclamation plan in compliance with subsection (c) if either of the following apply:
(1) After considering the engineering cost estimate for completion of the approved reclamation plan of the licensed mine operator whose bonds were forfeited for the reclamation site, the Department determines that the plan may be amended to decrease the cost of reclaiming the bond forfeiture site.
(2) The Department determines that completion of the approved reclamation plan of the licensed mine operator whose bonds were forfeited for the reclamation site is unreasonable, unnecessary or physically impossible.
(c) If the Department determines under subsection (b) that an alternative to the approved reclamation plan of the licensed mine operator whose bonds were forfeited for the reclamation site should be implemented, the Department will prepare and implement a plan that complies with the applicable performance standards in accordance with § 86.189(c)(2), (3) or (4) (relating to reclamation of bond forfeiture sites), whichever is appropriate, and that ensures that all disturbed areas are restored to conditions that are capable of supporting either the uses they were capable of supporting before any mining, or higher or better uses.
§ 86.188. Evaluation of bond forfeiture sites.
(a) After forfeiture of bond under §§ 86.180--86.182 and 86.185 (relating to scope; general; procedures; and preservation of remedies) has become final and the bond proceeds have been collected, the Department will evaluate the bond forfeiture site for reclamation purposes. The evaluation will consist of an onsite inspection by the Department and solicitation of information regarding the site and reclamation intention of the landowner and others determined by the Department to have information on, or an interest in, the site. The Department will provide to the landowner of the site, upon request, a copy of the completed site evaluation report.
(b) The Department will prioritize a bond forfeiture site according to the following categories, which are listed in decreasing order of severity of condition:
(1) Sites which present a significant and continuing hazard to human life by either their proximity to or impact on human populations.
(2) Sites which present a significant threat to health or safety, including actual or threatened loss of public or private water supplies.
(3) Sites which present a significant risk of damage to public or private property.
(4) Sites which are causing environmental degradation or pollution affecting the productive use of public or private land, or the reclamation of which would create significant environmental benefits.
(c) The Department, in selecting sites for reclamation under § 86.189(b)(1) (relating to reclamation of bond forfeiture sites), will consider the following factors:
(1) The severity of the conditions at the site.
(2) The potential for conditions at the site to deteriorate, including environmental quality, thus increasing the hazard to life, health, safety or property.
(3) The willingness of the landowner, or other person, to undertake the reclamation of the site under § 86.189(b)(2), (3) or (4), as evidenced by previous reclamation activity performed on the site or other indications of willingness to reclaim by the landowner or other person.
(4) The ability of the Department to gain adequate access to the site.
(5) The potential for remining of all or a portion of the site.
(6) The lack of participation of the landowner in the surface mining activities which created the conditions at the site.
(7) The potential for agricultural use or reforestation of the site.
(d) The Department will compile a list of sites for which forfeiture of bonds under §§ 86.180--86.182 and 86.185 has become final and bond proceeds have been collected. The list will be updated quarterly and will be available for review in the Department's district and central offices. The Department will publish quarterly in the Pennsylvania Bulletin notice of the availability of this list for review.
§ 86.189. Reclamation of bond forfeiture sites.
* * * * * (c) The Department will not enter into a reclamation contract under this section with a person unless the person demonstrates the following to the satisfaction of the Department:
* * * * * (2) For bond forfeiture sites for which permits were issued under the Federally-approved surface coal mining regulatory program which took effect July 31, 1982, the proposed reclamation plan will result in reclamation of the site in a manner consistent with The Clean Streams Law and the regulations promulgated thereunder for active surface coal mining operations, as specified in the contract, and the Surface Mining Conservation and Reclamation Act and the regulations promulgated thereunder for active surface coal mining operations.
(3) For bond forfeiture sites for which the bonds were declared forfeit on or after May 3, 1978, and for which permits were not issued under the Federally-approved surface coal mining regulatory program which took effect July 31, 1982, the proposed reclamation plan will result in reclamation of the site in a manner that is consistent with the interim Federal program regulations first published at 42 FR 62639 (December 13, 1977), as well as The Clean Streams Law and the regulations promulgated thereunder in effect at the time the bonds were declared forfeit, as specified in the contract, and the Surface Mining Conservation and Reclamation Act and the regulations promulgated thereunder in effect at the time the bonds were declared forfeit. If the Department's permit files for the site clearly show that surface mining activities on the site occurred before August 3, 1977, the proposed reclamation plan may be consistent with paragraph (4).
(4) For bond forfeiture sites for which the bonds were declared forfeit before May 3, 1978, the proposed reclamation plan will result in reclamation of the site in a manner that is consistent with The Clean Streams Law and the regulations promulgated thereunder that were applicable to active surface coal mining operations at the time the bonds were declared forfeit, as specified in the contract, and the Surface Mining Conservation and Reclamation Act and the regulations that were promulgated thereunder at the time the bonds were declared forfeit.
(5) Except in the case of a landowner of a bond forfeiture site under subsection (b)(2) and (4), the person shall demonstrate the following:
* * * * * § 86.190. Sites where reclamation is unreasonable, unnecessary or impossible; excess funds.
(a) If the Department determines in the evaluation of a bond forfeiture site that completion of the approved reclamation plan of the licensed mine operator whose bonds were forfeited for the reclamation site or an alternative reclamation plan is unreasonable, unnecessary or physically impossible, the bond amount will be made available for expenditure from the Fund only to reclaim land and restore water supplies affected by surface mining operations for which the Department has forfeited bonds. The reasons justifying this determination include the following:
(1) The site has been repermitted and rebonded for mining, and reclamation of the site is a condition of the permit.
(2) The site has been otherwise reclaimed.
(b) Before a final determination under subsection (a), the Department will send written notice to the landowner of the Department's intention to remove restrictions on the expenditure of the forfeited bond amount.
(c) If the Department determines that the funds received from bonds covering the bond forfeiture site exceed the amount which is required to reclaim the bond forfeiture site, the excess funds will be made available for expenditure from the fund only to reclaim land and restore water supplies affected by surface mining operations for which the Department has forfeited bonds.
[Pa.B. Doc. No. 08-1585. Filed for public inspection August 29, 2008, 9:00 a.m.]
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