Subchapter D. BONDING AND INSURANCE REQUIREMENTS
GENERAL PROVISIONS Sec.
77.191. Scope.
77.192. Definitions.
77.193. Requirement to file a bond.
77.194. Requirement to file a certification of liability insurance.
77.195. Department responsibilities.
AMOUNT AND DURATION OF LIABILITY
77.201. Scope.
77.202. Determination of bond amount.
77.203. Minimum amount of bond.
77.204. Period of liability.
77.205. Bond adjustments.
FORMS, TERMS AND CONDITIONS OF BONDS
AND INSURANCE
77.221. Scope.
77.222. Form of the bond.
77.223. Special terms and conditions for surety bonds.
77.224. Special terms and conditions for collateral bonds.
77.225. Surety/collateral combination bond.
77.226. Phased deposits of collateral.
77.227. Payment in lieu of bond (PILB).
77.228. Failure to maintain proper bond.
77.229. Replacement of bonds.
77.230. Transfer of permits.
77.231. Terms and conditions for liability insurance.
RELEASE OF BONDS
77.241. Scope.
77.242. Procedures for seeking release of bond.
77.243. Criteria and schedule for release of bond.
BOND FORFEITURE
77.251. Scope.
77.252. General.
77.253. Procedures.
77.254. Preservation of remedies.
Cross References This subchapter cited in 25 Pa. Code § 77.1 (relating to definitions); 25 Pa. Code § 77.125 (relating to review of permit applications); 25 Pa. Code § 77.126 (relating to criteria for permit approval or denial); 25 Pa. Code § 77.129 (relating to condition of permits—general and right of entry); 25 Pa. Code § 77.144 (relating to transfer of permit); 25 Pa. Code § 77.163 (relating to right of entry); 25 Pa. Code § 77.454 (relating to maps and plans); 25 Pa. Code § 77.456 (relating to reclamation information); and 25 Pa. Code § 77.803 (relating to nature of a general permit; substitution for individual applications and permits).
GENERAL PROVISIONS
§ 77.191. Scope.
This subchapter sets forth the minimum requirements for demonstrating sufficient financial responsibility for mining and reclamation operations by providing for bond guarantees for the operations and minimum standards for insurance protection for personal injury and property damage to third parties arising out of the operations.
Source The provisions of this § 77.191 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
§ 77.192. Definitions.
The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:
Cash—The term includes, when used in regard to bond requirements, negotiable certificates of deposit.
Collateral bond—A penal bond agreement in a sum certain, payable to the Department, executed by the operator, and which is supported by the deposit with the Department of cash, negotiable bonds of the United States, the Commonwealth, the Turnpike Commission, the General State Authority, the State Public School Building Authority, or a Commonwealth municipality, or Pennsylvania bank or banking institution, automatically renewable and assignable certificates of deposit or irrevocable and stand-by Commonwealth bank or banking institution letters of credit.
Long term facility—A processing plant located within the permit area, mine drainage facility, refuse area or other structure and facility associated with surface or underground mining which will be an active mine operation for at least 10 years.
Long term mine—An underground mine which will be in active operation for at least 10 years, or a surface mine in which the mineral to be removed exceeds the amount of overburden by a ratio of at least 4:1 and which will be in active operation for at least 10 years.
Surety bond—A penal bond agreement in a sum certain payable to the Department, executed by the operator and a corporation licensed to do business as a surety in this Commonwealth and approved by the Department, and which is supported by the guarantee of payment on the bond by the surety.
Source The provisions of this § 77.192 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
§ 77.193. Requirement to file a bond.
(a) A new, revised or renewed permit to conduct mining or reclamation operations, or permission to expand mining or reclamation operations within a permit area which has been limited to a portion or phase of the entire permit area will not be issued by the Department before the applicant for the permit or phase approval has filed with the Department a bond upon a form provided by the Department payable to the Department, and the bond has been approved by the Department. The bond will be conditioned upon the faithful performance of the requirements of the act, the environmental acts, this title, orders of the Department, the reclamation plan and the conditions of the permit. The amount, duration, form, conditions and terms of the bond shall conform to the requirements of this chapter.
(b) An operator may not disturb surface acreage or extend operations prior to receipt of approval from the Department of a bond and issuance of a permit or incremental phase approval covering the surface acreage to be affected.
(c) Liability on the bond shall be limited to the specific bonded area except where there are adverse hydrologic impacts. When there are adverse hydrologic impacts the Department will not release liability for a bonded area which is, in the Department’s best conservative judgment, hydrologically connected to the adverse hydrologic impact.
(d) The Department may allow the bond liability for parts of a highwall to be transferred to a subsequent bonded area in relation to the progress of the highwall. The transfer of liability will not be considered a bond release.
Source The provisions of this § 77.193 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.126 (relating to criteria for permit approval or denial); and 25 Pa. Code § 77.572 (relating to permit line setback).
§ 77.194. Requirement to file a certification of liability insurance.
An applicant for a permit who extracted more than 2000 tons of marketable minerals in the previous year or plans to do so in the current year shall submit proof to the Department of liability insurance coverage for its mining and reclamation operations issued by an insurance company authorized to do business in this Commonwealth. The amount, duration, form, conditions, terms and method of proof of insurance coverage shall conform to § 77.231 (relating to terms and conditions for liability insurance).
Source The provisions of this § 77.194 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
§ 77.195. Department responsibilities.
(a) The Department will prescribe and furnish the forms for filing bonds.
(b) The Department will prescribe terms and conditions for bonds and insurance.
(c) The Department will establish bonding amount rate guidelines based on the estimated cost to the Department for completing the reclamation requirements of the permittee under the act, this chapter and the conditions of the permit. The guidelines shall be reviewed and, if necessary, revised by the Department annually to reflect the current cost of reclamation to the Department. The Department may consider fees, or other sources of money paid by the permittee and dedicated for reclamation of defaulted permit areas in determining bonding guidelines.
(d) The Department will determine the amount of the bond required for the permit areas, including adjustments to the initial amount from time to time as land acreages in the permit area are revised, costs to the Department of reclamation change or when other relevant conditions change, according to the minimum requirements of § 77.202 (relating to determination of bond amount).
(e) A bond shall be reviewed for legality and form according to established procedures.
(f) The Department will release the permittee from bond and insurance requirements as provided in § § 77.241—77.243 (relating to release of bonds).
(g) The Department will cause a bond to be forfeited as provided in § § 77.251—77.254 (relating to bond forfeiture).
Source The provisions of this § 77.195 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
AMOUNT AND DURATION OF LIABILITY
§ 77.201. Scope.
Sections 77.202—77.205 set forth the minimum requirements for determining the amounts and time periods of liability for bonds for mining and reclamation operations.
Source The provisions of this § 77.201 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.226 (relating to phased deposits of collateral).
§ 77.202. Determination of bond amount.
The standard applied by the Department in determining the amount of bond shall be the estimated cost to the Department if it had to complete the reclamation, restoration and abatement work required under the act, this chapter and the conditions of the permit. The bond rate shall be based on the maximum disturbed unrestored area which will exist at one time, and shall be in accordance with the bond schedule as published by the Department or the Secretary.
Source The provisions of this § 77.202 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.195 (relating to Department responsibilities); 25 Pa. Code § 77.201 (relating to scope); 25 Pa. Code § 77.226 (relating to phased deposits of collateral); and 25 Pa. Code § 77.456 (relating to reclamation information).
§ 77.203. Minimum amount of bond.
The minimum amount of bond, except as provided under general permits, shall be $5000 for the entire permit area, including additional acreage permit revisions.
Source The provisions of this § 77.203 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.201 (relating to scope); 25 Pa. Code § 77.226 (relating to phased deposits of collateral).
§ 77.204. Period of liability.
(a) Liability under bonds posted for a noncoal mining activity shall continue for the duration of the mining activities and its reclamation as provided in the act, this chapter and the conditions of the permit for 5 years after completion of the mining and reclamation of the area, unless released in whole or in part prior thereto if the Department is satisfied that the reclamation covered by the bond has been accomplished as required by the act.
(b) The bond liability of the permittee shall include only those actions which the operator is obliged to take under the permit, including completion of the reclamation plan so that the land will be capable of supporting a postmining land use approved under § 77.653 (relating to postmining land use). Actions of third parties which are beyond the control and influence of the operator and for which the operator is not responsible under the permit need not be covered by the bond.
Source The provisions of this § 77.204 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643; amended January 30, 1998, effective January 31, 1998, 28 Pa.B. 619. Immediately preceding text appears at serial pages (198700) to (198701).
Cross References This section cited in 25 Pa. Code § 77.201 (relating to scope); 25 Pa. Code § 77.226 (relating to phased deposits of collateral); and 25 Pa. Code § 77.243 (relating to criteria and schedule for release of bond).
§ 77.205. Bond adjustments.
(a) The permittee shall deposit additional bond amounts upon notification by the Department if the existing bond does not meet the requirements of this subchapter for any reason, including, but not limited to, mining or operation changes, reclamation changes or changes in the cost of reclamation, restoration or abatement work.
(b) A permittee may request reduction of the required bond amount upon submission of evidence to the Department proving that the permittee’s method of operation or other circumstances will reduce the maximum estimated cost to the Department to complete the reclamation responsibilities and, therefore, warrants a reduction of the bond amount. The request will not be considered as a request for partial bond release under § § 77.241—77.243 (relating to release of bonds).
(c) Periodically, after the date on which a bond was required to be submitted under this subchapter, the Department may determine the adequacy of bond amount requirements for mining operations and, if necessary, require additional bond amounts.
(d) The Department will notify the permittee, the surety and any person with a property interest in collateral who has requested notification of any proposed adjustment to the bond amount. The Department will also provide the permittee an opportunity for an informal conference on the proposed adjustment.
Source The provisions of this § 77.205 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643; amended January 30, 1998, effective January 31, 1998, 28 Pa.B. 619. Immediately preceding text appears at serial page (198701).
Cross References This section cited in 25 Pa. Code § 77.201 (relating to scope); 25 Pa. Code § 77.226 (relating to phased deposits of collateral); and 25 Pa. Code § 77.228 (relating to failure to maintain proper bond).
FORM, TERMS AND CONDITIONS OF BONDS
AND INSURANCE
§ 77.221. Scope.
Sections 77.222—77.231 establish the minimum standards for the form of the bond for mining and reclamation activities, and the terms and conditions applicable to bonds and liability insurance.
Source The provisions of this § 77.221 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
§ 77.222. Form of the bond.
(a) The Department will accept the following types of bonds:
(1) A surety bond.
(2) A collateral bond.
(3) For long term mines and long term facilities, a phased deposit of collateral bond under § 77.226 (relating to phased deposits of collateral).
(4) Payment in lieu of bond under § 77.227 (relating to payment in lieu of bond (PILB)).
(b) A person submitting a bond shall comply with Department guidelines establishing minimum criteria for execution and completion of the bond forms and related documents and on calculation of total bond liability.
Source The provisions of this § 77.222 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.221 (relating to scope).
§ 77.223. Special terms and conditions for surety bonds.
A surety bond is subject to the following conditions:
(1) The Department will not accept the bond of a surety company which has failed or delayed in making payment on a forfeited surety bond.
(2) The Department will not accept the bond of a surety company unless the bond is not cancellable by the surety at any time for any reason, including, but not limited to, nonpayment of premium or bankruptcy of the permittee during the period of liability.
(3) The Department will not accept a single bond in excess of a surety company’s maximum single obligation as provided by The Insurance Company Law of 1921 (40 P. S. § § 341—991), unless the surety company satisfies that statute for exceeding that limit.
(4) The Department will provide in the bond that the amount shall be confessed to judgment upon forfeiture.
(5) The bond shall provide that the surety and the permittee shall be jointly and severally liable.
(6) The Department will accept only the bond of a surety authorized to do business in this Commonwealth, when the surety bond is signed by an appropriate official of the surety as determined by the Department. When the principal place of business of the surety is outside of this Commonwealth, the surety bond shall be signed by an authorized resident agent of the surety.
(7) The bond shall provide that liability on the bond will not be impaired nor affected by a renewal or extension of the time for performance, or a forbearance or delay, in declaring or enforcing forfeiture of the bond. The surety has no right to cover or perform the principal’s obligation on the bond, although the Department may allow the surety to do so in lieu of enforcing the forfeiture or collecting the bond. A forbearance of delay does not affect the obligations under the bond.
Source The provisions of this § 77.223 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.221 (relating to scope).
§ 77.224. Special terms and conditions for collateral bonds.
(a) The Department will obtain and keep in custody collateral deposited by the permittee until authorized for release or replacement as provided in this subchapter.
(b) A collateral bond pledging negotiable government securities is subject to the following conditions:
(1) The Department may determine the current market value of government securities for the purpose of establishing the value of the securities for bond deposit.
(2) The current market value shall be at least equal to the amount of the required bond amount.
(3) The Department may periodically revalue the securities and may require additional amounts if the current market value is insufficient to satisfy the bond amount requirements for the facility.
(4) The operator may request and receive the interest accruing on governmental securities with the Department as the interest becomes due. The Department will not make interest payments for postforfeiture interest, accruing during appeals, and after resolution of the appeals, when the forfeiture is adjudicated, decided or settled in favor of the Commonwealth.
(c) A collateral bond pledging certificates of deposit is subject to the following conditions:
(1) The Department will require that certificates of deposit be assigned to the Department, in writing, and that the assignment be recorded upon the books of the bank issuing the certificates.
(2) The Department will not accept an individual certificate of deposit for a denomination in excess of the maximum insurable amount as determined by the Federal Deposit Insurance Corporation (FDIC) and Federal Savings and Loan Insurance Corporation (FSLIC).
(3) The Department will require the banks issuing the certificates of deposit to waive rights of setoff or liens which they have or might have against the certificates.
(4) The Department will accept only automatically renewable certificates of deposit.
(5) The Department will require the permittee to deposit sufficient amounts of certificates of deposit, to assure that the Department will be able to liquidate the certificates prior to maturity, upon forfeiture, for the amount of the bond required by this subchapter.
(6) The Department will accept only certificates of deposit from banks or banking institutions licensed or chartered to do business in this Commonwealth.
(7) The permittee will not be entitled to interest accruing after forfeiture is declared by the Department, unless the forfeiture declaration is ruled invalid by a court having jurisdiction over the Department, and the ruling is final.
(d) A collateral bond pledging a letter of credit is subject to the following conditions:
(1) The letter of credit shall be a stand-by letter of credit issued by a Federally-insured or equivalently protected bank or banking institution, chartered or authorized to do business in this Commonwealth.
(2) A letter of credit shall be irrevocable. The Department may accept a letter of credit which is irrevocable for a term of 1 year if:
(i) The letter of credit is automatically renewable for additional terms unless the bank gives at least 90 days prior written notice to the Department and the permittee of its intent to terminate the credit at the end of the current term.
(ii) The Department has the right to draw upon the credit before the end of its term and to convert it into a cash collateral bond, if the permittee fails to replace the letter of credit with other acceptable bond within 30 days of the bank’s notice to terminate the credit.
(3) The letter of credit shall name the Department as the beneficiary and shall be payable to the Department under § 77.253(a)(1) (relating to procedures).
(4) A letter of credit shall be subject to the most recent edition of the Uniform Customs and Practices for Documentary Credits, published by the International Chamber of Commerce, and the laws of the Commonwealth, including 13 Pa.C.S. § § 1101—9507 (relating to Uniform Commercial Code).
(5) The Department will not accept letters of credit from a bank that has failed to make or delayed in making payment on a defaulted letter of credit.
(e) Collateral shall be in the name of the permittee, and shall be pledged and assigned to the Department free and clear of rights or claims. The pledge or assignment shall vest in the Department a property interest in the collateral which shall remain until release under the terms of this chapter, and may not be affected by the bankruptcy, insolvency or other financial incapacity of the operator. The Department will insure that ownership rights to collateral deposited are established to make the collateral readily available upon forfeiture. The Department may require proof of ownership, and other means such as secondary agreements, as it deems necessary to meet the requirements of this chapter.
Source The provisions of this § 77.224 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643; amended August 18, 2023, effective August 19, 2023, 53 Pa.B. 5159. Immediately preceding text appears at serial pages (198703) to (198705).
Cross References This section cited in 25 Pa. Code § 77.221 (relating to scope).
§ 77.225. Surety/collateral combination bond.
A permittee for surface mining activities may post a combination of surety and collateral bonds for a permit or designated phase of a permit.
Source The provisions of this § 77.225 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.221 (relating to scope).
§ 77.226. Phased deposits of collateral.
(a) A permittee for a long term mining operation or facility may post a collateral bond for a permit area in compliance with the following requirements:
(1) The permittee shall submit a collateral bond to the Department.
(2) The permittee shall deposit $10,000 or 25%, whichever is greater, of the total amount of bond determined under § § 77.201—77.205 (relating to amount and duration of liability) in approved collateral with the Department.
(3) The permittee shall submit a schedule agreeing to deposit a minimum of 10% of the remaining amount of bond, in approved collateral in each of the next 10 years or in a proportion so that final payment is made by the date required by the Department. The entire bond amount shall be submitted by the operator no later than the actual or expected completion of operations at the mine or the facility. Annual payments become due on the anniversary date of the issuance of the permit, unless otherwise established by the Department. Payments shall be accompanied by appropriate bond documents required by the Department.
(4) The Department may require additional bonding if the Department determines that a higher bond amount is necessary. The increase in the total bond amount required shall proportionately increase the remaining annual payments. The operator shall submit a new schedule within 30 days of notice by the Department of the increase in the total bond amount due.
(5) The operator shall deposit the full amount of the bond required for the facility within 30 days of receipt of a written demand by the Department to accelerate deposit of the bond. The Department may make the demand when the Department determines that the purposes of this section, this chapter or the act have not been met, including, but not limited to, when one of the following occurs:
(i) The operator has failed to make a deposit of bond amount when required according to the schedule for the deposit.
(ii) The operator has violated the requirements of the act, this chapter, the terms or conditions of the permit or orders of the Department.
(iii) The actual or expected completion of operations of the mine or the facility will occur prior to the expiration of the 10-year period determined under this section.
(6) The Department may not accept phased deposit of collateral as bond for a facility when it determines that the purposes of this section, this chapter or the act have not been met, including one of the following circumstances:
(i) The operator has failed to pay the Department when due, permit fees, fines, penalties or other payments; or has failed to deposit bond amounts with the Department when due.
(ii) The operator has indicated a pattern or history of violations of applicable statutes, this chapter, the terms and conditions of the permit, or orders of the Department, even if later corrected, which demonstrate a lack of ability or intention to comply with mining operation requirements.
Source The provisions of this § 77.226 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.221 (relating to scope); 25 Pa. Code § 77.222 (relating to form of the bond); and 25 Pa. Code § 77.228 (relating to failure to maintain proper bond).
§ 77.227. Payment in lieu of bond (PILB).
(a) In lieu of the bond otherwise required in this subchapter, an operator may elect to pay to the Department a payment as provided in this section. A person may not make a payment under this section, unless that person demonstrates to the Department’s satisfaction the following:
(1) The operator is unable to post a collateral bond otherwise required by this chapter. The operator shall demonstrate inability to post a collateral bond by an earnings test established by the Department. The operator will be deemed to be unable to post a collateral bond when the earnings test demonstrates the operator’s earnings after taxes, minus the amount of the collateral bond, are zero or less.
(2) The operator is unable to obtain a surety bond otherwise required under this chapter by submitting letters of rejection from three surety companies licensed to do business in this Commonwealth, or one letter of rejection from a broker indicating rejection from the three sureties.
(3) The operator is unable to obtain a self-bond allowed under this chapter. The operator may not convert collateral or surety bonds to payment in lieu of bonds.
(4) The operator’s past history of compliance with environmental laws does not indicate a lack of intention or ability to comply with financial responsibility requirements, including regular payments to the Department under the payment in lieu of bond provisions of this chapter and the operator is in compliance with the act.
(b) In administering the payment in lieu of bond provisions of this chapter, the Department will require the operator to submit the following:
(1) A financial test on a form approved by the Department and prepared in conformance with generally accepted accounting principles. The financial statements used to prepare the financial test shall be from the operator’s latest completed fiscal year.
(2) A report, prepared by an independent certified public accountant in conformity with generally accepted accounting principles, containing the accountant’s audit or review opinion on the financial statements for the latest completed fiscal year.
(3) After initial submission of the information required by this section, updated information shall be submitted by the operator with the license renewal applications provided for in Subchapter B (relating to surface mining operator’s license). The operator shall meet the requirements of this section relating to eligibility to make payments in lieu of bond for each succeeding fiscal year.
(4) Other information deemed necessary by the Department to determine the operator’s eligibility to make payments in lieu of bond. Failure of the operator to provide information requested by the Department shall render the operator ineligible to make payments in lieu of bond.
(c) An adverse or disclaimer of opinion expressed by the independent certified public accountant in his report shall render the operator ineligible to make payments in lieu of bond. The Department may determine the operator ineligible to make payments in lieu of bonds on the basis of other qualifications expressed by the independent certified public accountant in the report.
(d) If an operator is a subsidiary corporation, both the parent and the subsidiary corporation shall satisfy the financial eligibility requirements of this section by relying on its parent corporation. In this case, the parent corporation shall meet the eligibility, reporting and payment requirements of this section.
(e) If an operator, a parent corporation or an independent certified public accountant submits false information in the financial test or other information required by this section, the operator or parent corporation shall be ineligible to make payments in lieu of bond. In addition, the operator or parent corporation and the independent certified public accountant are subject to 18 Pa.C.S. § § 4903 and 4904 (relating to false swearing; and unsworn falsification to authorities).
(f) An operator’s payment in lieu of bond obligations is subject to the following requirements:
(1) Annual payments will be 4.75% of the total bond amount required.
(2) The first payment is due upon receipt of notice from the Department of its approval of the operator’s application for payment in lieu of bond. Annual payments due thereafter shall be paid with each license renewal application for the applicable license year.
(3) Payment made under this section, upon determination by the Department of the operator’s eligibility to make payments in lieu of bond, are not refundable and will be deposited into the Noncoal Surface Mining Conservation and Reclamation Fund to be used only for reclamation purposes. If, under the operator’s application for a license renewal, the operator has made payment under this section and, after submission of the information required by subsections (a) and (b) has been determined by the Department to be ineligible to make payments in lieu of bond, the operator is entitled to a refund of the payment after submitting to the Department acceptable surety or collateral bond.
(4) The Department may annually adjust the amount to insure that there are sufficient funds in this account to reclaim sites for which bonds posted under this subsection were forfeited.
(g) If the Department determines that the operator’s activities are of a type that bonds otherwise required to be posted by the operator would be forfeited, the Department will declare the payment in lieu of bond forfeited and notify the operator according to the procedures in § § 77.251—77.254 (relating to bond forfeiture). The declaration of forfeiture by the Department has the same force and effect on the operator as a bond forfeiture under § § 77.251—77.254, including loss of mining license.
(h) The Department’s declaration of forfeiture under this section does not excuse the operator from meeting the requirements of this chapter or other requirements under the act.
(i) The applicant shall compare the information from the financial statements with the information on the financial test and assure that the financial test accurately represents the information contained in the financial statements.
Source The provisions of this § 77.227 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.221 (relating to scope); and 25 Pa. Code § 77.222 (relating to form of the bond).
§ 77.228. Failure to maintain proper bond.
(a) If a permittee fails to post promptly additional bond required under § 77.205(a) (relating to adjustments) or fails to make timely deposits of bond according to the schedule submitted under § 77.226 (relating to phased deposits of collateral), the Department will issue a notice of violation to the permittee, and if the permittee fails to show satisfactory compliance, the Department will issue a cessation order for the permittee’s permit areas and thereafter may take appropriate actions.
(b) The permittee shall, at all times, maintain a bond in an amount and with sufficient guarantee as provided by this chapter. If a surety company who has provided surety bonds, or a bank who has provided letters of credit or certificates of deposit for a permittee, enters into bankruptcy or liquidation, or has its license suspended or revoked, or for another reason indicates an inability or unwillingness to provide an adequate financial guarantee of the obligations under the bond or instrument, the Department will issue a notice of violation to the permittee requiring that affected permits be rebonded according to the requirements of this subchapter. If the permittee fails to correct the violation within the prescribed period for correction, the Department will issue a cessation order for the permittee’s permit areas and thereafter may take appropriate actions.
Source The provisions of this § 77.228 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.221 (relating to scope).
§ 77.229. Replacement of bonds.
(a) The Department may allow permittees to replace existing surety or collateral bonds with other surety or collateral bonds, if the liability which has accrued against the permittee on the permit area is transferred to the replacement bonds.
(b) The Department will not release existing bonds until the permittee has submitted, and the Department has approved, acceptable replacement bonds. A replacement of bonds under this section does not constitute a release of bond under § § 77.241—77.243 (relating to release of bonds).
(c) In lieu of bond—state bonding—arrangements made before March 17, 1990, may be continued if the permit is in existence on March 17, 1990, and continues in force and the annual payments required to be made are made by the permittee.
Source The provisions of this § 77.229 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.221 (relating to scope).
§ 77.230. Transfer of permits.
Before a permit is transferred as provided in § 77.144 (relating to transfer of permit), the succeeding operator shall post a bond in an appropriate amount determined by the Department under this subchapter. The bond may not be for less than the amount of the bond on deposit with the Department, in the succeeding operator’s name, assuming accrued liability for the permit area.
Source The provisions of this § 77.230 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.221 (relating to scope).
§ 77.231. Terms and conditions for liability insurance.
(a) A license applicant or licensee, when required by section 5(e) of the act (52 P.S. § 3305(e)), shall submit proof of liability insurance before a license is issued or renewed and before a permit is issued. The proof shall consist of a certificate issued by an insurance company authorized to do business in this Commonwealth, and the certificate may be filed at the time of license application and renewal thereof; or, otherwise annually filed with the Department certifying that the permittee has a public liability insurance policy in force covering the licensee’s mining and reclamation operations in this Commonwealth.
(b) The insurance shall be written on an occurrence basis and provide for personal injury and property damage protection in a total amount determined by the Department on a case by case basis, and adequate to compensate persons injured or property damaged as a result of the permittee’s mining and reclamation operations and entitled to compensation under Pennsylvania law.
(c) If explosives are to be used by the permittee and loss, diminution in quantity or quality, contamination or interruption of public or private sources of water is possible as determined by the Department, the liability insurance shall include and the certificate shall provide a rider covering personal injury and property damage from these occurrences. The applicant may provide bond under subsection (i) in lieu of insurance to cover water supply loss, diminution, contamination or interruption.
(d) The insurance shall include a rider requiring that the insurer notify the Department whenever substantive changes are made affecting the adequacy of the policy, including cancellation or failure to renew.
(e) Minimum insurance coverage for bodily injury shall be $500,000 per person and $1 million aggregate. Minimum insurance coverage for property damage shall be $500,000 for each occurrence and $1 million aggregate.
(f) The insurance coverage shall be maintained in full force for the duration of the permittee’s mining and reclamation operation. The licensee shall submit annually proof of coverage. If a licensee fails to maintain the insurance, the Department will issue a notice of violation to the licensee requiring the licensee to submit proof of insurance coverage.
(g) Separate certificates of insurance may be submitted for general liability, blasting coverage and water loss coverage if the licensee is shown as the insured and not listed separately on the certificate as an additional insured.
(h) The certificate holder shall be the Department.
(i) Bond may be provided in lieu of liability insurance to cover replacements or restoration of water supplies as required under § 77.533 (relating to water rights and replacement).
(1) If the Department determines that the mining operation may affect a public or private water supply, the Department may require bond or additional insurance sufficient to replace the water supplies which could be affected as required under section 11(g) of the act (52 P.S. § 3311(g)).
(2) The bond shall be submitted on a form provided by the Department, and meet the requirements of this chapter.
Source The provisions of this § 77.231 adopted March 16, 1 990, effective March 17, 1990, 20 Pa.B. 1643; amended January 30, 1998, effective January 31, 1998, 28 Pa.B. 619; amended August 18, 2023, effective August 19, 2023, 53 Pa.B. 5159. Immediately preceding text appears at serial pages (240740) and (352571).
Cross References This section cited in 25 Pa. Code § 77.51 (relating to license requirement); 25 Pa. Code § 77.164 (relating to personal injury and property damage insurance information); 25 Pa. Code § 77.194 (relating to requirement to file a certification of liability insurance); and 25 Pa. Code § 77.221 (relating to scope).
RELEASE OF BONDS
§ 77.241. Scope.
Sections 77.242 and 77.243 (relating to procedures for seeking release of bond; and criteria and schedule for release of bond) set forth the procedures and criteria for release of bonds for mining and reclamation operations, unless otherwise specified by the terms and conditions of this chapter or by a general permit issued under this chapter.
Source The provisions of this § 77.241 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643; amended January 30, 1998, effective January 31, 1998, 28 Pa.B. 619. Immediately preceding text appears at serial pages (198711) to (198712).
Cross References This section cited in 25 Pa. Code § 77.108 (relating to permit for small noncoal operations); 25 Pa. Code § 77.195 (relating to Department responsibilities); 25 Pa. Code § 77.205 (relating to bond adjustments); 25 Pa. Code § 77.229 (relating to replacement of bonds); 25 Pa. Code § 77.253 (relating to procedures); and 25 Pa. Code § 92a.76 (relating to cessation of discharge).
§ 77.242. Procedures for seeking release of bond.
(a) Release of bond. The permittee may file an application with the Department for release of all or part of the bond liability applicable to a permit or designated phase of a permit area after reclamation, restoration and abatement work in a reclamation stage, as defined in § 77.243 (relating to criteria and schedule for release of bond), has been completed on the permit area or designated phase of a permit area, subject to the following conditions:
(1) Applications may be filed only at times or seasons that allow the Department to properly evaluate the reclamation operations reported to have been completed.
(2) Within 60 days after filing the application for release, the permittee shall submit proof of publication of the advertisement required by subsection (b). The proof of publication shall be considered part of the bond release application. If the proof of publication is not received within 60 days after filing the application for release of bond, the application will be considered incomplete and the Department may return the application with no further action.
(b) Newspaper advertisement of application. At the time of filing an application under this section, the permittee shall advertise the filing of the application in a newspaper of general circulation in the locality of the permit area. The advertisement shall:
(1) Be placed in the newspaper at least once a week for 4 consecutive weeks.
(2) Show the name of the permittee, including the number and date of issuance or renewal of the permit.
(3) Identify the location and the number of acres of the lands subject to the application.
(4) State the total amount of bond in effect for the permit area and the amount for which release is sought.
(5) Summarize the reclamation completed.
(c) Surface landowners. The application for bond release shall include copies of letters to the affected surface landowners notifying the surface landowners of the request for bond release.
(d) Objections to proposed bond release. Written objections to the proposed bond release and requests for a public hearing or an informal conference may be filed with the Department, by persons having an interest that is or may be adversely affected, within 30 days following the last advertisement of the filing of the application.
(e) Inspection of reclamation work. The Department will inspect and evaluate the reclamation work involved within 30 days after receiving a completed application for bond release, or as soon thereafter as possible.
(f) Public hearing. The Department will schedule a public hearing or informal conference if written objections are filed and a public hearing or informal conference is requested. The public hearing or informal conference shall be held in the locality of the permit area for which bond release is sought.
(1) Notice of a public hearing or informal conference shall be published in a newspaper of general circulation in the locality of the public hearing or informal conference, at least 2 weeks before the date of the public hearing or conference.
(2) The public hearing or informal conference will be held within 30 days from the date of the notice.
(3) An electronic or stenographic record may be made of the public hearing or informal conference and the record maintained for access by the parties, until final release of the bond, if requested in advance by a party in the public hearing or informal conference.
(g) Review by Department. Department review and decision will be as follows:
(1) The Department will consider, during inspection, evaluation and public hearing or informal conference decisions:
(i) Whether the permittee has met the criteria for release of the bond under § 77.243.
(ii) Whether the permittee has satisfactorily completed the requirements of the reclamation plan, or relevant portions thereof, and complied with the requirements of the act, this chapter, and the conditions of the permit.
(iii) Whether pollution of surface and subsurface water is occurring or the continuance of present pollution, and the estimated cost of abating pollution.
(2) If a public hearing or informal conference has not been held under subsection (f), the Department will notify the permittee in writing of its decision to release or not to release all or part of the bond.
(3) If there has been a public hearing or informal conference held, the notification of the decision shall be made to the permittee, and other interested parties, within 30 days after conclusion of the public hearing or informal conference.
(4) The notice of the decision will state the reasons for the decision, recommend corrective actions necessary to secure the release and notify the permittee and interested parties of the right to file an appeal to the decision with the EHB. An appeal shall be filed with the EHB under section 4 of the Environmental Hearing Board Act (35 P.S. § 7514) and Chapter 1021 (relating to practice and procedures).
Source The provisions of this § 77.242 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643; amended January 30, 1998, effective January 31, 1998, 28 Pa.B. 619; amended August 18, 2023, effective August 19, 2023, 53 Pa.B. 5159. Immediately preceding text appears at serial pages (352572) to (352574).
Cross References This section cited in 25 Pa. Code § 77.108 (relating to permit for small noncoal operations); 25 Pa. Code § 77.195 (relating to Department responsibilities); 25 Pa. Code § 77.205 (relating to bond adjustments); 25 Pa. Code § 77.229 (relating to replacement of bonds); 25 Pa. Code § 77.241 (relating to scope); 25 Pa. Code § 77.253 (relating to procedures); and 25 Pa. Code § 92a.76 (relating to cessation of discharge).
§ 77.243. Criteria and schedule for release of bond.
(a) A bond release or release from payment in lieu of a bond applicable to a permit area or designated phase of a permit area shall be released as follows:
(1) Up to 90% of the total amount of bond attributable to that portion of reclamation completed shall be released upon completion and approval by the Department for Reclamation Stage I.
(2) The balance shall be released for the entire permit area or designated phase of permit upon Department approval of Reclamation Stage II liability period.
(b) For the purposes of this section the following apply:
(1) Reclamation Stage I shall be deemed to have been completed when:
(i) The permittee completes backfilling, regrading and drainage control in accordance with the approved reclamation plan.
(ii) Topsoil has been replaced and revegetation has been established in accordance with the approved reclamation plan and the standards for the success of revegetation are met.
(iii) The lands have been stabilized to prevent accelerated erosion and sedimentation under Chapter 102 (relating to erosion control).
(iv) The permittee has successfully completed mining and reclamation operations in accordance with the approved reclamation plan, so that the land is capable of supporting postmining land use approved under § 77.653 (relating to postmining land use).
(v) The permittee has achieved compliance with the requirements of the environmental acts, this chapter and the conditions of the permits.
(2) Reclamation Stage II shall be deemed to be complete when the applicable liability period under § 77.204 (relating to period of liability) has expired.
(c) The Department will not release a bond amount deposited, or reduce the payment in lieu of bond if the release would reduce the total remaining amount of bond to an amount which would be insufficient for the Department to complete reclamation and to take measures that may be necessary to prevent adverse effects upon the environment or public health, safety or welfare under the environmental acts, the act, this chapter, the terms and conditions of the permits and orders of the Department.
(d) The publication of a Reclamation Stage I bond release request will be considered a request for final bond release for the purpose of public notice.
(e) The release of a bond by the Department does not constitute a waiver or release of other liability provided in law, nor does it abridge or alter rights of action or remedies of persons or municipalities existing in equity, or under criminal and civil common or statutory law.
Source The provisions of this § 77.243 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643; amended January 30, 1998, effective January 31, 1998, 28 Pa.B. 619. Immediately preceding text appears at serial pages (198714) to (198715).
Cross References This section cited in 25 Pa. Code § 77.108 (relating to permit for small noncoal operations); 25 Pa. Code § 77.195 (relating to Department responsibilities); 25 Pa. Code § 77.205 (relating to bond adjustments); 25 Pa. Code § 77.229 (relating to replacement bonds); 25 Pa. Code § 77.241 (relating to scope); 25 Pa. Code § 77.242 (relating to procedures for seeking release of bond); 25 Pa. Code § 77.253 (relating to procedures); and 25 Pa. Code § 92a.76 (relating to cessation of discharge).
BOND FORFEITURE
§ 77.251. Scope.
Sections 77.252—77.254 (relating to general; procedures; and preservation of remedies) set forth the procedures and criteria for the forfeiture of bond as a result of the permittee’s failure to meet the conditions upon the bond.
Source The provisions of this § 77.251 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.195 (relating to Department responsibilities); and 25 Pa. Code § 77.227 (relating to payment in lieu of bond (PILB)).
§ 77.252. General.
(a) The Department will forfeit the bond, or make an equivalent declaration for payment in lieu of bond for a permit if it determines that one of the following applies:
(1) The permittee has violated and continues to violate terms or conditions of the bond.
(2) The permittee has failed and continues to fail to conduct the mining or reclamation operations in accordance with the act, this chapter or the conditions of the permit.
(3) The permittee has abandoned the permit area.
(4) The permits for the area under the bond have been revoked, and the permittee has failed to complete the reclamation, abatement and revegetation required by the act, this chapter and the conditions of the permit.
(5) The permittee has failed to comply with a compliance schedule in an adjudicated proceeding, consent order or agreement approved by the Department.
(6) The permittee has become insolvent, or has a receiver appointed by the court; or a creditor of the permittee has attached or executed a judgment against the permittee’s equipment, materials and facilities at the permit area or on the collateral pledged to the Department; and the permittee cannot demonstrate or prove the ability to continue to operate in compliance with the environmental acts, the act, this chapter and the conditions of the permit.
(7) The permittee has failed to make payment in lieu of bond.
(b) If the operator fails or refuses to comply with a provision of the act for which liability has been charged on the bond, the Department will declare the bond forfeited.
(c) Upon certification of surety bond forfeiture by the Department, the Office of Attorney General will promptly collect the bond and pay the proceeds into the fund. Where the operator deposited cash or securities as collateral, the Department will sell the collateral and pay the proceeds into the fund or direct the State Treasurer to pay the proceeds into that fund.
Source The provisions of this § 77.252 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.195 (relating to Department responsibilities); 25 Pa. Code § 77.227 (relating to payment in lieu of bond (PILB)); and 25 Pa. Code § 77.251 (relating to scope).
§ 77.253. Procedures.
(a) If forfeiture of the bond is required, the Department will:
(1) Send written notification by registered or certified mail to the permittee, the surety on the bond and the bank issuing a letter of credit of the Department’s determination to forfeit the bond and the reasons for the forfeiture.
(2) Advise the permittee and surety of the right to appeal to the EHB under section 4 of the Environmental Hearing Board Act (35 P.S. § 7514) and 2 Pa.C.S. § § 501—508 and 701—704 (relating to the Administrative Agency Law).
(3) Proceed to collect on the bond as provided by applicable laws for the collection of defaulted bonds or other debts, consistent with this section, if timely appeal under Chapter 1021 (relating to practice and procedures) is not filed, or if an appeal is filed, and if the appeal is unsuccessful.
(b) The written determination to forfeit the bond, including the reasons for forfeiture, will be a final decision by the Department.
(c) The Department will forfeit a bond deposited for a permit area, including designated phases of a permit area and amended permit areas, except for a portion of bond which has been released as provided in § § 77.241—77.243 (relating to release of bonds).
(d) If the Department declares a collateral bond forfeited, it will pay, or direct the State Treasurer to pay, the collateral funds into the Noncoal Surface Mining Conservation and Reclamation Fund. If upon proper demand and presentation, the banking institution or other person or municipality which issued the collateral refuses to pay the Department the proceeds of a collateral undertaking, such as a certificate of deposit, letter of credit or government negotiable bond, the Department will take appropriate steps to collect the proceeds.
(e) If the Department declares a surety bond forfeited, it will certify the same to the Office of Attorney General which will enforce and collect the amount forfeited and pay it into the Noncoal Surface Mining Conservation and Reclamation Fund.
(f) Funds received from the forfeiture of bonds, both surety and collateral, will be expended by the Secretary for reclaiming and planting the area of land affected by the operation upon which liability was charged on the bond, if the Secretary determines the expenditure to be reasonable, necessary and physically possible. Funds received from the forfeited bonds in excess of the amount that is required to reclaim and plant the area of land affected by the operation upon which liability was charged, and funds received from bond forfeitures where reclamation and planting is determined to be unreasonable, unnecessary or physically impossible, may be used by the Secretary for a purpose provided by law.
(g) The Department’s declaration of forfeiture under this section does not excuse the operator from meeting the requirements of this chapter or other requirements under the act.
Source The provisions of this § 77.253 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.
Cross References This section cited in 25 Pa. Code § 77.195 (relating to Department responsibilities); 25 Pa. Code § 77.224 (relating to special terms and conditions for collateral bonds); 25 Pa. Code § 77.227 (relating to payment in lieu of bond (PILB)); and 25 Pa. Code § 77.251 (relating to scope).
§ 77.254. Preservation of remedies.
(a) Remedies provided in law for violation of the act, the Surface Mining Conservation and Reclamation Act (52 P.S. § § 1396.1—1396.19b), The Clean Streams Law (35 P.S. § § 691.1—691.1001), the Air Pollution Control Act (35 P.S. § § 4001—4015), the Dam Safety and Encroachments Act (32 P.S. § § 693.1—693.27), the Coal Refuse Disposal Control Act (52 P.S. § § 30.51—30.66), the Solid Waste Management Act (35 P.S. § § 6018.101—6018.1003) and The Bituminous Mine Subsidence and Land Conservation Act (52 P.S. § § 1406.1—1406.21), regulations thereunder or the conditions of the permits, are expressly preserved.
(b) Nothing in this subchapter is an exclusive penalty or remedy for violations of law. Action taken under this subchapter does not waive or impair other remedies or penalties provided in law.
Authority The provisions of this § 77.254 amended under section 5 of The Clean Streams Law (35 P.S. § 691.5); sections 4(a) and 4.2 of the Surface Mining Conservation and Reclamation Act (52 P.S. § § 1396.4(a) and 1396.4b); and section 1920-A of The Administrative Code of 1929 (71 P.S. § 510-20).
Source The provisions of this § 77.254 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643; amended August 21, 2015, effective August 22, 2015, 45 Pa.B. 4904. Immediately preceding text appears at serial pages (198717) to (198718).
Cross References This section cited in 25 Pa. Code § 77.195 (relating to Department responsibilities); 25 Pa. Code § 77.227 (relating to payment in lieu of bond (PILB)); and 25 Pa. Code § 77.251 (relating to scope).
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