Proceeds from bond forfeitures and other income associated with Pennsylvania's alternative and full-cost bonding programs are deposited into one of three funds. These funds are the Surface Mining Conservation and Reclamation Fund, the Coal Refuse Disposal Control Fund and the Bituminous Mine Subsidence and Land Conservation Fund. In addition, proceeds from permit application fees for coal mining activities and fines and penalties levied on deep mines are deposited into the Clean Water Fund. The details on these funds that are relevant to Pennsylvania's coal mining bonding programs are discussed below.

The Surface Mining Conservation and Reclamation Fund is established under PA SMCRA (52 P.S. §1396.18(a)). The primary purposes of the fund are to provide for the revegetation or reclamation of land affected by surface mining activities and for the restoration or replacement of water supplies affected by surface mining activities (52 P.S. §1396.18(a)).

The fund receives money from a variety of sources. The proceeds from bond forfeitures represent the most important source. All license, permit and reclamation fees collected under the alternative bonding program are also deposited into the fund. In addition, fines collected under Section 1396.3a, penalties collected under Section 1396.18e, civil penalties collected under Section 1396.18d, and cash deposits, securities and costs recovered from the Clean Streams Law as related to surface mining, are deposited into the fund (52 P.S. §1396.18(a)). However, funds from each of these sources are specifically earmarked for certain activities.

Money deposited into the fund from surface coal and coal refuse reprocessing permit and reclamation fees, and the interest accrued from these fees, can be used for the reclamation of any land and the restoration of its water supplies. These areas must have been affected by surface mining operations on sites where the department has forfeited bonds. These funds are a financial supplement to forfeited bonds deposited in the bond forfeiture fund (52 P.S. §1396.18(a); 25 Pa. Code §86.187(a)(1)).

Money deposited in the fund from the forfeiture of mining bonds can only be used for the reclamation of land and restoration of water supplies on the specific site that was affected by the surface mining operations where the liability was charged on the bond. If there are excess funds from these bonds, the department may use these funds to reclaim land and restore water supplies affected by any surface mining operations where bonds have been forfeited (25 Pa. Code §86.190(c)). However, moneys received from bond forfeitures need not be used where reclamation is unreasonable, unnecessary or impossible (52 P.S. §1396.18(b); 25 Pa. Code §86.190(a)).

The interest, however, that has accrued on these bond forfeitures can be used for the reclamation of land and the restoration of water supplies of any site affected by surface mining operations on sites where the department has forfeited bonds. The interest is used as a financial supplement in the reclamation and restoration of bond forfeiture sites. (25 Pa. Code §86.187(a)(2)).

Existing balances in the SMCR Fund are presented in Table 25.

Table 26 summarizes the recent average annual revenue to the Surface Mining Conservation and Reclamation Fund by category. The summary excludes proceeds from bond forfeitures because these funds are restricted to expenditures on the sites for which the bonds were posted. As has been previously discussed, the income from reclamation fees is available only to supplement site-specific bonds. In recent years, this income has averaged $680,000 annually. The remaining categories of income – licenses, fees, fines, penalties and interest – are also authorized for use in supplementing expenditures for site-specific bond forfeitures. However, these categories are additionally authorized for expenditures in support of the Remining Operators Assistance Program (ROAP) and for administrative expenses related to the operation of the bond forfeiture program. In recent years, the revenue from these categories has averaged approximately $2 million annually. Further, a total of $450,000 in financial support has been provided for the ROAP program.

Section 14 of the Coal Refuse Disposal Control Act (CRDCA) establishes the Coal Refuse Disposal Control (CRDC) Fund (52 P.S. §30.64). All fines, civil penalties, bond forfeitures and fees collected are to be paid into the CRDC Fund (52 P.S. §30.64). Forfeited bond money from coal refuse disposal sites also is contributed to the CRDC Fund. (52 P.S. §30.56(b)).

The department is authorized to charge reasonable fees for coal refuse disposal applications and permits in accordance with regulations (Section 5(b) (52 P.S. §55(b)) and Section 6(a) (52 P.S. §56(a))) and requires self-bonding permittees to pay an annual review fee. The amount of the annual review fee is to be determined by the department. Section 86.17 of the regulations establishes various fees and Section 86.159(3) establishes the annual review fee for self-bonding permittees. Sections 11 and 12 of the CRDCA (52 P.S. §§30.61 and 30.62) authorize the assessment of fines and civil penalties. Subchapter G of Chapter 86 of the regulations contains provisions governing the assessment of civil penalties under the Coal Refuse Disposal Control Act.

Section 14 of the CRDCA provides the CRDC Fund "shall be administered by the department for use in the elimination of pollution, the abatement of health and safety hazards and nuisances and such other purposes as are necessary to implement the provisions of the Act (CRDCA) pursuant to the rules and regulations adopted by the Environmental Quality Board" (52 P.S. §30.64). Section 86.3, the regulations adopted by the Environmental Quality Board, provides that the money in the CRDC Fund "may be used by the department for the elimination of pollution, the abatement of health and safety hazards and nuisances, reclamation and other related uses including conducting scientific studies and research as authorized under the Coal Refuse Disposal Control Act." Section 6(a)(8) authorizes the department to require a self-bonding permittee to pledge real and personal property to guarantee the self-bond and authorizes the department to use CRDC Fund money to acquire and dispose of such property in the event of default.

Whereas Chapter 86 of the regulations contains general provisions that apply to coal mining activities, most of the provisions governing bond forfeiture are limited to SMCRA and the SMCR Fund. Sections 86.187-86.190 are specifically limited to the use of money in the SMCR Fund. Sections 86.181, 86.182 and 86.185 are generally applicable to coal mining activities except where the provisions are contrary to the provisions of the CRDCA governing the use of money in the CRDC Fund or BMSLCA governing the use of money in the BMSLC Fund.

The current balance in the Coal Refuse Disposal Control Fund is approximately $680,000. Table 27 is a summary of recent average annual revenue into the fund. As shown in the table, income, including proceeds from bond forfeitures, has been less than $100,000 annually.

Section 17.2 of the Bituminous Mine Subsidence and Land Conservation Act (BMSLCA) establishes the Bituminous Mine Subsidence and Land Conservation Fund (BMSLC Fund). (52 P.S. §1406.17b). All funds received by the department from permit fees, forfeiture of bonds, cash deposits and securities, and from all fines and all civil penalties collected under BMSLCA are to be held in the BMSLC Fund. However, Section 315(b) of the Clean Streams Law (CSL) (35 P.S. §691.315(b)) provides that if the operator was engaged in the operation of a deep mine at the time of violation which resulted in bond forfeiture, then the funds are to be paid into the Clean Water Fund. Generally, the CSL provision has been construed to apply to the bond posted for mine drainage.

Section 5(h) authorizes the department to collect reasonable filing fees for applications in accordance with rules and regulations, and Section 6(b)(13) requires self-bonding permittees to pay an annual fee in an amount determined by the department. Section 86.17 of the regulations establishes various fees and Section 86.159(3) establishes the annual review fee for self-bonding permittees. Section 17 of BMSLCA authorizes the assessment of fines and penalties. Subchapter G of Chapter 86 of the regulations contains provisions governing the assessment of civil penalties under BMSLCA. (Also under CRDCA, CSL and SMCRA.)

Section 17.2 of BMSLCA provides that the money in the BMSLC Fund "shall be used by the department for the protection of the health, safety and general welfare of the people of the Commonwealth of Pennsylvania, and for the conservation of surface land areas which may be affected by the deep mining of bituminous coal." Section 6(b)(8) authorizes the department to require a self-bonding permittee to pledge real and personal property to guarantee the permittees self-bond and; in the event of a default, the department is authorized to use BMSLC Fund money to acquire and dispose of such property.

While Chapter 86 of the regulations contains general provisions that apply to coal mining activities, most of the provisions governing bond forfeiture are limited to SMCRA and the SMCR Fund. Sections 86.187-86.190 are specifically limited to use of money in the SMCR Fund. Sections 86.181, 86.182 and 86.185 are generally applicable to coal mining activities, except where the provisions are contrary to the provisions of the BMSLCA governing the use of money in the BMSLC Fund or CRDCA governing the use of money in the CRDC Fund.

The current balance in the Bituminous Mine Subsidence and Land Conservation Fund is approximately $230,000. Since 1990, the average annual revenue into the fund has been less than $35,000.

Section 8 of the Clean Streams Law (CSL) establishes the Clean Water Fund (35 P.S. §8). The fund is the repository for all fines collected under the penal provisions of the CSL, all civil penalties collected under section 605, all permit fees except those imposed pursuant to sections 202, 203 and 207, and all bond forfeitures and costs recovered under section 315. The fund is to be used by the department for the elimination of pollution. Receipts from permit fees, fines and penalties for deep mines and permit fees for surface mine drainage are deposited into the fund. However, the fund also receives revenues from many non-mining activities, and none of its assets are specifically designated for use on sites where reclamation is needed because of forfeitures.