Regulation, Legislation and Technical Committee Meeting
Wednesday, June 7, 2000
Rachel Carson State Office Building
9:00 a.m.

Members in attendance: Jack Chamberlain, Wayne Crawford (alternate), George Ellis (alternate), Richard Fox (alternate), Susan Germanio (alternate), Walter Heine, David Osikowicz, Rep. Sam Smith, David Strong, Bruce Tetkoskie (alternate), Sue Wilson (alternate), Fred Wolf, Mike Young (alternate).

Others in attendance: Bob Biggi (OSM), Dan Blaschak (Blaschak Coal Corp.), John Blaschak (Fisher Mining), Joel Bostein (DP&R), Gary Camus (Pa. Game Commission), Robert Dolence (DEP,) Rod Fletcher (DEP), Charlie Gutshall (counsel for Pennsylvania Anthracite Council), Jeff Jarrett (DEP), Bob Biggi (OSM, Harrisburg), Dan Blaschak (Pennsylvania Anthracite Council), Joe Imler (Evergreen), Mick McCommons (DEP), Joe Pizarchik (DEP), J. Scott Roberts (DEP), Billie Ramsey (ARIPPA), Evan Shuster (DEP/BMR), Joe Sieber (DEP Policy Office), Kurt Weist (PennFuture).

Meeting Called to Order

MRAB Board Chairman Fred Wolf called the meeting to order at 9:10 a.m. Fred made a few opening remarks and turned the meeting over to Regulation, Legislation and Technical Committee Chairman, David Osikowicz. After introductions, Dave made a motion to accept the minutes of the prior meeting on April 13. Richard Fox seconded the motion.

Bob Dolence gave an update of a meeting held with Senator Rhoades, Dan Blaschak, Fred Wolf, Mike Young, George Ellis, Scott Roberts and attorneys Joe Pizarchik and Charles Gutshall to discuss Full Cost Bonding (FCB). Dan Blashak and Bob Dolence agreed it was a productive meeting. The primary consensus was the commonly referred to "federal exemption" for anthracite in federal SMCRA was in reality a "referral in federal regulation to state law." Susan Wilson said she also had a meeting with Scott who was able to answer her questions as well. Ms. Wilson also noted a lot of development of FCB needs to occur; however it is a good idea to move ahead.

Dave Osikowicz then opened the topic of FCB for discussion. Jeff Jarrett shared with the group OSMís negative response to the remining program and white papers from the last meeting. This involved the use of the Abandoned Mines Land program (AML) monies to take care of part of the property that is being remined. The new Title IV language states "Öif a bond is forfeited on a remining site and not adequate, the site is still eligible for expenditure of Title IV funds." OSMís original position regarding this is that they did not need to research the question because the plain reading of the statute is clear and unambiguous. DEP disagreed and said the language does not clarify whether the shortfall has to be inadvertent or planned. It just says it is forfeited. Departmental research revealed that the Congressional Interior and Insular Affairs Committee was the only report that addressed that specific change in that statute and said the purpose of the change was to create a remining incentive. DEPís position is that the language is not unclear and unambiguous at all. How does that create a remining incentive? It is meaningless until after forfeiture, and only then when the bond is inadvertently adequate. The language simply says "if". It can be planned for. It can be inadvertent. OSM agreed with DEPís assessment that their initial interpretation was not correct because the language did not clearly say you could not do it. But following that same logic, the language doesnít clearly say that you can do it; therefore, following that logic, the answer has to be no.

The committee discussed the issue in length in search of alternatives. They determined that endorsement of FCB is still a viable option and they need to continue the search for creative solutions. OSMís decision is unfortunate, but not finality to pursuing FCB. Bob Biggi (OSM) stated that OSM approached their solicitors, but could not get any to back the right interpretation. George Ellis encouraged Bob Biggy to work with the committee towards a creative alternative to this national issue.

Bob Dolence raised a point regarding a July 1999 meeting in Washington, D.C. with OSM. The director of OSM recommended looking into the AML fund as a partial solution to some of the bonding problems. The AML fund is not government money, but industry money. It makes sense to promote remining as the 1992 Rahal Amendment provides. He committed to continue to seek a solution with OSM for a "yes" answer. Bob Biggi stated that the letter allows for other approaches and affirmed that he is willing to orchestrate a meeting with solicitors.

Jeff Jarrett noted that the Department received a letter from OSM months ago in response to the Departmentís search for leadership to resolve the issue on a national basis. OSM told the Department that they hired Tetratech in order to obtain guidance in creating a national regulatory framework. Jeff asked when the Tetratech report (which was originally due in April) would be finalized. Bob Biggi said it is due this month. The subject was then tabled to allow time for other discussion.

Sue Wilson briefed the committee on questions she previously raised with Scott Roberts regarding the issue papers: How do we ensure that we are protecting against future forfeiture of state money? A ten percent rate already exists. How much can we remine and then claim? How can we better defend the use of the $12.5 million? Bob Dolence confirmed that his office is working on a breakdown of the expenditures from Project Restore and the current bond pool as part of the presentation to the Budget Office. He added that with the leverage on the $12.5 million, in spite of forfeitures, the value to the Commonwealth could be as much as $125 million worth of reclamation under the new system.

Scott Roberts passed out two proposed language revisions to the plan -- one for reporting and recalculation of bond amounts, and a new section on dispute resolution. The latter would provide a mechanism for bond dispute resolution before appearing before the hearing board.

A discussion ensued regarding reporting and recalculation compliance with the following explanations:

Dave Osikowicz reviewed the committeeís role and the task laid before it in December 1999 to look at full cost bonding in depth. After discussion, the committee unanimously voted, with no abstentions, to proceed before the MRAB with full cost bonding.

George Ellis thanked the legislative representative and CAC members for looking at the big picture. He also commended the committee, the Department and the Department participants for their creativity and mutual cooperation in seeking solutions to a complex historic problem and the great strides that were made since January.

New Business

Mick McCommons completed calculation and comparison of the reclamation bond requirements of Pennsylvania, Ohio, Kentucky, Virginia, West Virginia and Maryland, which he shared with the committee. At the request of the committee, the Department will conduct more comparisons to show Pennsylvaniaís FCB costs with a more diverse range of example operations.

Jeff Jarrett gave an overview of other states in light of his visit with West Virginia DEP. They have an ABS, site-specific bonds that are short on demand and greater numbers of water problems than most other states. A critical issue for all other states is the financial guarantee for mine draining problems. Oklahoma also possesses a mine with a discharge. No state is immune to these problems.

The Department conducted comparison reports of water quality impacts on remining used to support the EPA proposal and remining efforts. The bound version is available. This contains the process of building a post mortem study with one percent failure rates, and reveals where and why mistakes were made. Jeff stated what they expected to find was that stream loading got better because they reduced the flows through remining. What they found is that about 47-50 percent of the time the discharge got better in terms of stream loading but the surprise was that the other 53 percent the water quality actually got better. Also the vast majority of those discharges got better in almost category. They analyzed in terms of acid quality, iron and other perimeters. The only one that did not show a dramatic improvement was manganese, which according to a prior study, is irrelevant when there is an alkaline discharge. The numbers for remining permits issued under Subchapter F & G are readily available. This information adds to the Boardís overall understanding of the benefits as well as the breakdown in terms of remining permits for AMD.

Next Meeting

A meeting time and date will be determined at the MRAB meeting.


There being no further business, Dave Osikowicz made the motion to adjourn the meeting. Water Heine seconded it. The meeting adjourned at 11:35 a.m.