RULES AND REGULATIONS

Title 25--ENVIRONMENTAL PROTECTION

ENVIRONMENTAL QUALITY BOARD

[25 PA. CODE CH. 86]

New Reclamation and Remining Incentives

[26 Pa.B. 4181]

   The Environmental Quality Board (Board) by this order amends Chapter 86 (relating to surface and underground coal mining: general). The regulations implement various remining and reclamation incentives contained in the Surface Mining Conservation and Reclamation Act (act) (52 P. S.  1396.1--1396.19a).

   This order was adopted by the Board at its meeting of June 18, 1996.

A.  Effective Date

   These regulations will go into effect upon publication in the Pennsylvania Bulletin as final rulemaking.

B.  Contact Persons

   For further information, contact Peter T. Slack, Director, Bureau of Mining and Reclamation, Room 209 Executive House, P.O. Box 8461, Harrisburg, PA 17105-8461, (717) 787-5103 or Leigh Cohen, Assistant Counsel, Bureau of Regulatory Counsel, P.O. Box 8464, Harrisburg, PA 17105-8464, (717) 787-7060. Persons with a disability may use the AT&T Relay service by calling (800) 654-5984 (TDD users) or (800) 654-5988 (voice users). This proposal is available electronically through the Department of Environmental Protection (Department) web site (http://www.dep.state.pa.us).

C.  Statutory Authority

   The final rulemaking is being made under the authority of section 4.2 of the act (52 P. S.  1396.4b), which contains the general rulemaking authority for establishing a remining and reclamation incentive program; and under section 1920-A of The Administrative Code of 1929 (71 P. S.  510-20) which authorizes the Board to adopt regulations necessary for the Department to perform its work.

D.  Background and Summary

   The Board is revising Chapter 86 by adding a new subchapter which creates a remining and reclamation incentive program to encourage reclamation of abandoned mine lands by active coal mine operators. This program is authorized by the 1992 amendment to the act (the act of December 18, 1992 (P. L. 1384, No. 173) (Act 173)) and by the 1996 amendment to the act (the act of May 22, 1996) (P. L. 232, No. 43) (Act 43)). Acts 43 and 173 also authorized funding for this program by establishing the Remining Environmental Enhancement Fund and the Remining Financial Assurance Fund.

   The act, as amended by Acts 43 and 173, directs the Board to propose regulations implementing certain remining and reclamation incentives. Section 4.2(h) of the act authorizes the Board to establish an operator qualification system with standards and criteria for operators wishing to participate in the remining and reclamation incentives program (ROAP). Section 4.10 of the act (52 P. S.  1396.4j) provides for a remining operator's assistance program (ROAP) to assist and pay for the preparation of applications for qualified operators proposing to remine abandoned mine lands. Section 4.12 of the act (52 P. S.  1396.4l) authorizes the Department to financially guarantee the bond obligation on remining areas for certain qualified operators who make payments to the Department. This section also identifies the Remining Financial Assurance Fund as the sole source of funds for this program. Section 4.13 of the act (52 P. S.  1396.4m) authorizes the Department to issue bond credits to a qualified mine operator for voluntary reclamation of abandoned mine lands. The bond credit program is supported solely by the Remining Financial Assurance Fund.

   Section 18(a.1) of the act (52 P. S.  1396.18(a.1)) establishes the Remining Environmental Enhancement Fund to support the remining and reclamation incentives program including ROAP. Section 18(a.1) of the act authorizes the Department to transfer $1 million annually into the Remining Environmental Enhancement Fund from license and permit fees and from fees, fines and penalties collected under the various coal mining acts. Section 18(a.2) of the act establishes the Remining Financial Assurance Fund to support the financial guarantees on remining areas program and the bond credit program. Section 18(a.2) of the act authorizes the Governor to transfer up to $5 million from the allotment in section 16(a)(1) of the Land and Water Conservation and Reclamation Act (32 P. S.  5116(a)(1)) to the Remining Financial Assurance Fund. Finally, section 18(a.3) of the act establishes qualifications which an operator must have in order to participate in the remining and reclamation incentives program.

   These regulations were discussed with the Mining and Reclamation Advisory Board (MRAB). The MRAB recommended these amendments be moved to final rulemaking at its meetings on July 6, 1995, and April 25, 1996.

E.  Summary of Comments and Responses on the Proposed Rulemaking

   Notice of proposed rulemaking was published at 24 Pa.B. 2110 (April 23, 1994). The proposal set forth a 60-day public comment period which concluded on June 22, 1994.

   The Board held one public hearing (May 26, 1994) for the purpose of accepting comments on the proposed amendments. The Department has considered the comments received at this hearing in formulating the final amendments to these regulations.

   A comment and response document summarizing and responding to all comments received by the Board during the public comment period, and from the Independent Regulatory Review Commission (IRRC), was prepared by the Department and is available upon request from Peter T. Slack, whose address is identified in Section B of this Preamble.

   The Department solicited and received informal comments from the Federal Office of Surface Mining (OSM) and the MRAB on this rulemaking package.

   After the public comment period on the proposed amendments expired, Act 43 became effective. This act contains several corrections to technical errors in Act 173, and it authorizes several recommendations by the MRAB which revise sections 4.12 and 4.13 of the act dealing with payment in lieu of bond and bond credits, respectively. The revisions to section 4.12 of the act replaced an erroneous reference to the Remining Environmental Enhancement Fund with the correct reference to the Remining Financial Assurance Fund, and replaced the payment in lieu of bond program with a program which financially guarantees the bond obligation of a qualified operator on remining areas. Section 4.13 of the act was amended to allow transfer of bond credits, to allow bond credits to be used a second time and to provide for termination of unused bond credits.

   The following is a summary of major comments received and changes which have been made to the proposed rulemaking as a result of the comments received, as well as the effect of Act 43 on the act. The summary of comments is listed in the same order as the proposed amendments found at 24 Pa.B. 2110.

   1.  Definitions

   Section 86.252.

   a.  Abandoned mine lands

   Several commentators stated that the definition of ''abandoned mine lands'' does not clearly include bond forfeiture sites, since it is not clear whether a bond would be considered to be in effect after it has been forfeited by the operator but before the Department has received the funds.

   The Board agrees. The definition of ''abandoned mine lands'' has been revised to specifically refer to bond forfeiture sites for which the bonds have been collected by the Department.

   b.  Remining area

   One commentator stated that designation of a remining area must be done on a site specific basis according to section 4.9 of the act (52 P. S.  1396.4i). The commentator further noted that defining a remining area under section 4.9 of the act would conflict with the intent of ROAP.

   The Board finds that a definition of ''remining area'' is needed in order to implement ROAP (section 4.10 of the act) and the financial guarantees program (section 4.12 of the act). Sections 4.10 and 4.12 of the act allow operators to remine areas that meet certain criteria regardless of whether or not the Department has previously designated the area as suitable for remining. The section 4.9 of the act process for designating areas suitable for remining may be developed by future rulemaking.

   Other commentators suggested that areas unaffected by previous mining may be needed to support the remining operation. The areas would be used for facilities such as haul roads, drainage controls, equipment storage, coal preparation and storage. These areas should be included in the remining area. IRRC recommended that the definition be amended to allow the remining area to extend beyond 300 feet if the operator can demonstrate that a larger area is needed to undertake the remining operation.

   The Board agrees that in some cases unaffected lands may be needed to support remining activities. As proposed, the definition allowed additional undisturbed area if the permittee demonstrated the need for it. However, the definition of ''remining area'' has been clarified by specifically referring to previously undisturbed areas needed for support activities related to the remining.

   In its comments, OSM expressed concern that these provisions and definitions may allow use of alternate reclamation standards on sites not eligible for alternate standards under the Federal program.

   The Board points out that these amendments do not change the reclamation performance standards contained in the existing, OSM-approved coal mining program.

   c.  Other terms

   The definitions of ''adverse opinion,'' ''payment in lieu of bond,'' ''percent profit before taxes to total assets'' and ''profit before taxes'' have been deleted due to significant revisions to  86.281--86.284 of the proposed amendments relating to payment in lieu of bonds. A definition has been added for ''financial guarantee'' in order to implement the revisions to section 4.12 of the act. Section 4.12 of the act now deals with financial guarantees for operators conducting remining. Further discussion of these changes can be found in the subsection of this Preamble dealing with financial guarantees.

   2.  Operator and project qualification.

   Section 86.253.

   Two commentators objected to  86.253(a)(5) being more stringent than the act. They noted that an operator who had a single violation of one of the listed regulations would be ineligible even if the violation was corrected in a timely manner.

   Subsection (a)(5) has been deleted, making the criteria in revised subsection (a) equivalent to the criteria established by the act.

   In its comments, OSM suggested that an applicant for ROAP remining incentive should meet compliance as well as ownership and control requirements before the Department expends funds for assistance.

   The Board notes that these requirements are contained in subsection (a)(1) which refers to the mining license including ownership and control information and subsection (a)(2) which refers to the compliance requirements for obtaining a permit. An operator must meet these requirements before being approved for ROAP.

   Three commentators stated that subsection (b)(1), which requires the operator to demonstrate that the proposed activity is technologically and economically feasible, contradicts section 4.9 of the act. Section 4.9 of the act states that the Department, when designating areas suitable for remining, must make this determination. Furthermore, they note that section 4.9 of the act requires the Department to prepare a report which contains enough information to allow its use in preparation of a permit application.

   The Board disagrees. The statutory authority section of the preamble for the proposed amendments specifically excluded any reference to section 4.9 of the act from this rulemaking. Additionally, the Board points out that  86.253 reiterates the requirements of section 18(a.3) of the act. These requirements apply to any operator proposing to participate in a program funded by the Remining Environmental Enhancement Fund or the Remining Financial Assurance Fund, namely ROAP, the financial guarantees on remining areas and reclamation bond credits. The process for designating areas suitable for remining may be the subject of future rulemaking.

   IRRC found that the right of entry requirements of subsection (b)(4) were similar to the right of entry requirements in  86.263(1) and 86.264(b)(6)(i) (relating to eligibility for assistance; and applications for assistance). IRRC recommended the amendments address the applicant's responsibility to demonstrate the right to enter, mine, and the like, in a single provision such as subsection (b)(4).

   The Board disagrees with this recommendation. The Board believes that  86.263(1) and 86.264(b)(6)(i) differ substantively from subsection (b)(4) and from each other. Subsection (b)(4) requires a person who wishes to utilize any of the three incentives to demonstrate his right to enter onto and affect that property by remining or reclamation and his right to remove materials as necessary to accomplish reclamation. The removal of materials and structures is not the same as mining. An example would be the removal of abandoned equipment, buildings or coal refuse. In many cases, the owners of these items may not be the landowner.

   Sections 86.263(1) and 86.264(b)(6)(i) are provisions in ROAP and refer to the person's right to enter the property and mine coal under section 4(a)(2)(F) of the act. Section 86.263(1) provides notice to an operator that he must have the right to enter and mine the property to be eligible for ROAP while  86.264(b)(6)(ii) identifies specific documents which must be included in the operator's application for assistance.

   3.  Program services and application approval.

   Sections 86.261 and 86.265.

   Two commentators recommended that the operator be given an opportunity to participate in the selection of a qualified consultant. As written,  86.261 states that the Department will select the consultant.

   Section 86.261 reflects the Department's ultimate responsibility over ROAP. However,  86.265, which deals with application approval, has been revised to state that the operator may select a qualified consultant from the list of consultants approved by the Department.

   4.  Eligibility for assistance.

   Section 86.263.

   Several commentators found the reference to  86.253 in this section to be confusing. Section 86.253(b)(1) requires the operator to demonstrate that the proposed activity will not result in a violation of applicable water quality standards. The commentators note that this demonstration requires submitting information equivalent to an application for permit, and that the purpose of ROAP is to obtain this information.

   To eliminate confusion,  86.263 has been revised to refer to  86.253(a), which relates only to the operator`s eligibility. An additional change was made to paragraph (1) to indicate that it applies specifically to the remining area.

   Two commentators noted that paragraph (3) refers to abandoned mine lands or lands for which the Department has forfeited and collected reclamation bonds. They questioned its applicability to coal refuse.

   The Board notes that the definition of ''abandoned mine lands'' specifically includes unreclaimed coal refuse. Paragraph (3) has been further revised by the deletion of superfluous wording.

   5.  Applications for assistance.

   Section 86.264.

   Three commentators were concerned that under this section the Department would be paying a consultant to obtain information and prepare reports while section 4.9 of the act clearly states that the Department will prepare the report.

   The Board again notes that this rulemaking does not address section 4.9 of the act which deals with designating areas suitable for remining. Furthermore, section 4.10 of the act clearly directs the Department to pay for this information. Other changes were made to this section to indicate that these requirements apply specifically to the remining area.

   6.  Notice

   Section 86.266.

   Under this section, the Department will inform the applicant if the application for assistance is denied. One commentator was concerned about the operator`s right to redress for losses if the application is rejected or delayed due to unacceptable work by a consultant not chosen by the operator.

   The Board believes that this commentator is confusing the application for assistance with a permit application. Section 86.266 deals only with the application for assistance under ROAP. The mine operator is responsible for preparing this application. Once the application for assistance is approved and a consultant selected, the consultant is responsible for obtaining specific information for use in a permit application. The Department will make sure that this information is of adequate quality before the consultant is paid. Additionally, under revised  86.265 (relating to application approval) the operator will select the qualified consultant to perform the services.

   An additional change was made to subsection (c) to clearly indicate its applicability to the remining area.

   7.  Basic qualifications for consultants and laboratories.

   Section 86.269.

   Three commentators stated that the analytical laboratory performing ROAP work should be properly certified.

   The Board believes this concern is already addressed. In order to participate in ROAP, a laboratory must demonstrate to the Department's satisfaction that it meets the applicable requirements of subsection (a).

   Since subcontracting laboratory services is allowed, several commentators requested that subcontracting the services of other specialists such as biologists, hydrologists, chemists, and the like, should also be allowed.

   The Board agrees with the suggestion. Subsection (b) has been redrafted to allow consultants to subcontract various specialties in addition to laboratory services.

   Subsection (a)(6)(iv) contains a reference to the Department's Overburden Sampling and Testing Manual. One commentator objected to this publication stating that, unless the Board intends to proceed with rulemaking for overburden analysis, subsection (a)(6)(iv) should be deleted.

   The document identified in the proposed regulation and titled Overburden Sampling and Testing Manual describes sampling and analytical procedures for overburden testing. The commentator had confused this document with a proposed Department manual for interpreting overburden analysis data as a means of predicting the occurrence of acid mine drainage. The commentator later withdrew his objection to the document identified in the regulation.

   8.  Operator liability.

   Section 86.270.

   Two commentators expressed concern with subsection (a)(4) which requires an operator to reimburse the Department for services performed under ROAP if the operator fails to mine within 3 years of obtaining a permit. They noted that there are many factors beyond the operator's control which could result in an operator failing to meet this requirement and that the act has no such requirement.

   A similar concern was expressed over subsection (a)(5), which requires reimbursement if the operator sells, transfers or assigns the permit to an operator who does not qualify under  86.253. One commentator suggested that if a provision to prevent fraud is necessary, this subsection should be redrafted to provide that an operator must reimburse the Department if the operator knowingly transfers the permit to an operator who does not meet the qualifications in  86.253 and fails to complete the reclamation plan in the transferred permit.

   While the act contains no specific provisions concerning reimbursement for ROAP services, sections 4.2(h) and 18(a.3) of the act provide the Department with the authority to establish a program which includes provisions for protecting funds and accomplishing reclamation in a timely manner. The requirement to begin mining within 3 years of receiving a permit utilizing ROAP funds is consistent with  86.40(b) (relating to permit terms), which relates to permit terms. Section 86.40(b) states that a permit shall terminate if coal mining activities have not begun within 3 years. If the expected remining will not be initiated in a timely manner, the money spent by the Department should be returned for others to use. This same provision is also found in the small operator assistance program (SOAP) in  86.94 (relating to applicant liability). Since ROAP and SOAP are similar programs in services provided and since SOAP has operated effectively for many years, the Board has not changed this section.

   The Board also rejects the suggestion to require reimbursement only if the operator knowingly transfers the permit to an unqualified operator. It would be impossible for the Department to determine if the first operator knew that the successor was not qualified. This requirement does not prevent the transfer of a permit obtained with ROAP money. It merely requires the operator who sells the permit to reimburse the Remining Environmental Enhancement Fund if the new operator is not qualified to participate in the remining and reclamation incentives program.

   9.  Financial guarantees to insure reclamation--general.

   Section 86.281.

   During proposed rulemaking,  86.281 was entitled ''Financial assurance for payment in lieu of bond-general.'' As a result of the Act 43 amendments to section 4.12 of the act, this section has been retitled and revised.

   The phrase ''financial guarantees'' replaces payment in lieu of bond as a better descriptor of the program. The latter phrase may have suggested that  86.143 (relating to requirement to file a bond) would not apply to remining areas under this program. The new wording more accurately represents the money reserved for an operator in the special account in the Remining Financial Assurance Fund as a financial guarantee which can be used for the operator`s bonding obligation under  86.143.

   Act 43 also revised the basis for determining the total amount of guarantees which may be supported by the special account in the Remining Financial Assurance Fund. The total amount is to be determined by the Department on a loss reserves basis established by the historical rate of mine operator bond forfeiture with a reasonable margin of safety. In other words, the total amount of guarantees which can be issued will equal the amount of money in the special account divided by the sum of the forfeiture rate and margin of safety. The forfeiture rate for permits issued since 1985 has been approximately 6%.

   Section 86.281 has been further revised for clarity and as recommended by the MRAB. This section now limits the total amount from the special account which may be reserved per permit to 10% and per operator to 30%.

   10.  Participation requirements.

   Section 86.282.

   The general consensus among the commentators was that under the proposed requirements for participation, very few, if any, operators would qualify. Many believed that the proposed paperwork requirements alone were onerous enough to cause any operators who could qualify to avoid the program. An example of one specific problem was basing operator eligibility on a profit ratio of 6.2% over each of the past 5 years. The commentators have suggested that this requirement would have eliminated many financially sound companies from participation.

   Another comment was that this section required statements from a certified public accountant (CPA) for the current and preceding 5 years. Several commentators believe that this may be an unreasonable expense for small operators who do not otherwise need the services of a CPA.

   The Board has reconsidered and eased the financial standards for participation in this program. The ratio of profit before taxes to total assets has been removed from the financial test. The remaining criteria must be met only at the time the operator applies for participation or for an increased level of participation in the program. The requirement to meet these criteria on an annual basis has been removed. Financial statements from an officer of the operator's bank or the person who manages the operator's accounts will be accepted.

   The MRAB recommended that, in addition to meeting certain financial criteria, an operator wishing to participate in this program should demonstrate 5 years of experience in coal mining and reclamation. This requirement has been added to subsection (a)(1).

   One commentator asked if the eligibility test at subsection (a)(2) should consider the denial of coverage by surety companies as opposed to the ability to obtain coverage. He noted that surety bonds were not readily available to many surface coal mine operators.

   The Board does not agree. Section 4.12(a) of the act requires consideration of an operator's eligibility ''...such as financial tests and criteria..., including factors indicative of an operator's ability to complete reclamation and payments into the fund...'' The Board's understanding of this language, as well as the interpretation of the MRAB is that this program is to be limited to operators who are financially capable of making the annual payments and completing the reclamation. One test of this is an ability to obtain a surety bond. Denial of coverage by a surety company suggests that the operator may not be financially able to complete reclamation and make the annual payments to the Remining Financial Assurance Fund.

   The Board has accepted an MRAB suggestion to revise subsection (a)(2) to include an ability to obtain a letter of credit collateral bond on the portion of the permit area which does not involve remining.

   In its informal comments on the proposed  86.282, OSM suggested the following terms be defined: ''current assets,'' ''total assets,'' ''current liabilities'' and ''total liabilities.'' The OSM also asked what is meant in subsection (a)(2) by the phrase ''...the remaining permit area.''

   The Board does not see the need to define ''current assets,'' ''total assets,'' ''current liabilities'' and ''total liabilities.'' These terms have a standard usage within the financial world.

   Remining will be conducted under a surface coal mining permit. The Board believes that many permits which involve remining will also include the mining of areas which do not qualify as remining areas. Therefore, the remaining permit area is that portion of a permit area which is outside of the remining area.

   11.  Procedures.

   Section 86.283.

   The commentators have said that the proposed fee of 2.5% of the average per acre cost for the Department to reclaim the mine site will not provide an economic incentive to participate in this program.

   The Board agrees with this comment. The rate for determining the annual payments has been changed to 1% of the amount of bond which would have been required under normal bonding procedures.

   IRRC commented that during a discussion of these amendments, the Department said that its average estimated cost to reclaim an acre of abandoned mine land is $7,000. However, under the regular bonding program and under  86.145 (relating to Department responsibilities), the cost is $3,000 per acre for areas being mined and $1,000 per acre for support areas. IRRC recommended the Board either establish a single reclamation cost or provide a convincing argument for maintaining two different reclamation amounts.

   The comment appears to indicate a misunderstanding of the bonding program. The coal mining bonding program consists of a per acre bond which is returned upon successful reclamation and a per acre reclamation fee which is nonreturnable. The bond is posted at a rate of $3,000 per acre for areas to be mined and $1,000 per acre for areas which support the mining operation. The reclamation fee is deposited into the Surface Mining Conservation and Reclamation Fund and is used to supplement forfeited bonds. Since the actual average cost to reclaim a forfeited site is approximately $7,000 per acre, when a forfeiture does occur, the fees make up the difference between the actual cost of reclamation and the bonds posted for the site.

   12.  Forfeiture.

   Section 86.284.

   One commentator objected to the provision in subsection (d) which requires substitution with regular bonds if the program be discontinued. The commentator noted that section 4.12 of the act does not require replacement with regular bonds and that to do so would discourage participation.

   The Board agrees and has revised this section to allow outstanding obligations on the special account to remain in effect.

   In addition, the Board finds that further revisions are necessary. Act 43 extends the bond obligations which may be placed on the financial guarantees special account beyond the monetary value of the account. As a result, the Department may not be able to discontinue the program until the special account is overextended. To prevent this situation from occurring, a provision has been added to  86.284 allowing the Department to suspend additional participation in the program if a certain number of participating permits should undergo bond forfeiture. This number is based on the historical rate of coal mining bond forfeitures. The suspension would remain in place until the money lost from the special account to forfeiture is replaced through annual payments.

   The Board also has revised subsection (d) by replacing the ambiguous phrasing ''subject to forfeiture'' with the term ''declared forfeit.'' The latter denotes a specific, observable action.

   13.  Financial assurance for bond credit-general.

   Section 86.291.

   In their informal comments, the OSM, the MRAB and others suggested that the bond credit payment cap of $3,000 per acre would entice few operators to reclaim abandoned mine lands.

   The Board agrees and has raised the amount of the bond credit to the lesser of the operator`s cost or the Department`s cost to reclaim the project area.

   14.  Procedures and requirements.

   Section 86.292.

   Three commentators questioned the need for the operator to provide an estimate of the cost of reclamation. The operator already has to meet the requirements of  86.253(b)(1) by demonstrating that the project is technologically and economically feasible.

   Section 4.13 of the act specifically states that the Department will require the operator to submit an estimated cost of reclamation along with the proposal to reclaim when applying for a bond credit. The operator's estimated cost of reclamation will be used to determine the amount of the bond credit to be earned. The operator's proposed reclamation plan will provide the demonstration that the project is technologically and economically feasible as required by  86.253(b)(1).

   Section 86.292(b) allows the Department to require a performance bond to ensure that the operator completes the reclamation as proposed. Two commentators recommended suspending the requirement for a performance bond if the reclamation work is adding to or creating offsite detrimental impacts. IRRC recommended rewriting  86.292 to allow an operator to submit amendments to the reclamation plan subject to Departmental approval.

   The Board disagrees with the recommendation to suspend the requirement for a performance bond. Offsite detrimental impacts are considered when the reclamation plan is approved. The bond only guarantees completion of the work described in the approved reclamation plan. The Board agrees with IRRC and has inserted a provision in  86.292 to allow an operator, with Department approval, to amend the reclamation plan.

   Four commentators were concerned that the bond credit agreement between the operator and the Department had to specify a fixed completion date. Three of the commentators stated that a completion date cannot be specified because reclamation occurs after coal removal, and coal removal cannot be predicted because of market forces. IRRC expressed concern that an operator could be subject to sanctions even if there were valid reasons for a delay in completing the reclamation work. IRRC recommended that subsection (d) be amended to allow an extension for good cause.

   The Board disagrees that reclamation will always occur after coal removal. Many sites can be reclaimed without coal removal. However, the Board acknowledges the uncertainty in determining a completion date. Subsection (c)(5) has been revised to allow the agreement to contain an expected completion date. The Board agrees with IRRC that, as written, the operator could be subject to sanctions even if there were valid reasons for delays in completing the work. A new subsection (d) has been written to allow amendments to the agreement, including an extension of the completion date. Section (d) of the proposed amendments will become subsection (e). The Board believes that this change will satisfy the concerns of the other commentators.

   Two commentators objected to subsection (c)(3) which requires that agreements between an operator and the Department include a provision which allows the Department to assess penalties for default and a waiver of the right to appeal in the event of default. Since these agreements are voluntary no penalties should be attached. They believe that the Department is adequately protected by penal bonds. Furthermore, they noted that an operator should not be required to waive the right to appeal a decision of the Department in order to participate in this program and recommended subsection (c)(3) be deleted.

   While the Board does not agree with certain aspects of the commentators' arguments, it does agree to delete subsection (c)(3). The Board, however, believes that the potential for abuse of this program is significant. Precautions are needed to minimize the possibility that an operator will redisturb an area of abandoned mine lands, decide that the cost or effort to complete reclamation as planned is unacceptable, and simply leave the area. Since redisturbance typically results in increased erosion and sedimentation, stabilization of the redisturbed area is necessary. Because performance bonds will not be posted on all projects, enforcement authority must remain as an option. This authority is provided by subsection (d) of the proposed amendments. In reference to the comment about penal bonds, the Board notes that the act provides for the posting of performance bonds. Performance bonds are not penal in nature. They only guarantee the completion of the work specified in the agreement.

   To further reduce some of the impediments associated with the use of this reclamation incentive, the Board has deleted subsection (c)(4) which required the operator to remain qualified under  86.253 from the time the reclamation agreement is signed until the bond credit was issued.

   15.  Issuance.

   Section 86.293.

   The commentators indicated that the paperwork and time involved in obtaining a bond credit plus the limited uses and limited availability outweigh any incentive to participate.

   The Board agrees that the amount of bond credit on a per acre basis must be increased if participation in this program is to be encouraged. Reference to the amount of the bond credit has been deleted from  86.293, and  86.291 has been rewritten to make the bond credit equivalent to the lesser of the operator's cost or the Department's cost to reclaim the project area. The Board does not agree with the statement that paperwork is excessive. There must be some assurance that the reclamation work is well defined, that it accomplishes good reclamation and that the public interest is protected.

   16.  Uses and limitations.

   Section 86.294.

   This section has been revised to implement suggestions made by the MRAB. These changes are authorized by the Act 43 amendments to section 4.13 of the act. A new subsection (b) has been added which allows bond credits to be used a second time. Proposed subsection (d) has been rewritten to allow bond credits to be transferred as allowed by Act 43. Subsection (h) has been added which sets a 5-year limit on the length of time a bond credit may remain unused.

F.  Benefits, Costs and Compliance.

   Executive Order 1996-1 requires a cost/benefit analysis of the final regulations.

   Benefits

   The remining and reclamation incentives established by these regulations are intended to encourage active coal mine operators to reclaim abandoned mine lands and thereby improve the environment and enhance land value. Operators who participate could benefit from financial assistance for the collection of data for permit applications and through bonding incentives.

   Compliance Costs

   The regulations impose no mandatory costs, direct or indirect, on coal mine operators. However, operators who choose to avail themselves of the remining and reclamation incentives will find additional forms, reports, paperwork and, in some cases, engineering costs beyond that normally required for a coal mining activity permit. The incentives provided by these regulations should more than offset these costs.

   Administration of these regulations will place additional workload and costs on the Department. There will be no additional costs imposed on local government or the general public.

   Compliance Assistance Plan

   No compliance assistance plan has been developed. These regulations place no additional regulatory requirements on the coal mining industry. The new regulations establish procedures and qualifications for the operators who voluntarily choose to participate in the remining and reclamation incentives programs. When the incentives become available, the Department plans to provide notice to all licensed coal operators. Roundtable meetings will be held to help coal operators, their consultants and the public understand these incentives.

   Paperwork Requirements

   These regulations will result in three new programs. Each will require application forms, recordkeeping and reporting. The three programs are remining operator`s assistance for data collection, financial guarantees for bond obligations on remining areas and bond credits for voluntary reclamation of abandoned mine lands.

G.  Sunset Review Date

   These regulations will be reviewed in accordance with the sunset review schedule published by the Department to determine whether the regulations effectively fulfill the goals for which it were intended.

H.  Regulatory Review

   Under section 5(a) of the Regulatory Review Act (71 P. S.  745.5(a)), on April 5, 1994, the Department submitted a copy of the notice of proposed rulemaking published at 24 Pa.B. 2110 to IRRC and the Chairpersons of the Senate and House Environmental Resources and Energy Committees for review and comment. In compliance with section 5(b.1) of the Regulatory Review Act, the Department also provided IRRC and the Committees with copies of comments received as well as other documentation.

   In preparing these final-form regulations, the Department has considered the comments received from IRRC, the Committees and the public.

   These final-form regulations were deemed approved by the House Environmental Resources and Energy Committee on July 10, 1996, and were deemed approved by the Senate Environmental Resources and Energy Committee on July 10, 1996. IRRC met on July 18, 1996, and approved the regulations in accordance with section 5(c) of the Regulatory Review Act.

I.  Findings

   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 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)  These final-form regulations do not enlarge the purpose of the proposal published at 24 Pa.B. 2110.

   (4)  These final-form regulations are necessary and appropriate for administration and enforcement of the authorizing acts identified in Section C of the Preamble.

   J.  Order of the Board

   The Board, acting under the authorizing statutes, orders that:

   (a)  The regulations of the Department, 25 Pa.Code Chapter 86, are amended by adding  86.251--86.253, 86.261--86.270 and 86.281--86.295 to read as set forth in Annex A.

   (b)  The Chairperson of the Board shall submit this order and Annex A to the Office of General Counsel and the Office of the Attorney General for approval and review as to legality and form as required by law.

   (c)  The Chairperson shall submit this order and Annex A to IRRC and the Senate and House Environmental Resources and Energy Committees as required by the Regulatory Review Act.

   (d)  The Chairperson of the Board shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.

   (e)  This order shall take effect immediately upon publication in the Pennsylvania Bulletin.

JAMES M. SEIF,   
Chairperson

   (Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 26 Pa.B. 3776 (August 3, 1996).)

   Fiscal Note: Fiscal Note 7-265 remains valid for the final adoption of the subject regulations.

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