DEPARTMENT OF ENVIRONMENTAL PROTECTION

COMMENT AND RESPONSE DOCUMENT

25 PA CODE CHAPTER 86

Subchapter J. REMINING AND RECLAMATION INCENTIVES

EQB Docket No. 7-265


Bureau of Mining and Reclamation

Department of Environmental Protection

P.O. Box 8461

Harrisburg, PA 17105-8461


TABLE OF CONTENTS

Subject Page

INTRODUCTION i

LIST OF COMMENTATORS ii

LISTING OF ABBREVIATIONS AND ACRONYMS USED iii

GENERAL PROVISIONS

1. 86.251 Purpose 1

2. 86.252 Definitions 1

3. 86.253 Operator and project qualification 2

REMINING OPERATOR'S ASSISTANCE PROGRAM

4. 86.261 Program services and 86.265 Application for approval 4

5. 86.262 Department responsibilities 4

6. 86.263 Eligibility for assistance 4

7. 86.264 Applications for assistance and

86.267 Determination of data requirements 5

8. 86.266 Notice 5

9. 86.268 Public records; evidence 5

10. 86.269 Basic qualifications for consultants and laboratories 5

11. 86.270 Operator liability 6

FINANCIAL GUARANTEES (formerly PAYMENT IN LIEU OF BOND)

12. 86.281 Financial guarantees to insure reclamation - general 7

13. 86.282 Participation requirements 7

14. 86.283 Procedures 9

15. 86.284 Forfeiture 9

RECLAMATION BOND CREDITS

16. 86.291 Financial assurance for bond credit - general 10

17. 86.292 Procedures and requirements 10

18. 86.293 Issuance 12

19. 86.294 Uses and limitations 12

20. 86.295 Forfeiture 12

SUMMARY OF COMMENTS 13



INTRODUCTION

The Environmental Quality Board proposed amendments to 25 PA Code Chapter 86 (relating to surface and underground mining of coal: general). This amendment was proposed in order to implement various remining and reclamation incentives authorized by the 1992 amendment (Act 173) to the Surface Mining Conservation and Reclamation Act (52 P.S. §§1396.1 - 1396.19a).

This amendment to Chapter 86 was published as proposed rulemaking in the April 23, 1994 Pennsylvania Bulletin Volume 24 No. 17. A public hearing was held May 26, 1994 in New Stanton, PA.

This document addresses comments received by the Environmental Quality Board during the public comment period and from the Independent Regulatory Review Commission (IRRC).

Also included are informal comments of the Federal Office of Surface Mining Reclamation and Enforcement (OSM) and the Department's Mining and Reclamation Advisory Board (MRAB).

The comments and responses are arranged in the same sequence as the proposed regulations.

LIST OF COMMENTATORS

1. THOMAS J. HYDOCK, P.E.

Mining Engineer

Penn Equipment Corporation

P.O. Box 8

Port Carbon, PA 17965

2. MR. BRIAN C. MACE

HCR Box 40

Spring Glen, PA 17978

3. GUY L. MACE, PLS

White Pine Coal Company, Inc.

P.O. Box 59

Ashland, PA 17921-0059

4. J. ANTHONY ERCOLE

PA Coal Association

212 N. 3rd Street

Harrisburg, PA 17101

5. INDEPENDENT REGULATORY REVIEW COMMISSION

6. MINING AND RECLAMATION ADVISORY BOARD (providing informal comments)

7. OFFICE OF SURFACE MINING (providing informal comments)



LISTING OF ABBREVIATIONS AND ACRONYMS USED

Act - The Surface Mining Conservation and Reclamation Act

Board - The Environmental Quality Board

Department - The Department of Environmental Protection

IRRC - The Independent Regulatory Review Commission

MRAB - The Mining and Reclamation Advisory Board to the Department

OSM - The Office of Surface Mining Reclamation and Enforcement,

U.S. Department of the Interior

ROAP - Remining Operator's Assistance Program


GENERAL PROVISIONS

1. 82.251 Purpose.

No comments were received.

2. 86.252 Definitions.

Comment

Act 173 intends these remining and reclamation incentives to include reclamation of bond forfeiture sites. Therefore, the definition of abandoned mine lands should encompass bond forfeiture sites. IRRC noted that 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 Commonwealth has received the funds.

Commentators 1, 4, 5

Response

The Board agrees that the Act intended all reclamation and remining incentives to apply to bond forfeiture sites. For the sake of clarity, the Board has revised the definition of abandoned mine lands to refer specifically to bond forfeiture sites for which the bonds have been collected by the Department.

Comment

Mr. Hydock states that the designation of a remining area must be done on a site specific basis according to the provisions of Section 4.9 of the Act and that defining a remining area under Section 4.9 of the Act conflicts with the intent of the remining operator's assistance program.

Other commentors suggest that areas needed to support the remining operation such as haul roads, drainage control, equipment storage, coal preparation and storage 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.

Commentators 1, 4, 5, 6

Response

The definition of remining area is needed in order to implement the remining operator's assistance program (Section 4.10 of the Act) and the financial guarantees program (Section 4.12 of the Act). Sections 4.10 and 4.12 are intended to encourage an operator to remine an area under a permit whether or not the Department has designated the area as suitable for remining. Section 4.9 authorizes the Department to designate an area suitable for remining whether or not a permit application has been or will be submitted. The Section 4.9 process for designating areas suitable for remining may be developed by future rulemaking.

The Board agrees that in some cases the remining operation will need to use unaffected lands for support activities. The definition of remining area has been revised to include previously undisturbed areas needed for support activities related to the remining. The revised definition allows the permittee to use additional undisturbed area if the permittee demonstrates the need for it.

Comment

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

Commentator 7

Response

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

3. 86.253 Operator and project qualification.

Comment

The Act requires that for an operator to participate he only needs to be a licensed mine operator "otherwise eligible to obtain a permit." Subsection 86.253 (a)(5) creates a more stringent standard than SMCRA. 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.

Commentators 4, 5

Response

Paragraph 86.253 (a)(5) has been deleted. The revised subsection (a) is equivalent to the standard set by the Act.

Comment

In its informal comments on the proposed regulation, OSM suggested that an applicant for the ROAP remining incentive should meet compliance as well as ownership and control requirements before PaDER (DEP) expends funds for assistance.

Commentator 7

Response

These requirements can be found in the proposed regulation on operator qualifications at 86.253(a)(1) which refers to the mining license and 86.253(a)(2) which refers to the compliance requirements for obtaining a permit.

Comment

Subsection 86.253 (b)(1) requires an operator to demonstrate that the proposed remining activity is technologically and economically feasible and will not result in a violation of water quality criteria. This means that the operator would actually have to submit the equivalent of a technologically complete permit application to be eligible for the remining operator's assistance program (ROAP). However, the purpose of ROAP is to provide that very information.

Commentators 1, 2, 3, 5

Response

Section 4.10 of the Act, which establishes ROAP, has only one requirement for participation. The operator must be eligible to obtain a permit. To eliminate confusion, the wording of 86.263 (pertaining to eligibility for ROAP) has been modified to refer to 86.253(a) which relates to the operator`s qualifications.

Comment

For a project to be approved for reclamation under the remining and reclamation incentives program, Section 86.253 (b) requires the operator to demonstrate that the proposed activity is technologically and economically feasible. Mr. Hydock, Mr. Brian C. Mace and Mr. Guy L. Mace note that Section 4.9 of the Act states that the Department when designating areas suitable for remining must make this determination. Furthermore, 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. Consequently the requirement of 86.253 (b)(1) contradicts the Act and must be rewritten.

Commentators 1, 2, 3

Response

The Board disagrees. The language of subsection 86.253(b) is taken directly from section 18(a.3)(2) of the Act. Section 4.9 of the Act deals with the Department`s discretionary ability to designate areas suitable for remining whether or not an operator has submitted, or will submit, an application to remine or reclaim the area. Section 4.9 is separate and distinct from section 18(a.3) which deal with requirements for operators to participate in any programs funded by the Remining Environmental Enhancement Fund and the Remining Financial Assurance Fund. The preamble of the proposed regulations specifically excluded Section 4.9 of the Act. The process for designating areas suitable for remining may be the subject of future rulemaking.

Comment

Subsection 86.253 (b)(4) requires applicants for all three incentive programs to demonstrate that they have "the right to enter into and effect the property, and if applicable, the right to remove structures, materials including soil, rock, spoil, coal or coal refuse." Subsections 86.263 (1) and 86.264 (b)(6)(i) contain very similar requirements. IRRC recommends the EQB address the applicant's responsibility to demonstrate the right to enter, mine, etc. in a single provision such as Subsection 86.253 (b)(4).

Commentators 2, 5

Response

The Board disagrees with this recommendation. The Board believes that Subsections 86.263 (1) and 86.264 (b)(6)(i) differ substantively from Subsection 86.253 (b)(4) and from each other. Subsection 86.253 (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. For example, the removal of abandoned equipment, buildings or coal refuse differs from coal removal. In many cases the owners of abandoned equipment, buildings or coal refuse may not be the landowner.

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

REMINING OPERATOR'S ASSISTANCE PROGRAM

4. 86.261 Program services and 86.265 Application approval.

Comment

This regulation states that the Department will select a consultant to perform these services. The commentators recommend that the operator be given an opportunity to participate in the selection of a qualified consultant.

Commentators 1, 5

Response

Section 86.261 reflects the Department's ultimate responsibility over the remining operator's assistance program. However, Section 86.265 has been revised to state that the operator shall select a qualified consultant from the list of consultants approved by the Department.

5. 86.262 Department responsibilities.

No comments were received.

6. 86.263 Eligibility for assistance.

Comment

Section 86.263 (3) refers to abandoned mine lands or lands for which the Department has forfeited and collected reclamation bonds. What about coal refuse, and shouldn't this be included in Section 86.253 (b)?

Commentators 2, 3

Response

The definition of abandoned mine lands includes unreclaimed coal refuse. As pointed out by the commentator, this term is used in Section 86.263 (3). However, subsection 86.253(b) has been revised to use the term "abandoned mine lands" in paragraph (1).

7. 86.264 Applications for assistance and 86.267 determination of data requirements.

Comment

The Department will be paying a consultant to obtain information and prepare reports while Section 4.9 of the Act clearly states that the Department shall prepare the report.

Commentators 1, 2, 3

Response

This rulemaking does not address Section 4.9 of the Act which deals with the Department`s discretionary ability to designate areas suitable for remining whether or not an operator has submitted, or will submit, a permit application to remine the area. Furthermore, Section 4.10 of the Act clearly requires the Department to pay for the information for ROAP.

8. 86.266 Notice.

Comment

This regulation states that the Department will inform the applicant if the application for assistance is denied. What petition for redress of losses does the operator have if the application is rejected or delayed due to shoddy work of a consultant not chosen by the operator?

Commentator 1

Response

The commentator appears to be 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, Section 86.265 has been revised to allow the operator to select a qualified consultant to perform the services.

9. 86.268 Public records; evidence.

No comments were received.

10. 86.269 Basic qualifications for consultants and laboratories.

Comment

The analytical laboratory should be properly certified.

Commentators 1, 4, 5

Response

The Board believes that laboratories will be properly qualified. In order to participate in ROAP, the analytical laboratory must be on the list of qualified laboratories. To be on this list, the laboratory must demonstrate to the Department's satisfaction that it meets the applicable requirements of 86.269 (a).

Comment

Subcontracting laboratory services is allowed. Subcontracting the services of other specialists such as biologists, hydrologists, chemists, etc. should also be allowed. Mr. Hydock stated that specialization of job tasks allows market efficiency which itself allows the most efficient use of limited government assets.

IRRC also recommends that this section be redrafted so that it is clear to consultants and laboratories that they can qualify for participation in ROAP individually or as a group to perform all services or individually to perform a subset of services to be funded by ROAP.

Commentators 1, 4, 5

Response

The Board agrees with the suggestion. Subsection 86.269(d) has been redrafted to allow consultants to subcontract various specialties in addition to laboratory services.

Comment

Section 86.269 (6)(iv) contains a reference to "the Department's Overburden Sampling and Testing Manual." Unless the Environmental Quality Board intends to proceed with rulemaking for overburden analysis, we would strongly recommend that (6) (iv) be deleted.

Commentator 4

Response

The Department and Mr. Ercole have had a subsequent discussion on this issue. The Department explained that the document referenced by the proposed regulation and entitled Overburden Sampling and Testing Manual is used to describe sampling and analytical procedures for overburden testing. Mr. Ercole has withdrawn his objection to the reference to this document.

11. 86.270 Operator liability.

Comment

Section 86.270 (a)(4) requires an operator to reimburse the Department for services performed under this subchapter including interest if the operator fails to mine within 3 years of obtaining a permit. There are many factors beyond the operator's control which could result in an operator failing to meet this requirement. Act 173 has no such requirement.

Similarly Section 86.270 (a)(5) requires reimbursement if the operator sells, transfers or assigns the permit to an operator who does not meet the requirements of 86.253 (relating to operator qualification). Act 173 does not provide for this requirement. Mr. Ercole 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 it 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. The MRAB suggested dropping 86.270(a)(5) in its entirety.

Commentators 4, 6

Response

While Act 173 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 three years of receiving a permit utilizing ROAP funds is not unreasonable. Furthermore, Section 86.40(b), which relates to permit terms, states that a permit shall terminate if coal mining activities have not begun with three years. If the expected remining will not be accomplished in a timely manner, then 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) at Section 86.94. Since ROAP and SOAP are similar programs both in services provided and in manner of operation, and since SOAP has operated effectively for many years without any undue burden on participating operators, 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 other was not qualified. Likewise, the Board will not drop 86.270(a)(5). This requirement will 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 for all ROAP money spent on the transferred permit if the new operator is not qualified to participate in the remining and reclamation incentives program. The seller may certainly include the cost of reimbursement in the sale price.

FINANCIAL GUARANTEES (formerly PAYMENT IN LIEU OF BOND)

12. 86.281 Financial guarantees to insure reclamation - general.

No comments were received.

13. 86.282 Participation requirements.

Comment

The requirements for participating in the payment in lieu of bond program are such that very few, if any, operators can qualify. Additionally the "paperwork" requirements are onerous enough to lead any operators who can qualify to avoid the program. Some of the problems are:

_ Basing eligibility on a profit ratio of 6.2% over the past five years will rule out many companies. One recommendation is to use a standard that demonstrates an operator's ability to earn a net profit over a longer period of time such as five years.

_ This regulation also requires statements from a CPA for the current and preceding five years. While large companies may have their financial statements audited annually, this may be an unreasonable expense for small operators who do not otherwise need an independent audit.

Commentators 2, 3, 4, 5, 6

Response

The Board has reconsidered and eased the financial standards for participation in the financial guarantees program. The Board has deleted the requirement for an operator to have a 6.2% ratio of profit before taxes to total assets. The remaining standards must be met only at the time the operator applies for initial participation or for an increased level of participation in the program. The annual demonstration has been dropped. Financial statements from an officer of the operator's bank or the person who manages the operator's accounts will be accepted. Furthermore, Section 86.282(a)(2) has been expanded to allow the Department to consider the operator`s ability to obtain a letter of credit collateral bond in determining an operator`s eligibility to participate in the financial guarantees program.

Comment

Mr. Ercole asked if the eligibility test in 86.282(a)(2) should consider the denial of coverage by surety companies as opposed to the ability to obtain coverage. In support of this question the commentator suggested that the General Assembly would not enact and encourage such an incentive program if surety bonds were readily available to surface coal mine operators.

Commentator 4

Response

Section 4.12 (a) of the Act requires consideration of an operator's eligibility "...such as financial tests and criteria for participation in the program, 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 the financial guarantees 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 suggests that the operator may not be financially able to complete reclamation and make payments.

Comment

In its informal comments on the proposed 86.282, OSM suggested that the Board define the following terms: current assets, total assets, current liabilities, and total liabilities.

OSM also asked what is meant in 86.282(a)(2) by the phrase "...the remaining permit area."

Commentator 7

Response

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.

Section 86.282(a)(2) refers to a demonstration by the operator that it is able to obtain a surety bond for a coal mining permit. The Board believes that most permits which involve remining will also include the mining of areas which do not qualify as remining areas. Therefore, these permits cannot be covered in their entirety by the financial guarantees program. The remaining permit area is that portion of a permit area which is not part of the remining area.

14. 86.283 Procedures.

Comment

The Department has told IRRC that under this program its average estimated cost to reclaim an acre of abandoned mine land is $7,000. However, under the regular bonding program pursuant to 86.145, the cost is $3,000 per acre for areas being mined and $1,000 per acre for support areas. IRRC recommends the Environmental Quality Board either establish a single reclamation cost or provide a convincing argument for maintaining two different reclamation amounts.

Commentator 5

Response

This comment results from a meeting between Department staff and IRRC. 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 non-returnable. 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 (SMCR Fund) and is used to supplement forfeited bonds. The actual average cost to reclaim a forfeited site is approximately $7,000 per acre. The SMCR Fund makes up the difference between the actual cost of reclamation and the bonds posted for the forfeited site.

Comment

Several 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 engage in remining activities. They also assert the financial criteria are such that very few, if any, operators can qualify and the paperwork requirements are prohibitively excessive.

Commentators 2, 3, 5, 7

Response

In response to these comments, the financial standards for eligibility and the rate for determining the annual payments have been eased.

15. 86.284 Forfeiture.

Comment

Section 86.284(d) provides that the program will discontinue if 25% or greater of the outstanding bond obligation for the financial guarantees program is subject to forfeiture. This requirement is in accordance with the Act. However, the Department has added that, if such an event occurs, the participants in this program must substitute regular bonds within 90 days or the operation will be ceased. The Act only requires that the program be discontinued. The requirement for immediate replacement with regular bonds is clearly contrary to creating incentives for remining.

Commentator 4

Response

In light of Mr. Ercole's comments, the Board has reread the language of Section 4.12(d) of the Act. The proposed regulation originally interpreted that section to mean the financial guarantees program would cease to exist upon notice in the Pennsylvania Bulletin. However, the Board finds that under Section 4.12 discontinuance is optional and that the statute is silent regarding replacement of the reserved funds with conventional bonds. Consequently, this regulation has been revised so that upon discontinuance no additional participation can be accepted. The outstanding obligations on the fund will continue to be covered by the Remining Financial Assurance Fund until released under the regulations dealing with bond release.

RECLAMATION BOND CREDITS

16. 86.291 Financial assurance for bond credit-general.

No comments were received.

17. 86.292 Procedures and requirements.

Comment

Section 86.292(a)(3) asks the operator to provide an estimate of the cost of reclamation. Why should the operator provide an estimate when he already had to meet the requirements of 86.253(b)(1) in demonstrating that the project is technologically and economically feasible?

Commentators 1, 2, 3

Response

Subsection 4.13(a)(1) of the Act specifically states that the Department shall 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).

Comment

Section 86.292(b) allows the Department to require a performance bond to ensure that the operator completes the reclamation as proposed. What if the operator or Department find that after reclamation has begun, instead of correcting or eliminating a problem it creates a bigger problem. Mr. Hydock and Mr. Mace recommended suspending the requirement for a performance bond if the reclamation work is adding to or creating off-site detrimental impacts. IRRC recommended rewriting 86.292 to allow an operator to submit amendments to the reclamation plan subject to Department approval.

Commentators 1, 3, 5

Response

The Board disagrees with the recommendation to suspend the requirement for a performance bond. The real issue is not the performance bond since, under the Act, the bond only guarantees completion of the work described in the approved reclamation plan. The issue is the need to provide authority for amending the approved reclamation plan. The Board has inserted a provision in Section 86.292 to allow an operator, with Department approval, to amend the reclamation plan.

Comment

According to 86.292(c)(5) the bond credit agreement between the operator and the Department shall specify a completion date. Three of the commentators stated that a completion date cannot be specified because reclamation follows coal removal and coal removal cannot be predicted because of market forces. The 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. The IRRC recommended that the Board amend subsection 86.292(d) to allow an extension for good cause.

Commentators 1, 2, 3, 5

Response

The Board disagrees that reclamation will always follow coal removal. Many sites can be reclaimed without coal removal. However, 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 86.292(d) has been written to allow amendments to the agreement, including an extension of the completion date. The Board believes that this change will satisfy the concerns of the other commentators.

Comment

Proposed 86.292(c)(3) provides that bond credit agreements between an operator and the Department shall allow the Department to assess penalties for default including a waiver of the right to appeal in the event of default. Since these agreements are essentially voluntary, no such penalties should be attached. The Department is adequately protected by penal bonds. Furthermore, an operator should not be required to waive the right to appeal a decision of the Department in order to participate in this program. Paragraph (c)(3) should be deleted in its entirety.

Commentators 4, 5

Response

While the Board does not agree with certain aspects of the commentators' arguments, it does agree to delete 86.292(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 will be necessary. In addition, since performance bonds will not be posted on all projects, enforcement authority must remain as an option. This authority is provided by 86.292(d) of the proposed regulations. In reference to the comment about penal bonds, the Board notes that these regulations provide for the posting of performance bonds. Performance bonds are not penal in nature since they only guarantee the completion of the work specified in the agreement.

18. 86.293 Issuance.

Comment

Mr. Hydock, Mr. Brian Mace, and Mr. Guy Mace indicated that the paperwork and time involved in obtaining a bond credit plus the limited uses and limited availability outweigh any incentive to participate.

In their informal comments on this regulation, OSM and MRAB suggested that the payment cap of $3000 per acre will only entice a few operators to reclaim abandoned mine lands.

Commentators 1, 2, 3, 6, 7

Response

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. The regulations have 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. As an additional encouragement, bond credits will be allowed to be used a second time after being released from their first use. 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.

19. 86.294 Uses and limitations.

No comments were received.

20. 86.295 Forfeiture.

No comments were received.