February 21, 1997


Members present: Representative Sam Smith, Fred Wolf, David Osikowicz, Jack Chamberlin, and
George Ellis.

Also present were: Duane Feagley from the PA Anthracite Council, Bernie Hoffnar, Rod Fletcher and Evan Shuster, Bureau of Mining and Reclamation, and Ernie Giovannitti, Bureau of Abandoned Mine Reclamation.

Representative Smith was the chairman for this committee meeting.

The subject of this meeting was a May 1996 draft report to the Governor titled Alternative Financing Mechanisms for the Perpetual Treatment of Post-Mining Discharges. These discharges are currently being treated by the coal mine operators. In almost all cases the Department is continuing to hold the reclamation bonds on these sites. The report evaluates several alternate mechanisms for funding the treatment of the discharges when the coal mine operators stop treatment. The mandate for the "ad-hoc" committee was to develop recommendations to present to the MRAB at the next board meeting. The Board will then decide what further action to take, based on the findings of the committee.

Specific aspects of the report which were discussed include:

The committee members agreed that the public would expect the problem to be dealt with; however, the public will ultimately bear the financial costs for treating post-mining discharges. Additionally, the committee agreed that because of the need for continuing treatment, bonding (which provides a one-time infusion of funds) is not an appropriate tool to address this problem on a long term basis.

The committee developed several recommendations for improving the report. They were:

  1. Strengthen the technical foundation of the report.
  2. Update the report to 1995 numbers.
  3. Recommendations on the potential sources of funding should be general. For example, instead of specifying the gross receipts tax, the report should simply indicate the need for public funding.
  4. The report should list all alternate mechanisms including remining, use of Title IV or other federal money, a bond referendum like Scarlift, self-bonding, reclamation incentives established by the Act 43 amendment to SMCRA, increased use of passive treatment systems, an annual appropriation by the General Assembly, and public sector participation through watershed projects.
  5. Recommendations should consider combinations of alternatives, especially for reducing the costs which would need to be imposed on the public.
  6. The report should explore the concept of having water users, such as fishermen, contribute to the cost of treatment through a check-off system associated with license fees.
  7. The report should include charts of cost trends based on constant dollars in addition to the existing charts which are based on current dollars.
  8. The text of the report should acknowledge that many of the discharges on which bonds are being held pre-existed the permitted mining activity. At the time the permit was issued, the mine operator believed that he would not be held liable for those discharges unless he or she made them worse.

The committee has asked the Department to identify how many of the bonds being held are for pre-existing discharges. They have also requested that a write-up on the meeting be sent out before the next MRAB meeting so that the other board member have time to consider the issues and recommendations.

Meeting Handout: Revisions to Chapter 86, Postmining Discharges, Licensing and Bonding