25 Pa. Code § 77.227 - Payment in lieu of bond (PILB)
(a) In
lieu of the bond otherwise required in this subchapter, an operator may elect
to pay to the Department a payment as provided in this section. A person may
not make a payment under this section, unless that person demonstrates to the
Department's satisfaction the following:
(1)
The operator is unable to post a collateral bond otherwise required by this
chapter. The operator shall demonstrate inability to post a collateral bond by
an earnings test established by the Department. The operator will be deemed to
be unable to post a collateral bond when the earnings test demonstrates the
operator's earnings after taxes, minus the amount of the collateral bond, are
zero or less.
(2) The operator is
unable to obtain a surety bond otherwise required under this chapter by
submitting letters of rejection from three surety companies licensed to do
business in this Commonwealth, or one letter of rejection from a broker
indicating rejection from the three sureties.
(3) The operator is unable to obtain a
self-bond allowed under this chapter. The operator may not convert collateral
or surety bonds to payment in lieu of bonds.
(4) The operator's past history of compliance
with environmental laws does not indicate a lack of intention or ability to
comply with financial responsibility requirements, including regular payments
to the Department under the payment in lieu of bond provisions of this chapter
and the operator is in compliance with the act.
(b) In administering the payment in lieu of
bond provisions of this chapter, the Department will require the operator to
submit the following:
(1) A financial test on
a form approved by the Department and prepared in conformance with generally
accepted accounting principles. The financial statements used to prepare the
financial test shall be from the operator's latest completed fiscal
year.
(2) A report, prepared by an
independent certified public accountant in conformity with generally accepted
accounting principles, containing the accountant's audit or review opinion on
the financial statements for the latest completed fiscal year.
(3) After initial submission of the
information required by this section, updated information shall be submitted by
the operator with the license renewal applications provided for in Subchapter B
(relating to surface mining operator's license). The operator shall meet the
requirements of this section relating to eligibility to make payments in lieu
of bond for each succeeding fiscal year.
(4) Other information deemed necessary by the
Department to determine the operator's eligibility to make payments in lieu of
bond. Failure of the operator to provide information requested by the
Department shall render the operator ineligible to make payments in lieu of
bond.
(c) An adverse or
disclaimer of opinion expressed by the independent certified public accountant
in his report shall render the operator ineligible to make payments in lieu of
bond. The Department may determine the operator ineligible to make payments in
lieu of bonds on the basis of other qualifications expressed by the independent
certified public accountant in the report.
(d) If an operator is a subsidiary
corporation, both the parent and the subsidiary corporation shall satisfy the
financial eligibility requirements of this section by relying on its parent
corporation. In this case, the parent corporation shall meet the eligibility,
reporting and payment requirements of this section.
(e) If an operator, a parent corporation or
an independent certified public accountant submits false information in the
financial test or other information required by this section, the operator or
parent corporation shall be ineligible to make payments in lieu of bond. In
addition, the operator or parent corporation and the independent certified
public accountant are subject to
18 Pa.C.S. §§
4903 and
4904 (relating to false
swearing; and unsworn falsification to authorities).
(f) An operator's payment in lieu of bond
obligations is subject to the following requirements:
(1) Annual payments will be 4.75% of the
total bond amount required.
(2) The
first payment is due upon receipt of notice from the Department of its approval
of the operator's application for payment in lieu of bond. Annual payments due
thereafter shall be paid with each license renewal application for the
applicable license year.
(3)
Payment made under this section, upon determination by the Department of the
operator's eligibility to make payments in lieu of bond, are not refundable and
will be deposited into the Noncoal Surface Mining Conservation and Reclamation
Fund to be used only for reclamation purposes. If, under the operator's
application for a license renewal, the operator has made payment under this
section and, after submission of the information required by subsections (a)
and (b) has been determined by the Department to be ineligible to make payments
in lieu of bond, the operator is entitled to a refund of the payment after
submitting to the Department acceptable surety or collateral bond.
(4) The Department may annually adjust the
amount to insure that there are sufficient funds in this account to reclaim
sites for which bonds posted under this subsection were forfeited.
(g) If the Department determines
that the operator's activities are of a type that bonds otherwise required to
be posted by the operator would be forfeited, the Department will declare the
payment in lieu of bond forfeited and notify the operator according to the
procedures in §§
77.251-77.254 (relating to bond
forfeiture). The declaration of forfeiture by the Department has the same force
and effect on the operator as a bond forfeiture under §§
77.251-77.254, including loss of mining
license.
(h) The Department's
declaration of forfeiture under this section does not excuse the operator from
meeting the requirements of this chapter or other requirements under the
act.
(i) The applicant shall compare
the information from the financial statements with the information on the
financial test and assure that the financial test accurately represents the
information contained in the financial statements.
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