Pennsylvania Code & Bulletin
COMMONWEALTH OF PENNSYLVANIA

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25 Pa. Code § 77.227. Payment in lieu of bond (PILB).

§ 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.

Source

   The provisions of this §  77.227 adopted March 16, 1990, effective March 17, 1990, 20 Pa.B. 1643.

Cross References

   This section cited in 25 Pa. Code §  77.221 (relating to scope); and 25 Pa. Code §  77.222 (relating to form of the bond).



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