CHAPTER 111
An Act to amend and reenact §§45.1-241, 45.1-270.3, and
45.1-270.4 of the Code of Virginia, relating to the Virginia Coal Surface
Mining Control and Reclamation Act of 1979.
[S 560]
Approved March 3, 2014
Be it enacted by the General Assembly of Virginia:
1. That §§45.1-241, 45.1-270.3, and 45.1-270.4 of the Code
of Virginia are amended and reenacted as follows:
§45.1-241. Performance bonds.
A. After a coal surface mining permit application has been
approved, but before such permit is issued, the applicant shall file with the
Director on a form prescribed and furnished by the Director, a bond for
performance payable to the Commonwealth and conditioned upon faithful
performance of all the requirements of this chapter and the permit. The bond
shall cover that area of land within the permit area upon which the operator
will initiate and conduct surface coal mining and reclamation operations within
the initial term of the permit. As succeeding increments of coal surface mining
and reclamation operations are initiated and conducted within the permit area,
the permittee shall file with the Director an additional bond or bonds to cover
such increments in accordance with this section. The amount of the bond required
for each bonded area shall depend upon the reclamation requirements of the
approved permit, shall reflect the probable difficulty of reclamation giving
consideration to such factors as topography, geology of the site, hydrology,
and revegetation potential, and shall be determined by the Director. The amount
of the bond shall be sufficient to assure the completion of the reclamation
plan if the work has to be performed by the Director in the event of
forfeiture, but in no case shall the bond for the entire area under one permit
be less than $10,000.
B. Liability under the bond shall be for the duration of the
coal surface mining and reclamation operation and for a period coincident with
the operator's responsibility for revegetation as required under regulations
promulgated pursuant to §45.1-242. The bond shall be executed by the operator
and a corporate surety licensed to do business in the Commonwealth, except that
the operator may elect to deposit cash, negotiable bonds of the United States
Government or of the Commonwealth, or negotiable certificates of deposit of any
bank organized for transacting business in the United States. The cash deposit
or market value of such securities shall be equal to or greater than the amount
of the bond required for the bonded area.
C. The Director may accept the bond of the applicant itself
without separate surety when the applicant demonstrates to the satisfaction of
the Director, pursuant to regulations, the existence of a suitable agent to
receive service of process and a history of financial solvency and continuous
operation sufficient for authorization to self-insure or bond such amount.
The Director may also accept a letter of credit on certain designated
funds issued by a financial institution authorized to do business in the United
States. The letters of credit shall be irrevocable, unconditional, shall be
payable to the Department upon demand, and shall afford to the Department
protection equivalent to a corporate surety's bond. The issuer of the letter of
credit shall give prompt notice to the permittee and the Department of any
notice received or action filed alleging the insolvency or bankruptcy of the
issuer, or alleging any violations of regulatory requirements which could
result in suspension or revocation of the issuer's charter or license to do
business. In the event the issuer becomes unable to fulfill its obligations
under the letter of credit for any reason, the issuer shall immediately notify
the permittee and the Department. Upon the incapacity of an issuer by a reason
of bankruptcy, insolvency or suspension or revocation of its charter or
license, the permittee shall be deemed to be without proper performance bond
coverage and shall promptly notify the Department, and the Department shall
then issue a notice to the permittee specifying a reasonable period, which
shall not exceed ninety days, to replace bond coverage. If an adequate bond is
not posted by the end of the period allowed, the permittee shall cease coal
extraction and coal processing operations and shall immediately begin to
conduct reclamation operations in accordance with the reclamation plan. Coal
extraction and coal processing operations shall not resume until the Department
has determined that an acceptable bond has been posted. If an acceptable bond
has not been posted by the end of the period allowed, the Department may
suspend the permit until acceptable bond is posted. The letter of credit shall
be provided on the form and format established by the Director. Nothing herein
shall relieve the permittee of responsibility under the permit or the issuer of
liability on the letter of credit. The Director is further authorized to
develop and promulgate an alternative system that will achieve the objectives
and purposes of the bonding program established under this section.
D. Cash or securities so deposited shall be deposited upon the
same terms as the terms upon which surety bonds may be deposited. Such
securities shall be security for the repayment of such negotiable certificate
of deposit.
E. The amount of the bond or deposit required and the terms of
each acceptance of the applicant's bond shall be adjusted by the Director from
time to time as affected land acreages are increased or decreased or where the
cost of future reclamation changes.
§45.1-270.3. Initial payments into Fund; renewal payments;
bonds.
A. Operators filing permit applications for coal surface
mining operations participating in the pool fund shall be required to pay into
the Fund, as an entrance fee, a sum equal to $1,000 for each applicable permit
application. An entrance fee of $5,000 shall be required of all operators who
elect to participate in the Fund when the Director has determined the total
balance of the Fund is less than $1,750,000 pursuant to subsection B of §
45.1-270.4. The entrance fee shall be reduced to $1,000 when the total
Fund balance is greater than $2,000,000 $2 million pursuant to
subsection C of § 45.1-270.4. A renewal fee of $1,000 shall be
required of all permittees in the Fund at permit renewal.
1. For the purposes of this section, all planned
expenditures shall be deducted from the balance of the Fund during each
calendar quarter, including forfeitures on which engineering cost estimates
have been prepared, but no money has actually been expended from the Fund.
2. Should the actual expenditures from the Fund be less
than the engineering cost estimate, then the difference shall be credited to
the balance of the Fund during the calendar quarter in which the final
expenditure is made from the Fund to accomplish the reclamation.
B. In addition to the initial payments into the Fund described
in subsection A of this section, all operators that participate in the Fund
shall furnish to the Fund a bond which meets the criteria of §45.1-241 and
regulations issued pursuant thereto as follows:
1. For those underground mining operations participating in
the Fund prior to July 1, 1991, the amount of $1,000 per acre covered by each
permit. In no event shall such total bond be less than $40,000, except that on permits
which have completed all mining and for which completion reports have been
approved prior to July 1, 1991, the total bond shall not be less than $10,000.
2. For underground mining operations entering the Fund on or
after July 1, 1991, and for additional acreage bonded on or after July 1, 1991,
the amount of $3,000 per acre. In no event shall the total bond for such
underground operations entering the Fund on or after July 1, 1991, be less than
$40,000.
3. For other coal mining operations participating in the Fund
prior to July 1, 1991, the amount of $1,500 per acre covered by each permit. In
no event shall such total bond be less than $100,000, except that on permits
which have completed all mining and for which completion reports have been
approved prior to July 1, 1991, the total bond shall not be less than $25,000.
4. For other coal mining operations entering the Fund on or
after July 1, 1991, and for additional acreage bonded on or after July 1, 1991,
the amount of $3,000 per acre. In no event shall the total bond for such
operations entering the Fund on or after July 1, 1991, be less than $100,000.
C. 1. Notwithstanding the above, the Director may accept
the bond of an operator of an underground mining operation without separate
surety as provided in subsection C of § 45.1-241 and in any case upon a
showing by such operator of a net worth, total assets minus total liabilities,
certified by an independent certified public accountant equivalent to
$1,000,000. Such net worth figure shall thereafter during the existence of the
permit be certified annually on the anniversary date of such permit by an
independent certified public accountant.
2. The Director may accept the bond of an operator of a
surface mining operation or associated facility without separate surety as
provided in subsection C of § 45.1-241 upon a showing by the operator of
a suitable agent for service of process, satisfactory continuous operation,
financial solvency, and submission of information and an indemnity agreement in
accordance with regulations implementing this section and the applicable
federal regulations.
D. All fees and payments provided in this article shall
be in addition to initial permit application and anniversary payments provided
pursuant to §45.1-235 or any other payments required in compliance with this
chapter.
E. D. Fund participants shall be allowed to post
incremental bonds as set forth in §45.1-241. Such bonds will be posted in
annual increments according to a schedule contained in the permit application
and approved annually by the Director on the anniversary date.
F. E. Any mining operation participating in the
Fund that has been in temporary cessation for more than six months as of July
1, 1991, shall within ninety 90 days of that date post bond equal
to the total estimated cost of reclamation for all portions of the permitted
site which are in temporary cessation. Any mining operation participating in
the Fund that has been in temporary cessation six months or less as of July 1,
1991, shall within ninety 90 days after the date on which the
operation has been in temporary cessation for more than six months post bond
equal to the total estimated cost of reclamation for all portions of the
permitted site which are in temporary cessation. Any mining operation
participating in the Fund that enters temporary cessation on or after July 1,
1991, shall, prior to the date on which the operation has been in temporary
cessation for more than six months, post bond equal to the total estimated cost
of reclamation for all portions of the permitted site which are in temporary
cessation. Such bond shall remain in effect throughout the remainder of the
period during which the site is in temporary cessation. At such time as the
site returns to active status, the bond posted under this subsection may be
released, provided the permittee has posted bond pursuant to subsection B of
this section.
§45.1-270.4. Assessment of reclamation tax revenues for Fund.
A. There is hereby levied a reclamation tax upon the production
of coal by operators participating in the Fund under permits issued under this
chapter as set forth herein.
B. Thirty days after the end of any each
calendar quarter during which the total balance of the Fund, including interest
thereon, shall be is less than $1,750,000 $20 million,
all operators shall pay into the Fund an amount equal to:
1. Four cents per clean ton of coal produced by a surface
mining operation permitted under this chapter.
2. Three cents per clean ton of coal produced by a deep mining
operation permitted under this chapter.
3. One and one-half cents per clean ton of coal processed or
loaded by preparation or loading facilities permitted under this chapter.
C. At the end of any each calendar quarter
during which the total balance in the Fund, including interest thereon, shall
exceed two million dollars exceeds $20 million, payments under this
section shall cease until again required pursuant to subsection B of this
section.
1. For the purposes of subsection B of this section, all
potential obligations shall be deducted from the balance of the Fund during
each calendar quarter, including forfeitures on which engineering costs
estimates have been prepared, but no money has actually been expended from the
Fund.
2. Should the actual expenditures from the Fund be less
than the engineering cost estimate, then the difference shall be credited to
the balance of the Fund during the calendar quarter in which the final
expenditure is made from the Fund to accomplish the reclamation.
D. Upon the issuance of a permit for which bond is provided
pursuant to this article, each operator shall pay a reclamation tax into the
Fund pursuant to the schedule set forth in subsection B of this section on coal
mined and removed under authority of that permit during the one-year period
commencing with and running from the date of the commencement of coal
production, processing or loading from those operations covered under that
permit.
E. D. In no event shall any operator pay
reclamation tax under this section on total coal production in excess of five
million tons per calendar year, regardless of the number of permits held by
that operator, except as set forth in subsection D hereof. In no event
shall any operator holding more than one type of permit pay tax at a rate in
excess of five and one-half cents per ton on coal originally surface mined by
that operator or in excess of four and one-half cents per ton on coal
originally deep mined by that operator. Any operator holding one permit upon
which coal is mined and processed or loaded shall pay only the tax applicable
under this section to the surface mining operation or deep mining operation.
2. That the provisions of this act amending and
reenacting §45.1-270.4 shall expire on July 1, 2017.
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