COALEX STATE INQUIRY REPORT - 119
July 13, 1989

Mr. Gary L. Merritt, Director
Department of Environmental Resources
Office of Environmental Protection
P.O. Box 2063
Harrisburg, Pennsylvania 17120

TOPIC: BONDING - LEGISLATIVE HISTORY

INQUIRY: In the legislative history of the Surface Mining Control and Reclamation Act of 1977
(SMCRA), is there any discussion of the requirement for a bond, other than a performance bond,
for water discharge or treatment [water quality]?

SEARCH RESULTS: Research was conducted using the COALEX Library on LEXIS. Results of the
research are discussed below. Relevant excerpts from the materials identified as a result of the
research are attached.

Review of committee prints, hearings, congressional reports and Congressional Record entries
indicates that protection of water quality was consistently included in permit, reclamation plan
and bond sections of proposed surface mining legislation. Excerpts from relevant sections of the
Act follow.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

1. Application Requirements. Information on the stream into which "drainage will be discharged"
and "probable hydrologic consequences of mining...operations, both on and off the mine site" are
required as part of the application process. [SMCRA Sec. 507(b)]

   The reclamation plan must include "a plan for the control of surface water drainage...." [SMCRA
Sec. 508(a)(5)] 


2. Permit Approval or Renewal of Permit. [SMCRA Sec. 510] Permit approval includes an
assessment of the impact of mining on the "hydrologic balance" [510(b)(3)] and the assurance
that the quality and quantity of "water systems that supply [alluvial] valley floors" are not
damaged [SMCRA Sec. 510(b)(5)].

   Renewal of a permit is contingent upon compliance with the state or federal program. [SMCRA
Sec. 510(a)] 


3. Bonding. "Hydrology", a reclamation requirement, is a "factor" to be considered in setting the
amount of  performance bond required for a permit area. [SMCRA Sec. 509(a)]
       
   The whole or part of the bond may be released when "backfilling, regrading, and drainage
control" is completed "in accordance with [the] reclamation plan". [SMCRA Sec. 519(c)(1)]

   See the attached excerpts from H.R. Rep. No. 94-1445, 94th Cong., 2nd Sess. (1976), for
congressional explanation on the importance of water quality information as part of the
reclamation plan, permit renewal process and bond release process.

   The requirement for posting a bond in addition to a performance bond as security against
damages to the "surface estate" appears in conjunction with discussions of surface owner rights
when the surface owner is not the owner of the mineral rights. There are three relevant SMCRA
sections:

Sec. 714 Surface Owner Protection
Sec. 715 Federal Lessee Protection
Sec. 717 Water Rights and Replacement
[Written consent is part of the permit approval process, SMCRA Sec. 510(b)6)]
     
   In cases where the federal government owns the mineral rights, the "written consent" of the
surface owner or the "lessee of the surface lands" must be obtained before mining operations can
begin. In the case of the "lessee of the surface lands", a bond may be substituted for written
consent. The mine operator must provide a substitute water supply when the surface owner's
water supply is affected by the mine operations.

   In an earlier version of the surface mining legislation, the requirement for an additional bond
applied to all instances where the surface owner was not the owner of the mineral estate.  [S.
425, 93rd Cong., 1st Sess. (1973)] This was explained as follows:

"When the surface estate and the mineral estate are separate, primacy has frequently been
accorded to the rights of the mineral owner over those of the surface owner. But given the
adverse nature of the impacts of coal surface mining it is the intent of the [Senate Interior and
Insular Affairs] Committee that the rights of the surface owner be protected as well....This
provision applies to all cases involving separate estates, whether the mineral rights are held by
the Federal Government or whether the mineral and the surface rights are both privately owned.
It follows the rule used for many years where the Federal Government owns the minerals". [S.
Rep. 93-402, 93rd Cong., 1st Sess. (1973), 47]  

   The bill introduced by the House during the second session of the 93rd Congress (1974), set
requirements closer to those passed in the Act. H.R.11500 required an additional bond as an
alternative only in cases of a federal coal lease and included the requirement of substituting a
water supply to compensate surface owners. [H.R. 11500, 93rd Cong., 2nd Sess. (1974)] The
House Interior and Insular Affairs Committee weighed mine operator and surface owner rights
and determined that the requirement for written consent from the surface owner prior to the
commencement of mining operations would provide the surface owner with "complete
protection". [H.R. Rep. 93-1072, 93rd Cong., 2nd Sess. (1974), 111]

   Excerpts from other legislative history materials which relate to these sections are attached.


ATTACHMENTS
A.   H.R. Rep. 94-1445, 94th Cong., 2nd Sess. (1976).
B.   S. 425, 93rd Cong., 1st Sess. (1973).
C.   S. Rep. 93-402, 93rd Cong., 1st Sess. (1973).
D.   H.R. 11500, 93rd Cong., 2nd Sess. (1974).
E.   H.R. Rep. 93-1072, 93rd Cong., 2nd Sess. (1974).
F.   "Surface Mining Veto Briefing Justification", 94th Cong., 1st Sess. 206-207 (1975)
     (memorandum from the Director, Bureau of Mines).
G.   "Surface Mining Control and Reclamation Act of 1977", 95th Cong., 1st Sess. 319 (1977)
     (statement of John C. Doyle, Jr., Environmental Policy Institute).
H.   H.R. Rep. 95-218, 95th Cong., 1st Sess. (1977).
I.   H.R. Rep. 95-493, 95th Cong., 1st Sess. (1977). 


Research conducted by: Joyce Zweben Scall