COALEX REPORT 87

	Coalex Report 87

This is the Office of Surface Mining's library of COALEX Research Reports. COALEX is a database of mining and reclamation information, including the Surface Mining Law and regulations, maintained in LEXIS-NEXIS -- a commercial, on-line research service. These reports have been compiled under a cooperative agreement between the Office of Surface Mining and the Interstate Mining Compact Commission, which represents most U.S. coal producing states. The following report includes an analysis of a specific issue requested by a state regulatory authority with responsibility for carrying out the Surface Mining Law. Copies of the research reports and attachments are available to the public, upon request. For additional information, or to obtain copies of the listed attachments, contact Ron Tarquinio by phone at (202) 208-2882 or by e-mail at rtarquin@osmre.gov.

                   
COALEX STATE INQUIRY REPORT - 87
September 3, 1987

Fred Banta
Mine Land Reclamation Division
Centennial Bldg., Room 42
31313 Sherman Street
Denver, CO 80203

TOPIC: LEGISLATIVE HISTORY OF SMCRA SECTION 519(c )

INQUIRY: (1) What is the legislative history of SMCRA Sec. 519(c ) as it relates to the different
percentages of release of an operator's bond for different stages of reclamation?  (2) Are there
any alternatives to these percentages?

SEARCH RESULT: SMCRA Sec. 519(c ) (codified at 30 USC Sec.1269(c)) describes the standards
which must be met for an operator to receive partial bond release.  This section also gives a
certain percentage of the bond which may be released at each stage.  The pertinent section of
the Act allows release of 60% of the operator's bond upon satisfactory completion of the
backfilling, regrading and drainage control of the bonded area.  The remaining portion of the
bond is to be released after revegetation has been established on the regraded area and after
successful completion of all mining and reclamation activities but not before the expiration of the
period specified for operator responsibility. (30 USC Sec. 1269(c)(1977).)

Given this statutory language, the question arises as to whether a regulatory agency may modify
the percentages of the bond which is to be released at each stage of reclamation.  A COALEX
search was conducted of the relevant legislative history to determine whether Congress meant for
these bond release percentages to be strictly applied.

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

LEGISLATIVE HISTORY

   During the 92nd Congress, the Committee on Interior and Insular Affairs, unanimously reported
the first surface mine bill, S. 630, in September, 1972.

   Contained in Title IV, Sec. 203(b)(6) of this bill were the guidelines for bonding of disturbed
areas and the standards for release of bonds. It stated in part:

"That upon a determination by the regulatory authority that an area has been satisfactorily
reclaimed, so much of the bond as is applicable to such area may be released, or applied to any
area to be mined in accordance with an approved plan." (S. Rep. No. 1162, 92nd Cong., 2d Sess.
5 (1972))

   The 92nd Congress adjourned, however, before the full Senate considered the bill.

   Of the fifteen surface mining bills introduced in the House in the 93rd Congress, only one
provided for a measured amount of bond release during the reclamation phase of the mining
operation, H.R. 5988. The bill, sponsored by Senators Saylor and Dent of Pennsylvania, first
introduced the provision of releasing 60% of an operator's bond upon satisfactory completion of
backfilling and regrading of the mine site. (H.R. 5988, 93rd Cong., 1st Sess., Sec. 218(a) (1973))
This provision was well received in the hearings conducted by the Committee on Interior and
Insular Affairs, House of Representatives. (Testimony of Ernest Preate, (comparing H.R. 5988
favorably to other introduced bills) H.R. 3 and related bills: Hearings Before the Subcommittee on
mines and Mining of the House Committee on Interior and Insular Affairs, 93rd Cong., 1st Sess.
913 (1973)) Thus it appears that this bill and the support the 60% release provision received was
the origin of the 60% criteria, although no mention of the origin is given by Senator Saylor's
section-by-section analysis of his bill (Id. at 858)

   These fifteen separate bills were eventually molded into a single bill, H.R. 11500, which the
Committee on Interior and Insular Affairs felt incorporated many features of the earlier bills and
the results of many days of public hearings, testimony and extensive field trips. The final version
of this bill concerning the standards for release of bonds remained virtually unchanged after
1974. (H.R. Rep. 1072, 93rd Cong., 2d Sess. 23 (1974)) These sections were not addressed in
any further explanation in Congressional reports after this date.

   Thus, there appears to be no clear reason why Congress chose the 60% level it did in the
backfilling and grading phase of performance bond release. Since this provision is statutorily
mandated, it cannot be altered through implementation by regulation. However, the remaining
two levels of release are subject to interpretation in line with the current working of the Act. The
legislative history simply does not provide any guidance on the interpretation of this section.

   A search of the state regulatory programs revealed that one state, Wyoming, has taken a
different approach to the traditional bonding practices. This system is designed to address the
problems which would arise when the mining operation covers an extremely large area, as often
occurs in Western states.

   The Wyoming program requires that an operator post two separate bonds to cover the permit
area: an "area bond" and an "incremental bond". The area bond is posted for the entire permit
area, and must be an amount sufficient to cover the estimated cost of completing the maximum
amount of rough backfilling during the annual bonding period as set forth in the regulation. The
incremental bond is calculated by determining the estimated cost of performing all reclamation
requirements other than those covered under the area bond.

   Liability under both types of bonds is for the entire permit area; however, the duration of the
liability differs for each type of bond. The liability under the area bond is for a duration sufficient
to insure that all rough backfilling has been properly achieved on the entire permit area. Liability
under the incremental bond is for the entire duration of the operation and for the ten-year period
of revegetation responsibility; however, the incremental bond may be posted to guarantee a
certain portion of the permit area, rather than the entire area.

   When the operator has completed the backfilling, regrading, topsoil replacement, recontouring
and drainage control of a bonded area, the regulatory authority may release 60% of the
operator's incremental bond. Note that it is only the incremental bond, and not the area bond,
which may be released under this provision. However, the area bond, in effect, "moves" from on
increment to the next.  Thus, the operator is allowed to post one amount for the entire duration
of the operation to cover all backfilling, but is only required to pose the remained of the bond for
a small area at a time.


ATTACHMENTS
A    Excerpt, Surface Mining and Control Reclamation Act of 1977, Pub. L. 95-87, Sec. 519(c ),
     91 Stat. 445, 501-503 (1977).
B    Excerpt, S. Rep. No. 1162, 92nd Cong., 2d Sess., 5 (1972).
C    Excerpt, H.R. 5988, 93rd Cong., 1st Sess., Sec. 218(a) (1973).
D    Excerpt, H.R. 3 and Related Bills, Hearings Before the Subcommittee on mines and Mining
     of the House Committee on Interior and Insular Affairs, 93rd Cong., 1st Sess. 913, 858
     (1973).
E    Excerpt, H.R. Rep. 1072, 93rd Cong., 2d Sess. 23 (1974).
F    Wyoming Land Quality Division Rules and Regulations, Section 2-5.


Search conducted by: Stephen G. Allen

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