Administrative Code

Virginia Administrative Code
1/25/2022

Part 801. Coal Surface Mining Reclamation Fund, Penalties, and Self-Bonding

4VAC25-130-801.2. Scope.

The regulations of this Part establish the procedures and requirements for an alternative bonding system through which the division will implement and administer the Coal Surface Mining Reclamation Fund (Pool Bond Fund) as established under Article 5 (§ 45.1-270.1 et seq.) of Chapter 19 of Title 45.1 of the Code of Virginia.

Statutory Authority

§§ 45.1-161.3 and 45.1-230 of the Code of Virginia.

Historical Notes

Derived from VR480-03-19 § 801.2, eff. December 15, 1981; amended, eff. June 28, 1982; October 28, 1982; December 14, 1982; October 11, 1983; December 27, 1983; May 8, 1984; June 22, 1984; August 2, 1984; October 16, 1985; January 7, 1987; July 22, 1987; November 25, 1987; October 12, 1988; December 26, 1990; July 1, 1991; July 17, 1991; November 20, 1991; July 7, 1992; May 5, 1993; October 19, 1994.

4VAC25-130-801.4. Objective.

The objective of this Part is to set forth the requirements and procedures that a participating applicant must comply with in order to be relieved of the bonding requirements of 4VAC25-130-800.14 and 4VAC25-130-800.17.

Statutory Authority

§§ 45.1-161.3 and 45.1-230 of the Code of Virginia.

Historical Notes

Derived from VR480-03-19 § 801.4, eff. December 15, 1981; amended, eff. June 28, 1982; October 28, 1982; December 14, 1982; October 11, 1983; December 27, 1983; May 8, 1984; June 22, 1984; August 2, 1984; October 16, 1985; January 7, 1987; July 22, 1987; November 25, 1987; October 12, 1988; December 26, 1990; July 1, 1991; July 17, 1991; November 20, 1991; July 7, 1992; May 5, 1993; October 19, 1994.

4VAC25-130-801.11. Participation in the pool bond fund.

(a) Participation in the Pool Bond Fund shall be at the option of any applicant for a permit under the Act and the regulations promulgated thereunder who can demonstrate to the division's satisfaction at least a consecutive three-year history of compliance under the Act or any other comparable State or Federal Act.

(b) All participants in the Pool Bond Fund shall:

(1) Pay all entrance fees to the Pool Bond Fund as required by 4VAC25-130-801.12(a); and

(2) Comply with the applicable parts of section 45.1-241 of the Code of Virginia.

(c) Commencement of participation in the Pool Bond Fund shall constitute an irrevocable commitment by the permittee to participate therein as to the applicable permit and for the duration of the coal surface mining operations covered thereunder.

(d) All fees and taxes are nonrefundable.

(e) The division shall, as provided by section 45.1-270.5(B) of the Code of Virginia, utilize those monies from the interest accrued to the fund which are required to properly administer the Pool Bond Fund. These monies shall be used to support one position for administration of the Pool Bond Fund; however, if it is apparent that such position is insufficient to ensure proper administration of the Pool Bond Fund, the division may upon proof of need, and upon concurrence with the Pool Bond Fund Advisory Board obtain additional assistance.

Statutory Authority

§§ 45.1-161.3 and 45.1-230 of the Code of Virginia.

Historical Notes

Derived from VR480-03-19 § 801.11, eff. December 15, 1981; amended, eff. June 28, 1982; October 28, 1982; December 14, 1982; October 11, 1983; December 27, 1983; May 8, 1984; June 22, 1984; August 2, 1984; October 16, 1985; January 7, 1987; July 22, 1987; November 25, 1987; October 12, 1988; December 26, 1990; July 1, 1991; July 17, 1991; November 20, 1991; July 7, 1992; May 5, 1993; October 19, 1994.

4VAC25-130-801.12. Entrance fee and bond.

(a) An applicant filing a permit application for coal surface mining operations and electing to participate in the Pool Bond Fund shall prior to permit issuance pay into the Pool Bond Fund an entrance fee for the applicable permit application. An entrance fee of $5,000 shall be required of all applicants who elect to participate in the Fund when the total balance of the Fund is determined to be less than $1,750,000. The entrance fee shall be reduced to $1,000 when the total Fund balance is greater than $2 million. A renewal fee of $1,000 shall be required of all permittees in the Fund at permit renewal. The fee shall be made payable to the Treasurer of Virginia and shall be in the form of cash, cashier's check, certified check, or personal check.

(b) An applicant electing to participate in the Pool Bond Fund shall, in accordance with section 45.1-241 of the Code of Virginia, furnish a bond as provided by 4VAC25-130-800.12, 4VAC25-130-800.14 and 4VAC25-130-800.16:

(1) For those underground mining operations participating in the Fund prior to July 1, 1991, in the amount of $1,000 per acre covered by the permit. In no event shall the 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 all other coal surface 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) The Director may accept the bond of an applicant of an underground mining operation without separate surety, as provided by 4VAC25-130-801.13, upon a showing by such applicant of a net worth, total assets minus total liabilities (certified by an independent certified public accountant), equivalent to $1 million. Such net worth shall be, during the existence of the permit, certified annually by an independent certified public accountant and the certification submitted on the anniversary date of the permit.

(d) The Director may accept the bond of an applicant of a surface mining operation or associated facility without separate surety, upon a showing by the applicant of those conditions set forth in 4VAC25-130-801.13(b).

(e) The bond liability shall extend to cover subsidence and mine drainage in accordance with 4VAC25-130-800.14(c).

(f) The amount of the performance bond liability applicable to a permit shall be adjusted by the division as the acreage in the permit area is revised. The bond adjustments are not subject to the bond release procedures of 4VAC25-130-801.17.

(g) 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 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 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. The amount of bond required for each area bonded under this Subsection shall be determined by the division in accordance with 4VAC25-130-800.14. 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.

Statutory Authority

§§ 45.1-161.3 and 45.1-230 of the Code of Virginia.

Historical Notes

Derived from VR480-03-19 § 801.12, eff. December 15, 1981; amended, eff. June 28, 1982; October 28, 1982; December 14, 1982; October 11, 1983; December 27, 1983; May 8, 1984; June 22, 1984; August 2, 1984; October 16, 1985; January 7, 1987; July 22, 1987; November 25, 1987; October 12, 1988; December 26, 1990; July 1, 1991; July 17, 1991; November 20, 1991; July 7, 1992; May 5, 1993; October 19, 1994.

4VAC25-130-801.13. Self-bonding.

(a) The division may accept a self-bond from the applicant of a proposed underground mining operation.

(1) The applicant shall designate the:

(i) Name and address of a suitable agent to receive service of process in the Commonwealth.

(ii) Name and address of the certified public accountant(s) who prepared the statement required by this section.

(iii) Location of the financial records used to prepare the C.P.A. statement required by this section.

(2) The applicant has a net worth, certified by an independent Certified Public Accountant in the form of an unqualified opinion appended to the financial statement submitted, of no less than $1 million after total liabilities are subtracted from total assets. If the applicant is a subsidiary corporation, the applicant's parent organization's net worth need only be certified by the independent Certified Public Accountant, if the applicant uses or includes any assets or liabilities of the parent organization in computing or arriving at the applicant's net worth. Where the division has a valid reason to believe that the permittee's net worth is less than required by this Subsection, it may require a new Certified Public Accountant's statement and certification.

(3)(i) A cognovit note must be executed by the applicant, and said agreement must also be executed by:

(A) If a corporation, two corporate officers who are authorized to sign the note by a resolution of the board of directors, a copy of which shall be provided;

(B) To the extent that the history or assets of a parent organization are relied upon to make the showings of this Part, the parent organization of which it is a subsidiary, whether first-tier, second-tier, or further removed, in the form of (A) above;

(C) If the applicant is a partnership, all of its general partners and their parent organization or principal investors; and

(D) If the applicant is a married individual, the applicant's spouse;

(ii) Any person who occupies more than one of the specified positions shall indicate each capacity in which he signs the note;

(iii) The cognovit note shall be a binding obligation, jointly and severally, on all who execute it;

(iv) For the purposes of this Paragraph, principal investor or parent organization means anyone with a 10 percent or more beneficial ownership interest, directly or indirectly, in the applicant.

(b) The division may accept a self-bond from the applicant of a proposed surface mining operation or associated facility. The applicant shall provide the:

(1) Name and address of a suitable agent to receive service of process in the Commonwealth.

(2) Evidence indicating a history of satisfactory continuous operation.

(3) Evidence substantiating the applicant's financial solvency, with the appropriate financial documentation required by Paragraph (a)(2) of this section.

(4) Indemnity agreement:

(i) Containing the date of execution;

(ii) Made payable to the "Treasurer of Virginia";

(iii) Immediately due and payable in the event of bond forfeiture of the permit;

(iv) Payable in a sum certain of money;

(v) Signed by the maker(s);

(vi) The indemnity agreement must be executed by the applicant and by:

(A) If a corporation, two corporate officers who are authorized to sign the agreement by a resolution of the Board of Directors, a copy of which shall be provided;

(B) To the extent that the history or assets of a parent organization are relied upon to make the showings of this Part, the parent organization of which it is a subsidiary, whether first-tier, second-tier, or further removed, in the form of (A) above;

(C) If the applicant is a partnership, all of its general partners and their parent organization or principal investors; and

(D) If the applicant is a married individual, the applicant's spouse;

(vii) Any person who occupies more than one of the specified positions shall indicate each capacity in which he signs the indemnity agreement;

(viii) The indemnity agreement shall be a binding obligation, jointly and severally, on all who execute it;

(ix) For purposes of this Paragraph, principal investor or parent organization means anyone with a 10 percent or more beneficial ownership interest, directly or indirectly, in the applicant.

(c) Whenever a participant in the Pool Bond Fund applies for an additional permit or permits, the C.P.A. certification required by Paragraph (a)(2) or (b)(3) of this section shall be updated reflecting those prior reclamation obligations and self- bonding liabilities still in effect.

(d) If at any time the conditions upon which the self-bond was approved no longer prevail, the division shall require the posting of a surety or collateral bond before coal surface mining operations may continue. The permittee shall immediately notify the division of any change in his total liabilities or total assets which would jeopardize the support of the self-bond. If the permittee fails to have sufficient resources to support the self-bond, he shall be deemed to be without bond coverage in violation of 4VAC25-130-800.11(b).

Statutory Authority

§§ 45.1-161.3 and 45.1-230 of the Code of Virginia.

Historical Notes

Derived from VR480-03-19 § 801.13, eff. December 15, 1981; amended, eff. June 28, 1982; October 28, 1982; December 14, 1982; October 11, 1983; December 27, 1983; May 8, 1984; June 22, 1984; August 2, 1984; October 16, 1985; January 7, 1987; July 22, 1987; November 25, 1987; October 12, 1988; December 26, 1990; July 1, 1991; July 17, 1991; November 20, 1991; July 7, 1992; May 5, 1993; October 19, 1994.

4VAC25-130-801.14. Reclamation tax.

(a) If at the end of any calendar quarter the total balance of the Pool Bond Fund, including interest thereon, is less than $1,750,000, the tax shall be initiated. All permittees participating in the Pool Bond Fund shall pay within 30 days after the end of each taxable calendar quarter, an amount equal to:

(1) Four cents per clean ton of coal produced by the surface mining operation of the permit during the taxable calendar quarter.

(2) Three cents per clean ton of coal produced by the underground mining operation of the permit during the taxable calendar quarter.

(3) One and one-half cents per clean ton of coal processed or loaded by the preparation or loading facility operation of the permit during the taxable calendar quarter.

(b) If at the end of any calendar quarter the total balance of the Pool Bond Fund, including interest thereon, exceeds $2 million, payments shall be deferred until required by 4VAC25-130-801.14(a).

(c) No permittee shall pay the reclamation tax on more than five million tons of coal produced per calendar year, regardless of the number of permits held by that permittee, except as provided in Subsection (e) of this section.

(d) In no event except as provided in Subsection (e) of this section, shall the division require any permittee participating in the Pool Bond Fund:

(1) Holding more than one type of permit to pay a reclamation tax at a rate in excess of five and one-half cents per ton on coal originally surface mined by that permittee or in excess of four and one-half cents per ton on coal originally deep mined by that permittee; or

(2) Holding one permit upon which coal is both mined and processed or loaded to pay more than the tax applicable to the surface mining operation or underground mining operation. However, the permittee shall pay the one and one-half cents per clean ton for all coal processed and/or loaded at the permit which originated from other permits during the calendar quarter.

(e) Upon permit issuance for which bond is provided pursuant to this Part, the permittee shall pay the applicable reclamation tax required by Subsection (a) into the Pool Bond Fund on coal mined and removed under the permit during the one year period commencing with and running from the date of the commencement of coal production, processing or loading from that permit.

Statutory Authority

§§ 45.1-161.3 and 45.1-230 of the Code of Virginia.

Historical Notes

Derived from VR480-03-19 § 801.14, eff. December 15, 1981; amended, eff. June 28, 1982; October 28, 1982; December 14, 1982; October 11, 1983; December 27, 1983; May 8, 1984; June 22, 1984; August 2, 1984; October 16, 1985; January 7, 1987; July 22, 1987; November 25, 1987; October 12, 1988; December 26, 1990; July 1, 1991; July 17, 1991; November 20, 1991; July 7, 1992; May 5, 1993; October 19, 1994.

4VAC25-130-801.15. Collection of the reclamation tax and penalties for non-payment.

(a) The division shall notify, in writing, each permittee participating in the Pool Bond Fund, at the end of each calendar quarter, of those periods during which the reclamation taxes are applicable or deferred. The permittee shall on a quarterly basis file a notarized copy of the "Coal Surface Mining Reclamation Fund Tax Reporting Form" with the division: Attention Director. The permittee shall file the report by permit and applicable tonnage mined, processed, and/or loaded no later than the 15th day of the month after the end of each calendar quarter, even if no coal was mined, processed and/or loaded on the permit(s).

(b) Each permittee participating in the Fund shall submit to the division's Big Stone Gap Office full payment of the appropriate reclamation taxes required under 4VAC25-130-801.14(a) or (e) within 30 days after the end of the calendar quarter, when the taxes are applicable. Payment of the reclamation taxes shall be in cash, cashier's check, certified check or personal check made payable to the Treasurer of Virginia.

(c) Where the division has reason to suspect inaccurate reporting of the production of clean tons of coal, it may request to audit the relevant books and records of the permittee upon which the taxes paid under this Part are based. The request shall be in writing and sent to the permittee or his authorized representative by certified mail, return receipt requested. Failure to consent to the request for the audit shall be deemed a violation of this Part and subject to the enforcement procedures of Part 843. The audit shall be conducted at reasonable times during normal business hours and the permittee shall be given adequate advance notice of when the audit is to be conducted.

(d) If the permittee fails to make full payment of the reclamation taxes due under 4VAC25-130-801.14, the division shall issue a notice of violation in accordance with 4VAC25-130-843.12. The notice shall state that upon failure to make full payment within 15 calendar days thereafter, the division shall issue a cessation order to the permittee for failure to abate the notice of violation. If the cessation order is issued, the enforcement procedures of Part 843 shall apply.

(e) The division shall assess a civil penalty in accordance with Part 845, for the permittee's violation of the conditions set forth in this Part. Civil penalties imposed upon the permittee for violation of this section, shall be placed in the Pool Bond Fund.

Statutory Authority

§§ 45.1-161.3 and 45.1-230 of the Code of Virginia.

Historical Notes

Derived from VR480-03-19 § 801.15, eff. December 15, 1981; amended, eff. June 28, 1982; October 28, 1982; December 14, 1982; October 11, 1983; December 27, 1983; May 8, 1984; June 22, 1984; August 2, 1984; October 16, 1985; January 7, 1987; July 22, 1987; November 25, 1987; October 12, 1988; December 26, 1990; July 1, 1991; July 17, 1991; November 20, 1991; July 7, 1992; May 5, 1993; October 19, 1994.

4VAC25-130-801.16. Reinstatement to the pool bond fund.

(a) A permittee who has defaulted on any reclamation obligation and has thereby caused the Pool Bond Fund to incur reclamation expenses as a result thereof, shall not be eligible to participate in the Pool Bond Fund for any new permit or any permit renewal thereafter until full restitution for such default has been made to the Pool Bond Fund. The Director at his discretion and with the recommendation from the Coal Surface Mining Reclamation Pool Bond Fund Advisory Committee may require that the person seeking reinstatement pay interest at the composite rate determined by the Treasurer of Virginia compounded monthly.

(b) Compliance with Subsection (a) shall be a prerequisite to the filing by the permittee of any new permit application or renewal under the Act, but shall not affect the permittee's need to comply with all other requirements of the Act and the regulations promulgated thereunder in applying for a permit.

Statutory Authority

§§ 45.1-161.3 and 45.1-230 of the Code of Virginia.

Historical Notes

Derived from VR480-03-19 § 801.16, eff. December 15, 1981; amended, eff. June 28, 1982; October 28, 1982; December 14, 1982; October 11, 1983; December 27, 1983; May 8, 1984; June 22, 1984; August 2, 1984; October 16, 1985; January 7, 1987; July 22, 1987; November 25, 1987; October 12, 1988; December 26, 1990; July 1, 1991; July 17, 1991; November 20, 1991; July 7, 1992; May 5, 1993; October 19, 1994.

4VAC25-130-801.17. Bond release application.

The permittee participating in the Pool Bond Fund, or any person authorized to act upon his behalf, may file an application with the division for the Phase I, II or III release of the bond furnished in accordance with 4VAC25-130-801.12 (b) for the permit area or any applicable increment thereof. The bond release application, the procedural requirements and the released percentages shall be consistent with the release criteria of 4VAC25-130-800.40. However, in no event shall the total bond of the permit be less than the minimum amounts established pursuant to §§ 45.1-241 and 45.1-270.3 B of the Virginia Coal Surface Mining Control and Reclamation Act prior to completion of Phase III reclamation of the entire permit area.

Statutory Authority

§§ 45.1-161.3, 45.1-230, and 45.1-241 of the Code of Virginia.

Historical Notes

Derived from VR480-03-19 § 801.17, eff. December 15, 1981; amended, eff. June 28, 1982; October 28, 1982; December 14, 1982; October 11, 1983; December 27, 1983; May 8, 1984; June 22, 1984; August 2, 1984; October 16, 1985; January 7, 1987; July 22, 1987; November 25, 1987; October 12, 1988; December 26, 1990; July 1, 1991; July 17, 1991; November 20, 1991; July 7, 1992; May 5, 1993; October 19, 1994; Virginia Register Volume 20, Issue 23, eff. October 12, 2004.

4VAC25-130-801.18. Criteria for release of bond.

(a) The division shall release bond furnished in accordance with §§ 45.1-241 and 45.1-270.3 of the Virginia Coal Surface Mining Control and Reclamation Act through the standards specified at 4VAC25-130-800.40 upon receipt of an application for Phase I, II or III release.

(b) The division shall terminate jurisdiction for the permit area, or any increment thereof upon approval of the Phase III bond release for that area.

(c) In the event a forfeiture occurs, the division may, after utilizing the available bond monies, utilize the Fund as necessary to complete reclamation liabilities for the permit area.

Statutory Authority

§§ 45.1-161.3, 45.1-230, 45.1-241 of the Code of Virginia.

Historical Notes

Derived from VR480-03-19 § 801.18, eff. December 15, 1981; amended, eff. June 28, 1982; October 28, 1982; December 14, 1982; October 11, 1983; December 27, 1983; May 8, 1984; June 22, 1984; August 2, 1984; October 16, 1985; January 7, 1987; July 22, 1987; November 25, 1987; October 12, 1988; December 26, 1990; July 1, 1991; July 17, 1991; November 20, 1991; July 7, 1992; May 5, 1993; October 19, 1994; Virginia Register Volume 20, Issue 23, eff. October 12, 2004.

4VAC25-130-801.19. Forfeiture.

In the event of bond forfeiture pursuant to 4VAC25-130-800.50, the bond submitted in accordance with 4VAC25-130-801.12(b) shall:

(a) Be utilized by the division in performing the necessary reclamation work before any monies are utilized from the Pool Bond Fund; however,

(b) If an emergency, imminent danger or harm to the public or environment exists, the division may utilize the Pool Bond Fund for reclamation of those mining operations bonded pursuant to 4VAC25-130-801.12 (c) and (d) if the Director determines that collection will delay the essential and necessary reclamation work required. Bond amounts subsequently collected shall be deposited into the Pool Bond Fund, up to but not exceeding the full amount of liabilities which the Pool Bond Fund incurred.

Statutory Authority

§§ 45.1-161.3 and 45.1-230 of the Code of Virginia.

Historical Notes

Derived from VR480-03-19 § 801.19, eff. December 15, 1981; amended, eff. June 28, 1982; October 28, 1982; December 14, 1982; October 11, 1983; December 27, 1983; May 8, 1984; June 22, 1984; August 2, 1984; October 16, 1985; January 7, 1987; July 22, 1987; November 25, 1987; October 12, 1988; December 26, 1990; July 1, 1991; July 17, 1991; November 20, 1991; July 7, 1992; May 5, 1993; October 19, 1994.

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