949 Revised bond rate guidelines for the calculation of land reclamation bonds on coal mining operations

Revised Bond Rate Guidelines for the Calculation of Land Reclamation Bonds on Coal Mining Operations

[35 Pa.B. 2958]

   The Department of Environmental Protection (Department) announces revisions to the bond rate guidelines for 2005 for anthracite and bituminous coal mining operations. These revisions are effective July 1, 2005. The authority for bonding coal mining operations is found under The Clean Streams Law (35 P. S. §§ 691.1--691.1001); the Surface Mining Conservation and Reclamation Act (52 P. S. §§ 1396.1--1396.19a); the Coal Refuse Disposal Control Act (52 P. S. §§  30.51--30.66) and the regulations promulgated thereunder at 25 Pa. Code Chapter 86, Subchapter F (relating to bonding and insurance requirements). The unit costs listed in these guidelines will be used in calculating the land reclamation bonds for surface coal mining operations including surface mines, coal refuse disposal sites, coal refuse reprocessing sites, coal processing facilities and the surface facilities of underground mining operations. The procedures for calculating land reclamation bonds are described in technical guidance 563-2504-001, ''Conventional Bonding for Land Reclamation--Coal,'' which is available at the Public Participation Center page on the Department's website: www.dep.state.pa.us, (DEP Keyword: ''Participate'').

   The Department may review the adequacy of bonds on existing permits based on the bond rate guidelines at any time. The Department will conduct these reviews before issuing permit renewals and may conduct similar reviews at the midterm of a permit and before approving a permit revision.

   The bond rate guidelines do not apply to bonds assuring replacement of water supplies under section 3.1(c) of the Surface Mining Conservation and Reclamation Act (52 P. S. § 1396.3a(c)) or to bonds ensuring compliance with the requirements of The Bituminous Mine Subsidence and Land Conservation Act (52 P. S. §§ 1406.1--1406.21).

   These revisions are the result of a survey conducted relating to the bond rates for mine sites awaiting final (stage 3) bond release. The results of the survey indicated that many stage 3 sites were over bonded and some may be under bonded. The survey also identified the primary potential reclamation liabilities on these sites to be unreclaimed temporary structures (the most common example of this is sediment controls) and the possible need for active management (costs for fertilizer and or lime) for cropland areas.

   Therefore, new Bond Rate Guidelines have been established for the stage 3 maintenance bond for land uses where crop yield data is required (either including reseeding or not). In addition, a new Bond Rate Guideline has been established for the cost for removing the remaining ditches. Another consequence of the survey is the reduction of the standard per-acre rate for the stage 3 maintenance bond for noncropland land uses (where crop yields are not needed).

   The approach to determining bond amounts for sediment control reclamation has been changed. Prior to stage 2 bond release, the bond liability for ponds will remain the flat per-pond rate. However, after stage 2 bond release, the cost of the reclamation of any remaining temporary structures is the primary cost item. Therefore, a site-specific calculation for the reclamation of a sediment pond must be completed. This is done by calculating the pond embankment volume (applying the <500 feet earthmoving Bond Rate Guideline) and the per-acre revegetation cost for the area disturbed by the reclamation and adding in the cost for spreading topsoil. A Bond Rate Guideline has also been established for stage 3 ditch removal.

   Similarly, the approach to calculating mobilization costs has been changed. Prior to stage 2 release, mobilization costs are calculated at 4% of the direct costs (with a maximum of $40,000). After stage 2 release, the mobilization costs would be limited to moving small equipment. This cost was determined to be $2,500.

   The stage 3 maintenance bond amount is the combined cost for mobilization, the total of the per-acre amounts, and the cost for removal of any remaining temporary structures.

   In addition, to implement the Land Maintenance Financial Guarantee Program, fees have been established for the cost for publication of the notice of a bond release request and for the cost to the Department to administer the program. These fees will be reviewed from time to time and published along with the Bond Rate Guidelines. These fees are set out in Table 2.

General Methodology

   The revised bond rate for the stage 3 maintenance bond was calculated using data collected during the survey of stage 3 permits. The average estimated cost to complete the reclamation of the sites included in the survey was slightly less than $100 per acre. The new rates for cropland and pastureland or land occasionally cut for hay were calculated using the contract data for soil amendments and seed for the contracts from 2001-2003.

   The Department developed the bond rate guidelines for 2005 from a spreadsheet of unit costs provided by the Bureau of Abandoned Mine Reclamation (BAMR). The BAMR spreadsheet lists contract bid amounts for the various unit operations needed to complete reclamation of a mine site for years 1998-2003. A 3-year (2001-2003) average was used to calculate the guidelines.

   In general, the bond rate for a given unit operation is the weighted average of the three lowest total bids for each contract. In some cases, a longer-term average was used because of limited data. For example, for selective grading, a 4-year average was used since there were only 27 acres of selective grading in the contracts from 2003. Not all unit operations included in the BAMR spreadsheet are included in Table 1.

   In the event that a unit operation necessary to calculate a reclamation bond is not listed in Table 1, then any additional cost information available from BAMR will be used. If enough data is still not available, the rate will be set from a standard reference like ''Means Building Construction Cost Data'' or ''Walker's Building Estimator's Reference Book.''

   The bond rate guidelines are available at www.dep.state.pa.us/dep/deputate/minres/BMR/BMRhome.htm. For background information and supporting documentation regarding bonding rate guidelines, contact the Bureau of Mining and Reclamation, Division of Monitoring and Compliance, P. O. Box 8461, Harrisburg, PA 17105-8461, [phone].

Effective Date

   The bond rate guidelines in this notice will become effective July 1, 2005.

TABLE 1

Bond Rate Guidelines
for Year 2005

Unit Operation	Unit Measure	Unit Costs ($)
Mobilization/demobilization	Job	4% of direct costs or $40,000, whichever is less
Grading (<500-foot push)	cubic yard	0.55
Grading (>=500-foot push)	cubic yard	0.80
Selective Grading	Acre	985.00
Revegetation	Acre	1,250.00
Tree Planting	Tree	0.15
Ditch Excavation	cubic yard	4.25
Jute Matting	square yard	2.20
High Velocity Erosion Control	square yard	2.00
R3 Rock Lining	square yard	18.00
R4 Rock Lining	square yard	18.00
R5 Rock Lining	square yard	17.00
Geotextile/Filter Fabric	square yard	2.75
PVC Lining1	square yard	9.50
Subsurface Drain	lineal foot	13.25
Pond Removal Active Phase2	Pond	3,500.00
Erosion and Sedimentation Control (Temporary Installation)	Job	Lump sum (5% of direct costs for site)
Stage 3 Maintenance Bond Noncropland Areas (Land uses where crop yields are not required)	Acre	100.00
Stage 3 Maintenance Bond Cropland (not row crops) Pastureland or Land occasionally cut for hay (excludes seed cost)	Acre	500.00
Stage 3 Maintenance Bond Cropland Area-Row Crops (includes seed cost)	Acre	700.00
Stage 3 Mobilization	Job	2,500.00
Pond Removal--Stage 3	Cubic yards (Embankment volume) Plus Topsoiling and Revegetation Cost	Use <500 grading for pond embankment volume plus Topsoiling and Revegetation cost for the area disturbed
Ditch Removal--Stage 3	Lineal Foot	0.55
Structure Demolition	Costs will be calculated using costs listed in the construction industry's latest annual cost publications, such as Means Building Construction Cost Data.
	shaft (10 ft. or less diameter)	1,400.00
Mine Sealing3	shaft (11 to 15 ft. diameter)	3,000.00
Nonhydraulic shaft seal--inert fill	shaft (16 to 20 ft. diameter)	4,500.00
	shaft (21 to 25 ft. diameter)	8,000.00
	shaft (10 ft. or less diameter)	7,600.00
Mine Sealing3	shaft (11 to 15 ft. diameter)	9,200.00
Hydraulic shaft seal w/bulkhead	shaft (16 to 20 ft. diameter)	10,700.00
	shaft (21 to 25 ft. diameter)	14,200.00
Mine Sealing3 Nonhydraulic drift/slope seal	drift/slope	3,900.00
Mine Sealing3 Hydraulic drift/slope seal w/bulkhead	drift/slope	6,200.00

   ¹ Typically used for lining of ponds or ditches crossing fill material.

   ² Unit cost not from BAMR bids, includes dewatering, grading, topsoil placement and revegetation. This flat rate is used until the permit area is approved for stage 2 release.

   ³ Mine sealing costs are minimum costs. Additional costs per mine seal will be assessed based on specific design criteria, such as the thickness of the seal and the volume of backfill material required, using appropriate material, equipment and labor costs from BAMR bid abstracts or from an industry-standard cost estimation publication, such as Means Estimating Handbook or Walker's Building Estimator's Reference Book.

TABLE 2

Land Maintenance Financial Guarantee Fees
for Year 2005

Fee Category	Fee ($)
Publication	$1,000
Administrative	$   300

KATHLEEN A. MCGINTY,   
Secretary

[Pa.B. Doc. No. 05-949. Filed for public inspection May 13, 2005, 9:00 a.m.]