OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

Search conducted by: Joyce Zweben Scall

Page 1 of 2

COALEX STATE INQUIRY REPORT – 124

August 7, 1989

Roger T. Hall

West Virginia Department of Energy

1615 Washington Street East

Charleston, West Virginia 25311

TOPIC: BONDING PROGRAMS

INQUIRY: Are there any states with "unusual" bonding schemes, i.e., bonding programs which 

assign fees after an evaluation of a specific site, rather than the more typical flat rate fee per acre 

bonding structure? 

SEARCH RESULTS: Review of the statutory and regulatory material available in the 

COALEX Library on LEXIS failed to identify any specific formulas used to assign bonding 

rates. There are, however, states which "calculate" a bond rate per acre, as opposed to those 

which assign a flat fee per acre. Under this less traditional format, the per acre rate for an 

operator applying for a permit is determined by applying the criteria set out in Sec. 509(a) of the 

Surface Mining Control and Reclamation Act of 1977 (SMCRA), 30 U.S.C. 1259, and the 

corresponding regulations, 30 CFR 800.14. 

For example: "The amount of the bond required for each bonded area shall...reflect the probable 

difficulty of reclamation, giving consideration to such factors as topography, geology, 

hydrology, and revegetation potential; and be based on, but not limited to, the estimated cost 

submitted by the permit applicant." 30 CFR 800.14(a)(3) and (4).

Regulatory authorities may add other factors into their calculations. Kentucky, for example, 

includes this criteria: "An additional amount based on factors of cost changes during the previous 

five (5) years for the types of activities associated with the reclamation to be performed." 405 

KAR 10:020E, Sec. 1(4). 

Although this research effort did not identify material which specifically addressed the question 

posed by this inquiry, a recent IMCC survey identified eight states with non-traditional bond 

forms. The "alternate bonding systems" include bond supplement funds and "bond pools". A 

description of these bonding programs and a state-by-state analysis are attached in the form of 

testimony by Anthony Abar before the House Interior and Insular Affairs Committee. Also 

included for your review are an earlier STATE COMPARISON REPORT on the topic and 

material on Kentucky's bond pool system. 
OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

Search conducted by: Joyce Zweben Scall

Page 2 of 2

ATTACHMENTS

A. KENTUCKY SURFACE MINING LAW, KRS Chapter 350, Sec. KRS 350.060 (1986). 

Permit; application; map; transportation plan; proof of public liability insurance 

coverage; fee; bond; mining two acres or less; permit renewal or termination; auger 

mining of previously mined area; exempt operations. 

B. 405 KENTUCKY ADMIN REGS. 10:020E, Sec. 1 (1982). Amount and duration of 

performance bond; determination of bond amount. 

C. "Mine Reclamation and Bonding Requirements": Oversight Hearings Before the 

Subcomm. on Mining and Natural Resources of the House Comm. on Interior and Insular 

Affairs (1989) (statement of the Interstate Mining Compact Commission, presented by 

Anthony Abar, Dir., Md. Bur. of Mines). 

D. COALEX COMPARISON REPORT - 37, "Alternative Bonding Programs" (1985). 

E. The KENTUCKY Bond Pool (1986). 

F. KENTUCKY Senate Bill No. 130, 86 RS BR 1392 (January 16, 1986).