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Treatment Trust Funds

Financial Assurance for Mine Sites with Post-mining Discharges - AKA "Treatment Trust Funds"

The Pennsylvania Surface Mining Act, the Clean Streams Law, the Coal Refuse Act, and regulations require that all sites be adequately bonded to ensure that reclamation is completed. The courts have held that reclamation includes the treatment of post-mining discharges. In the event that a post-mining discharge develops, the permittee is required to treat the discharge for as long as the discharge exists and is required to provide a bond in an amount sufficient for the Department to continue the treatment in the event the permittee does not.

Post-Mining Polution Discharge Bonds however, are not the ideal financial instrument for ensuring the long term treatment of a post-mining pollutional discharge. Bonds are finite in nature and inherently unable to keep up with inflation. Every five years when the permit is renewed the permittee must provide additional bond to keep pace with inflation. Also, due to the uncertain term and the fact it is highly unlikely the bond will ever be released, most permittees will be unable to purchase the necessary surety bonds to meet their legal obligations.

Treatment PlantAs an alternative to bonds, Section 4(d.2) of the Surface Mining Act authorizes the Department to establish alternative financial assurance mechanisms that meet the purposes and objectives of the bonding program. One alternative financial assurance mechanism established by the Department is a trust fund. Those permittees unable or unwilling to provide a surety bond or a collateral bond can establish and fund a trust with a third-party trustee. The main purpose of the trust fund is to generate sufficient income to cover the cost of treatment into the future. In the event the permittee defaults on its legal obligations to treat the discharge, the trustee will be able to make disbursements, at the direction of the Department, to fund continued treatment.

Reclaimed MineClick here to view a listing of web accessible trust fund documents. From this listing you will be able to link to the documents associated to a specific trust fund. Each trust fund will normally consist of two documents, a Consent Order and Agreement (CO&A) (PDF) between the Responsible Party and the Department and a Trust Agreement (PDF) or Participation Agreement between the Responsible Party and the Trustee. Some funds may have more documents dependant on inpidual circumstances.

Please be aware that some of these documents are quite large and may not be easily downloaded, especially over a low-speed or dial-up connection.

If you would like to have this information sent to you via normal postal service, contact Sonia Pavlekovsky at (724) 925-5548. In accordance with the Commonwealth's Public Access to Information Policy, fees may be assessed for copying these documents.