Surface Mining: Cost and Availability of Reclamation Bonds
PEMD-88-17
Published: Apr 08, 1988. Publicly Released: May 03, 1988.
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Highlights
In response to a congressional request, GAO assessed the availability and cost of surety reclamation bonds for surface coal mine operators in four states to determine the reasonableness of rate-setting procedures.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Interior | The Secretary of the Interior should direct the Office of Surface Mining Reclamation and Enforcement (OSMRE) to explore ways to develop a bond market in which more bond sources are available to responsible coal mine operators and regulators are more confident that reclamation will be timely and successful. This should be done by bringing together all relevant parties, including surety representatives, coal mine operators (particularly smaller operators), environmental groups, and state officials. Among the matters that should be discussed are whether: (1) the liability period for reclamation bonds could be shortened without negatively affecting the environment; (2) state bond pools could be developed in additional states as an alternative bonding mechanism; and (3) innovations in underwriting reclamation bonds could be introduced without increasing the risk of bond forfeitures. |
Closed – Implemented
Further exploration of alternatives to traditional bonding mechanisms within environmental safeguards of legislation. OSMRE has identified bonding as a research priority area for FY 1989, encouraged field officials to become more involved in assisting states with bonding issues, and is exploring possibilities of federal/state guarantees on bonding pools.
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Topics
Coal miningCost controlFinancial institutionsInsurance companiesInsurance premiumsInsurance regulationMining industrySurety bondsSurface mining land reclamationBail bonds