PRINTER'S NO. 248
No. 240 Session of 2001
INTRODUCED BY STOUT, WAGNER, BOSCOLA, COSTA, WOZNIAK, MELLOW, MUSTO, RHOADES, LOGAN, HUGHES AND KITCHEN, FEBRUARY 5, 2001
REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, FEBRUARY 5, 2001
AN ACT 1 Amending the act of August 23, 1961 (P.L.1068, No.484), 2 entitled, as reenacted and amended, "An act to provide for 3 the creation and administration of a Coal and Clay Mine 4 Subsidence Insurance Fund within the Department of 5 Environmental Resources for the insurance of compensation for 6 damages to subscribers thereto; declaring false oaths by the 7 subscribers to be misdemeanors; providing penalties for the 8 violation thereof; and making an appropriation," further 9 providing for purpose, for definitions, for disbursements, 10 for inflation protection, for audits by the Insurance 11 Department and for subrogation; establishing the Mine 12 Subsidence Assistance Program; providing for subsidence 13 insurance; and making editorial changes. 14 The General Assembly of the Commonwealth of Pennsylvania 15 hereby enacts as follows: 16 Section 1. The title and sections 1, 2, 3, 4, 5, 7 and 9 of 17 the act of August 23, 1961 (P.L.1068, No.484), entitled, as 18 reenacted and amended, "An act to provide for the creation and 19 administration of a Coal and Clay Mine Subsidence Insurance Fund 20 within the Department of Environmental Resources for the 21 insurance of compensation for damages to subscribers thereto; 22 declaring false oaths by the subscribers to be misdemeanors; 23 providing penalties for the violation thereof; and making an
1 appropriation," reenacted and amended November 27, 1972
2 (P.L.1243, No.278), are amended to read:
3 AN ACT
4 To provide for the creation and administration of a Coal and
5 Clay Mine Subsidence Insurance Fund within the Department of
6 Environmental [Resources] Protection for the insurance of
7 compensation for damages to subscribers thereto; declaring
8 false oaths by the subscribers to be misdemeanors; providing
9 penalties for the violation thereof; and making an
10 appropriation.
11 Section 1. Purposes.--Whereas, the anthracite and bituminous
12 coal and clay mine areas have been faced with the grave problem
13 of subsidence for many years, and
14 Whereas, these problems are becoming more widespread, and
15 Whereas, these conditions cause undue hardship upon a
16 multitude of persons, and
17 [Whereas, studies reveal that the subsidence is traceable
18 primarily to mining of thirty or more years ago and not
19 necessarily to present day mining so that effective measures
20 cannot readily be taken at this late date for the elimination of
21 the problem, and]
22 Whereas, it would be to the advantage of residents of the
23 anthracite and bituminous coal and clay mining regions to form a
24 common bond to combat distress resulting from subsidence;
25 Now therefore, there shall be established a Coal and Clay
26 Mine Subsidence Insurance Fund and a Coal and Clay Mine
27 Subsidence Insurance Board with the powers and duties as herein
28 set out.
29 Section 2. [Terms.--The Coal and Clay Mine Subsidence
30 Insurance Board is hereinafter called the board, the Coal and
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1 Clay Mine Subsidence Insurance Fund is hereinafter called the 2 fund, and the Department of Environmental Resources is 3 hereinafter called the department.] Definitions.--The following 4 words and phrases when used in this act shall have the meanings 5 given to them in this section unless the context clearly 6 indicates otherwise: 7 "Board." The Coal and Clay Mine Subsidence Insurance Board 8 established in section 3. 9 "Department." The Department of Environmental Protection of 10 the Commonwealth. 11 "Dwelling." A single-family structure the primary purpose of 12 which is residential. 13 "Dwelling requiring mine subsidence insurance." A dwelling 14 located above abandoned mine workings, which is within a one- 15 half mile radius of an area where mine subsidence has been 16 detected and which the department determines to be at risk for 17 mine subsidence damage. 18 "Fund." The Coal and Clay Mine Subsidence Insurance Fund 19 established in section 4. 20 "Mine subsidence." The lateral or vertical movement of the 21 earth resulting from past or present underground coal or clay 22 mining operations. 23 "Mine subsidence emergency." A condition in which a dwelling 24 sustains mine subsidence damage sufficient to render the 25 structure unsafe for human occupancy as determined by the 26 department. 27 "Mine subsidence insurance policy." An insurance 28 certificate, an insuring agreement, an application for mine 29 subsidence insurance and endorsements to the insurance policy. 30 "Owner of structure." A person, corporation, organization or 20010S0240B0248 - 3 -
1 association holding title to a structure within the anthracite 2 or bituminous coal or clay mine regions as defined by the board. 3 "Program." The Mine Subsidence Assistance Program 4 established in section 20. 5 "Secretary." The Secretary of Environmental Protection of 6 the Commonwealth. 7 "Structure." A complete building which contains a roof, 8 walls and a foundation which firmly attaches the structure to 9 the earth. 10 Section 3. The Coal and Clay Mine Subsidence Insurance 11 Board.--The Coal and Clay Mine Subsidence Insurance Board is 12 hereby created consisting of the [Secretary of Environmental 13 Resources] secretary, as chairman, and the Commissioner of 14 Insurance and the State Treasurer. 15 Section 4. The Coal and Clay Mine Subsidence Insurance 16 Fund.--The premiums to be paid by owners of structures, as 17 hereinafter described, are hereby constituted a Coal and Clay 18 Mine Subsidence Insurance Fund, [hereinafter called fund,] for 19 the purpose of insuring from the moneys in the fund such owners 20 against the damages resulting from subsidence, of coal or clay 21 mines. Such fund shall be administered by a board without 22 liability on the part of the State except as hereinafter 23 provided beyond the amount thereof and shall be applied to the 24 payment of such damages. 25 Section 5. The Initial Source of Fund.--The expenses of the 26 administration of the fund shall after July 1, 1972, be paid out 27 of the general appropriation of the [Department of Environmental 28 Resources] department. 29 Section 7. Schedule of Premiums.--At any time during each 30 year, the [said] board shall prepare and publish a schedule of 20010S0240B0248 - 4 -
1 premiums or rates of insurance for subscribers, which schedule 2 shall be printed and distributed free of charge to such persons 3 who shall make application therefor, and any such subscriber 4 may, at his option as hereinafter provided, pay to the fund the 5 amount of premium appropriate, and upon payment thereof, shall 6 be insured, as hereinafter provided, for the year for which such 7 premium is paid, and such insurance shall cover all payments 8 becoming due for which said premium is paid. The premium is 9 fixed and shall be adequate to enable payment of all sums which 10 may become due and payable under the provisions of this act, and 11 adequate reserve sufficient to carry all policies and claims to 12 maturity. In fixing the premiums payable by any subscriber, the 13 board may take into account the condition of the premises of 14 such subscriber in respect to the possibility of subsidence as 15 shown by the report of any inspector appointed by the board or 16 by the department, and they may from time to time change the 17 amount of premiums payable by any of the subscribers as 18 circumstances may require and the condition of the premises of 19 such subscribers in respect to the possibility of subsidence may 20 justify, and they may increase the premiums of any subscriber 21 whose loss experience warrants such change. The insurance of any 22 subscriber shall not be effective until he shall have paid in 23 full the premium so fixed and determined. 24 Section 9. Investment of Surplus.--The [said] board may 25 invest any of the surplus or reserve belonging to the fund in 26 such securities and investments as are authorized for investment 27 by savings banks. All such securities or evidences of 28 indebtedness shall be placed in the hands of the State Treasurer 29 who shall be the custodian thereof. He shall collect the 30 principal and interest thereof when due and pay the same into 20010S0240B0248 - 5 -
1 the fund. The State Treasurer shall pay for all such securities 2 or evidences of indebtedness by check issued upon requisition of 3 the board. All such payments shall be made only upon delivery of 4 such securities or evidences of indebtedness to the State 5 Treasurer. To all requisitions calling upon the State Treasurer 6 to pay for any securities or evidences of indebtedness, there 7 shall be attached a certified copy of the resolution of the 8 board authorizing the investment. The [said] board may upon like 9 resolution sell any of such securities. 10 Section 2. Section 10 of the act, amended November 20, 1981 11 (P.L.350, No.127), is amended to read: 12 Section 10. Disbursements from Fund.--(a) Moneys from the 13 general appropriation of the [Department of Environmental 14 Resources] department are hereby made available for the expense 15 of administering the fund including the purchase through the 16 Department of General Services of surety bonds for such officers 17 or employes of the board as may be required to furnish them 18 supplies, materials, motor vehicles, workmen's insurance 19 covering the officers and employes of the board, and liability 20 insurance covering vehicles operated by the officers and 21 employes of the board. 22 (b) Moneys from the general appropriation of the [Department 23 of Environmental Resources] department shall also be available 24 [for payment, to the Insurance Department, of the cost incurred 25 by that department in examining and auditing the fund in such 26 amounts as the Insurance Department shall determine, and] for 27 payment, to the Treasury Department, of the cost of making 28 disbursements out of the fund on behalf of the fund at such 29 amounts as the Treasury Department, with the approval of the 30 Executive Board, shall determine. 20010S0240B0248 - 6 -
1 (c) The board shall keep an accurate account of the money
2 paid in premiums by the subscribers and the disbursements on
3 account of damages to the premises thereof, and if at the
4 expiration of any year there shall be a balance remaining after
5 deducting such disbursements, the unearned premiums on
6 undetermined risks and the percentage of premiums paid or
7 payable to create or maintain the surplus provided herein, and
8 after setting aside an adequate reserve, so much of the balance
9 as the board may determine to be safely distributable may either
10 be allocated to the cost of administering the fund or be
11 distributed among the subscribers in proportion to the premiums
12 paid by them and the proportionate share of such subscribers as
13 shall remain subscribers to the fund shall be credited to the
14 installment of premiums next due by them and the proportionate
15 share of such subscribers as shall have ceased to be subscribers
16 in the fund shall be refunded to them out of the fund in the
17 manner hereinafter provided.
18 Section 3. Sections 12 and 12.2 of the act, amended or added
19 July 10, 1984 (P.L.711, No.151), are amended to read:
20 Section 12. Application for Insurance; Terms of Insurance;
21 Penalty for False Statement.--(a) Any owner of a structure
22 located within the anthracite or bituminous coal or clay mine
23 region and who desires to become a subscriber to [said] the fund
24 for the purpose of insuring such a structure therein against
25 damages from coal or clay mine subsidences, shall make a written
26 request for an application for such insurance to the [said]
27 board or any of its agents. The board shall then send to the
28 owner of the structure an application in which application the
29 applicant shall state the name, address, date of ownership of
30 the premises to be insured, the condition of the premises, prior
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1 subsidence experience, if any, nature of title whether it 2 includes any subsurface support, whether any agreement exists 3 concerning surface support. Thereupon, the board shall make such 4 investigation as may be necessary if such application complies 5 with the rules and regulations of the board and within sixty 6 days after the request for an application is received shall 7 issue a certificate showing the acceptance of the application 8 and the amount of premium payable by such applicant for the year 9 for which premium is sought. Policies may be issued for one 10 year, for two years or for three years as the board may 11 establish. Except as provided in subsection (b), no insurance 12 shall become effective until the premiums have been paid. All 13 premiums shall be payable to the State Treasurer whereupon a 14 receipt shall be issued therefor. The receipt for premium 15 together with a certificate of the board shall be evidence that 16 the applicant has become a subscriber to the fund and is 17 insured. 18 (b) If the board fails to make the necessary investigations 19 or inspection and fails to approve or deny an application for 20 insurance within sixty days of receipt of the written request 21 for an application by the board or any of its agents, in 22 accordance with this section, the insurance requested by the 23 applicant shall be deemed granted. The insurance shall be 24 effective from the date the written request for an application 25 was received by the board or any of its agents, but the coverage 26 will be null and void if the applicant fails to remit the 27 premium payment within twenty days from the day the bill for the 28 premium was postmarked. 29 (1) The insurance may be subjected to later reductions, and 30 premiums adjusted accordingly, if the board determines that the 20010S0240B0248 - 8 -
1 amount of insurance coverage requested is in excess of the 2 current market value of the structure or current statutory 3 limits, whichever is less. 4 (2) The insurance shall be void if, upon inspection of the 5 structure, the board determines that either (i) mine subsidence 6 damage occurred prior to the request by the applicant for 7 insurance, or (ii) the applicant by his unreasonable actions or 8 in actions is responsible for the failure of the board to 9 inspect the structure within sixty days of receipt of the 10 written request for an application in accordance with this 11 section. 12 (c) Whoever shall knowingly furnish or make any false 13 certificate, application or statement herein required shall be 14 guilty of a misdemeanor, and upon conviction thereof, shall be 15 sentenced to pay a fine not exceeding one thousand five hundred 16 dollars ($1,500) and shall undergo imprisonment not exceeding 17 one year. 18 Section 12.2. Automatic Inflation Protection Increase.--(a) 19 The board shall make available to all subscribers an annual 20 inflation protection option on the anniversary date of each 21 policy to uniformly increase subscribers' coverage, and shall 22 allow thirty days for subscribers to elect this option. In any 23 case, the option shall not be made available more than once 24 annually[.], unless the board shall increase the maximum level 25 of insurance coverage available pursuant to subsection (b), in 26 which case, the board shall notify all subscribers of the 27 revised maximum level of insurance available and shall allow 28 thirty days for subscribers to apply for an increased level of 29 insurance. An application for an increased level of insurance 30 shall be governed by section 12.1. An inflation protection 20010S0240B0248 - 9 -
1 increase shall not be subject to a reinspection of the 2 structure. 3 (b) The board shall annually review the premiums charged and 4 the maximum levels of insurance offered by the fund. If 5 inflation, loss experience and other relevant factors indicate 6 that a change may be warranted in the amount of premiums charged 7 or in the maximum levels of insurance offered, the board shall 8 determine a revised schedule of premiums and establish new 9 maximum levels of insurance available and notify all 10 subscribers, within sixty days, of the revised schedule of 11 premiums and new maximum levels of insurance available. 12 Section 4. Sections 13, 14, 15 and 17 of the act are amended 13 to read: 14 Section 13. Audit by Auditor General.--The Auditor General 15 through such agents as he may select shall, at least once each 16 year, make a complete examination and audit of the fund 17 including all receipts and expenditures, cash on hand and 18 securities, investments or property held representing cash or 19 cash disbursements, and for these purposes the Auditor General 20 is hereby authorized to employ such consultants, experts, 21 accountants or investigators as he may deem advisable. 22 The expense incurred in making said examination and audit 23 shall be certified to the fund by the Auditor General and shall 24 be paid from the general appropriation of the [Department of 25 Environmental Resources] department. 26 The first audit of such fund may, in the discretion of the 27 Auditor General, extend back to the creation of such fund or to 28 any other period in its life. 29 [Section 14. Audit by Insurance Department.--The Insurance 30 Department at least once each year shall make a complete 20010S0240B0248 - 10 -
1 examination and audit of the affairs of the fund including all 2 receipts and expenditures, cash on hand and securities, 3 investments or property held representing cash or cash 4 disbursements to ascertain its financial condition and its 5 ability to fulfill its obligations, whether the board in 6 managing the fund has complied with the provisions of law 7 relating to the fund and the equity of the board's plans and 8 dealings with its policyholders. 9 For the purpose of any examination and audit authorized by 10 this act, the Commissioner of Insurance, his deputy or his 11 examiners shall have free access to all the books, records and 12 papers pertaining to the fund, and all persons charged with the 13 management of the fund or connected therewith as employes are 14 hereby directed and required to give to the Commissioner of 15 Insurance, his deputy or officers the means, facilities and 16 opportunity for such examination and audit. 17 The expenses incurred by the Insurance Department in making 18 any examination and audit under the provisions of this act shall 19 be ascertained by the department, certified to the fund, and 20 paid from the general appropriation of the Department of 21 Environmental Resources.] 22 Section 15. Claims against Fund.--Any subscriber to the fund 23 must file with the board a true statement of his claim for any 24 subsidence and shall give to the board an opportunity to 25 investigate and to determine whether the board will pay the 26 claim. For any claim to be considered valid the department must 27 determine that a mine subsidence event occurred during the term 28 of the mine subsidence insurance policy. 29 Section 17. Subrogation to Rights of Claimants.--Nothing 30 herein shall relieve any person, partnership, or corporation 20010S0240B0248 - 11 -
1 otherwise liable therefor from any liability for damages 2 sustained; and the fund and the program shall be subrogated to 3 the rights of any property owners' insurance herein. 4 Section 5. The act is amended by adding sections to read: 5 Section 20. Program.--(a) If a homeowner believes that the 6 homeowner's dwelling has sustained mine subsidence damage, the 7 homeowner may apply to the department for mine subsidence 8 assistance. The application must be on a form prepared by the 9 department and must provide for inspection of the dwelling to 10 determine the nature, extent and time of the damage. Upon a 11 determination that a dwelling has sustained mine subsidence 12 damage and that an application for assistance was submitted to 13 the department within forty-five days of occurrence of the mine 14 subsidence event, the department shall, to the extent funds are 15 made available, grant assistance, as follows: 16 (1) Grants may be awarded only to persons whose dwelling are 17 unsafe for occupancy as a result of a mine subsidence emergency 18 and may be awarded to move and provide temporary housing for 19 persons whose dwellings are destroyed or endangered until the 20 homes are repaired, until there is no further danger of 21 subsidence or until a new permanent residence is found, provided 22 that grants shall not be used to pay for temporary housing for 23 more than one year and the total amount of a grant shall not 24 exceed twelve thousand dollars ($12,000). 25 (2) Loans may be approved at an interest rate equal to the 26 current rate of return being earned by the fund, or five 27 percent, whichever is lower for the repair or replacement of 28 dwellings damaged by mine subsidence. Loans shall be awarded on 29 a priority basis according to severity of damages sustained, but 30 a dwelling need not be rendered unsafe for human occupancy as a 20010S0240B0248 - 12 -
1 result of a mine subsidence emergency to qualify for a loan. The 2 loan shall be for a period of time not exceeding fifteen years 3 in duration and shall be in an amount sufficient to cover the 4 cost of repairing the structural damage to the dwelling, but in 5 no event shall be greater than the replacement cost of the 6 dwelling as determined by an appraiser, as provided for in 7 regulations promulgated under this act. Loans shall be 8 administered by the department and shall be secured by a lien 9 upon the dwelling being repaired or replaced. 10 (3) In addition to repairing or replacing structural damage 11 to a dwelling, loans may also be made to repair or replace 12 dwelling-related driveways, septic systems, sidewalks, fences, 13 sewer laterals, water lines, gas lines, wells and inground 14 pools, located on the property on which the dwelling is located, 15 provided that the damage has been caused by the same mine 16 subsidence that damaged the dwelling. 17 (4) Loans shall only be made for the amount not covered by 18 insurance or other sources of remuneration, including amounts 19 for which a mine operator is liable under the act of April 27, 20 1966 (1st Sp. Sess., P.L.31, No.1), known as "The Bituminous 21 Mine Subsidence and Land Conservation Act," unless it is 22 determined that the operator is unable to meet his obligations 23 under that act. 24 (b) If a person receiving assistance under this section does 25 not have mine subsidence insurance, the person shall be required 26 to purchase a mine subsidence insurance policy when the 27 structural damage for which assistance was granted has been 28 repaired. Persons receiving a loan under this section must 29 maintain mine subsidence insurance coverage for the duration of 30 the loan and persons receiving a grant under this section must 20010S0240B0248 - 13 -
1 maintain mine subsidence insurance coverage for as long as it is 2 determined by the department that the dwelling is in danger of 3 further damage from mine subsidence. If a person receiving mine 4 subsidence assistance fails to maintain the required mine 5 subsidence insurance, the person shall immediately pay the fund 6 the outstanding balance due on the loan or repay the amount of 7 grant assistance received under this section. 8 (c) Repairs for which grants or loans are provided under 9 this section must be completed within one year of the receipt of 10 grant or loan assistance, unless an extension is approved by the 11 department. If the department determines that repairs have not 12 been made within one year and that no extension should be 13 granted, the person who received the grant or loan assistance 14 shall repay the fund for the amount of the grant or loan not 15 expended on repairs for which the grant or loan was provided. 16 (d) Up to five percent of the money in the fund which is not 17 committed to reserves, claims or other fund expenses, plus 18 repayment of principal and interest on loans under this section, 19 shall be used to fund assistance under this section. 20 Section 20.1. Subsidence Insurance Purchase and Compliance 21 Requirements.--(a) Every purchaser of a dwelling requiring mine 22 subsidence insurance shall purchase subsidence insurance in an 23 amount at least equal to the appraised value of the dwelling 24 purchased or to the maximum amount of coverage available with 25 respect to the particular dwelling, whichever is less; provided, 26 however, that the amount of subsidence insurance required need 27 not exceed the outstanding principal balance of a loan against 28 the dwelling and need not be required beyond the term of the 29 loan. 30 (b) Notification of mortgage lending institution shall be as 20010S0240B0248 - 14 -
1 follows: 2 (1) The department shall notify mortgage lending 3 institutions in areas identified by the department as being 4 located above abandoned mine workings of the requirements for 5 subsidence insurance. Notified lenders shall direct persons 6 applying for loans for the purchase of dwellings in these areas 7 to contact the department to determine if the dwelling requires 8 mine subsidence insurance and to provide the lender with a 9 certificate from the department stating one of the following: 10 (i) That subsidence insurance is necessary under the 11 provisions of this section and has been obtained as a condition 12 of receiving and maintaining the loan. 13 (ii) That subsidence insurance may be necessary under the 14 provisions of this section but is not being provided for reasons 15 set forth in the certificate by the department. 16 (iii) That subsidence insurance is not necessary under the 17 provisions of this section. 18 (2) Each State agency participating in providing mortgage 19 loan assistance for the purchase of a dwelling in an area 20 identified by the department as being located above abandoned 21 mine workings shall, by regulations, require borrowers to obtain 22 subsidence insurance under the circumstances and in the manner 23 provided in subsection (a). 24 (c) Notwithstanding any other provision of this section, 25 subsections (a) and (b) shall not apply to any loan having an 26 original outstanding principal balance of $5,000 or less and a 27 repayment term of one year or less. 28 (d) If a lender subject to this act requires the escrowing 29 of taxes, insurance premiums, fees or any other charges for a 30 loan secured by a dwelling, then all premiums and fees for 20010S0240B0248 - 15 -
1 subsidence insurance for the dwelling shall be paid to the 2 lender or servicer for the loan in a manner sufficient to make 3 payments as due for the duration of the loan. Upon receipt of 4 the premiums, the lender or other servicer of the loan shall 5 deposit the premiums in an escrow account on behalf of the 6 borrower. Upon receipt of a notice from the department that 7 subsidence insurance premiums are due, the lender or servicer 8 shall pay from the escrow account to the department the amount 9 of insurance premiums owed. Escrow accounts established pursuant 10 to this subsection shall be subject to the provisions of section 11 10 of the Real Estate Settlement Procedures Act of 1974 (Public 12 law 93-533, 12 U.S.C. § 2609). 13 (e) Placement of subsidence insurance by lender shall be as 14 follows: 15 (1) If, at the time of origination or at any time during the 16 term of a loan secured by a dwelling requiring mine subsidence 17 insurance, a lender or servicer for the loan determines that the 18 dwelling is not covered by subsidence insurance or is covered by 19 such insurance in an amount less than the amount required for 20 the property pursuant to subsection (a), the lender or servicer 21 for the loan shall notify the borrower that the borrower should 22 obtain, at the borrower's expense, the required amount of 23 subsidence insurance for the term of the loan and provide the 24 lender or servicer for the loan with a certificate from the 25 department as provided in subsection (b)(1). 26 (2) If the borrower fails to purchase the required 27 subsidence insurance within forty-five days after notification 28 under paragraph (1), the lender or servicer for the loan shall 29 purchase the insurance on behalf of the borrower and may charge 30 the borrower for the cost of premiums and fees incurred by the 20010S0240B0248 - 16 -
1 lender in purchasing the insurance. 2 (3) Review of determination that subsidence insurance is 3 required: 4 (i) The borrower and lender for a loan secured by a dwelling 5 may jointly request the department to review a determination 6 that the dwelling requires mine subsidence insurance. The 7 request must be supported by technical information relating to 8 the dwelling and its location. Within forty-five days of 9 receiving the request for review, the department shall provide 10 the borrower and the lender with a written redetermination 11 stating whether or not the dwelling requires mine subsidence 12 insurance. The redetermination of the department shall be final. 13 (ii) If the department redetermines that the dwelling 14 securing the loan of the borrower does not require mine 15 subsidence insurance, the borrower shall not be obligated to 16 purchase subsidence insurance for the dwelling during the period 17 determined by the department, which shall be stated in the 18 redetermination under subparagraph (i) and shall begin on the 19 date on which the letter is provided. 20 (iii) The borrower shall not be required to purchase 21 subsidence insurance for the dwelling securing the loan until a 22 redetermination under subparagraph (i) is provided if a request 23 for redetermination is made under subparagraph (i) and the 24 department does not provide the redetermination before the later 25 of: 26 (A) the expiration of the time period under subparagraph 27 (i); or 28 (B) closing of the loan. 29 (iv) A lender or any servicer for a loan may charge the 30 borrower a reasonable fee for the costs of determining whether 20010S0240B0248 - 17 -
1 the dwelling securing the loan requires mine subsidence 2 insurance if any of the following apply: 3 (A) The determination is made pursuant to the making, 4 increasing, extending or renewing of the loan that is initiated 5 by the borrower. 6 (B) The loan for the dwelling may reasonably be considered 7 to require the determination. 8 (C) The determination results in the purchase of subsidence 9 insurance pursuant to paragraph (2). 10 (v) The purchaser or transferee of such a loan may be 11 charged the fee in the case of sale or transfer of the loan. 12 (f) Penalties for failure to require subsidence insurance 13 shall be as follows: 14 (1) Monetary penalty shall be as follows: 15 (i) The department may assess a penalty in the amount of 16 three hundred dollars ($300) for each violation against any 17 lender that fails to require subsidence insurance pursuant to 18 subsection (b)(1) or fails to notify a borrower of lack of 19 coverage pursuant to subsection (e)(1). 20 (ii) Each State agency providing mortgage loan assistance 21 for dwellings located above abandoned mine workings pursuant to 22 subsection (b)(2) may assess a penalty in the amount of three 23 hundred dollars ($300) for each violation against any lender 24 participating in the program that fails to require subsidence 25 insurance pursuant to agency regulations or fails to notify a 26 borrower of lack of coverage pursuant to subsection (e)(1). 27 (iii) This paragraph is subject to 2 Pa.C.S. Ch. 5 Subch. A 28 (relating to practice and procedure of Commonwealth agencies) 29 and Ch. 7 Subch. A (relating to judicial review of Commonwealth 30 agency action). 20010S0240B0248 - 18 -
1 (2) Any lender that purchases or renews subsidence insurance 2 on behalf of or as an agent of a borrower of a loan for which 3 subsidence insurance is required shall be considered to be in 4 compliance with this section. 5 (3) Sale or other transfer of a loan by a lender that has 6 committed a violation of this section which occurs subsequent to 7 the violation shall not affect the liability of the transferring 8 lender regarding any penalty under this subsection. A lender 9 shall not be liable for any violations by another lender that 10 previously held the loan. 11 (4) Penalties collected under this subsection shall be paid 12 into the fund. 13 (5) No penalty may be imposed under this subsection after 14 the expiration of the four-year period beginning on the date of 15 the violation for which the penalty is authorized under this 16 subsection. 17 (g) This section shall apply with respect to any loan made, 18 increased, extended or renewed on or after the effective date of 19 this section. 20 Section 21. Department.--(a) The department may promulgate 21 regulations to administer this act. 22 (b) The department shall provide for public notice of the 23 program and the requirements for mine subsidence insurance. 24 (c) The department shall make an annual report on the 25 program and on compliance and experience with mine subsidence 26 insurance requirements to the Environmental Resources and Energy 27 Committee of the Senate and the Environmental Resources and 28 Energy Committee of the House of Representatives. 29 Section 6. Sections 22 and 24.1 of the act are amended to 30 read: 20010S0240B0248 - 19 -
1 Section 22. Employes of the Board to Be Part of the 2 Department [of Environmental Resources].--All employes of the 3 board shall be employed by and located in the [Department of 4 Environmental Resources] department and shall be subject to the 5 administrative jurisdiction and authority of the [Secretary of 6 Environmental Resources] secretary. 7 Section 24.1. Appeals.--Any party aggrieved by an action of 8 the board [hereunder] shall have the right to appeal to the 9 Environmental Hearing Board. 10 Section 7. The addition of section 20 of the act shall apply 11 to mine subsidence damage incurred after December 31, 1998, 12 provided that mine subsidence damage which occurred between 13 January 1, 2001, and the effective date of this act and for 14 which mine subsidence assistance is applied must have been 15 reported to the department prior to the effective date of this 16 act, and an application for assistance for such damage must be 17 filed with the department within 90 days of the effective date 18 of this act. 19 Section 8. This act shall take effect as follows: 20 (1) The addition of section 20.1 of the act shall take 21 effect in 180 days. 22 (2) The remainder of this act shall take effect immediately. L6L46JS/20010S0240B0248 - 20 -