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Millions in strip mine fines go uncollected

Every year, the state Division of Environmental Protection fines coal operators an average of $5.2 million for violating strip mine laws.

But the agency only collects $1.2 million of that money. Every year, an average of more than $4 million is not collected.

The DEP Office of Mining and Reclamation collects just 22 percent of the money it fines coal companies, according to an analysis of agency records.

Civil penalty money is supposed to go into the state Special Reclamation Fund, and be used to clean up mines abandoned over the last 20 years.

But over the last 10 years, DEP has built up a $42 million pile of uncollected civil penalties, agency records show.

These unpaid penalties have helped create an unfunded liability of more than $62 million in the state's reclamation fund. More than 260 abandoned mine sites, covering 10,000 acres, are waiting to be reclaimed.

The U.S. Office of Surface Mining, charged with overseeing DEP, has never conducted a review of the civil penalty collection problem or ordered DEP to do anything to improve its collections.

Roger Calhoun, director of the Charleston OSM field office, said he can't explain the problem.

"I don't know what to tell you until I go back and review it," Calhoun said last week.

Cindy Rank, mining chairwoman of the West Virginia Highlands Conservancy, said, "It's amazing to me that no one in an oversight position has picked up on that or considered it important."

The 1977 federal Surface Mining Reclamation and Control Act requires coal companies to reclaim land that they strip mine.

Under the law, operators must also post bond money that can be used by the state DEP to reclaim mines if coal companies go belly up. Forfeited bond money goes into the Special Reclamation Fund, or SRF. The SRF is also funded by civil penalties, a tax on coal production, and interest on those funds.

Starting in 1989, OSM warned the state in annual oversight reports that the SRF had problems.

The most recent estimate, published by OSM in 1995, showed the fund had $62 million less than what it needs to reclaim the mine sites currently covered by the program.

For the last three years, OSM and DEP officials have studied the SRF to try to come up with solutions for its financial problems.

A draft report issued in December 1998 found that "the yearly trend has been downward, with collections falling to $1.1 million during both the 1995-1996 and 1996-97 years.

"This level is not expected to change significantly in the future," the report said.

In 1990, OSM predicted a different trend.

That year's OSM annual report on the state program said that, on March 13, 1990, "the state issued a policy prohibiting issuance of permits or permit related approvals to any applicant who has delinquent civil penalties.

"This new policy is expected to aid the state in its civil penalty collection efforts," OSM said.

Ed Griffith, an assistant chief with the DEP Office of Mining and Reclamation, said fine collection efforts are frustrated by the large number of coal companies that go bankrupt while owing the state money. "When that happens, there's just no where to go to get the money," Griffith said.

Bill Adams, chief of the DEP office of Legal Services which is supposed to try to collect the fines, did not return a phone call last week.

A 1995 OSM report praised the state for improving its debt collections.

"The collection of civil penalties by the WVDEP was significantly boosted by the addition of delinquent civil penalties into the [Applicant Violator System] as permit blocks," the report said.

"Another initiative West Virginia has taken to spur the collection of civil penalties is the referral of all delinquent debt to a collection agency."

In the last three years, the total amount of uncollected civil penalties has grown by $7.4 million, according to DEP records.

Through June 10, the agency has collected 10 percent of the civil penalties issued in 1999.

Rank said DEP needs to get better at collecting penalties, and at denying permits to coal companies that violate mining laws and then go out of business.

"It's deplorable that 78 percent of the civil penalties that are assessed are not collected," Rank said. "It's just beyond imagination that, with such a chunk of money at stake, they can't follow up on this better.

"They have to look closer, and if these people aren't reputable enough to run these operations, they should not be granting permits to people who will walk away from these operations."

To contact staff writer Ken Ward Jr., call 348-1702, or e-mail kw...@wvgazette.com.


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