FRANKFORT, Ky. (July 12, 2004)- The Environmental and Public Protection Cabinet announced today that it has resolved an issue with the federal Office of Surface Mining (OSM) regarding the transfer of $3.84 million from the Kentucky Bond Pool Fund to the state's General Fund.
In 2002, the Kentucky General Assembly issued a legislative directive requiring this transfer of funds. The OSM later disapproved the transfer and suspended the issuance of new financial guarantees to small- and medium-size coal companies, thus rendering the fund insolvent. The cabinet had argued that the transfer should not affect the fund's solvency because the fund balance remained well within the operating range established in a 2003 Actuarial Report.
"Governor Fletcher has again shown the leadership to balance the responsibilities of economic development with environmental stewardship by transferring these funds back to the Kentucky Bond Pool Fund. He has protected jobs and the environment," said EPPC Secretary LaJuana S. Wilcher. "A suspension of financial guarantees from the fund would have placed serious hardship on small- and medium-sized coal operators. Although we do not believe that the fund transfer rendered the Bond Pool insolvent, we will remain diligent to ensure that the environment is protected and that reclamation is performed properly."
The Kentucky Bond Pool Fund provides bond coverage for small- and medium-sized coal operator's reclamation liability. Today's action fulfills the requirements contained in the May 13 Federal Register Notice that Kentucky replenish $3.84 million into the Bond Pool Fund.
Joseph Jacobs, Chairman of the Kentucky Bond Pool said, "We are pleased to know that Governor Fletcher has worked so diligently to restore the integrity of the Bond Pool. A program that is so vital to small operators in Kentucky as they work to provide the energy needs of America."
Tom FitzGerald, Director of the Kentucky Resources Council, Inc., a nonprofit environmental advocacy organization that had served a notice of intent to sue on the Cabinet regarding the fund transfers from the bond pool, expressed appreciation to the Fletcher Administration for the prompt decision to replace the funds. "We appreciate the Governor acting so promptly to restore the solvency of the bond pool."