Federal Assistance Manual Chapter 4-10

CHAPTER 4-10 CHARACTERISTICS OF THE SUBSIDENCE INSURANCE PROGRAM

• 4-10-10 Background
  
• 4-10-20 Policy
  
• 4-10-30 Responsibilities
  
• 4-10-40 Grant Considerations

4-10-10 BACKGROUND

The Department of the Interior's fiscal year 1985 continuing appropriations resolution (PL 98-473) authorized the expenditure of Abandoned Mine Land (AML) Funds for the "establishment of self-sustaining, individual State administered programs to insure private property against damages caused by land subsidence resulting from underground coal mining in those States which have reclamation plans approved in accordance with Section 503 of the Act," Reference 30 CFR 887.

4-10-20 POLICY

1. Only those States with approved reclamation plans are eligible to receive funding under this program.

2. Funding per State for this program shall not exceed $3,000,000 in State-share funds.

3. Insurance premiums shall be considered program income.

4-10-30 RESPONSIBILITIES

FOs are responsible for verifying that the cumulative total of requests is not in excess of the maximum-allowed $3,000,000 per grantee, and is State-share funds.

4-10-40 GRANT CONSIDERATIONS

1. Application Procedures
   1. Application for funding shall be submitted in accordance with the requirements outlined in FAM Chapter 5-10A.

   2. The program narrative statement must describe how the subsidence insurance program is "State-administered" and how the funds requested will achieve a self-sustaining, individual State-administered program to insure private property against subsidence resulting from underground coal mining.

2. Coverage
   1. Funding cannot exceed $3,000,000 in State-share funds, either through a one-time award or a series of awards.

   2. Performance periods may be for up to eight years.

3. Program Income

   For this program, insurance premiums are considered program income during the life of the program. In accordance with the requirements of 30 CFR 887.12(e), the State must use the earned program income to further the goals of the State's subsidence insurance program (additive option).

4. Allowable Costs
   1. Monies awarded may be used to cover capitalization requirements and initial reserve requirements mandated by State law provided use of monies is consistent with OMB Circular A-87.

   2. Funds may be used to pay for administrative costs associated with the establishment and operation of the program.

5. Unallowable Costs
   1. Monies awarded may not be used for coal-related lands that are ineligible for reclamation funding under Title IV of SMCRA. Specifically excluded are payments for subsidence damage caused by all active mining.

   2. Funds cannot be used to pay for the actual construction costs of housing or for damages to public property.

FEDERAL ASSISTANCE MANUAL
January 2, 1998