Section 9-16-89

Performance bonds and bond releases.

(a) After a surface coal mining and reclamation permit application has been approved but before such a permit is issued, the applicant shall file with the regulatory authority, on a form prescribed and furnished by the regulatory authority, a bond for performance payable to the state and conditioned upon faithful performance of all the requirements of this article and the permit. The bond shall cover all lands disturbed by the surface coal mining operation and the amount of the initial bond shall be such to cover that area of land within the permit area upon which the operator will initiate and conduct surface coal mining and reclamation operations within the initial term of the permit. As succeeding increments of surface coal mining and reclamation operations are to be initiated and conducted within the permit area, the permittee shall file with the regulatory authority an additional bond or bonds to cover such increments in accordance with this section. The amount of the bond required for each bonded area shall depend upon the reclamation requirements of the approved permit, shall reflect the probable difficulty of reclamation giving consideration to such factors as topography, geology of the site, hydrology, and revegetation potential, and shall be determined by the regulatory authority. The amount of the bond shall be sufficient to assure the completion of the reclamation plan if the work had to be performed by the regulatory authority in the event of forfeiture and in no case shall the bond for the entire area under one permit be less than $10,000.00.

(b) Liability under the bond shall be for the duration of the surface coal mining and reclamation operation and for the period coincident with operator's responsibility for revegetation requirements in Section 9-16-90. The bond shall be executed by the operator and a corporate surety licensed to do business in the state, except that the operator may elect to deposit cash, negotiable bonds of the United States government or state, or negotiable certificates of deposit of any bank organized or transacting business in the United States. The cash deposit or market value of such securities shall be equal to or greater than the amount of the bond required for the bonded area.

(c) The regulatory authority may accept the bond of the applicant itself without separate surety when the applicant demonstrates pursuant to regulations of the regulatory authority the existence of a suitable agent to receive service of process and a history of financial solvency and continuous operation sufficient for authorization to self-insure or bond such amount or the regulatory authority may approve an alternative system pursuant to regulations that will achieve the objectives and purposes of the bonding program pursuant to this section.

(d) Cash or securities so deposited shall be deposited upon the same terms as the terms upon which surety bonds may be deposited. Such securities shall be security for the repayment of such negotiable certificate of deposit.

(e) The amount of the bond or deposit required and the terms of each acceptance of the applicant's bond shall be adjusted by the regulatory authority from time to time as the acreage in the permit area is revised, methods of mining operation change, standards of reclamation change or when the cost of future reclamation, restoration or abatement change. The regulatory authority shall notify the permittee of any proposed bond adjustment and provide the permittee an opportunity for an informal conference on the adjustment, with notice to the landowner and surety, if any.

(f) The permittee may file a request with the regulatory authority for the release of all or part of a performance bond or deposit. Within 30 days after any application for bond or deposit release has been filed with the regulatory authority, the operator shall submit a copy of an advertisement placed at least once a week for four successive weeks in a newspaper of general circulation in the locality of the surface coal mining operation. Such advertisement shall be considered part of any bond release application and shall contain a notification of the precise location of the land affected, the number of acres, the permit and the date approved, the amount of the bond filed and the portion sought to be released, and the type and appropriate dates of reclamation work performed, and a description of the results achieved as they relate to the operator's approved reclamation plan. In addition, as part of any bond release application, the applicant shall submit copies of letters which he has sent to adjoining property owners, local governmental bodies, planning agencies, and sewage and water treatment authorities, or water companies in the locality in which the surface coal mining and reclamation activities took place, notifying them of his intention to seek release from the bond.

(g) Upon receipt of the notification and request, the regulatory authority shall within 30 days conduct an inspection and evaluation of the reclamation work involved. Such evaluation shall consider, among other things, the degree of difficulty to complete any remaining reclamation, whether pollution of surface and subsurface water is occurring, the probability of continuance of future occurrence of such pollution, and the estimated cost of abating such pollution. The regulatory authority shall notify the permittee in writing of its decision to release or not to release all or part of the performance bond or deposit within 60 days from the filing of the request, or, if a public hearing has been held pursuant to subsection (k) of this section, within 30 days thereafter.

(h) The regulatory authority may release in whole or in part said bond or deposit if the authority is satisfied the reclamation covered by the bond or deposit or portion thereof has been accomplished as required by this article according to the following schedule:

(1) When the operator completes the backfilling, regrading, and drainage control of a bonded area in accordance with his approved reclamation plan, 60 per centum of the bond or collateral for the applicable permit area may be released.

(2) When determining the amount of bond to be released after successful revegetation has been established on the regraded mined lands in accordance with the approved reclamation plan, the regulatory authority shall retain that amount of bond for the revegetated area which would be sufficient for a third party to cover the cost of reestablishing revegetation and for the period specified for operator responsibility in Section 9-16-90 of reestablishing revegetation. No part of the bond or deposit shall be released under this subdivision so long as the lands to which the release would be applicable are contributing settleable solids to streamflow or runoff outside the permit area in excess of the requirements set by applicable state or federal law or regulations, or until soil productivity for prime farm lands has returned to equivalent levels of yield as nonmined land of the same soil type in the surrounding area under equivalent management practices as determined from the soil survey performed pursuant to Section 9-16-83(b)(15). Where a silt dam is to be retained as a permanent impoundment pursuant to Section 9-16-90(b)(8), the portion of bond may be released under this subdivision so long as provisions for sound future maintenance by the operator or the landowner have been made with the regulatory authority.

(3) When the operator has completed successfully all surface coal mining and reclamation activities, the remaining portion of the bond may be released, but not before the expiration of the period specified for operator responsibility in Section 9-16-90, provided, however, that no bond shall be fully released until all reclamation requirements of this article are fully met.

(i) If the regulatory authority disapproves the application for release of the bond or portion thereof, the regulatory authority shall notify the permittee, in writing, stating the reasons for disapproval and recommending corrective actions necessary to secure said release and allowing opportunity for a public hearing.

(j) When any application for total or partial bond release is filed with the regulatory authority, the regulatory authority shall notify the municipality in which a surface coal mining operation is located by certified mail at least 30 days prior to the release of all or a portion of the bond.

(k) Any person with a valid legal interest which might be adversely affected by release of the bond or the responsible officer or head of any federal, state, or local governmental agency which has jurisdiction by law with respect to any environmental, social, or economic impact involved in the operation, or is authorized to develop and enforce environmental standards with respect to such operations shall have the right to file written objections to the proposed release from bond with the regulatory authority within 30 days after the last publication of the above notice. If written objections are filed, and a hearing requested, a hearing shall be held before a hearing officer pursuant to Sections 9-16-78 and 9-16-79. The hearing officer shall inform all the interested parties, of the time and place of the hearing, and hold a public hearing in the locality of the surface coal mining operation proposed for bond release within 30 days of the request for such hearing. The hearing officer shall advertise the date, time, and location of such public hearings, in a newspaper of general circulation in the locality for two consecutive weeks, and shall hold a public hearing in the locality of the surface coal mining operation proposed for bond release or at the office of the regulatory authority, at the option of the objector, within 30 days of the request for such hearing.

(l) Without prejudice to the rights of the objectors, the applicant, or the responsibilities of the regulatory authority pursuant to this section, the regulatory authority may establish an informal conference as provided in Section 9-16-88(b) to resolve such written objections.

(Acts 1981, No. 81-435, p. 682, §21; Acts 1983, No. 83-774, p. 1415, §10.)