TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.1 SCOPE AND PURPOSE
Section 1800.1 Scope and
Purpose
This Part sets forth the minimum
requirements for filing and maintaining bonds and insurance for surface coal
mining and reclamation operations under regulatory programs in accordance with
the Surface Coal Mining Land Conservation and Reclamation Act (Ill. Rev. Stat.
1985, ch. 96½, pars. 7901.01 et seq. (State Act).
(Source: Added at 11 Ill. Reg. 7985, effective July 1, 1987)
 | TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.2 OBJECTIVE (REPEALED)
Section 1800.2 Objective
(Repealed)
(Source:
Repealed at 11 Ill. Reg. 7985, effective July 1, 1987)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.4 DEPARTMENT RESPONSIBILITIES
Section 1800.4 Department
Responsibilities
a) The Illinois Department of Natural Resources, Office of
Natural Resources (Department) shall prescribe and furnish forms for filing
performance bonds.
b) The Department shall determine the amount of the bond for each
area to be bonded, in accordance with Section 1800.14. The Department shall
also adjust the amount as acreage in the permit area is revised, or when other
relevant conditions change, according to the requirements of Section 1800.15.
c) The Department may accept a self-bond if the permittee meets
the requirements of Section 1800.23.
d) The Department shall release liability under a bond or bonds
in accordance with Section 1800.40.
e) If the conditions specified in Section 1800.50 occur, the
Department shall take appropriate action to cause all or part of a bond to be
forfeited in accordance with procedures of that Section.
f) The Department shall require in the permit that adequate bond
coverage be in effect at all times. Except as provided in Section
1800.16(e)(2), operating without a bond is a violation of a condition upon
which the permit is issued.
(Source: Amended at 22 Ill. Reg. 20157, effective November 5, 1998)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.5 DEFINITIONS
Section 1800.5 Definitions
a) Surety bond means an indemnity agreement in a sum certain
payable to the Department, executed by the permittee as principal and which is
supported by the performance guarantee of a corporation licensed to do business
as a surety in Illinois.
b) Collateral bond means an indemnity agreement in a sum certain
executed by the permittee as principal which is supported by the deposit with
the Department of one or more of the following:
1) A cash account, which shall be the deposit of cash in one or
more federally-insured or equivalently protected accounts, payable only to the
Department upon demand, or the deposit of cash directly with the Department;
2) Negotiable bonds of the United States, a State, or a
municipality, endorsed to the order of, and placed in the possession of, the
Department;
3) Negotiable certificates of deposit, made payable or assigned
to the Department and placed in its possession or held by a federally-insured
bank;
4) An irrevocable letter of credit of any bank organized or
authorized to transact business in Illinois, in another state of the United
States, or in the United States by national charter, payable only to the
Department upon presentation provided that if the bank does not have an office
for collection in Illinois, there shall be a confirming bank designated with an
office in Illinois that is authorized to accept, negotiate and pay the letter
upon presentment in Illinois; or
5) Other investment-grade rated securities having a rating of
AAA, AA, or A or an equivalent rating issued by a nationally recognized
securities rating service, endorsed to the order of, and placed in the possession
of the Department.
c) Self-bonding means an indemnity agreement in a sum certain
executed by the applicant or by the applicant and any corporate guarantor and
made payable to the Department, with or without separate surety.
(Source: Amended at 20 Ill. Reg. 15683, effective December 2, 1996)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.11 REQUIREMENT TO FILE A BOND
Section 1800.11 Requirement
to File a Bond
a) After a permit application under 62 Ill. Adm. Code 1772
through 1785 has been approved, but before a permit is issued in accordance
with 62 Ill. Adm. Code 1773.19, the Department shall notify the applicant in
writing of the amount of bond required to ensure reclamation of the permit
area. The applicant shall file with the Department, on a form provided by the
Department a bond or bonds for performance made payable to the Department and
conditioned upon the faithful performance of all the requirements of the State
Act, 62 Ill. Adm. Code 1700 through 1850, the permit and the reclamation plan.
Failure to file a performance bond or other equivalent guarantee in accordance
with this Section within 1 year after the issuance of the Department's written
notification of the required bond amount shall result in the application being
deemed null and void. The Department may issue an extension to this time limit
if the applicant can demonstrate just cause (e.g., extended periods of illness,
extreme inclement weather, acts of civil unrest, or other emergency situations)
for doing so.
b) Bond coverage.
1) The bonds or bonds shall cover the entire permit area, or an
identified increment of land within the permit area upon which the operator
will initiate and conduct surface coal mining operations during the initial
term of the permit.
2) As surface coal mining and reclamation operations on
succeeding increments are initiated and conducted within the permit area, the
permittee shall file with the Department an additional bond or bonds to cover
such increments in accordance with this Section.
3) The operator shall identify the initial and successive areas
or increments for bonding on the permit application map submitted for approval
as provided in the application (under 62 Ill. Adm. Code 1780 and 1784), and
shall specify the bond amount to be provided for each area or increment.
4) Independent increments shall be of sufficient size and
configuration to provide for efficient reclamation operations should
reclamation by the Department become necessary pursuant to Section 1800.50.
c) An operator shall not disturb any surface areas, succeeding
increments or extend any underground shafts, tunnels, or operations prior to
acceptance by the Department of the required performance bond.
d) The applicant shall file, with the approval of the Department,
a bond or bonds under one of the following schemes to cover the bond amounts
for the permit area as determined in accordance with Section 1800.14:
1) A performance bond or bonds for the entire permit area;
2) A cumulative bond schedule and the performance bond required
for the full reclamation of the initial area to be disturbed; or
3) An incremental bond schedule and the performance bond required
for the first increment in the schedule.
e) The Department shall administer self-bonding for eligible
permittees consistent with all applicable provisions of Section 1800.1 through
1800.50.
(Source: Amended at 26 Ill. Reg. 4197, effective March 6, 2002)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.12 FORM OF THE PERFORMANCE BOND
Section 1800.12 Form of the
Performance Bond
The Department shall prescribe
the form of the performance bond. The Department shall allow for:
a) A surety bond;
b) A collateral bond;
c) A self-bond; or
d) A combination of any of these bonding methods.
(Source: Amended at 20 Ill. Reg. 15683, effective December 2, 1996)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.13 PERIOD OF LIABILITY
Section 1800.13 Period of
Liability
a) Performance bond liability shall be for the duration of the
surface coal mining and reclamation operation and for a period which is
coincident with the operator's period of extended responsibility for successful
revegetation provided in 62 Ill. Adm. Code 1816.116 or 1817.116 or until
achievement of the reclamation requirements of the State Act, regulatory
programs, and permit, whichever is later.
b) Isolated and clearly defined portions of the permit area
requiring extended liability may be separated from the original area and bonded
separately with the approval of the Department. Such areas shall be limited in
extent and not constitute a scattered, intermittent, or checkerboard pattern of
failure. Access to the separated areas for remedial work may be included in the
area under extended liability if deemed necessary by the Department.
c) If the Department approves a long-term, intensive agricultural
post-mining land use, in accordance with 62 Ill. Adm. Code 1816.133 or
1817.133, the five year period of liability shall commence at the date of
initial planting for such long-term agricultural use.
d) Bond liability
1) The bond liability of the permittee shall include only those
actions which he or she is obligated to take under the permit, including completion
of the reclamation plan, so that the land will be capable of supporting the
post-mining land use approved under 62 Ill. Adm. Code 1816.133 or 1817.133.
2) Implementation of an alternative post-mining land use approved
under 62 Ill. Adm. Code 1816.133 and 1817.133 which is beyond the control of
the permittee, need not be covered by the bond. Bond liability for prime
farmland shall be as specified in Section 1800.40(c)(2).
(Source: Amended at 24 Ill. Reg. 5898, effective March 21, 2000)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.14 DETERMINATION OF BOND AMOUNT
Section 1800.14
Determination of Bond Amount
a) The amount of the bond required for each bonded area shall:
1) Be determined by the Department;
2) Depend upon the requirements of the approved permit and
reclamation plan;
3) Reflect the probable difficulty of reclamation, giving
consideration to such factors as topography, geology, hydrology, and
revegetation potential; and
4) Be based on, but not limited to, the estimated cost submitted
by the permit applicant.
b) The amount of the bond shall be sufficient to assure the
completion of the reclamation plan if the work has to be performed by the
Department in the event of forfeiture, and in no case shall the total bond
initially posted for the entire area under one permit be less than the greater
of six hundred dollars ($600) per acre or ten thousand dollars ($10,000).
c) An operator's financial responsibility under 62 Ill. Adm. Code
1817.121(c) for repairing material damage resulting from subsidence may be
satisfied by the liability insurance policy required under Section 1800.60.
(Source: Added at 11 Ill. Reg. 7985, effective July 1, 1987)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.15 ADJUSTMENT OF AMOUNT
Section 1800.15 Adjustment
of Amount
a) The amount of the bond or deposit required and the terms of
the acceptance of the applicant's bond shall be adjusted by the Department from
time to time as the area requiring bond coverage is increased or decreased or
where the cost of future reclamation changes. The Department may specify
periodic times or set a schedule for reevaluating and adjusting the bond amount
to fulfill this requirement.
b) The Department shall:
1) Notify the permittee, the surety, and any person with a
property interest in collateral who has requested notification under Section
1800.21(e) of any proposed adjustment to the bond amount; and
2) Provide the permittee an opportunity for administrative review
in accordance with 62 Ill. Adm. Code 1847.3.
c) A permittee may request reduction of the amount of the
performance bond upon submission of evidence to the Department proving that the
permittee's method of operation or other circumstances reduces the estimated
cost for the Department to reclaim the bonded area. Bond adjustments which
involve undisturbed land or revision of the cost estimate of reclamation are
not considered bond release subject to procedures of Section 1800.40.
d) In the event that an approved permit is revised in accordance
with 62 Ill. Adm. Code 1772 through 1785 the Department shall review the bond
for adequacy and, if necessary, shall require adjustment of the bond to conform
to the permit as revised.
(Source: Amended at 24 Ill. Reg. 5898, effective March 21, 2000)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.16 GENERAL TERMS AND CONDITIONS OF BOND
Section 1800.16 General
Terms and Conditions of Bond
a) The performance bond shall be in an amount determined by the
Department as provided in Section 1800.14.
b) The performance bond shall be payable to the Department.
c) The performance bond shall be conditioned upon faithful
performance of all the requirements of the State Act, 62 Ill. Adm. Code 1700-1850,
the regulatory program, and the approved permit, including completion of the
reclamation plan.
d) The duration of the bond shall be for the time period provided
in Section 1800.13.
e)
1) The bond shall provide a mechanism for a bank or surety
company to give prompt notice to the Department and the permittee of any action
filed alleging the insolvency or bankruptcy of the surety company, the bank, or
the permittee, or alleging any violations which would result in suspension or
revocation of the surety or bank charter or license to do business.
2) Upon the incapacity of a bank or surety company by reason of
bankruptcy, insolvency, or suspension or revocation of a charter or license,
the permittee shall be deemed to be without bond coverage and shall promptly
notify the Department. The Department, upon notification received through the
procedures of subsection (e)(1) or from the permittee, shall, in writing,
notify the operator who is without bond coverage and specify a reasonable
period, not to exceed ninety (90) days, to replace bond coverage. If an
adequate bond is not posted by the end of the period allowed, the operator
shall cease coal extraction and shall comply with the provisions of 62 Ill. Adm.
Code 1816.132 or 1817.132 and shall immediately begin to conduct reclamation
operations in accordance with the reclamation plan. Mining operations shall
not resume until the Department has determined that an acceptable bond has been
posted.
(Source: Added at 11 Ill. Reg. 7985, effective July 1, 1987)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.17 BONDING REQUIREMENTS FOR UNDERGROUND COAL MINES AND LONG-TERM COAL-RELATED SURFACE FACILITIES AND STRUCTURES
Section 1800.17 Bonding
Requirements for Underground Coal Mines and Long-Term Coal-Related Surface
Facilities and Structures
a) Responsibilities. The Department shall require bond coverage,
in an amount determined under Section 1800.14, for long-term surface facilities
and structures, and for areas disturbed by surface impacts incident to
underground mines within the permit area. Specific reclamation techniques
required for underground mines and long-term facilities shall be considered in
determining the amount of bond to complete the reclamation.
b) Long-term period of liability.
1) The period of liability for every bond covering long-term
surface disturbances shall commence with the issuance of a permit, except that
to the extent that such disturbances will occur on a succeeding increment to be
bonded, such liability will commence upon the posting of the bond for that
increment before the initial surface disturbance of that increment. The
liability period shall extend until all reclamation, restoration, and abatement
work under the permit has been completed and the bond is released under the
provisions of Section 1800.40, or until the bond has been replaced or extended
in accordance with subsection (b)(3).
2) Long-term surface disturbances shall include long-term
coal-related surface facilities and structures, and surface impacts incident to
underground coal mining, which disturb an area for a period that exceeds five
(5) years. Long-term surface disturbances include, but are not limited to:
surface features of shafts and slope facilities, coal refuse areas, powerlines,
boreholes, ventilation shafts, preparation plants, machine shops, roads, and
loading and treatment facilities.
3) Continuous bond coverage shall apply throughout the period of
extended responsibility for successful revegetation and until the provisions of
Section 1800.40 have been met.
c) The Department shall take action to forfeit a bond pursuant to
this Section if thirty (30) days prior to bond expiration the permittee has not
filed:
1) A performance bond for a new term as required for continuous
coverage; or
2) A performance bond providing coverage for the period of
liability, including the period of extended responsibility for successful
revegetation.
(Source: Added at 11 Ill. Reg. 7985, effective July 1, 1987)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.20 SURETY BONDS
Section 1800.20 Surety Bonds
a) A surety bond shall be executed by the operator and a
corporate surety licensed to do business in Illinois.
b) Surety bonds shall be subject to the following conditions:
The Department shall not accept the bond of a surety company
unless the surety company is licensed to do business in the State of Illinois
as surety and bond shall not be cancelable by the surety at any time for any
reason including, but not limited to, non-payment of premiums or bankruptcy of
the permittee during the period of liability. Surety bond coverage for
permitted lands not disturbed shall be cancelled if the surety gives at least
ninety (90) days notice to the Department of the intent to cancel prior to
cancellation. Such notice shall be by certified mail and shall not be
effective until received by the Department. Cancellation shall not be effective
for lands subject to bond coverage which have already been disturbed or are
disturbed after receipt of notice, but prior to approval by the Department.
The Department may allow continuation of surface coal mining and reclamation
operations on the land for which the bond is cancelled only if a replacement
bond is filed by the permittee prior to the cancellation date, or the permit is
amended so that the surface coal mining operations approved under the permit
are reduced to the degree necessary to cover all the costs attributable to the
completion of reclamation operations on the reduced permit area in accordance
with Section 1800.11(b)(2).
(Source: Amended at 20 Ill. Reg. 1939, effective January 19, 1996)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.21 COLLATERAL BONDS
Section 1800.21 Collateral
Bonds
a) Collateral bonds, except for letters of credit and cash
accounts, shall be subject to the following conditions:
1) The Department shall keep custody of collateral deposited by
the applicant until authorized for release or replacement as provided in Sections
1800.30 and 1800.40.
2) The Department shall value collateral at its current market
value, not at face value.
3) The Department shall require that certificates of deposit be
made payable to or assigned to the Department both in writing and upon the
records of the bank issuing the certificates. If assigned, the Department
shall require the banks issuing these certificates to waive all rights of
setoff or liens against those certificates.
4) The Department shall not accept an individual certificate of
deposit in an amount in excess of $100,000 or the maximum insurable amount as
determined by the Federal Deposit Insurance Corporation or the Federal Savings
and Loan Insurance Corporation.
b) Letters of credit shall be subject to the following conditions:
1) The letter may only be issued by a bank organized or
authorized to do business in Illinois, in another state of the United States,
or in the United States by national charter ("issuing bank"). If the
issuing bank does not have an office for collection in Illinois, there shall be
a confirming bank designated with an office in Illinois that is authorized to
accept, negotiate and pay the letter upon presentment in Illinois.
2) Letters of credit shall be irrevocable during their terms. A
letter of credit used as security in areas requiring continuous bond coverage
shall be forfeited and shall be collected by the Department if not replaced by
other suitable bond or letter of credit at least thirty (30) days before its
expiration date.
3) The letter of credit shall be payable to the Department upon
demand, in part or in full, upon receipt from the Department of a notice of
forfeiture issued in accordance with Section 1800.50.
4) The Department shall not accept a letter of credit in excess
of ten percent (10%) of the issuing bank's total capital and surplus accounts,
as certified by the President of the bank providing the letter of credit and as
evidenced by the most recent quarterly Call Report provided to the Federal
Deposit Insurance Corporation. The ten percent (10%) limit, as used in this
subsection, shall be a cumulative total of all letters of credit submitted to
the Department by any one issuing bank.
5) The letter of credit shall provide on its face that the
Department, its lawful assigns, or the attorneys for the Department or its
assigns, may sue, waive notice and process, appear on behalf of, and confess
judgment against the issuing bank (and any confirming bank) in the event that
the letter of credit is dishonored. The letter of credit shall be deemed to be
made in Sangamon County, Illinois, for the purpose of enforcement and any
actions thereon shall be enforceable in the Courts of Illinois, and shall be
construed under Illinois law.
c) Cash accounts shall be subject to the following conditions:
1) The Department may authorize the permittee to supplement the
bond through the establishment of a cash account in one or more
federally-insured or equivalently protected accounts made payable upon demand
to, or deposited directly with, the Department. The total bond including the
cash account shall not be less than the amount required under terms of
performance bonds including any adjustments, less amounts released in
accordance with Section 1800.40.
2) Any interest paid on a cash account shall be retained in the
account and applied to the bond value of the account unless the Department has
approved the payment of interest to the permittee.
3) Certificates of deposit may be substituted for a cash account
in accordance with subsection (a).
4) The Department shall not accept an individual cash account in
an amount in excess of $100,000 or the maximum insurable amount as determined
by the Federal Deposit Insurance Corporation or the Federal Savings and Loan
Insurance Corporation.
d) Bond value of collateral.
1) The estimated bond value of all collateral posted as assurance
under Section 1800.21 shall be subject to a margin which is the ratio of bond
value to market value, as determined by the Department. The margin shall
reflect legal and liquidation fees, as well as value depreciation,
marketability, and fluctuations which might affect the net cash available to
the Department to complete reclamation.
2) The bond value of collateral may be evaluated at any time, but
it shall be evaluated as part of permit renewal and, if necessary, the
performance bond amount increased or decreased. In no case shall the bond
value of collateral exceed the market value.
e) Persons with an interest in collateral posted as a bond, and
who desire notification of actions pursuant to the bond, shall request the
notification in writing to the Department at the time collateral is offered.
(Source: Amended at 20 Ill. Reg. 1939, effective January 19, 1996)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.23 SELF-BONDING
Section 1800.23 Self-Bonding
a) For purposes of this Section only, the following terms have
the following meanings:
Current assets means cash or other assets or resources which
are reasonably expected to be converted to cash or sold or consumed within one
year or within the normal operating cycle of the business.
Current liabilities means obligations which are reasonably
expected to be paid or liquidated within one year or within the normal
operating cycle of the business.
Fixed assets means plants and equipment, but does not include
land or coal in place.
Liabilities means legally enforceable obligations to transfer
assets or provide services to other entities in the future as a result of past
transactions.
Net worth means total assets minus total liabilities and is
equivalent to owners' equity.
Parent corporation means a corporation which owns or controls
the applicant.
Tangible net worth means net worth minus intangibles such as
goodwill and rights to patents or royalties.
b) The Department may accept a self-bond from an applicant for a
permit if all of the following conditions are met by the applicant or its
parent corporation guarantor:
1) The applicant designates a suitable agent to receive service
of process in the State of Illinois.
2) The applicant has been in continuous operation as a business
entity for a period of not less than five years. Continuous operation shall
mean that business was conducted over a period of five years immediately
preceding the time of application.
A) The Department may allow a joint venture or syndicate with less
than five years of continuous operation to qualify under subsection (b)(2)
above, if each member of the joint venture or syndicate has been in continuous
operation for at least five years immediately preceding the time of
application.
B) When calculating the period of continuous operation, the
Department may exclude past periods of interruption to the operation of the
business entity that were beyond the applicant's control and that do not affect
the applicant's likelihood of remaining in business during the proposed surface
coal mining and reclamation operations.
3) The applicant submits financial information in sufficient
detail to show that the applicant meets one of the following criteria:
A) The applicant has a current rating for its most recent bond
issuance of "A" or higher as issued by either Moody's Investor
Service or Standard and Poor's Corporation;
B) The applicant has a tangible net worth of at least $10 million,
a ratio of total liabilities to net worth of 2.5 times or less, and a ratio of
current assets to current liabilities of 1.2 times or greater; or
C) The applicant's fixed assets in the United States total at
least $20 million, and the applicant has a ratio of total liabilities to net
worth of 2.5 times or less, and a ratio of current assets to current
liabilities of 1.2 times or greater.
4) The applicant submits:
A) Financial statements for the most recently completed fiscal
year accompanied by a report prepared by an independent certified public
accountant in conformity with generally accepted accounting principles and
containing the accountant's audit opinion or review opinion of the financial
statements with no adverse opinion;
B) Unaudited financial statements for completed quarters in the
current fiscal year; and
C) Additional unaudited information as requested by the
Department.
c) Written guarantee.
1) The Department may accept a written guarantee for an
applicant's self-bond from a parent corporation guarantor, if the guarantor
meets the conditions of subsections (b)(1) through (4), above, as if it were
the applicant. Such a written guarantee shall be referred to as a
"corporate guarantee." The terms of the corporate guarantee shall
provide for the following:
A) If the applicant fails to complete the reclamation plan, the
guarantor shall do so or the guarantor shall be liable under the indemnity agreement
to provide funds to the Department sufficient to complete the reclamation plan,
but not to exceed the bond amount.
B) The corporate guarantee shall remain in force unless the
guarantor sends notice of cancellation by certified mail to the applicant and
to the Department at least 90 days in advance of the cancellation date, and the
Department accepts the cancellation.
C) The cancellation may be accepted by the Department if the
applicant obtains suitable replacement bond before the cancellation date or if
the lands for which the self-bond, or portion thereof, was accepted have not
been disturbed.
2) The Department may accept a written guarantee for an
applicant's self-bond from any corporate guarantor, whenever the applicant
meets the conditions of subsections (b)(1), (2) and (4) above, and the
guarantor meets the conditions of subsections (b)(1) through (4) above. Such a
written guarantee shall be referred to as a "non-parent corporate
guarantee." The terms of this guarantee shall provide for compliance with
the conditions of subsections (c)(1)(A) through (C) above. The Department may
require the applicant to submit any information specified in subsection (b)(3)
above in order to determine the financial capabilities of the applicant.
d) In order for the Department to accept an applicant's
self-bond, the total amount of the outstanding and proposed self-bonds of the
applicant for surface coal mining and reclamation operations shall not exceed
25 percent of the applicant's tangible net worth in the United States. In
order for the Department to accept a corporate guarantee, the total amount of
the parent corporation guarantor's present and proposed self-bonds and
guaranteed self-bonds for surface coal mining and reclamation operations shall
not exceed 25 percent of the guarantor's tangible net worth in the United
States. In order for the Department to accept a non-parent corporate
guarantee, the total amount of the non-parent corporate guarantor's present and
proposed self-bonds and guaranteed self-bonds shall not exceed 25 percent of
the guarantor's tangible net worth in the United States.
e) If the Department accepts an applicant's self-bond, an
indemnity agreement shall be submitted subject to the following requirements:
1) The indemnity agreement shall be executed by all persons and
parties who are to be bound by it, including the parent corporation guarantor,
and shall bind each jointly and severally.
2) Corporations applying for a self-bond, and parent and
non-parent corporations guaranteeing an applicant's self-bond shall submit an
indemnity agreement signed by two corporate officers who are authorized to bind
their corporations. A copy of such authorization shall be provided to the
Department along with an affidavit certifying that such an agreement is valid
under all applicable federal and state laws. In addition, the guarantor shall
provide a copy of the corporate authorization demonstrating that the
corporation may guarantee the self-bond and execute the indemnity agreement.
3) If the applicant is a partnership, joint venture or syndicate,
the agreement shall bind each partner or party who has a beneficial interest,
directly or indirectly, in the applicant.
4) Pursuant to Section 1800.50, the applicant, parent or
non-parent corporate guarantor shall be required to complete the approved
reclamation plan for the lands in default or to pay to the Department an amount
necessary to complete the approved reclamation plan, not to exceed the bond
amount. Under Illinois law, the indemnity agreement when under forfeiture
shall operate as a judgment against those parties liable under the indemnity
agreement.
f) The Department shall require self-bonded applicants and parent
and non-parent corporate guarantors to submit an update of the information
required under subsections (b)(3) and (4) above within 90 days after the close
of each fiscal year following the issuance of the self-bond or corporate
guarantee.
g) If at any time during the period when a self-bond is posted,
the financial conditions of the applicant, parent or non-parent corporate
guarantor change so that the criteria of subsections (b)(3) and (d) above are
not satisfied, the permittee shall notify the Department immediately and shall
within 90 days post an alternate form of bond in the same amount as the
self-bond. Should the permittee fail to post an adequate substitute bond, the
provisions of Section 1800.16(e)(2) shall apply.
(Source: Added at 20 Ill. Reg. 15683, effective December 2, 1996)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.30 REPLACEMENT OF BONDS
Section 1800.30 Replacement
of Bonds
a) The Department may allow a permittee to replace existing bonds
with other bonds that provide equivalent coverage, if the liability which has
accrued against the permittee on the permit area is transferred to such
replacement bonds. The replacement bond shall be accompanied by a letter from the
bonding company identifying the dates of the permit period which the bond is to
cover and acknowledging any previously affected areas which the replacement is
to cover.
b) The Department shall not release existing performance bonds
until the permittee has submitted, and the Department has approved, acceptable
replacement performance bonds. Replacement of a performance bond pursuant to
this Section shall not constitute a release of bond under Section 1800.40.
(Source: Added at 11 Ill. Reg. 7985, effective July 1, 1987)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.40 REQUIREMENT TO RELEASE PERFORMANCE BONDS
Section 1800.40 Requirement
to Release Performance Bonds
a) Bond
release application.
1) The permittee may file an application with the Department for
the release of all or part of a performance bond at any time. The permittee
may authorize a person to act on the permittee's behalf. The Department may
also initiate an application for bond release. For bond releases initiated by
the Department, the Department shall undertake the notification and
certification requirements of the applicant under this Section.
2) Within 30 days after an application for bond release has been
filed with the Department, the applicant shall submit a copy of an
advertisement placed at least once a week for 4 successive weeks in a newspaper
of general circulation in the locality of the surface coal mining operation.
The advertisement shall be considered part of any bond release application and
shall contain the permit number and approval date, notification of the precise
location of the land affected, the number of acres, the type and amount of the
bond filed and the portion sought to be released, the type and appropriate
dates of reclamation work performed, a description of the results achieved as
they relate to the permittee's approved reclamation plan, and the name and
address of the Department to which written comments, objections, or requests
for public hearings on the specific bond release may be submitted pursuant to
subsection (d). In addition, as part of any bond release application, the
applicant shall submit copies of letters which he or she has sent to adjoining
property owners, local governmental bodies, planning agencies, sewage and water
treatment authorities, and water companies in the locality in which the surface
coal mining and reclamation operation took place, notifying them of the
intention to seek release from the bond. The applicant shall submit a certification
of publication for such advertisement prior to the Department's final
administrative decision releasing bond.
3) The applicant shall include in the application for bond
release a notarized statement which certifies that all applicable reclamation
activities have been accomplished in accordance with the requirements of the
State Act, the regulatory program and the approved reclamation plan. Such
certification shall be submitted for each application or phase of bond release.
b) Inspection
by Department.
1) Upon filing of the bond release application, the Department
shall, within 30 days, or as soon thereafter as weather conditions permit,
conduct an inspection and evaluation of the reclamation work involved. The
evaluation shall consider, among other factors, the degree of difficulty to
complete any remaining reclamation, whether pollution of surface and subsurface
water is occurring, the probability of future occurrence of such pollution, and
the estimated cost of abating such pollution. The surface owner, agent, or
lessee shall be given notice of such inspection and may participate with the
Department in making the bond release inspection. The Department may arrange
with the permittee to allow access to the permit area, upon request by any person
with an interest in bond release, for the purpose of gathering information
relevant to the proceeding.
2) Within the later of 60 days from the filing of the bond
release application or 5 days after the expiration of the public comment period
provided under subsection (d), if no public hearing is held pursuant to
subsection (d), or within 30 days after a public hearing has been held pursuant
to subsection (d), the Department shall notify, in writing, the permittee, the
municipality and county in which the surface coal mining operation is located,
the surety, or other persons with an interest in bond collateral who have
requested notification under Section 1800.21(e), and the persons who either
filed objections in writing or objectors who were a party to the hearing
proceedings, if any, its final administrative decision to release or not to
release all or part of the performance bond. The municipality and county shall
be notified by certified mail.
c) The Department may release all or part of the bond for the
entire permit area or incremental area if the Department is satisfied that all
the reclamation or a phase of the reclamation covered by the bond or portion
thereof has been accomplished in accordance with the following schedules for
reclamation of Phases I, II, and III:
1) At the completion of Phase I, after the operator completes the
backfilling, regrading (which includes the replacement of topsoil) and drainage
control of a bonded area in accordance with the approved reclamation plan, 60%
of the bond or collateral for the applicable area.
2) At the completion of Phase II, after revegetation has been
established on the regraded mined lands in accordance with the approved
reclamation plan, an additional amount of bond. When determining the amount of
bond to be released after successful revegetation has been established, the
Department shall retain that amount of bond for the revegetated area which
would be sufficient to cover the cost of reestablishing revegetation if
completed by a third party and for the period specified for operator
responsibility in Section 6.08(d)(2) of the State Act for reestablishing
revegetation. No part of the bond or deposit shall be released under this
subsection (c)(2) so long as the lands to which the release would be applicable
are contributing suspended solids to streamflow or runoff outside the permit
area in excess of the requirements set by Section 3.10 of the State Act and by
62 Ill. Adm. Code 1816 or 1817 or until soil productivity for prime farmland
has returned to the 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 2.02(a) of the
State Act and 62 Ill. Adm. Code 1823. Where a silt dam is to be retained as a
permanent impoundment pursuant to 62 Ill. Adm. Code 1816 or 1817, the Phase II
portion of the bond may be released under this subsection so long as provisions
for sound future maintenance by the operator or the landowner have been made
with the Department.
3) At the completion of Phase III, after the operator has
completed successfully all surface coal mining and reclamation activities, the
release of the remaining portion of the bond, but not before the expiration of
the period specified for operator responsibility in 62 Ill. Adm. Code 1816.116
or 1817.116. However, no bond shall be fully released under this subsection
until the reclamation requirements of the State Act and the permit are fully
met.
d) 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 or
special expertise with respect to any environmental, social, or economic impact
involved in the operation or which is authorized to develop and enforce
environmental standards with respect to such operations, shall have the right
to file a written request for hearing and written objections to the proposed
release from bond with the Department within 30 days after the last publication
of the notice required by subsection (a)(2). If written objections are filed
and a hearing is requested, the hearing shall be held in accordance with 62
Ill. Adm. Code 1847.9.
e) If the Department disapproves the application for release of
the bond or portion of the bond, the Department shall notify the permittee, the
surety, and any person with an interest in collateral as provided for in
Section 1800.21(e), in writing, stating the reasons for disapproval and recommending
corrective actions necessary to secure the release. The permittee, the surety,
and any person with an interest in collateral as provided for in Section
1800.21(e) may request an administrative hearing on the disapproval of bond
release by filing a request for hearing in accordance with the procedures set
forth in 62 Ill. Adm. Code 1847.3.
(Source: Amended at 27 Ill.
Reg. 4683, effective March 26, 2003)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.50 FORFEITURE OF BONDS
Section 1800.50 Forfeiture
of Bonds
a) If a permittee refuses or is unable to conduct reclamation of
an unabated violation due to bankruptcy, insolvency, creditor attachment of
equipment or to the collateral supporting the performance bond being repledged,
if the terms of the permit are not met, or if the permittee defaults on the
conditions under which the bond was accepted, the Department shall take the
following action to forfeit all or part of a bond or bonds for any permit area
or an increment of a permit area:
1) Send written notification by certified mail, return receipt
requested, to the permittee and the surety on the bond, if any, informing them
of the determination to forfeit all or part of the bond, including the reasons
for the forfeiture and the amount to be forfeited.
2) The amount shall be based on the estimated total cost of
achieving the reclamation plan requirements.
b) Prior to the bond forfeiture notification under subsection
(a)(1) above, the Department shall advise the permittee and surety, if
applicable, of the conditions under which forfeiture may be avoided. Such
conditions include, but are not limited to:
1) Agreement by the permittee or another party to perform
reclamation operations in accordance with a compliance schedule which meets the
conditions of the permit, the reclamation plan, and the regulatory program and
a demonstration that such party has the ability to satisfy the conditions; or
2) The Department may allow a surety to complete the reclamation
plan, or the portion of the reclamation plan applicable to the bonded phase or
increment, if the surety can demonstrate an ability to complete the reclamation
in accordance with the approved reclamation plan. Except where the Department
may approve partial release authorized under Section 1800.40, no surety
liability shall be released until successful completion of all reclamation
under the terms of the permit, including the applicable liability periods of
Section 1800.13.
c) In the event forfeiture of the bond is required by subsection
(a) above, the Attorney General, on request of the Department, shall file suit
to collect any unpaid, forfeited bonds pursuant to Section 6.07 of the State
Act.
1) Before making a request to the Attorney General to collect the
forfeited bonds, or before presenting the collateral bond for collection, the
Department shall afford the permittee the right to a hearing to be held not
less than thirty (30) days after the permittee's receipt of the bond forfeiture
notification under subsection (a)(1).
2) The Department shall hold the hearing provided in subsection
(c)(1) in accordance with the procedures set forth in 62 Ill. Adm. Code 1847.7.
d) The Department shall use funds collected from bond forfeiture
to complete the reclamation plan, or portion thereof, on the permit area or
increment and to cover associated administrative expenses to which bond
coverage applies. Unless specifically limited, as provided in Section
1800.11(b), bond liability shall extend to the entire permit area under
forfeiture.
e) Reclamation costs.
1) In the event the estimated amount forfeited is insufficient to
pay for the full cost of reclamation, the operator shall be liable for
remaining costs. The Department may complete, or authorize completion of,
reclamation of the bonded area and may recover from the operator all costs of
reclamation in excess of the amount forfeited.
2) In the event the amount of performance bond forfeited was more
than the amount necessary to complete reclamation, the unused funds shall be
returned by the Department to the party from whom they were collected.
f) No permittee who has forfeited any bond shall be issued a
permit from the Department for surface coal mining and reclamation operations
unless the permit applicant provides the following assurances to the Department
that such proceedings will not again become necessary:
1) The permit applicant submits a cash bond or certificate of
deposit for the proposed permit area, pursuant to Section 1800.11.
2) The officers, directors, ten percent (10%) or greater shareholders
of the permit applicant, if a corporation, agree to be held personally liable
for violations of the State Act caused by the permittee.
3) The permit applicant has compensated the entity that completed
reclamation of the permit area for all costs attributable to bond forfeiture.
4) All prior violations of the State Act attributable to the
permit applicant have been corrected, including payments of all outstanding
civil penalties.
(Source: Amended at 17 Ill. Reg. 10916, effective July 1, 1993)
| TITLE 62: MINING
CHAPTER I: DEPARTMENT OF NATURAL RESOURCES
PART 1800
BONDING AND INSURANCE REQUIREMENTS FOR
SURFACE COAL MINING AND RECLAMATION OPERATIONS
SECTION 1800.60 TERMS AND CONDITIONS FOR LIABILITY INSURANCE
Section 1800.60 Terms and
Conditions for Liability Insurance
a) The Department shall require the applicant to submit as part
of its permit application a certificate issued by an insurance company
authorized to do business in Illinois certifying that the applicant has a
public liability insurance policy in force for the surface coal mining and
reclamation operations for which the permit is sought. Such policy shall
provide for personal injury and property damage protection in an amount
adequate to compensate any persons injured or property damaged as a result of
the surface coal mining and reclamation operations, including the use of
explosives, and who are entitled to compensation under the applicable
provisions of State law. Minimum insurance coverage for bodily injury and
property damage shall be three hundred thousand dollars ($300,000) for each
occurrence and five hundred thousand dollars ($500,000) aggregate.
b) The policy or approved replacement thereof shall be maintained
in full force during the life of the permit or any renewal thereof, and the
liability period necessary to complete all reclamation operations under 62 Ill.
Adm. Code 1800 - 1850.
c) The policy shall include a rider requiring that the insurer
notify the Department whenever substantive changes are made in the policy
including any termination or failure to renew.
(Source: Amended at 14 Ill. Reg. 11785, effective January 1, 1991)
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