Idaho Admin. Code r. 20.03.01.035

Current through September 2, 2024

Section 20.03.01.035 - PERFORMANCE BOND REQUIREMENTS

01.Amount of Bond. The initial bond is in the amount determined by the Board to be the estimated reasonable costs of reclamation of lands proposed to be disturbed in the permit area, plus ten percent (10%), and subject to the limitations in Idaho Code 47-1317(b).

02.Form of Performance Bond.

a. Corporate surety bond. This is an indemnity agreement executed for the Permittee by a corporate surety licensed to do business in the state of Idaho and submitted on a Department form. Surety bonds are subject to the following conditions:

i. The bond is to be conditioned upon the Permittee faithfully performing all requirements of the Act, these rules, and the permit, and must be payable to the state of Idaho;

ii. The surety company issuing the bond must, at a minimum, be among those listed as acceptable sureties in Circular 570 of the U.S. Department of the Treasury; and

iii. When a replacement bond is submitted, the following rider must be filed with the Department as part of the replacement before the existing bond will be released: "(Surety company or principal) understands and expressly agrees that the liability under this bond will extend to all acts for which reclamation is required on areas disturbed in connection with placer or dredge mining permit [number], both prior to and subsequent to the date of this rider."

iv. Any surety company canceling a bond must give the Department at least ninety (90) days' notice prior to cancellation. The Director will not release a surety from liability under an existing bond until the Permittee has submitted an acceptable replacement bond to the Director or reclaimed the site. A replacement bond must be received within thirty (30) days following written notice by the Director or prior to the effective date of cancellation, whichever is later.

v. If a surety's Idaho business license is suspended or revoked the Permittee must, within thirty (30) days after notice by the Department, submit a replacement bond for such surety to the Department.

vi. If the Permittee fails to submit a replacement bond or complete reclamation as directed in subparagraphs iv and v above, the Director may issue a cease-and-desist order and seek injunctive relief to stop the Permittee from conducting placer and dredge mining operations on the lands covered by the bond until a replacement bond has been submitted. The Permittee must cease mining operations on lands covered by the bond until a bond acceptable to the Department is filed.

b. Collateral bond. This is an indemnity agreement executed by or for the Permittee, and payable to the state of Idaho, pledging cash deposits, governmental securities, or certificates of deposit of any financial institution doing business in the United States. Collateral bonds are subject to the following conditions:

i. The Director will obtain possession of cash or other collateral bonds and then deposit them with the state treasurer to hold in trust for the purpose of bonding reclamation performance;

ii. The Director will value collateral at its current market value minus any penalty for early withdrawal, not its face value;

iii. Certificates of deposit or time deposit receipts are issued or assigned, in writing, to the state of Idaho and upon the books of the financial institution issuing such certificates. Interest will be allowed to accrue and may be paid by the bank, upon demand and after written release by the Department, to the Permittee or other person who posted the collateral bond;

iv. Amount of an individual certificate of deposit or time deposit receipt may not exceed the maximum amount insured by the Federal Deposit Insurance Corporation or Federal Savings and Loan Insurance Corporation or their successors;

v. Financial institutions issuing certificates of deposit or time deposit receipts will waive all rights of set-off or liens which it has or might have against such certificates, and will place holds on those funds that prevent the Permittee from withdrawing funds until the Department sends a written release to the financial institution;

vi. Certificates of deposit and time deposit receipts must be automatically renewable.

c. Letters of credit. A letter of credit is an instrument executed by a bank doing business in Idaho and made at the request of a customer. A letter of credit states that the issuing bank will honor drafts for payment upon compliance with the terms of the credit. Letters of credit are subject to the following conditions:

i. All credits are irrevocable and prepared in a format prescribed by the Director;

ii. All credits must be issued by an institution authorized to do business in the state of Idaho or through a correspondent bank authorized to do business in the state of Idaho; and

iii. The account party on all credits must be identical to the entity identified on the permit as the Permittee.

03.Blanket Bond. Where a Permittee is involved in numerous placer or dredge operations, the Director may accept a blanket bond in lieu of separate bonds under approved permits. The amount of such bond must comply with other applicable provisions of Section 035 and must be equal to the total of the amounts of the separate bonds being combined into a single bond.

04.Bond Reduction.

a. Upon finding that any land bonded under a permit will not be affected by mining, the Permittee will notify the Department. When the Department has verified that the bonding requirement for the remaining permit area is adequate, any excess reclamation bond will be released. Any request for bond reduction will be answered by the Director within thirty (30) days of receiving such request unless weather conditions prevent inspection.

b. A Permittee may petition the Department for a change in the initial bond rate. The Department will review the petition and if satisfied with the information presented a revised bond amount will be determined. The revised bond amount will be based upon the estimated cost that the Department would incur should a forfeiture of bond occur and it becomes necessary for the Department to complete reclamation to the standards established in the permit. This amount is subject to the limitations in Section 47-1317(b), Idaho Code.

05.Bond Release. Upon completion of the reclamation, specified in the permit, the Permittee must notify the Department in writing of their desire to secure release from bonding. When the Department has verified that the requirements of the permit have been met the bond will be released.

a. Any request for bond release will be answered by the Department within thirty (30) days of receiving such request unless weather conditions prevent inspection.

b. If the Department finds that a specific portion of the reclamation has been satisfactorily completed, the bond may be reduced to the amount required to complete the remaining reclamation. The following schedule will be used to complete these bond reductions unless the Department determines in a specific case that this schedule is not appropriate and specifies a different schedule:

i. Sixty percent (60%) of the bond may be released when the Permittee completes the required backfilling, regrading, topsoil replacement, and drainage control of the bonded area in accordance with the approved permit; and

ii. An additional twenty-five percent (25%) of the bond may be released after the Permittee performs revegetation activities on the regraded lands according to the approved permit and Section 040 of these rules.

c. The remaining bond will not be released:

i. As long as the disturbed lands are contributing sediment or other pollution to surface waters outside the disturbed land in excess of state water quality standards established under Title 39, Chapters 1 and 36, Idaho Code;

ii. Until final removal of equipment and structures related to the mining activity, or until any remaining equipment and structures are brought under an approved permit and bond by a new Permittee;

iii. Until all temporary sediment or erosion control structures have been removed and reclaimed or until such structures are brought under an approved permit and bond by a new Permittee; and

iv. Until vegetation meets the standards in Subsection 040.15 of these rules.

06.Forfeiture. In accord with Subsection 051.02, a bond may be forfeited if the Director determines that the Permittee has not conducted the placer and dredge mining and reclamation in accord with the Act, these rules, and the permit.

07.Correction of Deficiencies. The Director may, through cooperative agreement with the Permittee, devise a schedule to correct deficiencies in complying with the permit and thereby postpone action to recover the bond.

08.Federal Bonds Recognized. The Director may accept as a bond, evidence of a valid reclamation bond with the United States government. The bond must equal or exceed the amount determined in Subsection 03 5.01.a. This does not release a Permittee from bonding under these rules if the Permittee fails to continuously maintain a valid federal bond.

09.Insufficient Bond. In the event the amount of the bond is insufficient to reclaim the land in compliance with the Act, these rules, the permit, and the plan of operations, the attorney general is empowered to commence legal action against the Permittee in the name of the Board to recover the amount, in excess of the recoverable bond, necessary to reclaim the land in compliance with the Act, these rules, the permit, and the plan of operations.

Idaho Admin. Code r. 20.03.01.035

Effective July 1, 2024