N.M. Admin. Code § 19.10.12.1205

Current through Register Vol. 35, No. 23, December 10, 2024

Section 19.10.12.1205 - DETERMINATION OF FINANCIAL ASSURANCE AMOUNT

A. The amount of the financial assurance shall be determined by the director and take into account, but not be limited to, the estimated cost submitted by the permittee or the applicant. This estimated cost should include at a minimum the following costs: contract administration; mobilization; demobilization; engineering redesign; profit and overhead; procurement costs; reclamation or closeout plan management; and contingencies. Credit for salvage value of building materials or abandoned equipment and supplies shall not be allowed. Equipment normally available to a third party contractor should be used in determining the estimated cost;

(1) reflect the probable difficulty of reclamation or closure, giving consideration to such factors as topography, geology, hydrology, revegetation potential and approved post-mining land use;

(2) depend on the requirements of the approved permit;

(3) not duplicate any federal or state financial requirements for the same area so long as those entities' financial assurance requirements are at least as stringent as this part; and

(4) not be less comprehensive than the federal requirements, if any.

B. The amount of the financial assurance shall be sufficient to assure the completion of the reclamation plan or closeout plan if the work has to be performed by the state of New Mexico or a contractor with the state in the event of forfeiture.

C. The director may accept a net present value calculation for the amount of financial assurance required pursuant to Subsections A and B of 19.10.12.1205 NMAC, if the scheduled completion date for the reclamation or closeout plan exceeds five years following closure, not including the 12 year period described in Subsection A of 19.10.12.1204 NMAC for re-establishing vegetation, and if the financial assurance will be provided in the form of cash or other allowable form of financial assurance to be converted into cash upon forfeiture. The director shall require an appropriate adjustment be made to the net present value calculation to exclude anticipated delays for converting financial assurance into cash.

(1) The net present value calculation shall be based upon projected inflation rates and projected rates of return over the term of the reclamation plan and shall be based upon publicly available indices and data. The director shall determine whether a proposed net present value calculation is acceptable and complies with the requirements of Subsection B of 19.10.12.1205 NMAC. The director shall issue guidance on acceptable methods for calculating net present value within one year from the effective date of this rule.

(2) The director shall review any approved net present value calculation as needed, but at least once every five years, to take into consideration additional information regarding rates of return and inflation rates.

D. The amount of financial assurance for a minimal impact existing and new mining operations shall be as provided for in Subsection F of 19.10.3.303 NMAC and Subsection E of 19.10.3.304 NMAC, respectively.

N.M. Admin. Code § 19.10.12.1205

7-12-94, 2-15-96; 19.10.12.1205 NMAC - Rn, 19 NMAC 10.2.12.1205, 05-15-2001; A, 10-15-03; A, 12-30-03