W. Va. Code R. § 38-2-11

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 38-2-11 - Insurance and Bonding

11.1. Insurance.

11.1.a. The applicant shall provide liability insurance for each surface mining and reclamation operation and maintain such insurance throughout the life of the permit or any renewal thereof, and the liability period necessary to complete all reclamation operations, in the following minimum amounts for each surface mining and reclamation operation:

11.1.a.1. For bodily injury $300,000 for each occurrence and $500,000 aggregate.

11.1.a.2. For property damage $300,000 for each occurrence and $500,000 aggregate with no exclusions for blasting, landslides, or water loss.

11.1.b. A statement shall be affixed to each certificate of insurance affirming that the insurer will promptly notify the Secretary of any substantive change in policy including cancellations, termination, or failure to renew.

11.1.c. Insurance coverage for blasting damage may be terminated prior to final bond release but not before blasting activities have ceased provided that the full amount of liability coverage shall continue as required by the Act and this rule.

11.2. General Requirements For All Bonds.

11.2.a. Prior to issuance of a permit and prior to initiation of surface mining operations, the operator shall provide a bond in accordance with sections 11 and 12 of the Act and in accordance with this section.

11.2.b. All bonds shall provide a mechanism for a bank or surety company to give prompt notice to the Secretary 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's license or bank's charter to do business.

11.2.c. Upon incapacity of the 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 Secretary.

11.2.d. The Secretary shall issue a notice of violation against any operator who is without bond coverage. The notice of violation shall specify a period of time to replace bond coverage not to exceed fifteen (15) days. During this period the Secretary shall conduct weekly inspections to ensure continuing compliance with permit requirements, this rule, and the Act. Such notice of violation, if abated within the specified time period, shall not be counted as a notice of violation for purposes of civil or criminal penalties determining a "pattern of violations" and need not be reported as a past violation in subsequent permit applications. If such a notice of violation is not abated in accordance with the specified time period, a cessation order shall be issued, at which time the operator shall initiate and complete as contemporaneously as possible total reclamation of all disturbed areas. Mining operations shall not resume until the Secretary has determined that an acceptable bond has been posted.

11.2.e. For bonds and permits which are to be transferred, assigned or sold under the provisions of subsection 3.25 of this rule and which have significant long-term environmental liabilities the Secretary may require a showing that either the bond is sufficient to cover the liability or that the assignee has the financial resources and capability to assume the liability.

11.3. Bond Instruments.

11.3.a. Surety bonds shall be subject to the following conditions:

11.3.a.1. A surety bond shall be executed by the operator and a corporate surety licensed to do business in the State of West Virginia and approved by the Secretary.

11.3.a.2. Surety bonds shall be noncancelable during their term except that surety bond coverage may be adjusted in accordance with the provisions of subsection 12.3 of this rule.

11.3.a.3. Any company that executes surety bonds in the State after July 1, 2001, must:

(i) be recognized by the treasurer to the state as holding a current certificate of authority from the United States Department of the Treasury as an acceptable surety on federal bonds by being included on the Treasury Department's listing of approved sureties (Department Circular 570); or

(ii) submit proof to the Secretary that it holds a valid license issued by the West Virginia Insurance Commissioner, and agree to submit to the Secretary on at least a quarterly basis a certificate of good standing from the West Virginia Insurance Commissioner and such other evidence from the insurance regulator of its domiciliary state, if other than West Virginia, demonstrating that it is also in good standing in that state. Companies not included on the United States Treasury Department's listing of approved sureties Provided, That those companies electing to execute bonds under the provisions of (i) above in this subdivision must diligently pursue application for listing, submit evidence on a semi-annual basis demonstrating that they are pursuing such listing, and within four (4) years, obtain a certificate of authority from the United States Department of the Treasury as an acceptable surety on federal bonds.

11.3.b. Collateral bonds will be negotiable and guaranteed and subject to the following conditions:

11.3.b.1. The form of the collateral bond shall be:

11.3.b.1.A. Bonds of the United States or its possessions;

11.3.b.1.B. Full faith and credit general obligation bonds of the State of West Virginia, or other states, and any county, district municipality of the state of West Virginia or other states;

11.3.b.1.C. Certificate of deposit;

11.3.b.1.D. Cash;

11.3.b.1.E. Real property posted as a collateral bond shall meet the following conditions:

11.3.b.1.E.1. The applicant shall grant the Department of Environmental Protection a first mortgage, first deed of trust, or perfected first-lien security interest in real property with a right to sell or otherwise dispose of the property in the event of forfeiture;

11.3.b.1.E.2. In order for the Secretary to evaluate the adequacy of the real property offered to satisfy collateral requirements, the applicant shall submit a schedule of the real property which shall be mortgaged or pledged to secure the obligations under the indemnity agreement. The list shall include:

(1) A description of the property;

(2) The fair market value as determined by an independent appraisal conducted by a certified appraiser; and

(3) Proof of possession and title to the real property; and

11.3.b.1.E.3. The property may include land which is part of the permit area; however, land pledged as collateral for a bond under this section shall not be disturbed under any permit while it is serving as security.

11.3.b.1.F. Whole life insurance policies posted as a collateral bond shall meet the following conditions:

11.3.b.1.F.1. The corporation, partnership, or sole proprietorship applying for the permit shall own the said policy;

11.3.b.1.F.2. The Secretary shall obtain possession of and keep in custody all policies assigned by the applicant, until authorized for release or replacement;

11.3.b.1.F.3. The Secretary shall, at a minimum, value this collateral at net cash surrender value so as to ensure that such policies, less all penalties and administrative expenses incurred at the time of redemption, shall equal or exceed the amounts of the bond required to be posted;

11.3.b.1.F.4. The net cash surrender value of the whole life insurance policy shall not exceed $300,000.00;

11.3.b.1.F.5. The Secretary shall accept only whole life policies which are not interest sensitive and have a guaranteed rate of interest;

11.3.b.1.F.6. The Secretary shall require that whole life policies be assigned to the Department of Environmental Protection, in writing, and reflect this assignment upon the books of the company issuing such policies and be recorded by the applicant as required by the Secretary;

11.3.b.1.F.7. Upon and during the assignment, such policies shall bear no liens, loans or encumbrances, and none shall become effective without the prior written consent of the Secretary, with the exception of allowing future dividends distributed to such policies to offset annual premiums, so long as the net cash surrender value meets or exceeds the amounts of the bond required; and

11.3.b.1.F.8. The Secretary shall only accept those policies issued by companies licensed to conduct business in the State of West Virginia. Furthermore, such companies shall be member insurers of the West Virginia Life and Health Insurance Guaranty Association and have an independent financial rating by A. M. Best Company of A+ (Superior), Aaa by Moody's Investor Service, or the equivalent.

11.3.b.1.G. Letters of credit shall be subject to the following conditions:

11.3.b.1.G.1. The letter may only be issued by a bank organized or authorized to do business in the State of West Virginia;

11.3.b.1.G.2. Letters of credit shall be irrevocable during their terms. The Secretary may approve the use of letters of credit as security in accordance with a schedule approved with the permit. Any bank issuing a letter of credit for the purposes of this part shall notify the Secretary in writing at least ninety (90) days prior to the maturity date of such letter of credit or the expiration of the letter of credit agreement. Letters of credit utilized as securities in areas requiring continuous bond coverage shall be forfeited and collected by the Office of Attorney General, if not replaced by other suitable bond or letter of credit at least thirty (30) days before the expiration date of the letter of credit agreement;

11.3.b.1.G.3. The letter must be payable to the Department of Environmental Protection in part or in full upon demand and receipt from the Secretary of a notice of forfeiture;

11.3.b.1.G.4. The Secretary shall not accept a letter of credit in excess of ten percent (10%) of the bank's capital surplus account as shown on a balance sheet certified by a certified public accountant;

11.3.b.1.G.5. The Secretary shall not accept letters of credit from a bank for any person, on all permits held by that person, in excess of three times the company's maximum single obligation as provided by State law;

11.3.b.1.G.6. The Secretary shall provide in the indemnity agreement that the amount shall be confessed to judgment upon forfeiture; and

11.3.b.1.G.7. The bond shall provide that:

11.3.b.1.G.7.(a) The bank will give prompt notice to the permittee and the Secretary of any notice received or action filed alleging the insolvency or bankruptcy of the bank, or alleging any violations of regulatory requirements which could result in suspension or revocation of the bank's charter of license to do business;

11.3.b.1.G.7.(b) In the event the bank becomes unable to fulfill its obligations under the letter of credit for any reason, notice shall be given immediately to the permittee and the Secretary; and

11.3.b.1.G.7.(c) Upon the incapacity of a bank by reason of bankruptcy, insolvency or suspension or revocation of its charter or license, the permittee shall be deemed to be without bond coverage in violation of section 11 and/or section 12 of the Act. The Secretary shall issue a notice of violation against any permittee who is without bond coverage. The notice shall specify a reasonable period to replace bond coverage, not to exceed ninety (90) days. During this period the Secretary shall conduct weekly inspections to ensure continuing compliance with other permit requirements, the regulatory program and the Code of West Virginia. Such notice of violation, if abated within the period allowed, shall not be counted as a notice of violation for purposes of determining a "pattern of willful violations" and need not be reported as a past violation in permit applications. If such a notice of violation is not abated in accordance with the schedule, a cessation order shall be issued, at which time the operator shall begin and complete, as contemporaneously as possible, total reclamation of the area.

11.3.b.1.G.7.(d) Persons with an interest in letters of credit posted as a bond, and who desire notification of actions pursuant to the bond, shall request the notification in writing to the Secretary at the time collateral is offered.

11.3.b.2. The Secretary shall obtain possession of and keep in custody all collateral deposited by the applicant, until authorized for release or replacement;

11.3.b.3. The Secretary shall require that certificates of deposit be assigned to the Department of Environmental Protection, in writing, and reflect this assignment upon the books of the bank issuing such certificates;

11.3.b.4. The Secretary shall not accept an individual certificate for a denomination in excess of maximum insurable amount as determined by F.D.I.C.;

11.3.b.5. The Secretary shall require the banks issuing these certificates to waive all rights of setoff or liens which it has or might have against those certificates;

11.3.b.6. The Secretary shall only accept certificates of deposit in a bank in this State;

11.3.b.7. 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 Secretary at the time collateral is offered;

11.3.b.8. The estimated bond value of all collateral posted as bond assurance under this paragraph shall be subject to a margin which is a ratio of bond value to market value as determined by the Secretary. This margin shall reflect legal and liquidation fees, as well as value depreciation, marketability and fluctuations which might affect the net cash available to the Secretary for performing reclamation. The bond value of collateral may be evaluated at any time, but shall be evaluated as part of permit renewal and if necessary the bond value increased or decreased. In no case shall the market value be less than the required bond value; and

11.3.b.9. For those permits issued prior to January 1, 1993, which have collateral bonds other than these specified in this paragraph, such bond may remain in effect unless they are determined by the Secretary to be insufficient or otherwise invalid.

11.3.c. Escrow Bonding.

11.3.c.1. The Secretary may authorize the operator to supplement a bonding program through the establishment of an escrow account deposited in one or more federally insured accounts payable on demand only to the Secretary or deposited with the Secretary directly. Contributions to the account may be based on acres affected or tons of coal produced or any other rate approved by the Secretary. In all cases, the total bond including the escrow amount, as determined by the Secretary in the bonding schedule, shall not be less than the amount required under Sections 11 and 12 of the Act.

11.3.c.2. Escrow funds deposited in federally insured accounts shall not exceed the maximum insured amount under applicable Federal insurance programs such as by F.D.I.C.

11.3.c.3. Interest paid on an escrow account shall be retained in the escrow account and applied to the bond value of the escrow account unless the Secretary has approved that the interest be paid to the operator. In order to qualify for interest payment, the operator shall request such action in writing during the permit application process.

11.3.c.4. Certificates of deposit may be substituted for escrow accounts upon approval of the Secretary.

11.3.d. Self-Bonding.

11.3.d.1. Definitions. For the purposes of this subsection only:

11.3.d.1.A. Current assets means cash or other assets or resources which are reasonably expected to be converted to cash or sold or consumed within one (1) year or within the normal operating cycle of the business.

11.3.d.1.B. Current liabilities means obligations which are reasonably expected to be paid or liquidated within one (1) year or within the normal operating cycle of the business.

11.3.d.1.C. Fixed assets means plants and equipment, but does not include land or coal in place

11.3.d.1.D. Liabilities means obligations to transfer assets or provide services to other entities in the future as a result of past transactions.

11.3.d.1.E. Net worth means total assets minus total liabilities and is equivalent to owners equity.

11.3.d.1.F. Parent corporation means corporation which owns or controls the applicant.

11.3.d.1.G. Tangible net worth means net worth minus intangibles such as goodwill and rights to patents or royalties.

11.3.d.2. The Secretary 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:

11.3.d.2.A. The applicant designates a suitable agent to receive service of process in the state where the proposed surface coal mining operation is to be conducted.

11.3.d.2.B. The applicant has been in continuous operation as a business entity for a period of not less than five (5) years. Continuous operation shall mean that business was conducted over a period of five (5) years immediately preceding the time of application.

11.3.d.2.B.1. The Secretary may allow a joint venture or syndicate with less than five (5) years of continuous operation to qualify under this requirement, if each member of the joint venture or syndicate has been in continuous operation for at least five (5) years immediately preceding the time of application.

11.3.d.2.B.2. When calculating the period of continuous operation, the Secretary 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.

11.3.d.2.C. The applicant submits financial information in sufficient detail to show that the applicant meets one of the following criteria:

11.3.d.2.C.1. 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;

11.3.d.2.C.2. The applicant has a tangible net worth of at least ten (10) million dollars, 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

11.3.d.2.C.3. The applicant's fixed assets in the United State total at least twenty (20) million dollars, 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.

11.3.d.2.D. The applicant submits:

11.3.d.2.D.1. 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;

11.3.d.2.D.2. Unaudited financial statements for completed quarters in the current fiscal year; and

11.3.d.2.D.3. Additional unaudited information as requested by the Secretary.

11.3.d.3. The Secretary may accept a written guarantee for an applicant's self-bond from a parent corporation guarantor, if the guarantor meets the conditions of subparagraphs 11.3.d.2.A through 11.3.d.2.D of this paragraph 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:

11.3.d.3.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 Secretary sufficient to complete the reclamation plan, but not to exceed the bond amount

11.3.d.3.B. The corporate guarantee shall remain in force unless the guarantor sends notice of cancellation by certified mail to the applicant and to the Secretary at least ninety (90) days in advance of the cancellation date, and the Secretary accepts the cancellation.

11.3.d.3.C. The cancellation may be accepted by the Secretary 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.

11.3.d.4. For the Secretary 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 twenty-five (25) percent of the applicant's tangible net worth in the United States. For the Secretary 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 twenty-five (25) percent of the guarantor's tangible net worth in the United States.

11.3.d.5. If the Secretary accepts an applicant's self-bond, an indemnity agreement shall be submitted subject to the following requirements:

11.3.d.5.A. 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.

11.3.d.5.B. The indemnity agreement shall be accompanied by an affidavit certifying that the agreement is valid under all applicable State and Federal laws.

11.3.d.5.C. Corporations applying for a self-bond or parent corporations guaranteeing a subsidiary's self-bond shall submit an indemnity agreement signed by two (2) corporate officers who are authorized to bind the corporation. A copy of such authorization shall be provided to the Secretary. The guarantor shall provide a copy of the corporate authorization demonstrating that the corporation may guarantee the self-bond and execute the indemnity agreement.

11.3.d.5.D. 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.

11.3.d.5.E. Pursuant to the bond forfeiture provisions of subsection (b) of section 17 of the Act, the applicant or parent corporation guarantor shall be required to complete the approved reclamation plan for the lands in default or to pay to the Secretary an amount necessary to complete the approved reclamation plan, not to exceed the bond amount. The indemnity agreement when under forfeiture shall operate as a judgment against those parties liable under the indemnity agreement.

11.3.d.6. The Secretary may require self-bonded applicants and parent guarantors to submit an update of the information required under subparagraph 11.3.d.2.A. through 11.3.d.2.D. of this paragraph within ninety (90) days after the close of each fiscal year following the issuance of the self- bond or corporate guarantee.

11.3.d.7. If at any time during the period when a self-bond is posted, the financial conditions of the applicant or the parent corporation guarantor change so that the criteria under subparagraph 11.3.d.2.C of this paragraph are not satisfied, the permittee shall notify the Secretary immediately and shall within ninety (90) days post an alternate form of bond in the same amount as the self-bond.

11.3.e. Combined Surety/Escrow Bonding.

11.3.e.1. The Secretary may accept a combined surety/escrow bonding schedule provided that:

11.3.e.1.A. A surety bond payable to the Secretary is posted in the amount determined under Sections 11 and 12 of the Act for reclamation of each successive increment; and

11.3.e.1.B. An interest-bearing escrow account, payable to the Secretary with a predetermined deposit amount and frequency, is established.

11.3.e.2. Conditions of the combined surety/escrow bonding method shall be as follows:

11.3.e.2.A. Surety bond:

11.3.e.2.A.1. The term of the surety bond shall be not less than two (2) years.

11.3.e.2.A.2. The amount of the surety bond shall always be sufficient to cover the difference between the escrow balance and the total reclamation cost.

11.3.e.2.A.3. The surety bond may be reduced in amount, but the liability remaining shall depend on the escrow-deposit rate which shall be subject to the requirements of subdivisions 11.3.b and 11.3.c of this subsection.

11.3.e.2.A.4. The surety bond shall be noncancelable by the surety during the bond term.

11.3.e.2.A.5. Surety bond coverage may be released by the Secretary without applying the bond-release criteria of the Act and section 12 of this rule at any time during the bond term, provided provisions of part 11.3.e.2.B.5 of this subparagraph are met or are in accordance with the provisions of bond replacement under subsection 12.1 of this rule.

11.3.e.2.A.6. The surety bond is subject to the conditions of bond forfeiture including noncompliance with the escrow-account provisions of subparagraph 11.3.e.2.B of this paragraph.

11.3.e.2.B. Escrow account:

11.3.e.2.B.1. The terms and conditions of the escrow account shall be developed jointly by the operator, surety and Secretary. For the purposes of this section, the development of the escrow account shall be based on a production basis in an amount not less than that required to make the escrow account equal to or greater than the bond requirement within the term of the surety bond as agreed on jointly by the operator, the surety and the Secretary. Deposits to the escrow account by the operator shall be made monthly and so reported to the Secretary. Failure to make deposits on schedule shall be just cause for action by the Secretary.

11.3.e.2.B.2. A certified escrow-account balance statement shall be provided quarterly to the surety and the Secretary.

11.3.e.2.B.3. Provisions of the escrow account shall be in accordance with subdivision 11.3.b of this subsection.

11.3.e.2.B.4. The escrow account shall be subject to bond-forfeiture.

11.3.e.2.B.5. The escrow account balance shall equal the initial bond amount, plus any adjustments required by subdivision i. of this subpart, one hundred twenty (120) days prior to surety bond termination, unless the total bond amount required has been previously reduced through the bond-release procedures.

11.3.e.3. Provisions of the Act and section 12 of this rule may be applied to both surety and escrow bond coverage during the bond term.

11.3.e.4. The surety escrow combination may be repeated successively or amended during the term by replacing the escrow account with a surety bond, and reestablishing the escrow terms and deposit rate, subject to Secretary approval.

11.3.f. Special consideration for sites with long-term postmining pollutional discharges. With the approval of the Secretary, the permittee may establish a trust fund, annuity or both to guarantee treatment of long-term postmining pollutional discharges in lieu of posting one of the bond forms listed above. The trust fund or annuity will be subject to the following conditions:

11.3.f.1. The Secretary will determine the amount of the trust fund or annuity, which must be adequate to meet all anticipated treatment needs, including both capital and operational expenses;

11.3.f.2. The trust fund or annuity must be in a form approved by the Secretary and contain all terms and conditions required by the Secretary;

11.3.f.3. The trust fund or annuity must provide that the Department of Environmental Protection is irrevocably established as the beneficiary of the trust fund or the proceeds from the annuity;

11.3.f.4. The Secretary will specify the investment objectives of the trust fund or annuity;

11.3.f.5. Termination of the trust fund or annuity may occur only as specified by the Secretary upon a determination that no further treatment or other reclamation measures are necessary, that a replacement bond or another financial instrument has been posted, or that the administration of the trust fund or annuity in accordance with its purpose requires termination;

11.3.f.6. Release of money from the trust fund or annuity may be made only upon written authorization of the Secretary or according to a schedule established in the agreement accompanying the trust fund or annuity;

11.3.f.7. A financial institution or company serving as a trustee or issuing an annuity must be one of the following:

11.3.f.7.A. A bank or trust company organized or authorized to do business in the State of West Virginia;

11.3.f.7.B. A national bank chartered by the Office of the Comptroller of the Currency;

11.3.f.7.C. An operating subsidiary of a national bank chartered by the Office of the Comptroller of the Currency;

11.3.f.7.D. An insurance company licensed or authorized to do business in the State of West Virginia by the West Virginia Insurance Commissioner or designated by the West Virginia Insurance Commissioner as an eligible surplus lines insurer; or

11.3.f.7.E. Any other financial institution or company with trust powers and with offices located in West Virginia, provided that the institution's or company's activities are examined or regulated by a State or Federal agency.

11.3.f.8. Trust funds and annuities, as described in this subdivision, must be established in a manner that guarantees that sufficient moneys will be available to pay for treatment of postmining pollution discharges (including maintenance, renovation, and replacement of treatment and support facilities as needed), the reclamation of the sites upon which treatment facilities are located and areas used in support of those facilities; and

11.3.f.9. When a trust fund or annuity is in place and fully funded, the Secretary may, pursuant to section 12 below, approve release of conventional bonds posted for a permit or permit increment; Provided, that apart from the pollution discharge and associated treatment facilities, the area fully meets all applicable reclamation requirements and the trust fund or annuity is sufficient for treatment of pollution discharges and reclamation of all areas involved in such treatment. The portion of the permit required for postmining water treatment must remain bonded. However, the trust fund or annuity may serve as that bond.

11.4. Incremental Bonding.

11.4.a. After a permit application has been approved, but before a permit is issued, the applicant shall file with the Secretary, on a form prescribed by the Secretary, a bond or bonds for performance made payable to the Secretary and conditioned upon the faithful performance of all of the requirements of the Act, the rules promulgated thereof, the permit, and the reclamation plan.

11.4.a.1. The bond 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 and reclamation operations during the initial term of the permit.

11.4.a.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 Secretary and receive approval of an additional bond or bonds to cover such increments in accordance with this section;

11.4.a.3. A cumulative bond schedule shall be submitted to the Secretary listing the areas covered by the initial bond and for the addition of other acreage as it is affected. Independent increments will be of sufficient size and configurations so as to provide for efficient reclamation operations should reclamation by the Secretary become necessary pursuant to section 12.4 of this rule.

11.4.a.4. When the applicant elects to "increment" the amount of the bond during the term of the permit, he shall identify the initial and successive areas or increments for bonding on the permit application's proposal map submitted for approval, as provided for in sections 11 and 12 of the Act and section 11 of this rule, and shall specify the bond amount to be provided for each area or increment. The minimum amount of bond furnished per increment shall be ten thousand dollars ($10,000);

11.4.a.5. An operator shall not disturb any surface areas, succeeding increments, or extend any underground shafts, tunnels or operations prior to acceptance by the Secretary of the required performance bond. The scheduled amount of each bond increment shall be filed in the sequence approved in the permit, and shall be filed with the Secretary at least thirty (30) days prior to the commencement of surface coal mining and reclamation operations in the subject incremental area.

11.5. Site Specific Bonding.

11.5.a. Applicability. After the effective date of this subsection, the four major categories of mining identified in subdivision 11.5.b of this subsection shall be subject to the site specific bonding requirements of section 12 of the Act and this subsection. The site specific bond amount for a permit in any of these categories will be determined based on criteria set forth in this subsection, and as calculated from the tables set forth in subdivisions 11.5.c, 11.5.d, 11.5.e, and 11.5.f of this subsection. Separate permits for ancillary activities, i.e., haul roads, load outs, railroad spurs and sidings, etc., will post bond in the amount prescribed in section 11 of the Act: provided. That where such activities are incorporated into a permit application for one of the four major categories, the site specific bond rate provided for herein will apply; provided, however, that the bond required shall in no case be less than one thousand dollars ($1,000), nor more than five thousand dollars($5,000) per acre or fraction thereof.

Where a permit apphcation includes two or more of the four major mining categories, the application will delineate the proposed disturbed acres for each category and the site specific per acre bond amount for each category will be calculated in accordance with the provisions of this subsection as if it were a separate permit and the respective bond amount shall be posted for each area of proposed disturbance in that category.

Where active or inactive operations are in compliance with the provisions of subsection 14.15 of this rule and coal extraction operations are completed, or nearly completed, or when the operations are eligible for or have received Phase I bond release, the site specific bond criteria of this subsection shall not apply.

All existing permits for surface mining operations in the four major categories set forth in subdivision 11.5.b of this subsection shall be reviewed by the Secretary and a determination made as to whether or not the surface mining operations are subject to the site specific bonding criteria set forth herein. The determinations shall be made in accordance with the following:

Existing permits in the four major categories described in subdivision 11.5.b of this subsection shall be reviewed by the Secretary at the time of renewal and a determination made as to the adequacy of existing bond and shall not be renewed by the Secretary until the appropriate amount of bond has been posted.

11.5.b. The four major categories of mining permits subject to the provisions of this subsection are surface mines, underground mines, coal refuse disposal sites, and coal preparation plants. The tables in subdivisions 11.5.c, 11.5.d, 11.5.e, and 11.5.f of this subsection display in matrix form the major criteria which influence the level of difficulty in achieving reclamation for the specific mining permit category. These include but are not limited to the following factors:

11.5.b.1. Cost factors which will be encountered in mine land reclamation of a forfeited site;

11.5.b.2. The risk of bond forfeiture incurred by the State;

11.5.b.3. Operator's history of performance; and

11.5.b.4 Environmental enhancement potential which may mitigate reclamation cost.

These are shown on the "x" axis of the matrix. Each of these criteria have been assigned a numerical criteria value for calculating the site specific per acre bond amount. The sum of the criteria values do not exceed 5,000, which is the maximum per acre dollar amount of the bond provided for in the Act.

Under each major criteria are listed two or more sub-criteria. These sub-criteria represent readily identifiable and quantifiable elements of a permit application. Each sub-criteria is assigned a numerical constant which when summed equals the numerical value of their respective criteria.

In order to determine the appropriate site specific bond amount for a specific permit, each sub-criteria constant is multiplied by a conversion factor which is displayed on the "y" axis of the matrix. The value of the conversion factors reflects a quantifiable element of the sub-criteria which influences the level of consideration each element must be given in determining reclamation costs or risk. The sum of the converted constants will be the total per acre bond amount for a specific permit.

11.5.c. Surface Mines. The following describes the criteria, sub-criteria, and conversion factors for the surface mines category to be applied as follows:

11.5.c.1. The criteria of excess spoil disposal is assigned a maximum criteria value of 1000 subject to the following sub-criteria constants:

11.5.c.1.A. The type of excess spoil disposal fill is assigned a sub-criteria constant of 800 subject to the following conversion factors.

11.5.c.1.A.1. Excess spoil disposal on existing solid benches created by previous mining operations is assigned a conversion factor of 0.2.

11.5.c.1.A.2. Excess spoil disposal on natural slopes (side hill fills) utilizing controlled placement technology or in valleys where controlled placement and chimney rock core construction is employed, is assigned a conversion factor of 0.5.

11.5.c.1.A.3. Excess spoil disposal in valleys where single lift durable rock construction is employed is assigned a conversion factor of 1.0.

11.5.c.1.B. Where one or more excess spoil disposal fills are proposed, a sub-criteria constant of 200 is assigned subject to the following conversion factors: provided. That where two or more fills of different types are involved, the highest conversion factor will be applied for all fills.

11.5.c.1.B.1. Two or less fills proposed in a single permit application is assigned a conversion factor of 0.2.

11.5.c.1.B.2. Two to six fills proposed for a single permit application is assigned a conversion factor of 0.6.

11.5.c.1.B.3. More than six fills proposed on a single permit application is assigned a conversion factor of 1.0.

11.5.c.2. The mining plan contained in the permit application is assigned a maximum criteria value of 1000 subject to the following sub-criteria constants:

11.5.c.2.A. The type of surface mining operation proposed in the mining plan is assigned a sub-criteria constant of 500, subject to the following conversion factors:

11.5.c.2.A.1. Where the mining plan reflects that the mining operation is predominantly of the area mining type (level or gently rolling terrain), a conversion factor of 0.2 is assigned;

11.5.c.2.A.2. Where the mining plan reflects that the mining operation is predominantly of the contour strip type (on both steep and non-steep slopes), a conversion factor of 0.6 is assigned; and

11.5.c.2.A.3. Where the mining plan reflects that the mining operation is on steep slopes and a conversion factor of 1.0 is assigned.

11.5.c.2.B. A mining plan which reflects that multiple coal seams are to be mined is assigned a sub-criteria constant of 300 subject to the following conversion factors. Splits of the same coal seam will not be considered separate seams unless the partings between the splits are on the average greater than ten feet.

11.5.c.2.B.1. Where the mining plan reflects that no more than two seams of coal are to be mined, a conversion factor of 0.2 is assigned.

11.5.c.2.B.2. Where the mining plan reflects that two to four seams of coal or splits of the same seam are proposed to be mined, a conversion factor of 0.6 is assigned.

11.5.c.2.B.3. Where the mining plan reflects that more than four coal seams or splits of the same seams are proposed to be mined, a conversion factor of 1.0 is assigned.

11.5.c.2.C. Where the mining plan proposed that auguring of the coal is proposed, a sub-criteria constant of 200 is assigned subject to the following conversion factors

11.5.c.2.C.1. Where the mining plan reflects that twenty-five percent or less of the total lineal feet of coal outcrop for all seams or of any single seam is to be augured, a conversion factor of 0.2 is assigned;

11.5.c.2.C.2. Where the mining plan reflects that more than twenty-five percent of the total lineal feet of coal outcrop for all seams or of any single seam is to be augured by conventional screw-type augers, a conversion factor of 0.6 is assigned; and

11.5.c.2.C.3. Where the mining plan reflects that highwall mining is the auguring method of choice, a conversion factor of 1.0 is assigned.

11.5.c.3. The topographic, geologic, and hydrologic criteria associated with the proposed permit application is assigned a maximum criteria value of 800, subject to the following sub-criteria constants:

11.5.c.3.A. Where the nature of the geology associated with the proposed permit area requires overburden analysis (acid/base accounting) in accordance with paragraphs 3.23.f.2 and 3.23.f.6 of this rule, a sub-criteria constant of 400 is assigned, subject to the following conversion factors.

11.5.c.3.A.1. Where, from the results of overburden analysis, a volume-weighted acid base balance calculation shows that the overburden on the proposed disturbed area contains a net excess calcium carbonate equivalent of greater than 20 tons per thousand tons of overburden, a conversion factor of 0.2 is assigned;

11.5.c.3.A.2. Where, from the results of overburden analysis, a volume-weighted acid base balance calculation shows that the overburden on the proposed disturbed area contains a net excess calcium carbonate equivalent of 10 to 20 tons per thousand tons of overburden, a conversion factor of 0.6 is assigned; and

11.5.c.3.A.3. Where, from the results of overburden analysis, a volume-weighted acid base balance calculation shows that the overburden on the proposed disturbed area contains a net excess calcium carbonate equivalent of less than 10 tons per thousand tons of overburden or a net calcium carbonate deficiency, a conversion factor of 1.0 is assigned.

11.5.c.3.B. The average steepness of slopes on the proposed permit area is assigned a sub-criteria constant of 200 subject to the following conversion factors:

11.5.c.3.B.1. Where the average slope of the proposed permit area is less than twenty percent (20%), a conversion factor of 0.2 is assigned: provided, That except for downslope placement of first cut material, where the mining plan reflects area mining or mountaintop removal utilizing excess spoil disposal sites, a conversion factor of 1.0 is assigned;

11.5.c.3.B.2. Where the average slope of the proposed permit area is between twenty (20) to forty (40) percent, a conversion factor of 0.6 is assigned: provided, That where the mining plan reflects area mining or mountaintop removal utilizing excess spoil disposal sites, a conversion factor of 1.0 is assigned; and

11.5.c.3.B.3. Where the average slope of the proposed permit area is greater than forty percent (40%), a conversion factor of 1.0 is assigned.

11.5.c.3.C. The overburden type, based on percent of total volume of overburden to be removed from the coal seam(s), is assigned a sub-criteria constant of 200, subject to the following conversion factors.

11.5.c.3.C.1. Where the overburden mass consists of less than twenty percent (20%) by volume sandstone or other highly abrasive spoil material, a conversion factor of 0.2 is assigned;

11.5.c.3.C.2. Where the overburden mass consists of between twenty to sixty percent (20% - 60%) by volume sandstone or other highly abrasive spoil material, a conversion factor of 0.6 is assigned; and

11.5.c.3.C.3. Where the overburden mass consists of greater than sixty percent (60%) by volume sandstone or other highly abrasive spoil material, a conversion factor of 1.0 is assigned.

11.5.c.4. The overall reclamation plan contained in the proposed permit application (based on size, sequence, and timing of the proposed operation) is assigned a maximum criteria value of 1200 subject to the following sub-criteria constants:

11.5.c.4.A. The mining and reclamation sequence reflected in the proposed reclamation plan governing the expediency of achieving contemporaneous reclamation is assigned a sub- criteria constant of 600 subject to the following conversion factors:

11.5.c.4.A.1. Where the proposed reclamation plan contains specific time and distance criteria which clearly identify achievable mile posts to be reached during the life of the operation, a conversion factor of 0.2 is assigned: provided. That mountaintop removal and multiple seam contour mining operations utilizing single lift durable rock excess spoil fills are assigned a conversion factor of 1.0;

11.5.c.4.A.2. Where the proposed reclamation plan contains specific time and distance criteria in an incremental bond or open-acre limit bond scenario without clearly identified achievable mile posts to be reached during the life of the operation, a conversion factor of 0.6 is assigned: provided. That mountaintop removal and multiple seam contour mining operations utilizing single lift durable rock excess spoil disposal fills, are assigned a conversion factor of 1.0; and

11.5.c.4.A.3. Where the proposed reclamation plan contains time and distance criteria expressed as percentages, or where such criteria are vague, a conversion factor of 1.0 is assigned.

11.5.c.4.B. The size of the proposed permit area in acres disturbed is assigned a sub-criteria constant of 400, subject to the following conversion factors:

11.5.c.4.B.1. Where the total proposed disturbed area is less than 200 acres, a conversion factor of 0.2 is assigned;

11.5.c.4.B.2. Where the total proposed disturbed area is 200 to 500 acres, a conversion factor of 0.6 is assigned; and

11.5.c.4.B.3. Where the total proposed disturbed area is greater than 500 acres, a conversion factor of 1.0 is assigned.

11.5.c.4.C. The type, size, numbers, and configuration of earth-moving equipment as specified in the reclamation plan is assigned a sub-criteria value of 200, subject to the following conversion factors:

11.5.c.4.C.1. Where the equipment spread(s) identified in the reclamation plan consists only of trucks, loaders, and/or dozers, and/or power shovels or draglines with bucket capacity of less than 20 cubic yards, a conversion factor of 0.2 is assigned;

11.5.c.4.C.2. Where the equipment spread(s) identified in the reclamation plan includes the use of power shovels with a bucket capacity of 20 cubic yards or greater, a conversion factor of 0.6 is assigned; and

11.5.c.4.C.3. Where the equipment spread(s) identified in the reclamation plan includes the use of one or more draglines with a bucket capacity of 20 cubic yards or greater, a conversion factor of 1.0 is assigned.

11.5.c.5. The historical performance of the applicant in terms of level of performance of mining and reclamation activities in accordance with State law is assigned a maximum criteria value of 1000, subject to the following sub-criteria constants:

11.5.c.5.A. The violation history in West Virginia of the applicant based on the average number of cessation orders and/or notices of violations with a seriousness rating of greater than 4 for all active permits held by the applicant, is assigned a sub-criteria constant of 600, subject to the following conversion factors: provided, That the violation history period includes the last full calendar year prior to the date an SMA is issued; provided, however. That when the applicant has no record of performance in the state, a conversion factor of 1.0 is assigned:

11.5.c.5.A.1. Where the average of the number of notices of violation and cessation orders per active permit is less than 3, a conversion factor of 0.2 is assigned;

11.5.c.5.A.2. Where the average of the number of notices of violation and cessation orders per active permit is 3 to 5, a conversion factor of 0.6 is assigned; and

11.5.c.5.A.3. Where the average of the number of notices of violations and cessation orders per active permit is greater than 5, a conversion factor of 1.0 is assigned.

11.5.c.5.B. The status of all active permits held by the applicant in West Virginia based on compliance with the law and this rule,, and compliance with the permits' reclamation plan during the public notice period, is assigned a sub-criteria constant of 400, subject to the following conversion factors: provided, That when the applicant holds no other permits in the state, a conversion factor of 1.0 is assigned:

11.5.c.5.B.1. Where status of full compliance (no notices of violation issued) with the law, tills rule, and the reclamation plan, and one hundred percent (100%) contemporaneous reclamation exists during the public notice period for the subject application, a conversion factor of 0.2 is assigned;

11.5.c.5.B.2. Where status of compliance with the law and this rule (no negligence on the part of the operator in abatement action on notices of violation), and ninety percent (90%) contemporaneous reclamation, a conversion factor of 0.6 is assigned; and

11.5.c.5.B.3. A status of basic compliance with the law and this rule (negligence on the part of the operator in abatement action for notices of violation) and seventy percent (70%) contemporaneous reclamation, a conversion factor of 1.0 is assigned.

11.5.c.6. Where the applicant has demonstrated success in conducting mining and reclamation operations in such a manner that environmental resources have been extraordinarily enhanced, a bond reduction credit expressed as a negative criteria value of-1800 is assigned.

11.5.c.6.A. Where the applicant has successfully carried out remining operations, a sub-criteria constant of -800 is assigned, subject to the following conversion factors:

11.5.c.6.A.1. Where the remining operation(s) have complied with the reclamation plan, but did not result in the total elimination of highwalls, and did not result in an improvement in water quality, the conversion factor of 0.2 is assigned;

11.5.c.6.A.2. Where the remining operation(s) have complied with the reclamation plan and have resulted in total elimination of highwalls and/or improved water quality, a conversion factor of 0.6 is assigned; and

11.5.c.6.A.3. Where the remining operation(s) have complied with the reclamation plan and have resulted in total highwall elimination and water quality meets effluent limits and water quality standards, a conversion factor of 1.0 is assigned.

11.5.c.6.B. Where the applicant has received recognition for excellence in reclamation through local and/or national awards, from awards programs sanctioned by a regulatory authority as defined in Public Law (95-87), a sub-criteria constant of -600 is assigned, subject to the following conversion factors:

11.5.c.6.B.1. Where the applicant has received one local award but no national awards, a conversion factor of 0.2 is assigned;

11.5.c.6.B.2. Where the applicant has received more than one local award but no national awards, a conversion factor of 0.6 is assigned; and

11.5.c.6.B.3. Where the applicant has received both local and national awards, a conversion factor of 1.0 is assigned.

11.5.c.6.C. Where the applicant has demonstrated a history of restoration, development, or enhancement of wetlands in the State, a sub-criteria constant of -400 is assigned, subject to the following conversion factors:

11.5.c.6.C.1. Where the total cumulative area of wetlands restored, developed, or improved is less than one acre, a conversion factor of 0.2 is assigned;

11.5.c.6.C.2. Where the total cumulative area of wetlands restored, developed, or enhanced is between 1 and 5 acres, a conversion factor of 0.6 is assigned; and

11.5.c.6.C.3. Where the total cumulative area of wetlands restored, developed, or enhanced is greater than 5 acres, a conversion factor of 1.0 is assigned.

11.5.d. Underground Mines. The following describes the criteria, sub-criteria, and conversion factors for the category of underground mines to be applied as follow:

11.5.d.1. The criteria of availability of backfill material to be used to backfill the mine faceup area and eliminate highwalls, is assigned a maximum criteria value of 1200, subject to the following sub-criteria constants:

11.5.d.1.A. The haulage distance in miles from the portal area to the stockpiled or otherwise available backfilling material (such as borrow pits) is assigned a sub-criteria constant of 600, subject to the following conversion factors: provided. That for underground mines which involve slopes or vertical shafts as main portals, a conversion factor of 1.0 is assigned:

11.5.d.1.A.1. Where the backfill material is less than one-fourth mile from the portal area, a conversion factor of 0.2 is assigned;

11.5.d.1.A.2. Where the backfill material is between one-fourth and one-half mile from the portal area, a conversion factor of 0.6 is assigned; and

11.5.d.1.A.3. Where the backfill material is over one-half mile from the portal area, a conversion factor of 1.0 is assigned.

11.5.d.1.B. The volume of backfilling material, measured in cubic yards, which must be transported from the storage or borrow area to the face-up area in order to achieve reclamation, is assigned a sub-criteria constant of 400, subject to the following conversion factors: provided. That for underground mines which involve slopes or vertical shafts as main portals, a conversion factor of 1.0 is assigned;

11.5.d.1.B.1. Where the amount of material necessary to backfill and reclaim the faceup area is less than one hundred thousand cubic yards, a conversion factor of 0.2 is assigned;

11.5.d.1.B.2. Where the amount of material necessary to backfill and reclaim the faceup area is between one hundred and two hundred fifty thousand cubic yards, a conversion factor of 0.6 is assigned; and

11.5.d.1.B.3. Where the amount of material necessary to backfill and reclaim the faceup area is over two hundred fifty thousand cubic yards, a conversion factor of 1.0 is assigned.

11.5.d.1.C. The topographic location of the stockpiled or otherwise available backfill material relative to the coal seam being mined is assigned a sub-criteria constant of 200, subject to the following conversion factors: provided. That underground mines which involve slopes or vertical shafts as main portals, a conversion factor of 1.0 is assigned:

11.5.d.1.C.1. Where the available backfill material is located above the coal seam, a conversion factor of 0.2 is assigned;

11.5.d.1.C.2. Where the available backfill material is located at the same level as the coal seam being mined, a conversion factor of 0.6 is assigned; and

11.5.d.1.C.3. Where the available backfill material is located below the coal seam being mined, a conversion factor of 1.0 is assigned.

11.5.d.2. The topographic, geologic, and hydrologic features of the proposed mine site are assigned a maximum criteria value of 1200, subject to the following sub-criteria constants:

11.5.d.2.A. The acid/base accounting analysis of the coal seam to be mined, including four feet of material above and four feet of material below the coal seam, is assigned a sub-criteria constant of 600, subject to the following conversion factors:

11.5.d.2.A.1. Where, as determined from the results of an acid/base balance calculation, the coal seam and associated strata have a net excess calcium carbonate equivalent of greater than twenty tons per thousand tons of material, a conversion factor of 0.2 is assigned;

11.5.d.2.A.2. Where, as determined from the results of an acid/base balance calculation, the coal seam and associated strata have a net excess calcium carbonate equivalent of between ten and twenty tons per thousand tons of material, a conversion factor of 0.6 is assigned; and

11.5.d.2.A.3. Where, as determined from the results of an acid/base balance calculation, the coal seam and associated strata have a net excess calcium carbonate equivalent of less than ten tons per thousand tons of material or a net calcium carbonate deficiency, a conversion factor of 1.0 is assigned.

11.5.d.2.B. The average steepness of slopes on the proposed permit area is assigned a sub-criteria constant of 400, subject to the following conversion factors: provided. That for underground mines which involve slopes or vertical shafts as main portals, a conversion factor of 1.0 is assigned:

11.5.d.2.B.1. Where the average slope of the proposed permit area is less than twenty percent (20%), a conversion factor of 0.2 is assigned;

11.5.d.2.B.2. Where the average slope of the proposed permit area is between twenty (20) to forty (40) percent, a conversion factor of 0.6 is assigned; and

11.5.d.2.B.3. Where the average slope of the proposed permit area is greater than forty percent (40%), a conversion factor of 1.0 is assigned.

11.5.d.2.C. The type of backfilling material which must be handled in order to backfill and reclaim the face-up area is assigned a sub-criteria constant of 200, subject to the following conversion factors:

11.5.d.2.C.1. Where the backfilling material consists of less than twenty percent (20%) sandstone or other abrasive material, a conversion factor of 0.2 is assigned;

11.5.d.2.C.2. Where the backfilling material consists of between twenty and sixty percent (20% and 60%) sandstone or other abrasive material, a conversion factor of 0.6 is assigned; and

11.5.d.2.C.3. Where the backfilling material consists of greater than sixty percent (60%) sandstone or other abrasive material, a conversion factor of 1.0 is assigned.

11.5.d.3. The overall reclamation plan contained in the proposed permit application is assigned a maximum criteria value of 1200, subject to the following sub-criteria constants:

11.5.d.3.A. The size of the proposed permit area in acres disturbed is assigned a sub-criteria value of 800, subject to the following conversion factors:

11.5.d.3.A.1. Where the proposed disturbed area is less than three acres, a conversion factor of 0.2 is assigned;

11.5.d.3.A.2. Where the proposed disturbed area is between three and ten acres, a conversion factor of 0.6 is assigned; and

11.5.d.3.A.3. Where the proposed disturbed area is greater than ten acres, a conversion factor of 1.0 is assigned.

11.5.d.3.B. The mining and reclamation sequence expressed in terms of the time in years to complete mining and reclamation is assigned a sub-criteria constant of 400, subject to the following conversion factors.

11.5.d.3.B.1. Where the proposed time required to complete mining and reclamation is less than three years, a conversion factor of 0.2 is assigned;

11.5.d.3.B.2. Where the proposed time required to complete mining and reclamation is between three and ten years, a conversion factor of 0.6 is assigned; and

11.5.d.3.B.3. Where the proposed time required to complete mining and reclamation is greater than ten years, a conversion factor of 1.0 is assigned.

11.5.d.4. Coal preparation plants, coal refuse disposal sites, and other associated ancillary facilities which are proposed for construction as part of the proposed application for underground mines is assigned a maximum criteria value of 800.

11.5.d.4.A. A coal preparation plant is assigned a sub-criteria constant of 400, subject to the following conversion factors:

11.5.d.4.A.1. Where the facility has a maximum capacity of processing less than 200 tons of raw coal per hour, a conversion factor of 0.2 is assigned;

11.5.d.4.A.2. Where the facility has a maximum capacity of processing between 200 and 500 tons of raw coal per hour, a conversion factor of 0.6 is assigned; and

11.5.d.4.A.3. Where the facility has a maximum capacity of processing greater than 500 tons of raw coal per hour, a conversion factor of 1.0 is assigned.

11.5.d.4.B. The size in acres of a proposed coal refuse disposal site is assigned a sub-criteria constant of 400, subject to the following conversion factors:

11.5.d.4.B.1. Where the size of the proposed coal refuse disposal site is five acres or less, a conversion factor of 0.2 is assigned;

11.5.d.4.B.2. Where the size of the coal refuse disposal site is between five and ten acres, a conversion factor of 0.6 is assigned; and

11.5.d.4.B.3. Where the size of the proposed coal refuse disposal site is greater than ten acres, a conversion factor of 1.0 is assigned.

11.5.d.5. The historical performance of the applicant in terms of level of performance of mining and reclamation activities in accordance with state law is assigned a maximum criteria value of 600, subject to the following sub-criteria constants:

11.5.d.5.A. The violation history in West Virginia of the applicant based on the average number of cessation orders and/or notices of violation with a seriousness rating of greater than 4, and any cessation order for all active permits, is assigned sub-criteria constant of 400, subject to the following conversion factors: provided. That the violation history period includes the last full calendar year prior to the date an SMA is issued; provided, however. That when the applicant has no record of performance in the state, a conversion factor of 1.0 is assigned:

11.5.d.5.A.1. Where the average number of notices of violation and cessation orders per active permit is less than 3, a conversion factor of 0.2 is assigned;

11.5.d.5.A.2. Where the average number of notices of violation and cessation orders per active permit is between 3 and 5, a conversion factor of 0.6 is assigned; and

11.5.d.5.A.3. Where the average number of notices of violation and cessation orders per active permit is greater than 5, a conversion factor of 1.0 is assigned.

11.5.d.5.B. The status of all active permits held by the applicant in West Virginia, based on compliance with the law and this rule and compliance with the permits reclamation plan during the public notice period for the subject proposed application is assigned a sub-criteria constant of 200, subject to the following conversion factors; provided, That where the applicant holds no other permits in the state a conversion factor of 1.0 is assigned:

11.5.d.5.B.1. Where a status of full compliance (no notices of violation are issued) with the law, this rule, and the reclamation plan and one hundred percent (100%) contemporaneous reclamation exists, a conversion factor of 0.2 is assigned;

11.5.d.5.B.2. Where a status of compliance with the law and this rule (no negligence on the part of the operator in abatement action on outstanding notices of violation) and ninety percent (90%) contemporaneous reclamation exists, a conversion factor of 0.6 is assigned; and

11.5.d.5.B.3. Where a status of basic compliance exists with the law and this rule, (negligence on the part of the operator in abatement action for outstanding notices of violation) and seventy percent (70%) contemporaneous reclamation exists, a conversion factor of 1.0 is assigned.

11.5.d.6. Where the applicant has demonstrated success in conducting mining and reclamation operations in such a manner that environmental resources have been extraordinarily enhanced, a bond reduction credit, expressed as a negative criteria value, of -1000 is assigned, subject to the following sub-criteria constants:

11.5.d.6.A. Grratuitous reclamation or restoration of abandoned coal mining areas by the applicant, as part of a surface or underground mining operation under permit by the applicant is assigned a sub-criteria constant of -600, subject to the following conversion factors:

11.5.d.6.A.1. Where the cumulative area of gratuitous reclamation is less than one acre, a conversion factor of 0.2 is assigned;

11.5.d.6.A.2. Where the cumulative area of gratuitous reclamation is between one and five acres, a conversion factor of 0.6 is assigned; and

11.5.d.6.A.3. Where the cumulative area of gratuitous reclamation is greater than five acres, a conversion factor of 1.0 is assigned.

11.5.d.6.B. Where the applicant has received recognition for excellence in reclamation through local and/or national awards from awards programs sanctioned by any regulatory authority as defined in Public Law 95-87, a sub-criteria constant of -400 is assigned, subject to the following conversion factors:

11.5.d.6.B.1. Where the applicant has received one local award, but no national awards, a conversion factor of 0.2 is assigned;

11.5.d.6.B.2. Where the applicant has received more than one local award, but no national awards, a conversion factor of 0.6 is assigned; and

11.5.d.6.B.3. Where the applicant has received both local and national awards, a conversion factor of 1.0 is assigned.

11.5.d.6.C. Where the applicant has demonstrated a history of restoration, development, or enhancement of wetlands, a sub-criteria constant of-200 is assigned, subject to the following conversion factors:

11.5.d.6.C.1. Where the cumulative area of wetlands which have been restored, developed, or enhanced is less than one acre, a conversion factor of 0.2 is assigned;

11.5.d.6.C.2. Where the cumulative area of wetlands which have been restored, developed, or enhanced is between one and five acres, a conversion factor of 0.6 is assigned; and

11.5.d.6.C.3. Where the cumulative area of wetlands which have been restored, developed, or enhanced is greater than five acres, a conversion factor of 1.0 is assigned.

11.5.e. Coal Preparation Plants. The following describes the criteria, sub-criteria, and conversion factors for the category of coal preparation plants (which excludes coal-loading facilities) to be applied as follows:

11.5.e.1. The criteria of size is assigned a maximum criteria value of 1600, subject to the following sub-criteria constants:

11.5.e.1.A. The capacity of the specific plant in tons per hour of coal which the plant is designed to process is assigned a sub-criteria constant of 1000, subject to the following conversion factors:

11.5.e.1.A.1. Where the coal processing plant is designed to process less than 200 tons of raw coal per hour, a conversion factor of 0.2 is assigned;

11.5.e.1.A.2. Where the coal processing plant is designed to process between 200 and 750 tons of raw coal per hour, a conversion factor of 0.6 is assigned; and

11.5.e.1.A.3. Where the coal preparation plant is designed to process over 750 tons of raw coal per hour, a conversion factor of 1.0 is assigned.

11.5.e.1.B. The cumulative storage capacity of all proposed or existing coal storage silos is assigned a sub-criteria constant of 400, subject to the following conversion factors:

11.5.e.1.B.1 Where the silos are designed to store less than 2,500 tons of coal, a conversion factor of 0.2 is assigned;

11.5.e.1.B.2. Where the silos are designed to store between 2,500 and 5,000 tons of coal, a conversion factor of 0.6 is assigned; and

11.5.e.1.B.3. Where the proposed or existing silos are designed to store more than 5,000 tons of coal, a conversion factor of 1.0 is assigned.

11.5.e.1.C. The size in acres of the coal stockpile loading and operating area of the facility is assigned a sub-criteria constant of 200, subject to the following conversion factors:

11.5.e.1.C.1. Where the coal stockpile and operating area of the facility is less than five acres, a conversion factor of 0.2 is assigned;

11.5.e.1.C.2. Where the coal stockpile and operating area of the facility is between five acres and ten acres, a conversion factor of 0.6 is assigned; and

11.5.e.1.C.3. Where the coal stockpile and operating area of the facility is greater than ten acres, a conversion factor of 1.0 is assigned.

11.5.e.2. The proposed construction of a coal refuse disposal site in conjunction with a coal preparation plant, or the use of an existing coal refuse disposal site is assigned a maximum criteria value of 1000, subject to the following sub-criteria constants:

11.5.e.2.A. The capacity of a coal refuse disposal site to impound water or slurry is assigned a sub-criteria constant of 800, subject to the following conversion factors:

11.5.e.2.A.1. Where the impounding capacity of the coal refuse disposal site is less than twenty acre/feet, a conversion factor of 0.2 is assigned;

11.5.e.2.A.2. Where the impounding capacity of the coal refuse disposal site is between twenty and fifty acre/feet, a conversion factor of 0.6 is assigned; and

11.5.e.2.A.3. Where the impounding capacity of the coal refuse disposal facility is greater than fifty acre/feet, a conversion factor of 1.0 is assigned.

11.5.e.2.B. A non-impounding coal refuse disposal site is assigned a sub-criteria constant of 200 based on its size in acres and subject to the following conversion factors:

11.5.e.2.B.1. Where a non-impounding coal refuse disposal site is less than ten acres in size, a conversion factor of 0.2 is assigned;

11.5.e.2.B.2. Where a non-impounding coal refuse disposal site is between ten and twenty acres, a conversion factor of 0.6 is assigned; and

11.5.e.2.B.3. Where a non-impounding coal refuse disposal site is greater than twenty acres in size, a conversion factor of 1.0 is assigned.

11.5.e.3. The reclamation plan for the coal preparation plant is assigned a maximum criteria value of 1200, subject to the following criteria constants:

11.5.e.3.A. The total disturbed area upon which the coal preparation plant and all ancillary facilities included in the permit is located and operated is assigned a sub-criteria constant of 800, subject to the following conversion factors:

11.5.e.3.A.1. Where the total disturbed area is less than twenty acres, a conversion factor of 0.2 is assigned;

11.5.e.3.A.2. Where the total disturbed area is between twenty and fifty acres, a conversion factor of 0.6 is assigned; and

11.5.e.3.A.3. Where the total disturbed area is greater than fifty acres, a conversion factor of 1.0 is assigned.

11.5.e.3.B. For the length of time in which the coal preparation plant is projected to be in operation a sub-criteria constant of 400 is assigned, subject to the following conversion factors:

11.5.e.3.B.1. Where the length of duration for the plant is less than five years, a conversion factor of 0.2 is assigned;

11.5.e.3.B.2. Where the length of duration of the plant is between five and ten years, a conversion factor of 0.6 is assigned; and,

11.5.e.3.B.3. Where the length of duration of the plant is greater than ten years, a conversion factor of 1.0 is assigned.

11.5.e.4. The history of performance of the applicant in terms of level of performance of mining and reclamation activities in accordance with State law is assigned a maximum criteria value of 1200, subject to the following sub-criteria constants:

11.5.e.4.A. The violation history in West Virginia of the applicant based on the average number of cessation orders and/or notices of violations with a seriousness rating of greater than 4, and any cessation orders for all active permits is assigned a sub-criteria constant of 800 subject to the following conversion factors: provided. That the violation history period includes only the last full calendar year prior to the date an SMA is issued: provided, however. That where the applicant has no record of performance in the state, a conversion factor of 1.0 is assigned:

11.5.e.4.A.1. When the average number of notices of violation and cessation orders per active permit is less than 3, a conversion factor of 0.2 is assigned;

11.5.e.4.A.2. When the average number of notices of violation and cessation orders per active permit is between three and five, a conversion factor of 0.6 is assigned; and

11.5.e.4.A.3. When the average number of notices of violation and cessation orders per active permit of greater than five, a conversion factor of 1.0 is assigned.

11.5.e.4.B. The status of all active permits held by the applicant in West Virginia based on compliance with the law and this rule and compliance with the reclamation plan for these permits during the terms of the public notice for the proposed application is assigned a sub-criteria constant of 400, subject to the following conversion factors; provided, That when the applicant holds no permits in the state, a conversion factor of 1.0 is assigned:

11.5.e.4.B.1. A status of full compliance (no notices of violation are issued) with the laws, this rule, and the reclamation plan, and one hundred percent (100%) contemporaneous reclamation is assigned a conversion factor of 0.2;

11.5.e.4.B.2. A status of compliance (no negligence on the part of the operator in abatement action on outstanding notices of violation) and ninety percent (90%) contemporaneous reclamation exists, a conversion factor of 0.6 is assigned; and

11.5.e.4.B.3. A status of basic compliance with the law and this rule, (negligence on the part of the operator in abatement action for notices of violation) and seventy percent (70%) contemporaneous reclamation exists, a conversion factor of 1.0 is assigned.

11.5.e.5. Where the applicant has demonstrated success in conducting mining and reclamation operations in such a manner that environmental resources have been extraordinarily enhanced, a bond reduction credit expressed as a negative criteria value of no greater than -1000 is assigned subject to the following sub-criteria constants:

11.5.e.5.A. Where the applicant has received recognition for excellence in reclamation through local and/or national awards, from awards programs sanctioned by any regulatory authority as defined in Public Law 95-87, a sub-criteria constant of -600 is assigned:

11.5.e.5.A.1. Where the applicant has received one local award but no national awards, a conversion factor of 0.2 is assigned;

11.5.e.5.A.2. Where the applicant has received one or more local awards but no national awards, a conversion factor of 0.6 is assigned; and

11.5.e.5.A.3. Where the applicant has received one or more local and/or national awards, a conversion factor of 1.0 is assigned.

11.5.e.5.B. Where the applicant has demonstrated a history of restoration, development, or enhancement of wetlands, a sub-criteria constant of-400 is assigned, subject to the following conversion factors:

11.5.e.5.B.1. Where the total cumulative area of wetlands which have been restored, developed, or enhanced is one acre or less, a conversion factor of 0.2 is assigned;

11.5.e.5.B.2. Where the total cumulative area of wetlands which have been restored, developed, or enhanced is between one and five acres, a conversion factor of 0.6 is assigned; and

11.5.e.5.B.3. Where the total cumulative area of wetlands which have been restored, developed, or enhanced is greater than five, a conversion factor of 1.0 is assigned.

11.5.f. Coal Refuse Disposal Sites. The following describes the criteria, sub-criteria and conversion factors for the category of coal refuse disposal sites to be applied as follows:

11.5.f.1. The size of coal refuse disposal sites in terms of volumes of material and impounding capacity is assigned a maximum criteria value of 1200, subject to the following sub-criteria constants:

11.5.f.1.A. The capacity of the coal refuse disposal site to impound water is assigned a sub-criteria constant of 1200 subject to the following conversion factors:

11.5.f.1.A.1. Where the impounding capacity of the coal refuse disposal site is less than fifty acre/feet, a conversion factor of 0.2 is assigned;

11.5.f.1.A.2. Where the impounding capacity of the coal refuse disposal site is between fifty acre/feet and one hundred acre/feet, a conversion factor of 0.6 is assigned; and

11.5.f 1.A.3. Where the impounding capacity of the coal refuse disposal site is greater than one hundred acre/feet, a conversion factor of 1.0 is assigned.

11.5.f.1.B. The total permitted size in acres of a non-impounding coal refuse disposal site is assigned a sub-criteria constant of 1000, subject to the following conversion factors:

11.5.f.1.B.1. Where the size of the proposed coal refuse disposal site is twenty acres or less, a conversion factor of 0.2 is assigned;

11.5.f.1.B.2. Where the total permitted size of the coal refuse disposal site is between twenty and fifty acres, a conversion factor of 0.6 is assigned; and

11.5.f.1.B.3. Where the size of the proposed coal refuse disposal site is greater than fifty acres, a conversion factor of 1.0 is assigned.

11.5.f.2. The topography, geology, and water quality considerations of an impounding or non-impounding coal refuse disposal site is assigned a maximum criteria value of 1800, subject to the following sub-criteria constants:

11.5.f.2.A. The average slope of the area upon which the coal refuse disposal site is located is assigned a sub-criteria constant of 1000, subject to the following conversion factors. Where the site is located in a valley, the determining slope measurements will be taken from below the projected toe of the site to above the projected finished level:

11.5.f.2.A.1. Where the average slope of the area on which the coal refuse disposal site is located is less than seven percent (7%), a conversion factor of 0.2 is assigned;

11.5.f.2.A.2. Where the average slope of the area on which the coal refuse disposal site is located is between seven and ten percent (7% and 10%), a conversion factor of 0.6 is assigned; and

11.5.f.2.A.3. Where the average slope of the area on which the coal refuse disposal site is located is greater than ten percent (10%), a conversion factor of 1.0 is assigned.

11.5.f.2.B. The acid/base accounting value of the coal refuse is assigned a sub-criteria constant of 800, subject to the following conversion factors:

11.5.f.2.B.1. Where the acid/base accounting analysis indicates a net excess of greater than twenty tons of calcium carbonate per thousand tons of material, a conversion factor of 0.2 is assigned;

11.5.f.2.B.2. Where the acid/base accounting analysis indicates a net excess of between ten and twenty tons of calcium carbonate equivalents per thousand tons of material, a conversion factor of 0.6 is assigned; and

11.5.f.2.B.3. Where the acid/base accounting analysis indicates less than ten tons net excess of calcium carbonate equivalents per thousand tons of material or a net calcium carbonate deficiency, a conversion factor of 1.0 is assigned.

11.5.f.3. The reclamation plan for the proposed coal refuse disposal site is assigned a maximum criteria value of 1000, subject to the following sub-criteria constants:

11.5.f.3.A. The requirements for and the availability of topsoil to cover the coal refuse disposal site for the purposes of establishing vegetation is assigned a sub-criteria constant of 600, subject to the following conversion factors:

11.5.f.3.A.1. Where the coal refuse disposal site requires top soiling and the top soil or topsoil substitute material is available on site, a conversion factor of 0.2 is assigned;

11.5.f.3.A.2. Where the coal refuse disposal site requires top soiling and the topsoil or topsoil substitute material must be transported from adjacent off-site areas, a conversion factor of 0.6 is assigned; and

11.5.f.3.A.3. Where the coal refuse disposal site can be direct seeded, a conversion factor of 1.0 is assigned.

11.5.f.3.B. The projected life of the coal refuse disposal site in terms of years of operation is assigned a sub-criteria constant of 400, subject to the following conversion factors:

11.5.f.3.B.1. Where the projected life of the coal refuse disposal site is less than five years, a conversion factor of 0.2 is assigned;

11.5.f.3.B.2. Where the projected life of the coal refuse disposal site is between five and twenty years, a conversion factor of 0.6 is assigned; and

11.5.f.3.B.3. Where the projected life of the coal refuse disposal site is greater than twenty years, a conversion factor of 1.0 is assigned.

11.5.f.4. The historical performance of the operating company in terms of level of performance of mining and reclamation activities in accordance with state law is assigned a maximum criteria value of 1000, subject to the following sub-criteria constants:

11.5.f.4.A. The violation history in West Virginia of the applicant based on the average number of notices of violation with a seriousness rating of greater than 4, and any cessation order for all active permits, is assigned a sub-criteria constant of 600, subject to the following conversion factors: provided, That the violation history period includes only the last full calendar year prior to the date an SMA is assigned; provided, however. That when the applicant has no record performance in the state, a conversion factor of 1.0 is assigned:

11.5.f.4.A.1. Where the average number of notices of violation and cessation orders per active permit is less than 3, a conversion factor of 0.2 is assigned;

11.5.f.4.A.2. Where the average number of notices of violation and cessation orders per active permit is between 3 and 5, a conversion factor of 0.6 is assigned; and

11.5.f.4.A.3. Where the average number of notices of violation and cessation orders per active permit is greater than 5, a conversion factor of 1.0 is assigned.

11.5.f.4.B. The status of all active permits held by the applicant in West Virginia, based on compliance with the law and this rule, and compliance with the permits reclamation plan during the public notice period for the subject proposed application is assigned a sub-criteria constant of 400, subject to the following conversion factors; provided, however. That where the applicant holds no permits in the state, a conversion factor of 1.0 is assigned:

11.5.f.4.B.1. Where a status of full compliance (no notices of violations were issued) with the law, this rule, and the reclamation plan and one hundred percent (100%) contemporaneous reclamation exists, a conversion factor of 0.2 is assigned;

11.5.f.4.B.2. Where a status of compliance exists with the law and this rule (no negligence on the part of the operator in abatement action on notices of violation) and ninety percent (90%) concurrent reclamation, a conversion factor of 0.6 is assigned; and

11.5.f.4.B.3. Where a status of basic compliance exits with the law and this rule, (negligence on the part of the operator in abatement action for notices of violation) and seventy percent (70%) concurrent reclamation, a conversion factor of 1.0 is assigned.

11.5.f.5. Where the applicant has demonstrated success in conducting mining and reclamation operations in such a manner that environmental resources have been extraordinarily enhanced, a bond reduction credit, expressed as a negative criteria value, of no greater than-500 is assigned, subject to the following sub-criteria constants:

11.5.f.5.A. Where the applicant has received recognition for excellence in reclamation through local and/or national awards, from awards programs sanctioned by any regulatory authority as defined in Public Law 95-87, a sub-criteria constant of -300 is assigned, subject to the following conversion factors:

11.5.f.5.A.1. Where the applicant has received one local award, but no national awards, a conversion factor of 0.2 is assigned;

11.5.f.5.A.2. Where the applicant has received more than one local award, but no national awards, a conversion factor of 0.6 is assigned; and

11.5.f.5.A.3. Where the applicant has received both local and national awards, a conversion factor of 1.0 is assigned.

11.5.f.5.B. Where the applicant has demonstrated a history of restoration, development, or enhancement, a sub-criteria constant of -200 is assigned, subject to the following conversion factors:

11.5.f.5.B.1. Where the cumulative area of wetlands which have been restored, developed, or enhanced is less than one acre, a conversion factor of 0.2 is assigned;

11.5.f.5.B.2. There the cumulative area of wetlands which have been restored, developed, or enhanced is between one and five acres, a conversion factor of 0.6 is assigned; and

11.5.f.5.B.3. Where the cumulative area of wetlands which have been restored, developed, or enhanced is greater than five acres, a conversion factor of 1.0 is assigned

11.5.g. When the applicant believes that the per-acre amount of the bond derived pursuant to this subsection is inappropriate, the calculated amount of the bond may be rebutted as follows:

11.5.g.1. The applicant shall set forth in writing the reasons why it is believed that the bond amount is inappropriate to include a statement as to the amount which is believed to be appropriate.

11.5.g.2. Upon receipt of the written rebuttal the Secretary shall within fifteen (15) days hold an informal conference with the applicant to hear arguments as to the rebutted bond amount.

11.5.g.3. The Secretary shall issue a written decision within five (5) days following the informal conference setting forth a final bond amount.

11.5.g.4. The applicant may file an appeal of the Secretary's decision in accordance with W.Va. Code § 22-3-21.

11.6 Selective Husbandry Practices. The Secretary may approve selective husbandry practices, excluding augmented seeding, fertilization or irrigation, without extending the period of bond liability if the permittee can demonstrate that discontinuance of such measures after the liability period expires will not reduce the probability of permanent revegetation success.

Approved husbandry practices shall be limited to pest and vermin control, pruning and any reseeding and/or transplanting specifically necessitated by such actions, but shall be normal conservation practices within the region for unmined lands having land uses similar to the approved postmining land use of the area covered by the bond.

W. Va. Code R. § 38-2-11