020-12 Wyo. Code R. § 12-2

Current through April 27, 2019

Section 12-2 - Bonding and Insurance Procedures

(a) For surface coal mining operations, the following two types of bond calculations shall be required for setting a single bond amount:

• (i) Area Bond: This bond calculation shall be no less than the estimated cost of completing the maximum amount of rough backfilling during the annual bonding period set forth in W.S. §§ 35-11-411 and 35-1 l-417(c), in order to meet the applicable rough backfilling standards in Chapter 4 of these regulations and any other rough backfilling requirements of the approved permit.

• (ii) Incremental Bond: This bond calculation shall be no less than the estimated cost of performing all reclamation requirements other than those covered by (a)(i) above, during the annual bonding period in order to meet the standards of the Act, the regulations, and the provisions of the permit.

(b) For purposes of determining bond amounts, the estimated cost shall include all costs necessary, expedient or incidental to achieve required rough backfilling and reclamation. This shall reflect the probable difficulty of reclaiming the affected lands, giving consideration, as applicable, to such factors as topography, geology of the site, hydrology and revegetation potential. The estimated cost shall be based on the operator's cost estimate submitted with the permit, plus the Administrator's estimate of the additional cost to the State of bringing in personnel and equipment should the operation fail or the site be abandoned, plus an additional amount covering reclamation cost for any land which may reasonably be expected to be affected, as determined by the Administrator's assessment of the applicant's mine plan, prior to filing the renewal bond. All bonds shall be calculated on, and never fall below, the amount necessary to assure that the operator shall faithfully perform all requirements of the Act and comply with all rules and regulations and any provisions of the approved permit.

(c) Upon receipt of the annual report required by W.S. § 35-11-411, the Administrator shall publish a notice in a newspaper of general circulation in the locality of the mining operation, notifying all interested persons that the annual report is available for review, and that the renewal area and incremental bond calculations will be determined. Interested persons may submit information relating to the bond amounts within 30 days of the notice. This information, together with information submitted by the operator and developed by the Division, shall be considered by the Administrator and Director in setting bond amounts.

(d) Liability.

• (i) Liability under the bond(s) shall be for the entire permit area.

• (ii) Liability under the area bond shall be for a duration sufficient to assure that all rough backfilling has been achieved pursuant to the applicable standards of Chapter 4, Section 2.(b) and the approved permit.

• (iii) Liability under the incremental bond shall be for the entire duration of the operation and for the ten-year period of revegetation responsibility described in Chapter 4, Section 2(d). The liability period and area for an incremental bond may be limited if it is posted and approved to guarantee only specific increments of reclamation within the permit. Actions of third persons to implement an approved alternative postmining land use, which are beyond the control of the permittee or operator need not be covered by the bond.

• (iv) Isolated increments of bonded land.
  • (A) Isolated and clearly defined portions of the permit area requiring extended liability or limited areas or increments being assessed a specific bond amount may be separated from the original area and bonded separately with the approval of the Administrator.
  • (B) Such areas shall be of sufficient size and configuration and not constitute a scattered, intermittent, or checkerboard pattern to provide for efficient reclamation operations should reclamation by the Administrator become necessary pursuant to Section 2(b) of this Chapter.
  • (C) Access to the isolated areas for remedial work may be included in the area under extended liability if deemed necessary by the Administrator.

(e) A permittee may request reduction of the amount of either the area or incremental bond upon submission of evidence to the Administrator proving that the permittee's method of operation or other circumstances will reduce the estimated cost to the State for reclamation. This reduction of bond shall be deemed a bond adjustment if the reduction is based on a change in method of operation or a decrease in the number of acres projected to be disturbed. If the reduction is due to a decrease in the number of acres that have already been disturbed to account for areas partially reclaimed, then the request for reduction will be considered a request for partial bond release in accordance with the procedures of Chapter 15.

(f) A corporate surety shall not be considered good and sufficient for purposes of W.S. § 35-11-417(b) unless:

• (i) It is licensed to do business in the State;

• (ii) The estimated bond amount does not exceed the limit of risk as provided for in W.S. § 26-5-110, nor raise the total of all bonds held by the applicant under that surety above three times the limit of risk;

• (iii) The surety agrees:
  • (A) Not to cancel bond, except as provided for in W.S. § 35-11-419 or where the Administrator approves a good and sufficient replacement surety with transfer of the liability that has accrued against the permittee on the permit area;
  • (B) To be jointly and severally liable with the permittee; and
  • (C) To provide notice to the Administrator and operator once it becomes unable or may become unable due to any action filed against it to fulfill its obligations under the bond.

(g) The provisions applicable to cancellation of the surety's license in W.S. § 35-11-420 shall also apply if for any other reason the surety becomes unable to fulfill its obligations under the bond. Upon such occurrence the operator shall provide the required notice. Failure to comply with this provision shall result in suspension of the permit.

(h) The Administrator shall not accept an individual certificate of deposit in an amount in excess of $ 100,000 or the maximum insurable amount as determined by the FDIC or the Federal Savings and Loan Insurance Corporation. Such certificates of deposit shall be made payable to the Department both in writing and upon the records of the bank issuing these certificates. The Administrator shall require the banks issuing these certificates to waive all rights of setoff or liens against the certificates. The bond amount may be calculated to include any amount which would be deducted as a penalty for payment before maturity.

(i) Minimum insurance coverages for the public liability insurance policy required in W.S. § 35 - 1 l-406(a)(xiii) shall be $300,000 for each occurrence of bodily injury or property damage, and $500,000 aggregate.

(j) The public insurance liability policy shall include a rider requiring that the insurer notify the Administrator whenever substantive changes are made in the policy, including any termination or failure to renew. The policy shall be maintained in full force during the life of the permit or any renewal thereof, including the liability period necessary to complete all reclamation operations.

020-12 Wyo. Code R. § 12-2