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Handling Of Financial Security Instruments

Mined Land Reclamation Technical Guidance, MLR-95-1

October 18, 1995

To: Regional Supervisors of Natural Resources

From: Gregory H. Sovas, Director, Division of Mineral Resources

SUBJECT: Technical Guidance Memorandum #MN 95-1 MLR
Handling of Financial Security Instruments and Clarification of
Financial Security Calling Procedures

This document is intended to outline new procedures and clarify existing procedures in regard to the handling of financial security instruments as referenced in Environmental Conservation Law, Section 23-2715 (New York State Mined Land Reclamation Law) and 6 NYCRR Parts 420-425.

The major responsibility for administration of the financial security portion of the Mined Land Reclamation program has been shifted to the central office. This document has been prepared in order to standardize procedures throughout the State.

This document also provides guidance on general calling procedures for all types of financial security. It includes an overview of the circumstances which would lead up to calling financial security as well as exact steps to be taken by regional and central office staff. Also included are sample form letters to be used by all regions and new financial security forms, and a disk with form letters you will need.

Please place this memo in the notebooks containing the other technical guidance memos.

I. Paperwork Flow and General Procedures for New Permit and Transfer of Mine

The majority of the administration of the financial security portion of the Mined Land Reclamation program has been shifted to the central office. However, in order to ensure that the program is properly administered, there needs to be a clear delineation of responsibility between the central and regional offices.

The following is a narrative breakdown of responsibilities for the different aspects of the program.

Financial Security Instruments

For all permit applications, the regional MLRS will determine the amount of financial security requirement. The Division of Regulatory Services (DRS) will be informed of the amount as part of the standard technical review. DRS will continue to coordinate letters of completeness with applicant including informing permittee of financial security amount. The regional MLRS will be the recipient of the original financial security instrument. Upon receipt, the MLRS will review for acceptability and either approve or not. Attachments J, K, and L are provided and should be sent out to applicants as part of the application package.

If approved, the MLRS will inform DRS to issue permit and must send out the FS Acceptable letter (Attachment D). If not, MLRS must send out FS Unacceptable form letter to the applicant (Attachment E). In both instances, the central office and DRS must be copied.

Computer Maintenance

The MLRS must enter FS amount and acreage information on the ML database, make a copy of the FS for his file and send original instrument to central office. Upon receipt of the FS instruments in the central office, specific FS information will be entered on FS screen.

Paperwork Flow for Cancellation Notices

All cancellation notices are received in the central office. The notice is date stamped, the FS screen is changed to reflect the cancellation, and central office staff sends out the response to cancellation notice (Attachment B) certified-return receipt with copy to regional MLRS and FS issuing company. A copy is placed in tickler file for follow-up.

If the permittee comes into compliance, the new FS instrument or any code changes will be made on the FS screen in the central office. Any pertinent correspondence will be sent to the MLRS for their files. If the permittee fails to come into compliance, the central office will send out a Notice of Violation and Intent to Suspend Mining Permit letter (Attachment C) with a copy to the regional MLRS and regional DRS.

Any response to the violation and intent to suspend letter must be coordinated with DRS, Legal and central office. All further correspondence concerning legal action must be coordinated with regional and central office, DRS and Legal staff.

Bond Calling Procedures

After a permit is no longer in effect and various forms of notification have failed to achieve reclamation of a mine, a call should be made on the financial security (FS) instrument in accordance with $23-2715.5 and 6.

Prior to presenting the standardized call letter to the FS issuing institution, the MLRS may at his or her discretion contact them to explain the situation and attempt to have the issuing institution initiate reclamation, thereby saving them money and saving the Department time and effort.

If you encounter any additional problems that require interpretation of the statute, please call me immediately, and we will endeavor to formalize a response to you. Additional guidance on implementation of the new amendments will be forthcoming.


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