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Part 423: Reclamation Bond

[Effective January 18, 1995]

[page 1 of 1]

Contents:

Sec.

§423.1 General Provisions

(a) As a condition precedent to the issuance of mining permit, each applicant shall furnish a reclamation bond or appropriate substitute, as provided in this Part, which is conditioned upon conformance with the applicant's mined land-use plan.

(b) A person who has filed applications for more than one mine may furnish a blanket bond for the total amount of the financial obligation in lieu of individual bonds for each mine location.

(c) The amount of the bond shall be determined by the department and shall be based upon the total estimated cost to the state for completion of reclamation consistent with the minimum basic reclamation requirements as described in section 422.3(b) of this Title. This cost and the corresponding amount of the bond shall be determined by the department on the basis of an evaluation of the following factors: the type of mine; the number of acres of affected land; the geographic location of the mine; the proposed land-use objective and basic reclamation requirements; the length of the permit period; the proposed method and schedule of reclamation; and other criteria which may be considered relevant to the estimate. The bond shall be maintained for a period of two years after completion of reclamation as provided in section 423.3(c) of this Part.

(d) In lieu of the bond, the applicant may deposit cash or certified check, negotiable bonds of the United States government, United States treasury notes, United States treasury certificates of indebtedness, United States treasury bills, bonds or notes of the State of New York, bonds of any political subdivision in the State of New York, bonds of the New York State Housing Finance Agency or of other New York State agencies or authorities, or bonds of public corporations of the State of New York, an irrevocable bank letter of credit, a certificate of deposit, or other forms of financial security acceptable to the department. Acceptable substitutes, if furnished, shall be kept on deposit with the department for the duration of the bond period.

(e) If, in case of default, the amount of the bond established by the department is not sufficient to cover the cost of reclaiming the affected land, the permittee shall be liable for the full additional costs. These additional funds shall be obtained by agreement with the permittee or, if necessary, by placing a lien on any or all materials, machinery, implements and tools of every description which may be found at the mine, or on other assets of the permittee.

§423.2 Specific Provision

(a) The form and terms of the bond shall be as prescribed by the department. The bond shall name the State as beneficiary and shall be signed by the applicant as principal and by a responsible corporate surety authorized to do business in the State of New York. The terms of the bond shall be such that the applicant as principal shall agree to reclaim the affected land in accordance with the reclamation plan and schedule submitted to and approved by the department. In addition, the principal shall protect the State against all accounts, damages, costs and judgments arising from the performance of said work.

(b) The bonding requirement shall remain the obligation of the original permittee regardless of a change in landowner or operator, unless the latter person has furnished a replacement bond or appropriate substitute and the transfer of the reclamation obligation to the subsequent person has been approved by the department.

(c) If, for any reason, the principal defaults in the performance of reclamation under the terms of the bond, or if the permit is revoked, the department may thereupon call the surety to complete the reclamation as provided for in the bond. The liability of the surety shall not exceed the amount of the bond.

(d) A reclamation bond shall not be cancelled by the surety without at least 30 days notice to the department. If the reclamation bond is, for any reason, cancelled by the surety, the permittee shall provide a valid replacement within 30 days after receiving notice thereof. Failure to provide a replacement bond or acceptable substitute within such period shall be considered a violation of the mining permit and may result in the immediate suspension and subsequent revocation thereof.

§423.3 Release of Bond

(a) When a department determines that the permittee has satisfactorily completed reclamation and has complied with the provisions of the mined land-use plan, the department shall approve the reclamation and shall release the bond except as provided in subdivision (c) of this section. If the department does not approve reclamation, the permittee and the surety will be so notified. Such notification shall be given by certified mail and shall state the reasons for disapproving the reclamation and shall contain suggestions and recommendations for corrective action. Upon satisfactory completion of the corrective action and approval of reclamation, the department shall release the bond as described in this subdivision.

(b) A permittee may request a reduction of the amount of the bond after completion of reclamation on part of the affected land, when reducing the area of affected land or as provided in subdivision (c) of this section. The procedure for obtaining a reduction of the bond amount shall be by application for an alteration or amendment of the permit. The department may reduce the amount of the bond, if satisfied that the permittee has:

(1) complied with the provisions of the mined land-use plan; and (2) (i) completed partial reclamation; (ii) reduced the area of affected land, or (iii) completed reclamation subject to verification of success as provided in subdivision (c) of this section.

The department will inform the permittee and the surety in writing of the amount, if any, by which to reduce the bond.

(c) The department reserves the right to withhold approval of reclamation for a period not to exceed two years from the department's determination of compliance with the reclamation requirements of the mined land-use plan, in order to verify the success of reclamation. If the permittee requests the department to reduce the amount of the bond during this period, the new bond amount shall be sufficient to cover the cost of performing any additional work that may be necessary to correct or complete that reclamation which proves to be unsuccessful.

(d) Any suit brought upon the bond must be instituted within two years after release, cancellation or termination thereof.

§423.4 Exemptions

Political subdivisions, municipalities or agencies of the State are exempt from the bonding requirements of title 27 and this Subchapter.