§1259 Performance bonds

Summary

Before a surface coal mining permit is issued, the applicant must file a performance bond on the form the regulatory authority provides. The bond must be payable to the United States or the State and promise that the permit conditions and reclamation work will be done. The bond must cover the land where mining and reclamation will start during the permit’s first term. As new parts of the site are opened, the operator must add bonds for those parts. The regulatory authority sets each bond amount based on the approved reclamation plan and how hard the work will be (for example, topography, geology, hydrology, and how well plants will grow). The bond must be enough to finish the reclamation if the operator fails, and the total bond for a permit cannot be less than $10,000. The bond stays in effect for the whole mining operation and for the same time the operator must do revegetation under section 1265. Normally a corporate surety licensed in the State must sign the bond with the operator. Instead, the operator may deposit cash, negotiable U.S. or State bonds, or negotiable bank certificates of deposit equal to or greater than the bond amount. The regulatory authority may allow self-bonding if the applicant shows a local agent for legal papers and a record of financial stability and continuous operation. The Secretary may also approve an alternative bonding system that meets the same goals. Cash and securities are held on the same terms as surety bonds, and bond amounts and terms must be adjusted when bonded acreage or reclamation cost estimates change.