§1259 Performance Bonds

Summary

Applicants must file a performance bond before a surface coal mining permit is issued. The bond, on a form the regulator provides and payable to the U.S. or the State, must promise to finish all required reclamation. It must cover the land where mining will start during the permit’s first term, and extra bonds are required as new areas are begun. The bond amount depends on the approved reclamation plan and site conditions like slope, geology, water, and plant growth, and must be large enough to finish the work if the regulator has to do it. The total bond for a permit can’t be less than $10,000. The bond stays in effect while mining happens and for the revegetation period the operator must meet under section 1265. Usually a licensed corporate surety signs with the operator. Instead, the operator may give cash, U.S. or State government bonds, or negotiable bank certificates of deposit equal to or greater than the bond amount. The regulator can allow an operator to self-bond if it shows a local agent for legal service and strong finances. The regulator may approve other state or federal systems that meet the same goals. Cash and securities are held under the same rules as surety bonds, and bond amounts are adjusted when affected acreage or reclamation costs change.