ALABAMA SURFACE MINING COMMISSION ADMINISTRATIVE CODE

CHAPTER 880-X-9B BOND AND INSURANCE REQUIREMENTS FOR SURFACE COAL MINING AND RECLAMATION OPERATIONS AMOUNT AND DURATION OF PERFORMANCE BOND

TABLE OF CONTENTS

880-X-9B-.01 Scope

880-X-9B-.02 Determination Of Bond Amount

880-X-9B-.03 Minimum Amount

880-X-9B-.04 Period Of Liability

880-X-9B-.05 Adjustment Of Amount

880-X-9B-.01 Scope. This Rule sets forth the requirements for determining the amounts and time period of liability for performance bonds for surface coal mining and reclamation operations.

Author:

Statutory Authority: Code of Ala. 1975, 9-16-71, 73, 74, 75, 80, 81, 82, 83, 84, 85, 89, 90, 91.

History:

880-X-9B-.02 Determination Of Bond Amount.

(1) The amount of the performance bond shall be determined by the State Regulatory Authority and shall be the estimated cost to the State Regulatory Authority if it had to perform the reclamation, restoration, and abatement work required of the operator under the Act, these regulations, and the terms of the permit. The amount of the bond shall reflect the probable difficulty of reclamation based on site specific factors such as topography, geology, hydrology, and revegetation potential. Consideration shall also be given, but not limited to:

(a) The estimated costs submitted by the permittee in accordance with Rules 880-X-8F-.09 and 880-X-8I-.08.

(b) The additional estimated costs to the State Regulatory Authority which may arise from applicable public contracting requirements or the need to bring personnel and equipment to the permit area after its abandonment by the permittee to perform reclamation, restoration, and abatement work.

(2) The bond amount for acreage bonded initially under a permit, any acreage added to the permit, and any succeeding incremental bonds shall be computed in accordance with the adjusted base reclamation costs in effect at the time that acreage is added for bond coverage. Bonds covering unreclaimed acreage may be adjusted annually to reflect inflationary or deflationary changes in reclamation costs, but shall be specifically reviewed during the permit review process.

(3) The bond amount per acre for the proposed permit or increment will be computed in the following manner:

(a) A statewide base reclamation cost will be established reflecting the lowest cost which can be expected under ideal conditions and shall be modified annually to reflect inflationary or deflationary price adjustments. Two base cost categories will be established:

1. Base Grading Cost - This cost will reflect regrading of spoil under ideal conditions with no topsoil replacement and no highwall elimination.

2. Base Revegetation Cost - This cost will reflect revegetation costs for each postmine land use category under ideal conditions.

(b) For each permit the base grading and base revegetation costs will be increased if appropriate to reflect site specific conditions which can be expected to add to reclamation costs. The following adjustments will be made:

1. Adjustments to Base Grading Cost --

(i) Topography - Grading cost will be increased, if appropriate, based on slope conditions of the proposed permit area.

(ii) Geology - Grading cost will be increased, if appropriate, to reflect the hardness and amount of sandstone on the proposed permit area.

(iii) Highwall elimination - Grading cost will be increased, if applicable, to reflect the estimated cost of eliminating the maximum highwall which could be present on the proposed increment to be bonded.

(iv) Prime farmland reconstruction. Grading cost will be increased to reflect the cost of prime farmland reconstruction if applicable to the permit area.

2. Adjustments to Base Revegetation Cost --

(i) pH of topsoil or topsoil substitute - Base revegetation cost will be increased to reflect the cost of adjusting the pH of the topsoil or topsoil substitute on the proposed permit area to a level suitable for the proposed vegetation.

(ii) Topsoil replacement - Base revegetation cost will be increased to reflect the cost of replacing topsoil or topsoil substitute if applicable to the permit area.

(iii) Topography - The base revegetation cost will be increased to reflect the estimated increase in cost for revegetation due to the topography to the proposed permit area.

3. Adjustment for Probable Hydrologic Consequences - The bond amount for the permit will be increased to reflect additional reclamation costs due to probable impact of the proposed mining on the hydrology of the area.

4. Dismantling Costs for Surface Facilities - An adjustment shall be made to the bond amount to reflect the cost of dismantling surface facilities.

5. Cost Adjustment for Public Contracting Requirements and Contractor Mobilization - the bond amount will be increased to reflect costs to the State Regulatory Authority for contract preparation and control, and costs covering contractor mobilization and profit.

(c) The total bond amount per acre for the proposed permit or increment shall be the sum of the base grading and revegetation costs plus all adjustments.

(4) In accordance with Rule 880-X-8J-.03, abandoned surface mined lands may be included in a new permit and used for off-site spoil placement and shall not require additional bond coverage. The entire permit area, including the abandoned surface mined area, shall be deemed to have bond coverage and considered when determining bond release and forfeiture under Rules 880-X-9D and 880-X-9E.

Author:

Statutory Authority: Code of Ala. 1975, 9-16-71, 73, 74, 75, 80, 81, 82, 83, 84, 85, 89, 90, 91.

History:

880-X-9B-.03 Minimum_Amount. The amount of the bond for surface coal mining and reclamation operations shall be no less than $10,000.00 for the entire area under one permit and be sufficient to assure performance of reclamation, restoration and abatement work required of a person who conducts surface coal mining and reclamation operations under the Act, and the provisions of the permit, if the work had to be performed by the State Regulatory Authority in the event of forfeiture.

Author:

Statutory Authority: Code of Ala. 1975, 9-16-71, 73, 74, 75, 80, 81, 82, 83, 84, 85, 89, 90, 91.

History:

880-X-9B-.04 Period Of Liability.

(1) Liability under performance bond(s) applicable to a permit shall continue until all reclamation, restoration and abatement work required of persons who conduct surface coal mining and reclamation operations under requirements of the Act, these regulations and the provisions of the permit, has been completed, and the permit terminated by release of the permittee from any further liability in accordance with Subchapter 880-X-9D.

(2)(a) In addition to the period necessary to achieve compliance with all requirements of the Act, this Chapter, the regulatory program, and the permit, the period of liability under performance bond shall continue for a minimum of five years after the last year of augmented seeding, fertilization, irrigation,or other work.

(b) The period of liability shall be extended an additional five years whenever augmented seeding, fertilization, irrigation, or other work is required or conducted on the site prior to bond release.

(3) A portion of a bonded area requiring extended liability because of augmentation may be separated from the original area and bonded separately upon approval by the State Regulatory Authority. Before determining that extended liability should apply to only a portion of the original bonded area, the State Regulatory Authority shall determine that such area portion --

(a) Is not significant in extent in relation to the entire area under bond, and

(b) Is limited to isolated or distinguishable portions of the bonded area and does not constitute a checkerboard pattern of failure throughout the bonded area.

(4) If the State Regulatory Authority approves a long-term intensive agricultural postmining land use, in accordance with Rules 880-X-10C-.66 and 880-X-10D-.64, the applicable five-year period of liability shall commence at the date of initial planting for such long-term intensive agricultural land use.

(5) If the State Regulatory Authority issues a written finding approving a long-term intensive agricultural land use, the operation shall be exempt from the requirements of Rules 880-X-10C-.58(l) and 880-X-10D-.52(l). Such a finding shall not constitute a grant of an exception to the bond-liability periods of this Rule.

(6) The bond liability of the permittee shall include only those actions which the operator is obliged to take under the permit, including completion of the reclamation plan in such a manner that the land will be capable of supporting a postmining land use approved under Rules 880-X-10C-.66 and 880-X-10D-.64. Actions of third parties which are beyond the control and influence of the operator and for which the operator is not responsible under the permit need not be covered by the bond.

(7) If an area is separated under Paragraph (3) of this Rule, that portion shall be bonded separately and the applicable period of liability, in accordance with Rule 880-X-9B-.04(2) shall commence anew. The period of liability for the remaining area shall continue in effect without extension. The amount of bond on the original bonded area may be adjusted in accordance with Rule 880-X-9B-.05.

Author: Randall C. Johnson

Statutory Authority: Code of Ala. 1975, 9-16-71, 73, 74, 75, 80, 81, 82, 83, 84, 85, 89, 90, 91.

History: May 20, 1982; Amended: September 18, 1990; effective: August 2, 1991.

880-X-9B-.05 Adjustment Of Amount.

(1) The amount of the performance bond liability applicable to a permit shall be adjusted by the State Regulatory Authority as the acreage in the permit area is revised, methods of mining operation change, standards of reclamation change or when the cost of future reclamation, restoration or abatement work changes. The State Regulatory Authority shall notify persons involved in bond coverage of any proposed bond adjustments and provide those persons an opportunity for an informal conference on the adjustment. For purposes of this Rule, a person involved in a bond coverage shall include the permittee, and surety, and any other person with a property interest in collateral posted under this Chapter who has, in writing to the State Regulatory Authority, requested such notification at the time the collateral is posted or the interest is acquired, whichever occurs later. The State Regulatory Authority shall review each outstanding performance bond at the time that permit reviews are conducted under Rule 880-X-8M-.05 and re-evaluate those performance bonds in accordance with the standards in Rule 880-X-9B-.02.

(2) A permittee, surety or any person with property interest in collateral offered as bond coverage may request reduction of the required performance bond amount upon submission of evidence to the State Regulatory Authority proving that the permittee's method of operation, or other circumstances will reduce the maximum estimated cost to the State Regulatory Authority if it has to complete the reclamation and therefore warrants a reduction of the bond amount. Such request shall only be made annually or at such time as a permit review is conducted under Rule 880-X-8M-.05. The request shall be considered as a request for partial bond release in accordance with the procedures of Rule 880-X-9D.

Author:

Statutory Authority: Code of Ala. 1975, 9-16-71, 73, 74, 75, 80, 81, 82, 83, 84, 85, 89, 90, 91.

History: