SECTION 460:20-37-4. Requirement to file a bond

(a)   After a permit application under Subchapters 13, 15, 17, 19, 23, 25, 27, 29, 31, 33, and 35 has been approved, but before a permit is issued, the applicant shall file with the Department, on a form prescribed and furnished by the Department, a bond or bonds for performance made payable to the Department and conditioned upon the faithful performance of all the requirements of the Act, the regulatory program, the permit, and the reclamation plan.

(b)   

(1)   The bond or bonds shall cover the entire permit area, or an identified increment of land within the permit area upon which the operator will initiate and conduct surface coal mining and reclamation operations during the initial term of the permit.

(2)   As surface coal mining and reclamation operations on succeeding increments are initiated and conducted within the permit area, the permittee shall file with the Department an additional bond or bonds to cover such increments in accordance with this Section.

(3)   The operator shall identity the initial and successive areas or increments for bonding on the permit application map submitted for approval as provided in the application (under Subchapters 27 and 31 of this Chapter), and shall specify the bond amount to be provided for each area or increment.

(4)   Independent increments shall be of sufficient size and configuration to provide for efficient reclamation operations should reclamation by the Department become necessary pursuant to Section 460:20-37-16.

(c)   An operator shall not disturb any surface areas, succeeding increments, or extend any underground shafts, tunnels, or operations prior to acceptance by the Department of the required performance bond.

(d)   The applicant shall file, with the approval of the Department, a bond or bonds under one of the following schemes to cover the bond amounts for the permit area as determined in accordance with Section 460:20-37-7:

(1)   A performance bond or bonds for the entire permit area;

(2)   A cumulative bond schedule and the performance bond required for full reclamation of the initial area to be disturbed; or

(3)   An incremental-bond schedule and the performance bond required for the first increment in the schedule.

(e)   OSM may approve, as part of a State or Federal program, an alternative bonding system, if it will achieve the following objectives and purposes of the bonding program:

(1)   The alternative must assure that the Department will have available sufficient money to complete the reclamation plan for any areas which may be in default at any time; and

(2)   The alternative must provide a substantial economic incentive for the permittee to comply with all reclamation provisions.