SECTION 460:20-37-9. General terms and conditions of bond

(a)   The performance bond shall be in an amount determined by the Department as provided in Section 460:20-37-7.

(b)   The performance bond shall be payable to the Department.

(c)   The performance bond shall be conditioned upon faithful performance of all the requirements of the Act, these Regulations, the regulatory program, and the approved permit, including completion of the reclamation plan.

(d)   The duration of the bond shall be for the time period provided in Section 460:20-37-6.

(e)   

(1)   The bond shall provide a mechanism for a bank or surety company to give prompt notice to the Department and the permittee of any action filed alleging the insolvency or bankruptcy of the surety company, the bank, or the permittee, or alleging any violations which would result in suspension or revocation of the surety or bank charter or license to do business.

(2)   Upon the incapacity of a bank or surety company by reason of bankruptcy, insolvency, or suspension or revocation of a charter or license, the permittee shall be deemed to be without bond coverage and shall promptly notify the Department. The Department, upon notification received through the procedures of (e)(1) of this Section or from the permittee, shall, in writing, notify the operator who is without bond coverage and specify a reasonable period, not to exceed 90 days, to replace bond coverage. If an adequate bond is not posted by the end of the period allowed, the operator shall cease coal extraction and shall comply with the provisions of Section 460:20-43-50 or 460:20-45-50 of these Regulations and shall immediately begin to conduct reclamation operations in accordance with the reclamation plan. Mining operations shall not resume until the Department has determined that an acceptable bond has been posted.