Illinois Administrative Code
Title 62 - MINING
Part 1800 - BONDING AND INSURANCE REQUIREMENTS FOR SURFACE COAL MINING AND RECLAMATION OPERATIONS
Section 1800.21 - Collateral Bonds
Universal Citation: 62 IL Admin Code ยง 1800.21
Current through Register Vol. 48, No. 12, March 22, 2024
a) Collateral bonds, except for letters of credit and cash accounts, shall be subject to the following conditions:
1) The
Department shall keep custody of collateral deposited by the applicant until
authorized for release or replacement as provided in Sections
1800.30 and
1800.40.
2) The Department shall value collateral at
its current market value, not at face value.
3) The Department shall require that
certificates of deposit be made payable to or assigned to the Department both
in writing and upon the records of the bank issuing the certificates. If
assigned, the Department shall require the banks issuing these certificates to
waive all rights of setoff or liens against those certificates.
4) The Department shall not accept an
individual certificate of deposit in an amount in excess of $100,000 or the
maximum insurable amount as determined by the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance Corporation.
b) Letters of credit shall be subject to the following conditions:
1) The
letter may only be issued by a bank organized or authorized to do business in
Illinois, in another state of the United States, or in the United States by
national charter ("issuing bank"). If the issuing bank does not have an office
for collection in Illinois, there shall be a confirming bank designated with an
office in Illinois that is authorized to accept, negotiate and pay the letter
upon presentment in Illinois.
2)
Letters of credit shall be irrevocable during their terms. A letter of credit
used as security in areas requiring continuous bond coverage shall be forfeited
and shall be collected by the Department if not replaced by other suitable bond
or letter of credit at least thirty (30) days before its expiration
date.
3) The letter of credit shall
be payable to the Department upon demand, in part or in full, upon receipt from
the Department of a notice of forfeiture issued in accordance with Section
1800.50.
4) The Department shall not accept a letter
of credit in excess of ten percent (10%) of the issuing bank's total capital
and surplus accounts, as certified by the President of the bank providing the
letter of credit and as evidenced by the most recent quarterly Call Report
provided to the Federal Deposit Insurance Corporation. The ten percent (10%)
limit, as used in this subsection, shall be a cumulative total of all letters
of credit submitted to the Department by any one issuing bank.
5) The letter of credit shall provide on its
face that the Department, its lawful assigns, or the attorneys for the
Department or its assigns, may sue, waive notice and process, appear on behalf
of, and confess judgment against the issuing bank (and any confirming bank) in
the event that the letter of credit is dishonored. The letter of credit shall
be deemed to be made in Sangamon County, Illinois, for the purpose of
enforcement and any actions thereon shall be enforceable in the Courts of
Illinois, and shall be construed under Illinois law.
c) Cash accounts shall be subject to the following conditions:
1) The Department may
authorize the permittee to supplement the bond through the establishment of a
cash account in one or more federally-insured or equivalently protected
accounts made payable upon demand to, or deposited directly with, the
Department. The total bond including the cash account shall not be less than
the amount required under terms of performance bonds including any adjustments,
less amounts released in accordance with Section 1800.40.
2) Any interest paid on a cash account shall
be retained in the account and applied to the bond value of the account unless
the Department has approved the payment of interest to the permittee.
3) Certificates of deposit may be substituted
for a cash account in accordance with subsection (a).
4) The Department shall not accept an
individual cash account in an amount in excess of $100,000 or the maximum
insurable amount as determined by the Federal Deposit Insurance Corporation or
the Federal Savings and Loan Insurance Corporation.
d) Bond value of collateral.
1) The estimated bond value of all collateral
posted as assurance under Section
1800.21 shall be
subject to a margin which is the ratio of bond value to market value, as
determined by the Department. The margin shall reflect legal and liquidation
fees, as well as value depreciation, marketability, and fluctuations which
might affect the net cash available to the Department to complete
reclamation.
2) The bond value of
collateral may be evaluated at any time, but it shall be evaluated as part of
permit renewal and, if necessary, the performance bond amount increased or
decreased. In no case shall the bond value of collateral exceed the market
value.
e) Persons with an interest in collateral posted as a bond, and who desire notification of actions pursuant to the bond, shall request the notification in writing to the Department at the time collateral is offered.
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