Louisiana Administrative Code
Title 43 - NATURAL RESOURCES
Part XV - Office of Conservation-Surface Mining
Subpart 4 - Bond and Insurance Requirements for Surface Coal Mining and Reclamation Operations
Chapter 43 - Form, Conditions and Terms of Performance Bonds and Liability Insurance
Section XV-4303 - Terms and Conditions of the Bond

1. The office shall not accept the bond of a surety company unless the bond shall not be cancellable by the surety at any time for any reason including, but not limited to, nonpayment of premium or bankruptcy of the permittee during the period of liability. Surety bond coverage for permitted lands not disturbed may be cancelled with the consent of the office; provided, the surety gives at least 60 days notice to both the permittee and the office of the intent to cancel prior to cancellation. Such notice shall be by certified mail and shall not be effective until received by both the permittee and office. Cancellation shall not be effective for lands subject to bond coverage which are disturbed after receipt of notice, but prior to approval by the office. The office may approve such cancellation only if a replacement bond is filed by the permittee prior to the cancellation date, or the permit is amended so that the surface coal mining operations approved under the permit are reduced to the degree necessary to cover all the costs attributable to the completion of reclamation operations on the reduced permit area in accordance with Chapter 41 and the remaining performance bond liability.

2. The office shall not accept surety bonds in excess of 10 percent of the surety company's capital surplus account as shown on the balance sheet certified by a certified public accountant, unless otherwise provided by law.

3. The office shall not accept surety bonds from a surety company for any person, on all permits held by that person, in excess of three times the company's maximum single obligation as provided by state law, or, in the absence of state law, as provided in §4303. E 2

4. The office may provide in the bond that the amount shall be confessed to judgment upon forfeiture.

5. The bond shall provide that the surety and the permittee shall be liable jointly, severally and in solido.

6. The bond shall provide that:

1. The office shall obtain possession of and keep in custody all collateral deposited by the applicant, until authorized for release or replacement as provided in this Subpart.

2. The office shall value collateral at their current market value, not face value.

3. The office shall require that all collateral bonds comply with the provisions of §105Collateral Bond.

4. The office shall require that certificates of deposit be assigned to the office, in writing, and upon the books of the bank issuing such certificates.

5. The office shall not accept an individual certificate for a denomination in excess of $40,000, or maximum insurable amount as determined by FDIC and FSLIC.

6. The office shall require the banks issuing these certificates to waive all rights of set off or liens which it has or might have against those certificates.

7. The office shall only accept automatically renewable certificates of deposit.

8. The office shall require the applicant to deposit a sufficient amount of certificates of deposit to assure that the office will be able to liquidate those certificates prior to maturity, upon forfeiture, for the amount of the bond required by this Subpart.

9. The estimated bond value of all collateral posted as assurance under this Section shall be subject to a margin which is the ratio of bond value to market value, as determined by the office. 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 office to complete reclamation.

10. 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.

11. 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 office at the time collateral is offered.

1. The letter may only be issued by a bank organized or authorized to do business in the United States.

2. Letters of credit shall be irrevocable during their term. A letter of credit used as security in areas requiring continuous bond coverage shall be forfeited and shall be collected by the office if not replaced by other suitable bond or letter of credit at least 30 days before its expiration date.

3. The letter must be payable only to the office in part or in full upon demand and receipt from the office of a notice of forfeiture issued in accordance with Chapter 47.

4. The office shall not accept a letter of credit in excess of 10 percent of the bank's capital surplus account as shown on a balance sheet certified by a certified public accountant.

5. The office shall not accept letters of credit from a bank for any person, on all permits held by that person, in excess of three times the company's maximum single obligation as provided by state law or, in the absence of state law, as provided in §4303. E 2

6. The office may provide in the indemnity agreement that the amount shall be confessed to judgment upon forfeiture.

7. The bond shall provide that:

8. Persons with an interest in the letter of credit, and who desire notification of actions pursuant to the letter, shall request the notification in writing to the office at the time the letter is offered.