Current through Vol. 41, No. 13, March 15, 2024
(a) As used in this
Section, the following terms have specified meanings, except where otherwise
indicated:
(1)
"Current assets"
means cash or other assets or resources which are reasonably expected to be
converted to cash or sold or consumed within 1 year or within the normal
operating cycle of the business.
(2)
"Current liabilities" means
obligations which are reasonably expected to be paid or liquidated within 1
year or within the normal operating cycle of the business.
(3)
"Fixed assets" means plants
and equipment, but does not include land.
(4)
"Liabilities" means
obligations to transfer assets or provide services to other entities in the
future as a result of past transactions.
(5)
"Net worth" means total
assets minus total liabilities and is equivalent to owners' equity.
(6)
"Parent corporation" means a
corporation which owns or controls the applicant.
(7)
"Tangible net worth" means
net worth minus intangibles such as goodwill and rights to patents or
royalties.
(b) The
Department may accept a self-bond from an applicant for a permit if all of the
following conditions are met by the applicant or its parent corporation
guarantor:
(1) The applicant designates a
suitable agent to receive service of process in the State where the proposed
CCB operation is to be conducted.
(2) The applicant has been in continuous
operation as a business entity for a period of not less than 5 years.
Continuous operation shall mean that business was conducted over a period of 5
years immediately preceding the time of application.
(A) The Department may allow a joint venture
or syndicate with less than 5 years of continuous operation to qualify under
this requirement, if each member of the joint venture or syndicate has been in
continuous operation for at least 5 years immediately proceeding the time of
application.
(B) When calculating
the period of continuous operation, the Department may exclude past periods of
interruption to the operation of the business entity that were beyond the
applicant's control and that do not affect the applicant's likelihood of
remaining in business during the proposed CCB operations.
(3) The applicant submits financial
information in sufficient detail to show that the applicant meets one of the
following criteria:
(A) The applicant has a
current rating for its most recent bond issuance of "A" or higher as issued by
either Moody's Investor Service or Standard and Poor's Corporation;
(B) The applicant has a tangible net worth of
at least 10 million dollars, a ratio of total liabilities to net worth of 2.5
times or less, and a ratio of current assets to current liabilities of 1.2
times or greater; or
(C) The
applicant's fixed assets in the United States total at least 20 million
dollars, and the applicant has a ratio of total liabilities to net worth of 2.5
times or less, and a ratio of current assets to current liabilities of 1.2
times or greater.
(4)
The applicant submits:
(A) Financial
statements for the most recently completed fiscal year accompanied by a report
prepared by an independent certified public accountant in conformity with
generally accepted accounting principles and containing the accountant's audit
opinion or review opinion of the financial statements with no adverse
opinion;
(B) Unaudited financial
statements for completed quarters in the current fiscal year; and
(C) Additional unaudited information as
requested by the Department.
(c) The Department may accept a written
guarantee for an applicant's self-bond from a parent corporation guarantor, if
the guarantor meets the conditions of Paragraphs (b)(1)-(b)(4) of this Section
as if it were the applicant. Such a written guarantee shall be referred to as a
corporate guarantee. The terms of the corporate guarantee shall provide for the
following:
(1) If the applicant falls to
complete the reclamation plan, the guarantor shall do so or the guarantor shall
be liable under the indemnity agreement to provide funds to the Department
sufficient to complete the reclamation plan, but not to exceed the bond
amount.
(2) The corporate guarantee
shall remain in force un- less the guarantor sends notice of cancellation by
certified mail to the applicant and to the Department at least 90 days in
advance of the cancellation date, and the Department accepts the
cancellation.
(3) The cancellation
may be accepted by the Department if the applicant obtains suitable replacement
bond before the cancellation date or if the lands for which theself-bond, or
portion thereof, was accepted have not been disturbed.
(4) The Department may accept a written
guarantee for an applicant's self-bond from any corporate guarantor, whenever
the applicant meets the conditions of paragraphs (b)(1), (b)(2) and (b)(4) of
this Section, and the guarantor meets the conditions of paragraphs (b)(1)
through (b)(4) of this Section. Such a written guarantee shall be referred to
as a "non-parent corporate guarantee." The terms of this guarantee shall
provide for compliance with the conditions of paragraphs (c)(1)(i) through
(c)(1)(iii) of these Section. The Department may require the applicant to
submit any information specified in paragraph (b)(3) of this Section in order
to determine the financial capabilities of the applicant.
(d) For the Department to accept an
applicant's self-bond, the total amount of the outstanding and proposed
self-bonds of the applicant for CCB operations shall not exceed 25 percent of
the applicant's tangible net worth in the United States. For the Department to
accept a corporate guarantee the total amount of the parent corporation
guarantor's present and proposed self-bonds and guaranteed self bonds for CCB
operations shall not exceed 25 percent of the guarantor's tangible net worth in
the United States. For the Department to accept a non-parent corporate
guarantee, the total amount of the non-parent corporate guarantor's present and
proposed self-bonds and guaranteed self-bonds shall not exceed 25 percent of
the guarantor's tangible net worth in the United States.
(e) If the Department accepts an applicant's
self-bond, an indemnity agreement shall be submitted subject to the following
requirements:
(1) The indemnity agreement
shall be executed by all persons and parties who are to be bound by it,
including the parent corporation guarantor, and shall bind each jointly and
severally.
(2) Corporations
applying for a self-bond, and parent and non-parent corporations guaranteeing
an applicant's self-bond shall submit an indemnity agreement signed by two
corporate officers who are authorized to bind their corporations. A copy of
such authorization shall be provided to the Department along with an affidavit
certifying that such an agreement is valid under all applicable Federal and
State laws. In addition, the guarantor shall provide a copy of the corporate
authorization demonstrating that the corporation may guarantee the self-bond
and execute the indemnity agreement.
(3) If the applicant is a partnership, joint
venture, or syndicate, the agreement shall bind each partner or party who has a
beneficial interest, directly or indirectly, in the applicant.
(4) Pursuant to Section
460:30-4-16
of this Subchapter, the applicant, parent or non-parent corporate guarantor
shall be required to complete the approved reclamation plan for the lands in
default or to pay to the Department an amount necessary to complete the
approved reclamation plan, not to exceed the bond amount. If permitted under
State Law, the indemnity agreement when under forfeiture shall operate as a
judgment against those parties liable under the indemnity agreement.
(f) The Department may require
self-bonded applicants, parent and non-parent corporate guarantors to submit an
update of the information required under Paragraphs (b)(3) and (b)(4) of this
Section within 90 days after the close of each fiscal year following the
issuance of the self-bond or corporate guarantee.
(g) If at any time during the period when a
self-bond is posted, the financial conditions of the applicant, parent or
non-parent corporate guarantor change so that the criteria of (b)(3) and (d) of
this Section are not satisfied, the permittee shall notify the Department
immediately and shall within 90 days post an alternate form of bond in the same
amount as the self-bond. Should the permittee fail to post an adequate
substitute bond, the provisions of Section
460:30-4-9(e)
of this Subchapter shall apply.
Added at 28 Ok Reg 2371,
eff 9-11-11