30 CFR 800.23 - What additional requirements apply to self-bonds?
(a)Definitions. For the purposes of this section only:
Current assets means cash or other assets or resources that are reasonably expected to be converted to cash or sold or consumed within one year or within the normal operating cycle of the business.
Current liabilities means obligations that are reasonably expected to be paid or liquidated within one year or within the normal operating cycle of the business.
Fixed assets means plants and equipment, but does not include land or coal in place.
Liabilities means obligations to transfer assets or provide services to other entities in the future as a result of past transactions.
Net worth means total assets minus total liabilities and is equivalent to owners' equity.
Tangible net worth means net worth minus intangibles such as goodwill and rights to patents or royalties.
(2) The applicant has been in continuous operation as a business entity for a period of not less than 5 years. Continuous operation means that business was conducted over the 5 years immediately preceding the date of application.
(i) The regulatory authority 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 preceding the date of application.
(ii) When calculating the period of continuous operation, the regulatory authority 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 surface coal mining and reclamation operations.
(i) The applicant has a current rating for its most recent bond issuance of “A” or higher as issued by either Moody's Investors Service or Standard and Poor's or an equivalent rating from any other nationally recognized statistical rating organization registered with the Securities and Exchange Commission.
(ii) The applicant has a tangible net worth of at least $10 million, 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.
(iii) The applicant's fixed assets in the United States total at least $20 million, 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 -
(i) 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;
(ii) Unaudited financial statements for completed quarters in the current fiscal year; and
(iii) Additional unaudited information as requested by the regulatory authority.
(1) The regulatory authority 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) through (4) of this section as if it were the applicant. This written guarantee will be referred to as a “corporate guarantee.” The terms of the corporate guarantee must provide for the following:
(i) If the applicant fails to complete the reclamation plan, the guarantor must do so or the guarantor will be liable under the indemnity agreement to provide funds to the regulatory authority sufficient to complete the reclamation plan, but not to exceed the bond amount.
(ii) The corporate guarantee will remain in force unless the guarantor sends notice of cancellation by certified mail to the applicant and to the regulatory authority at least 90 days in advance of the cancellation date, and the regulatory authority accepts the cancellation.
(iii) The cancellation may be accepted by the regulatory authority if the applicant obtains suitable replacement bond before the cancellation date or if the lands for which the self-bond, or portion thereof, was accepted have not been disturbed.
(2) The regulatory authority 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), (2), and (4) of this section, and the guarantor meets the conditions of paragraphs (b)(1) through (4) of this section. This written guarantee will be referred to as a “non-parent corporate guarantee.” The terms of this guarantee must provide for compliance with the conditions of paragraphs (c)(1)(i) through (iii) of this section. The regulatory authority 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.
(1) For the regulatory authority to accept an applicant's self-bond, the total amount of the outstanding and proposed self-bonds of the applicant for surface coal mining and reclamation operations may not exceed 25 percent of the applicant's tangible net worth in the United States.
(2) For the regulatory authority to accept a corporate guarantee, the total amount of the parent corporation guarantor's present and proposed self-bonds and guaranteed self-bonds for surface coal mining and reclamation operations may not exceed 25 percent of the guarantor's tangible net worth in the United States.
(3) For the regulatory authority 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 may not exceed 25 percent of the guarantor's tangible net worth in the United States.
(2) Corporations applying for a self-bond, and parent and non-parent corporations guaranteeing an applicant's self-bond, must submit an indemnity agreement signed by two corporate officers who are authorized to bind their corporations. A copy of the authorization must be provided to the regulatory authority along with an affidavit certifying that the agreement is valid under all applicable federal and state laws. In addition, the guarantor must provide a copy of the corporate authorization demonstrating that the corporation may guarantee the self-bond and execute the indemnity agreement.
(4) Pursuant to § 800.50 of this part, the applicant and the parent or non-parent corporate guarantor will be required to complete the approved reclamation plan for the lands in default or to pay to the regulatory authority 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, will operate as a judgment against those parties liable under the indemnity agreement.
(f) A regulatory authority may require self-bonded applicants and parent and non-parent corporate guarantors to submit an update of the information required under paragraphs (b)(3) and (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 or the parent or non-parent corporate guarantor change so that the criteria of paragraphs (b)(3) and (d) of this section are not satisfied, the permittee must notify the regulatory authority immediately and post an alternate form of bond in the same amount as the self-bond within 90 days. Should the permittee fail to post an adequate substitute bond, the provisions of § 800.30(b) of this part will apply.
Title 30 published on 2015-10-21
The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 30 CFR Part 800 after this date.