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Mr. Howard Strand <br />Page 4 <br />April 20, 2018 <br />Division believes there is good cause that the possible violations against Tri-State set forth in the <br />Complaint do not currently exist under Colorado's self -bonding Rules. Therefore, the Division <br />believes that further action by OSMRE is unnecessary. <br />COLORADO'S SELF -BONDING RULES MIRROR OSMREs <br />The Colorado's self -bonding Rules are as stringent and, in fact, are analogous to OSMRE's self - <br />bonding Rules. The Rule regarding the financial information and financial criteria to be eligible <br />for self -bonding, Rule 3.02.4(2)(e)(i)(C), is analogous to 30 C.F.R. S800.23(b)(3), which states: <br />3) The applicant submits financial information in sufficient detail to show that the applicant <br />meets one of the following criteria: <br />(i) The applicant has a current ratingfor its most recent bond issuance of "A" or higher <br />as issued by either Moody's Investor Service or Standard and Poor's Corporation; <br />(ii) The applicant has a tangible net worth of at least $10 million, a ratio of total <br />liabilities to net worth of 2.5 times or less, and a ratio of current assets to current <br />liabilities of 1.2 times or greater; or <br />(iii) The applicant's fixed assets in the United States total at least $20 million, and the <br />applicant has a ratio of total liabilities to net worth of 2.5 times or less, and a ratio of <br />current assets to current liabilities of 1.2 times or greater. <br />The Rule regarding the submittal of recent financial data, Rule 3.02.4(e)(i)(D), is analogous to 30 C.F.R. <br />§800.23(b)(4), which states: <br />(4) The applicant submits; <br />(i) Financial statements for the most recently completed fiscal year accompanied by a <br />report prepared by an independent certified public accountant in conformity with <br />generally accepted accounting principles and containing the accountant's audit opinion <br />or review opinion of the financial statements with no adverse opinion; <br />(ii) Unaudited financial statements for completed quarters in the current fiscal year; and <br />(iii) Additional unaudited information as requested by the regulatory authority. <br />The Rule regarding the acceptability of a corporate guarantor, Rule 3.02.4(e)(ii), is analogous to 30 <br />C.F.R. §800.23(c)(1), which states: <br />(c)(1) The regulatory authority may accept a written guarantee for an applicant's self -bond from <br />a parent corporation guarantor, if the guarantor meets the conditions ofparagraphs (b)(1) <br />through (b)(4) of this section as if it were the applicant. Such a written guarantee shall be <br />referred to as a "corporate guarantee. " The terms of the corporate guarantee shall provide for <br />the following: <br />