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Snell &Wilmer <br />L.L P <br />Federal regulations are to the same effect. OSM's regulation regarding surety incapacity, <br />found at 30 C.F.R. § 800.16(e)(2), states that upon incapacity of a surety, the permittee is <br />deemed to be without bond coverage. If the permittee fails to post a replacement bond within an <br />acceptable period, the operator is required to cease coal extraction and to begin reclamation of <br />the site. The federal regulation does not, however, authorize enforcement action against the <br />permittee or operator who ceases operations. In fact, OSM considered this alternative and <br />specifically rejected it: <br />In the final rule for § 800.16(e)(2), OSM has not adopted the <br />provision for mandatory issuance of an NOV, and instead has <br />specified that a notice must be given by the regulatory authority <br />which specifies a reasonable period of up to 90 days within which <br />the bond must be replaced. If the bond is not replaced by the end <br />of that period, the operator must cease coal extraction... and <br />immediately begin to reclaim the permit area in accordance with <br />the reclamation plan. Mining operations can resume only upon the <br />posting of a bond acceptable to the regulatory authority. <br />These charges answer industry's concern for unfair treatment of <br />an operator following loss of bond due to incapacity of the <br />operator's bonding agent. <br />48 Fed. Reg. 32,932 (1983) (Emphasis added.) <br />V. <br />THE DMG'S POSITION MUST BE REJECTED BECAUSE IT VIOLATES <br />C.R.S. § 34-33-I08 <br />The Board should also reject the DMG's position that failure to replace an incapacitated <br />surety constitutes a violation even where mining operations have ceased because such an <br />interpretation would invalidate the regulation. C.R.S. § 34-33-108 specifically mandates that <br />rules or regulations promulgated pursuant to Colorado's surface mining statute "shall be no more <br />stringent than required to be effective as the federal `Surface Mining Control and Reclamation <br />Act of 1977'...." <br />As noted above, upon the incapacity of a surety, federal regulations require the posting of <br />a replacement bond only if the operator seeks to resume or continue mining operations. If <br />Colorado's regulations were read to require a company that had ceased operations to post a <br />replacement bond upon the incapacity of the surety those regulations would be more stringent <br />The continued existence of the Bond is consistent with the state view that the surety continues to <br />retain liability. <br />-7- <br />