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STITES &HAR.BISONPUr <br />.rra ~. rr~ <br />Robert D. Clark, Esq. <br />Cheryl A. Linden, Esq. <br />March 12, 2001 <br />Page 3 <br />bonding requirements. OSM's regulations speci$cally recognize that the validity of a surety <br />bond is to be determined by state, not federal law. For example, 30 C.F.R. § 740.11(a) states: <br />Upon approval or promulgation of a regulatory program for a <br />State, that program and this subchapter shall apply to: <br />{2) surface coal mining and reclamation operations taking place on <br />any Federal lands ...and lands ...over leased or unleased Federal <br />minerals. <br />30 C.F.R. § 740.13(c)(9) requires an applicant seeking a permit to mine on federal ]ands to post a <br />performance bond "which meets the requirements of the applicable regulatory program." Taken <br />together; these two sections demonstrate that the position taken by Colorado is incorrect. Once a <br />state has achieved primacy and entered into a cooperative agreement, the provisions of the <br />approved state regulatory program, including the bonding provisions, become applicable to <br />federal lands located within that state. <br />Further support for this position is found in the 1983 preamble to O5M's banding <br />regulations, which stated: <br />The recently adopted rules revising OSM's permanent program on <br />Federal lands ... make a State program, including its bonding <br />provisions, applicable to surface coal mining and reclamation <br />operations on Federal lands in that State. <br />48 Fed. Reg. 32,932 (1983). Finally, 30 C.F_R. § 800.5(a) defines a "surety bond" as "an <br />indemnity agreement ...which is supported by the performance guazantee of a corporation <br />licensed to do business as a surety in the State where the operation is located." <br />The Clark letter assumes that because O5M is an obligee on the Powderhorn bond, a <br />bond is not acceptable unless a company holding a Certificate of Authority from Treasury issues <br />it. This assumption is incorrect. OSM's regulations make a state's bonding program applicable <br />to any bond issued for federal lands. Any bond issued for a federal lands permit must be <br />acceptable under state law. Accordingly, any requirement that a bond be issued by a company <br />with a T listing must be found in state law, and Colorado cannot rely on the fact that OSM is an <br />obligee on the bond to make the federal T listing requirements applicable to the Frontier bond. <br />