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STITES&~IRBTSONaut ~tle,~F~! Robert D. Clark, Esq. Cheryl A. Linden, Esq_ Mazch 12, 2001 Page 4 B. Colorado Law Does Not Require a Surety to Have a T Listing to Write Bonds for State Minine Permits. The Clazk letter asserts that the Colorado mining regulations require reclamation bonds to be issued by a surety with a valid and current Certificate of Authority from Treasury. Clazk Letter, p. 7. There is no such specific requirement, either in the Colorado regulations cited in the Clark letter or in any other applicable provision of Colorado law. However, the Clark letter attempts to support this assertion by interpreting the "license to do business" referenced at 2 C.C.R. § 407-2, Rule 3.02.4(2)(b)(v)(A)° as encompassing a license to do "business with the United States," even if federal lands aze not involved. In fact, a review of the pertinent Colorado regulations demonstrates that the "license to do business" required by this regulation refers to a license issued by the State of Colorado, and not to aziy license or certificate mandated by federal bonding regulations. Colorado's regulations define a "surety bond" as "an indemnity agreement in a sum certain payable to the state executed by the petmittee which is supported by the performance guarantee of a corporation licensed to do business as a surety in Colorado." 2 C.C.R. 407-?, Rule 1.04(130) (emphasis supplied). Similarly, the Colorado mining regulations regazding the form, conditions and terms of a performance bond allow as one acceptahla form of bond "a surety bond, in which case the bond shall be executed by the applicant and a corporation surety licensed to do business in this State ...." 2 C.C.R. 407-2, Rule 3.02.4(1)(a) (emphasis supplied). Sureties and other insurers aze licensed by the Colorado Insurtttttee Commissioner pursuant to C.R.S. § 10-1-108. Accordingly, the "license" referenced in the applicable bonding regulations refers not to a license to do "business with the L3nited States." but rather to the license issued to Frontier by the Colorado Insurance Commissioner. lll. FRONTIER'S COLORADO LICENSE HAS NOT BEL•N SUSPENDED OR REVOKED. SO ITS BONDS NEED NOT BE REPLACED The Clark letter asserts that the Powderhom Frontier bond must be replaced because certain "facts cast serious doubt on Frontier's financial ability to honor its obligation under the Bond." Clark Letter, p. 6. However, the letter never alleges that Frontier is insolvent or that Frontier's Colorado license has been suspended or revoked. Absent any one of these situations, the Colorado DMG lacks the authority to require replacement of the Powderhom Frontier bond. Colorado's regulations require replacement of a surety reclamation bond "[u]pon the incapacity of a surety by reason of bankruptcy, insolvency or suspension or revocation of its ' That regulation requires all bonds to contain a provision stating that the surety will give notice to the regulatory authority of "any notice received or action filed ...alleging any violations of regulatory requirements which could result in suspension or revocation of the surety's license to do business."