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STITES &HARBISON cur .,,,~.~„ Robert D. Clazk, Esq. Cheryl A. Linden, Esq. Mazch 12, 2001 Page 6 bankruptcy, a determination by the Insurance Commissioner Chat Frontier is insolvent, or a proceeding to suspend or revoke Frontier's certificate or license under Colorado's insurance statutes, the DMG lacks the authority to require Powderhom to replace the Frontier bond. Accordingly, the NOV lacks a basis in fact or ]aw and it should be rescinded. IV. EVEN IF POWDERHORN IS WITHOUT BOND COVERAGE. DMG LACKS AUTHORITY TO TAKE IrNFORCEMENT ACTION AGAINST THE COMPANY A. Colorado's Regulation Authorizing Issuance of an NOV or CO for Inadequate $ond Coverage is More Stringent Than Its Federal Counterpart and Is Thus Invalid. Assuming areuendo that the DMG correctly found that Powderhom lacks acceptable bond coverage, the regulation under which DMG issued the NOV to Powderhom is invalid, inasmuch as it is more stringent than its federal counterpart. C.R.S. § 34-33-108 specifically mandates that rules or regulations promulgated pursuant to Colorado's surface mining statute "shall be no more stringent than required to be effective as the federal `Surface Mining Control and Reclamation Act of 1977' ...." Because the federal bonding regulations do not authorize issuance of an NOV or CO to an operator who is deemed to be without bond coverage because of problems beyoa$ the control of the operator, the Colorado regulation is more stringent than its federal counterpart and is thus invalid. OSM's regulation regarding surety incapacity, found at 30 C.F.R. § 800.16(e) {2), states that upon incapacity of a surety, the petatittee is deemed to be without bond coverage. If the petntittee fails to post a replacement bond within an acceptable period, the operator is required to cease coal extracrion and to begin reclamation of the site. The federal regulation does not, however, authorize enforcement action against the permittee or operator; in fact, OSM considered this alternative and specifically rejected it: In the final rule for § 800.16(e)(Z), OSM has not adopted the provision for mandatory issuance of an NOV, and instead has specified that a notice must be given by the regulatory authoriiy which specifies a reasonable period of up to 90 days within which the bond must be replaced. If the bond is not replaced by the end of that period, the operator must cease coal extraction ...and immediately begin to reclaim the permit azea in accordance with the reclamation plan. Mining operations can resume only upon the posting of a bond acceptable to the regulatory authority.