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without bond coverage." 2 C.C.R. 407-2, Rule 3.02.4(2)(b)(v)(C) (emphasis added). The <br />inclusion of the word "or" establishes that a loss of a license by itself constitutes <br />"incapacity" and is sufficient to find a violation. Powderhorn's argument would render <br />meaningless the grounds that constitute incapacity of a surety by arguing that only <br />insolvency can establish a violation. Insolvency is one ground. However, as stated above, <br />the regulation makes clear that incapacity can be shown by bankruptcy, insolvency or <br />suspension or revocation of a license. <br />The U.S. Department of Treasury has revoked Frontier's Certificate of Authority to <br />do business with the federal govemment. It therefore cannot conduct surety business with <br />the federal govemment. Contrary to Powderhom's argument, a plain reading of the <br />regulations establishes that the regulations do not require a showing that the surety have the <br />capacity to satisy its financial obligations despite the loss of its license. The fact that Frontier <br />has lost its license to conduct business with the United States constitutes a violation of <br />Colorado regulations. As such, Powderhom is not in compliance and must replace Frontier's <br />bond. 3 <br />Furthermore, where a coal mining company has a permit which includes a mining <br />operation being conducted on both federal land and nonfederal land, the company must have <br />a reclamation performance bond payable to both the United States and the State of Colordo. <br />~ It should be noted that a criterion used to revoke a certificate of authority includes the <br />financial condition of the surety company. See 31 C.F.R. 223. <br />11 <br />