ENFORCE37764

• Permit No: C1981041
• IBM Index Class Name: Enforcement
• Doc Date: 7/12/2001
• Doc Name: SUMMONS
• Violation No.: CV2001005
• Media Type: D
• Archive: No

JUN-19-01 02:09PI1 FR011-Colorado Dlviclon of Ilineralc i Geology [phone] T-646 P.004/006 F-132
5. On Mazch 14, 2001, the Colorado Commissioner of Insurance summarily
suspended Frontier's Colorado Certificate of Authority. Frontier was entitled to a hearing on the
summary suspension, but Frontier waived its right to a hearing.
6. As a result of the suspension of Frontier's Colorado Certificate of Authority, the
Division served on Powderhot NOV No. CV-2001-005 for failure to maintain an adequate
reclamation bond in violation of § 34-33-113, C.R.S., and Coal Rules 3.01, 3.02.1, 3.02.2,
3.02.4(1)(a) and 3.02.4(2)(b), on April 13, 2001. In NOV No. CV-2001-005, the Division
ordered Powderhom to abate the violation by replacing the Frontier Bond with a performance
bond that complies with all applicable statutes and regulations.
7. Pursuant to § 34-33-113(2), C.RS., bonds for coal reclatation permits must be
executed by a corporate surety licensed to do business is the state of Colorado. Furthermore,
pursuant to Coal Rule 3.02.4(2)(b)(v}(C), "Upon the incapacity of a surety by rcason of .. .
suspension or revocation of its license, the pertnittee shall be deemed to be without bond
coverage is violation of 3.02.1(2). The Division shall issue a notice of violation against any
permittee who is without bond coverage."
8. Because the Bond is a joint band held in favor of both the Boazd and the BLM, ,
Frontier's incapacities by reason of revocation of its federal Certificate of Authority and
suspension of its Colorado Certificate of Authority constitute grounds for two separate violations
pursuant to Coal Rule 3.02.4(2)(b)(v)(C).
9. NOV Nos. CV-2000-O10and CV-2001-005 were both validly issued by the
Division pr~*~+±a~t to Coal Rule 3.02.4(2)(b)(v)(C).
10. Powderhom has failed to abate NOV Nos. CV-2000-010 and CV-2001-005.
11. On June 16, 2000, Powderhom filed a petition in banlauptcy in Kentucky. The
Board finds that the Division and its Attorney General representatives should work through the
banknrptcy proceedings with Powderhom to addmss the Division's and Board's concerns
regarding Powderhom's reclamation liability at the site operated pursuant to the Permit
12. The Board was made aware at the hearing is this matter that Powderhom will
likely file a petition for judicial review in the District Court, Mesa County, Colorado, in order to
protect its ability to continue to challenge the NOV's in the future should it fmd such action
necessary. The Board was also made aware that Powderhom would be willing to stipulate to a
stay of the judicial review case pending further attempts to address the Division's and Board's
concerns regarding Powderhorn's reclamation liability through Powderhorn's bankruptcy
proceeding in Kentucky.
] 3. Powderhom is out of compliance with its bonding requirements, but has to date
remained incompliance with its on-the-ground reclamation responsibilities at the site, as set
forth in the Permit.
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