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27. As a result of the foregoing, Powderhorn can not be determined to be in violation <br />oft C.C R. 407-Z, Rule 3.01 of the regulations. <br />28. The Board concluded that Powderhorn is in violation of 2 C.C.R. 407-2, Rules <br />3.02.1 and 3.02.2, which generally involve the posting of performance bonds prior to the <br />commencement of coal extraction operations and subsequent modification of bond amounts. <br />29. In pertinent part, the provisions require that before a permit is issued a <br />performance bond payable to Colorado must be filed and that the bond amount be reviewed on a <br />periodic basis. <br />30. These provisions contain no requirements with respect to the subsequent <br />condition of the surety, and in fact, state that "Liability on the performance bond shall continue <br />until the entire reclamation plan required under the Act, these Rules, and the provisions of the <br />permit have been completed, and until the permittee is released from any further liability <br />pursuant to 3.03." Id. at 3.02.1(4). <br />31. At the time of issuance of the Frontier Bond, all the requirements for bond <br />approval were met by Powderhorn and Frontier; the bond was accepted by the State, and there is <br />no evidence in the administrative record to the contrary. <br />32. As a result of the foregoing, Powderhorn can not be determined to be in violation <br />of 2 C.C.R. 407-2, Rules 3.02.1 or 3.02.2 of the regulations. <br />COUNT III (Mined Land Reclamation Boardl <br />Issuance of the NOVs is Bevond the Leeal Authority of the Board and is not Supported by <br />Substantial Evidence on the Record as Powderhorn is Not in Violation of 2 C.C.R. 407-2, <br />Rule 3.02.4(2I(bl of the Coal Rules <br />33. Powderhorn repeats and realleges each preceding paragraph as if specifically <br />stated herein. <br />34. The Board concluded that Powderhorn is in violation of 2 C.C.R. 407-2, Rule <br />3.02.4(2)(b), which states, in pertinent part: - <br />Upon the incapacity of a surety by reason of ... suspension or <br />revocation of its license, the permittee shall be deemed to be <br />without bond coverage in violation of 3.02.1(2). <br />2 C.C.R. 407-2, Rule 3.02.4(2)(b)(v)(C). Rule 3.02.1(2) states: <br />An operator shall not disturb surface acreage or extend any <br />underground shafts, tunnels or operations prior to approval of the <br />permit and receipt of approval from the Division of a performance <br />bond covering the acreage to be affected. <br />4 <br />