1993-11-15_PERMIT FILE - C1981017

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Based upon the statutes, both the State and the OSM have historically calculated the cost to reclaim a site to the permit conditions as required by applicable statute. Therefore, the Colorado methodology for estimating the cost of reclamation is consistent with the program requirements, the Colorado statute, the Federal statute and Federal practice. Based upon the record and applicable rules and statute, Colorado asserts that it has effectively and appropriately implemented the approved program regarding reclamation cost estimating at the Coal Basin Mine. Allowing Mid-Continent to Fall One Year Behind in Reclamation Schedule/ Failure to Forfeit Performance Bond In May, 1991, the Mined Land Reclamation Board entered by order an Agreement which resulted from a finding that a Pattern of Violations existed at the Coal Basin Mines. The Pattern of Violations precipitated a Show Cause Order issued to Resources. The May, 1991 Agreement (Appendix 18) was entered into for two reasons. First, it was recognized that the bond instrument may not have been adequate security to ensure that the estimated $3,000, 000 of reclamation funds would be available. In addition, Resources stated that it could not financially afford to continue operations at the site. Therefore, rather than forfeit a security which was probably inadequate, it was determined that the best interests of the people of Colorado would be served if a financially viable operator succeeded to the permit and posted adequate bond with an acceptable security. The Deputy Director of the Office of Surface Mining endorsed the Agreement in principle in his March 30, 1992 correspondence to the Division (Appendix 14) . The Agreement was structured so as to provide environmental protection to the citizens of the state while attempting to facilitate a permit transfer. Second, the Agreement was entertained because, should a permit transfer fail, a reclamation schedule delineating Resources responsibilities and obligations coupled with revocation and forfeiture mechanisms would enhance the State's ability to pursue personal liability or other alternative enforcement mechanisms. Therefore, stabilization and reclamation schedules were built into the Agreement, along with permit revocation and bond forfeiture triggers. The Agreement was publicly negotiated. Parties to the Show Cause hearing, including the Garfield Citizens Alliance and the Crystal Valley Environmental Protection Association were provided opportunities for input, and their comments were incorporated -13-