New Mexico Administrative Code › Title 19 - NATURAL RESOURCES AND WILDLIFE › Chapter 15 - OIL AND GAS › Part 36 - SURFACE WASTE MANAGEMENT FACILITIES › Section 19.15.36.11 - FINANCIAL ASSURANCE REQUIREMENTS

Current through Register Vol. 35, No. 13, July 16, 2024
A. Centralized facilities. Upon notification
				by the division that it has approved a permit but prior to the division issuing
				the permit, an applicant for a new centralized facility permit shall submit
				acceptable financial assurance in the amount of $25,000 per centralized
				facility, or a statewide "blanket" financial assurance in the amount of $50,000
				to cover all of that applicant's centralized facilities, unless such applicant
				has previously posted a blanket financial assurance for centralized
				facilities.
B. New commercial
				facilities or major modifications of existing commercial facilities. Upon
				notification by the division that it has approved a permit for a new commercial
				facility or a major modification of an existing commercial facility but prior
				to the division issuing the permit, the applicant shall submit acceptable
				financial assurance in the amount of the commercial facility's estimated
				closure and post closure cost, or $25,000, whichever is greater. The commercial
				facility's estimated closure and post closure cost shall be the amount provided
				in the closure and post closure plan the applicant submitted pursuant to
				Paragraph (9) of Subsection C of
				19.15.36.8
				NMAC unless the division determines that such estimate does not reflect a
				reasonable and probable closure and post closure cost to implement the closure
				and post closure plan, in which event, the division shall determine the
				estimated closure and post closure cost and shall include such determination in
				its proposed decision. If the applicant disagrees with the division's
				determination of estimated closure and post closure cost, the applicant may
				request a hearing as provided in
				19.15.36.10
				NMAC. If the applicant so requests, and no other person files a request for a
				hearing regarding the proposed decision, the hearing shall be limited to
				determination of estimated closure and post closure cost.
C. Terms of financial assurance. The
				financial assurance shall be on division-prescribed forms, or forms otherwise
				acceptable to the division, payable to the energy, minerals and natural
				resources department, oil conservation division and conditioned upon the
				surface waste management facility's proper operation, site closure and post
				closure operations in compliance with state of New Mexico statutes, division
				rules, applicable division orders and the surface waste management facility
				permit terms. The division may require proof that the individual signing for an
				entity on a financial assurance document or any amendment thereto has the
				authority to obligate that entity.
D. Forfeiture of financial assurance. The
				division shall give the operator 20 days' notice and an opportunity for a
				hearing prior to forfeiting financial assurance. All forfeitures the division
				demands pursuant to 19.15.36 NMAC shall be made payable to the energy, minerals
				and natural resources department, oil conservation division upon demand by the
				division.
E. Forms of financial
				assurance. The division may accept the following forms of financial assurance.
(1) Surety bonds. A surety bond shall be
				executed and notarized by the applicant and by a corporate surety licensed by
				the superintendent of insurance to do business in the state . All surety bonds
				shall be non-cancelable and payable to the energy, minerals and natural
				resources department, oil conservation division within 45 days after demand is
				made by the division. All surety bonds shall be governed by the laws of the
				state of New Mexico.
(2) Letters of
				credit. A letter of credit shall be issued by a national or state-chartered
				banking association, shall be irrevocable for a term of not less than five
				years and shall provide for automatic renewal for successive, like terms upon
				expiration, unless the issuer has notified the division in writing of
				non-renewal at least 120 days before its expiration date. All letters of credit
				shall be governed by the laws of the state of New Mexico. If a letter of credit
				is not replaced by an approved financial assurance within 30 days of notice of
				non-renewal provided to the division, the division may demand and collect a
				letter of credit.
(3) Cash
				accounts. An operator may provide financial assurance in the form of a
				federally insured or equivalently protected cash account or accounts in a
				financial institution, provided that the operator and the financial institution
				shall execute as to each such account a collateral assignment of the account to
				the division, which shall provide that only the division may authorize
				withdrawals from the account. In the event of forfeiture pursuant to 19.15.36
				NMAC, the division may, at any time and from time to time, direct payment of
				all or part of the balance of such account (excluding interest accrued on the
				account) to itself or its designee for the surface waste management facility's
				closure and post closure. Any assignment of cash collateral shall be governed
				by the laws of the state of New Mexico and shall be on division-prescribed
				forms.