Wyoming Administrative Code › Agency 020 - Environmental Quality, Dept. of › Sub-Agency 0007 - Land Quality - Non Coal › Chapter 6 - FINANCIAL ASSURANCE › Section 6-5 - Collateral Bonds

Current through July 13, 2024
(a) Collateral bond
				means an indemnity agreement in a sum certain executed by the operator as
				principal which is supported by the deposit with the Department of one or more
				of the following:
(i) Cash directly deposited
				with the Department is exempt from the trust provisions;
(ii) Negotiable bonds of the United States, a
				State or a municipality, endorsed to the order of the Department and placed in
				possession of the Department. Possession may be in the form of the cash value
				of the irrevocable trust for the full amount of the reclamation obligation and
				payable to the Department and federally insured. An operator may satisfy the
				requirements of this subsection by establishing an irrevocable trust that
				conforms to the requirements below and submitting an originally signed
				duplicate of the trust agreement to the Administrator for consideration.
(A) The wording of the irrevocable trust must
				be identical to the wording specified on the Wyoming Department of
				Environmental Quality Irrevocable Trust for Coal Reclamation Form and be signed
				by the operator or guarantor as principal, the financial institution as Trustee
				and be made payable to the Department;
(B) The Trustee must be a bank organized to
				do business in the United States that has the authority to act as a trustee and
				whose trust operations is regulated and examined by a Federal or State
				Agency;
(C) The irrevocable trust
				must be cash funded for the full amount of the reclamation obligation to be
				provided in the irrevocable trust before it may be approved to satisfy the
				requirements of financial assurance in lieu of a bond. For purposes of this
				subsection, "the full amount of the reclamation obligation to be provided"
				means the amount of coverage for reclamation required to be provided for the
				permit, less the amount of financial assurance for reclamation obligation that
				is being provided by other financial assurance mechanisms being used to
				demonstrate financial assurance by the operator or guarantor;
(D) Cancellation of an irrevocable trust
				shall follow the same procedures detailed in
				W.S.
				35-11-419 for performance bonds;
				and
(E) Forfeiture proceeding for
				an irrevocable trust shall follow the same procedures detailed in
				W.S.
				35-11-421 for performance bonds.
(iii) For any real property
				collateral, the following information shall be provided:
(A) The value of the real property. The
				property shall be valued at the difference between the fair market value and
				any reasonable expense anticipated by the Department in selling the property.
				The fair market value shall be determined by a market analysis that may be
				conducted by an appraiser or qualified agent proposed by the operator. The
				appraiser shall be selected by the Administrator. The Administrator has the
				option to reject any appraiser proposed by the operator. The expense of the
				appraisal shall be borne by the operator. The real property shall be appraised
				every three (3) years; and
(B) A
				description of the property satisfactory for deposit to further assure that the
				operator shall faithfully perform all requirements of the Act. The
				Administrator shall have full discretion in accepting any such offer.
(I) Real property shall not include any lands
				in the process of being mined, reclaimed, or the subject of this application.
				The operator may offer any lands within the permit boundary which have received
				phase 3 bond release or which will not be disturbed while pledged as
				collateral. The acceptance of real property within the permit boundary shall be
				at the discretion of the Administrator.
(C) Evidence of ownership of the real
				property shall be in the form of a clear and unencumbered title.
(D) If the Administrator accepts any real
				property as collateral, the Administrator shall require possession by the
				Department of the mortgage agreement executed by the operator in favor of the
				Department of Environmental Quality. The requirement shall be sufficient to
				vest such interest in the property in the Department to secure the right and
				power to sell or otherwise dispose of the property by public or private
				proceedings so as to ensure reclamation of the affected lands in accordance
				with the Act. Any mortgage shall be executed and duly recorded as required by
				law so as to be first in time and constitute notice to any prospective
				subsequent purchaser of the same real property or any portion
				thereof.
(E) Any security interest
				created by a security agreement shall be perfected by filing a financing
				statement or taking possession of the collateral in accordance with W.S.
				§§
											34.1-9-401 through 406. The
				Department shall have all rights and duties set forth in W.S. §
											34.1-9-207 when the collateral is
				in its possession as a secured party, as defined in W.S. §
											34.1-9-102(a)(lxxv).
				Any money received from the collateral during this period of time shall be
				remitted to the operator. When the collateral is left in the possession of the
				operator, the security agreement shall require that, upon default, the operator
				shall assemble the collateral and make it available to the Department at a
				place to be designated by the Department which is reasonably convenient to both
				parties.
(F) The operator may, with
				written approval by the Administrator, substitute for any of the real property
				held hereunder other real property upon submittal of all information required
				under this section.
(G) All parties
				with a claim subordinate to the Department in property held as collateral under
				this section shall be notified by the operator of all actions affecting the
				collateral.
(iv)
				Securities.
(A) Securities that are
				unencumbered shall only include those which are United States Government
				securities or State Government securities which are acceptable to the
				Administrator. Certificates of deposit shall be insured by the Federal Deposit
				Insurance Company (FDIC).
(B) If
				the instrument offered for deposit is a security, the operator's interest must
				be evidenced by possession of the original or a notarized copy of the
				certificate or a certified statement of account from a brokerage
				house.
(C) If the Administrator
				accepts any government securities, the Administrator shall require possession
				by the Department of the security agreement executed by the operator in favor
				of the Department of Environmental Quality. The requirement shall be sufficient
				to vest such interest in the property in the Department to secure the right and
				power to sell or otherwise dispose of the property by public or private
				proceedings so as to ensure reclamation of the affected lands in accordance
				with the Act.