Permit Revocation, Bond Forfeiture and Authorization to Expend Reclamation Fund Monies

PURPOSE: This rule clarifies, revises and sets forth requirements, criteria and procedures for permit revocation, bond forfeiture and authorization to expend reclamation fund monies pursuant to sections 444.810, 444.830, 444.885, 444.960 and 444.970, RSMo. (1) Criteria for Permit Suspension or Revocation. A permit shall be subject to suspension or revocation if any of the following conditions apply: (A) The permittee has failed to abate a notice of delinquent reclamation within the time established for the abatement; (B) The permittee has failed to abate a cessation order within the time established pursuant to 10 CSR 40-8.030(6)(C)3.; (C) The permittee has become insolvent, failed in business, been adjudicated bankrupt, filed a petition in bankruptcy or for a receiver or had such a petition filed against him/her; or had a receiver appointed by any court or a creditor of the permittee, has attached or executed a judgment against the permittee’s equipment, materials or facilities at the permit area, and the permittee cannot demonstrate or prove the ability to continue to operate in compliance with the regulatory program and the permit and plan; (D) Any other permit issued to the permittee, or to any entity in which the permittee is a principal, or to any entity in which a principal of the permittee is a principal, or to an entity controlled by or under common control with the permittee, has been revoked and the reclamation plan for that permit has not been completed; or if the reclamation plan for that permit has been completed, the person to whom that permit was issued has not fully paid the costs of the completion to the reclamation fund; (E) The permittee has failed to comply with any conditions established by the commission pursuant to paragraph (2)(E)1. or 2.; or (F) A pattern of violations of any requirements of the regulatory program, or any permit conditions required by the law, exists or has existed and the violations were caused by the permittee willfully or through unwarranted failure to comply with those requirements or conditions. 1. Willful violation means an act or omission which violates the regulatory program or any permit condition required by the regulatory program, committed by a person who intends the result which actually occurs. Unwarranted failure to comply means the failure of the permittee to prevent the occurrence of any violation of the permit or any requirement of the regulatory program due to indifference, lack of diligence or lack of reasonable care, or the failure to abate any violation of the permit or the regulatory program due to indifference, lack of diligence or lack of reasonable care. Violations by any person conducting surface coal mining operations on behalf of the permittee shall be attributed to the permittee unless the permittee establishes that they were acts of deliberate sabotage. 2. The commission or director may determine that a pattern of violations exists, or has existed, based on two (2) or more inspections of the permit area within any twelve (12) months after considering the circumstances, including: A. The number of violations cited on more than one (1) occasion of the same or related requirements of the regulatory program or the permit; B. The number of violations cited on more than one (1) occasion of different requirements of the regulatory program or the permit; and C. The extent to which the violations were isolated departures from lawful conduct. 3. The director shall promptly review the history of violations of any permittee who has been cited for violations of the same or related requirements of the program or the permit during three (3) or more inspections of the permit area within any twelve (12)- month period. If, after the review, the director determines that a pattern of violations exists or has existed, s/he shall issue an order to show cause as provided in subsection (2)(A) of this rule. and Reclamation Operations 4. Whenever a permittee fails to abate a violation contained in a notice of violation or cessation order within the abatement period set in the notice of violation or cessation order or as subsequently extended, the director shall review the permittee’s history of violations to determine whether a pattern of violations exists pursuant to this section and, if so, shall issue an order to show cause as provided for in subsection (2)(A) of this rule. (2) Procedures. (A) If the director determines that a permit should be revoked or suspended as set out in section (1), s/he shall issue an order to the permittee, by certified mail or hand delivery, requiring him/her to show cause why his/her permit and right to mine under the regulatory program should not be suspended or revoked. A copy of this show-cause order shall be filed with the commission. (B) Upon receipt of the show-cause order, the permittee shall have thirty (30) days in which to answer the show-cause order and request a hearing before the commission to show cause why the permit should not be suspended or revoked. If a hearing is requested— 1. It shall be held within sixty (60) days of the receipt of the request by the commission; 2. The director shall advertise the time and place of the hearing once a week for two (2) weeks in a newspaper in the locality of the permit; and 3. Notice of the hearing, if any portion of the permit is bonded, shall be sent by the director to any surety or issuer of letter of credit, or guarantor of self-bonding. (C) If the permittee fails to request a hearing within the time allowed, the matters set forth in the show-cause order shall be conclusive and the commission shall issue its findings of fact, conclusions of law and order declaring the permit revoked at the first regularly scheduled commission meeting following the expiration of the thirty (30)-day period provided to request a hearing. (D) If a hearing is held pursuant to subsection (2)(B) of this rule, the commission shall issue a written findings of facts and conclusions of law and, if appropriate, an order suspending or revoking the permit within forty-five (45) days after the hearing. (E) In lieu of the hearing provided for in subsection (2)(B) of this rule, the commission either may— 1. Enter into a consent order with the permittee to correct the underlying causes of the show-cause order if the consent agreement will not unreasonably delay reclamation; or 2. Extend the abatement period as follows if the cause of the show-cause order is a failure to abate a notice of delinquent reclamation within the time established for the abatement: A. The extension of the abatement period shall be set by the commission and shall not exceed one (1) year from the abatement date established pursuant to 10 CSR 408.030(18)(B) or (C) that the permittee did not meet; B. An extension may only be approved if the commission finds that the failure to abate the notice of delinquent reclamation is not due to a lack of diligence by the permittee. (3) Bond Forfeiture. (A) If a permit is revoked, the commission shall declare all applicable bonds to be forfeited. (B) If the director determines that the surety, issuer of a letter of credit or certificate of deposit, guarantor of self-bonding or former permittee desires to and is capable of completing reclamation, or a portion of reclamation, the director, with approval of the commission and under additional terms and conditions as s/he deems necessary or prudent to assure that reclamation, or a portion of reclamation, is completed expeditiously, may enter into an agreement with the surety, issuer of a letter of credit or certificate of deposit, or former permittee where the person is allowed to complete reclamation, or a portion, on a set schedule of compliance in lieu of collection of the forfeited bond. The reclamation operations shall be in accordance with a compliance schedule which meets the conditions of the regulatory program. The performer of reclamation shall also demonstrate that they have the ability to satisfy the conditions, except where the commission may approve partial releases authorized under 10 CSR 40-7.021(2), no surety, issuer or guarantor liability shall be released until successful completion of all reclamation under the terms of the permit, including applicable liability periods of 10 CSR 40-7.021(1). If the surety, issuer of a letter of credit or certificate of deposit or former permittee fails to complete reclamation, or a portion of reclamation, according to the schedule of compliance, the director shall take action to collect the forfeited bond and any instruments securing the bond. (C) The entry of an order declaring a bond forfeited shall automatically authorize the director, with the assistance of the attorney general, if necessary, to take whatever actions are necessary to collect the forfeited bond and any instruments securing the bond. (4) Declaration of Permit Revocation. (A) For bonds forfeited before January 1, 2006, the director is authorized to utilize duly appropriated reclamation fund monies as specified in 10 CSR 40-7.041(1) to ensure compliance with all applicable regulations and satisfactory completion of the reclamation plan; (B) For bonds forfeited on or after January 1, 2006, the director is authorized to utilize forfeited bonds to ensure compliance with all applicable regulations and satisfactory completion of the reclamation plan. 1. In the event the estimated amount forfeited is insufficient to pay for the full cost of reclamation, the operator shall be liable for remaining costs. The director may complete or authorize completion of reclamation of the bonded area and may recover from the operator all costs of reclamation in excess of the amount forfeited. 2. In the event the amount of performance bond forfeited is more than the amount necessary to complete reclamation, the unused funds shall be returned by the director to the party from whom they were collected. AUTHORITY: section 444.810, RSMo 2000.* Original rule filed Dec. 9, 1982, effective April 11, 1983. Emergency amendment filed Sept. 26, 1985, effective Oct. 7, 1985, expired Feb. 4, 1986. Amended: Filed Dec. 3, 1985, effective March 24, 1986. Rescinded and readopted: Filed June 27, 1986, effective Oct. 27, 1986. Amended: Filed Sept. 15, 1988, effective Jan. 15, 1989. Amended: Filed July 3, 1990, effective Nov. 30, 1990. Amended: Filed May 15, 1992, effective Jan. 15, 1993. Emergency amendment filed Dec. 21, 2005, effective Jan. 1, 2006, expired June 29, 2006. Amended: Filed Dec. 1, 2005, effective July 30, 2006. *Original authority: 444.810, RSMo 1979, amended 1983, 1993, 1995.