Ariz. Admin. Code § 11-3-807

Current through Register Vol. 30, No. 25, June 21, 2024

Section R11-3-807 - Letter of Credit

A. A responsible party may satisfy the financial assurance requirements in the Act and this Chapter by obtaining a confirmed, irrevocable stand-by letter of credit naming with State of Arizona as the primary beneficiary.

B. The responsible party shall ensure the letter of credit is issued by a financial institution that:

1. Has authority to issue letters of credit,

2. Is federally insured, and

3. Has letter-of-credit operations regulated by the federal government and examined by an Arizona state agency.

C. The responsible party shall ensure the letter of credit:

1. Is for a period that exceeds one year by at least 90 days;

2. Contains terms acceptable to the Inspector;

3. Is in an amount equal to or greater than the estimated cost in the approved reclamation plan;

4. Indicates clearly the conditions under which the State of Arizona may draw on the letter of credit; and

5. Except as provided in subsection (E), indicates the letter of credit may be cancelled only by the issuing financial institution or the Inspector.

D. The financial institution that issued a letter of credit under subsection (B) may cancel the letter of credit by sending notice of cancellation by certified mail to both the responsible party and Inspector at least 120 days in advance of cancellation. Within 90 days after receiving the notice of cancellation, the responsible party shall provide the Inspector with evidence an alternate financial assurance mechanism that meets the requirements of the Act and this Chapter has been obtained.

E. A responsible party may cancel a letter of credit issued under subsection (B) if the responsible party:

1. Provides the Inspector with evidence an alternate financial assurance mechanism that meets the requirements of the Act and this Chapter has been substituted; or

2. Is released by the Inspector under A.R.S. § 27-1296 and R11-3-816 from the financial assurance requirements in the Act and this Chapter.

Ariz. Admin. Code § R11-3-807

Adopted by final rulemaking at 25 A.A.R. 828, effective 5/11/2019.