Section 11-8-2.4-43-4303 - Terms and Conditions of the Bond(a) The performance bond shall be in an amount determined by the permit board as provided in §§ 4101 and 4103.(b) The performance bond shall be payable to the Commission.(c) The performance bond shall be conditioned upon faithful performance of all of the requirements of the act, these regulations and the conditions of the permit, and shall cover the entire permit area or an identified increment of land within the permit area upon which the operator will initiate and conduct surface coal mining and reclamation operations during the initial term of the permit.(d) The duration of the bond shall be for the time period provided in § 4105.(e) Surety bonds shall be subject to the following conditions.(1) The Permit Board shall not approve the bond of a surety company unless the bond shall not be cancelable by the surety at any time for any reason including, but not limited to, nonpayment of premium or bankruptcy of the permittee during the period of liability. Surety bond coverage for permitted lands not disturbed may be canceled with the consent of the Permit Board; provided, the surety gives at least 60 days notice to both the permittee and the Permit Board of the intent to cancel prior to cancellation. Such notice shall be by certified mail and shall not be effective until received by both the permittee and Permit Board. Cancellation shall not be effective for lands subject to bond coverage which are disturbed after receipt of notice, but prior to approval by the Permit Board. The Permit Board may approve such cancellation only if a replacement bond is filed by the permittee prior to the cancellation date, or the permit is amended so that the surface coal mining operations approved under the permit are reduced to the degree necessary to cover all the costs attributable to the completion of reclamation operations on the reduced permit area in accordance with Rule 41 and the remaining performance bond liability.(2) The Permit Board shall not accept surety bonds in excess of 10 percent of the surety company's capital surplus account as shown on the balance sheet certified by a certified public accountant, unless otherwise provided by law.(3) The Permit Board shall not accept surety bonds from a surety company for any person, on all permits held by that person, in excess of three times the company's maximum single obligation as provided by state law, or, in the absence of state law, as provided in § 4303(e)(2).(4) The Permit Board may provide in the bond that the amount shall be confessed to judgment upon forfeiture.(5) The bond shall provide that the surety and the permittee shall be liable jointly and severally.(6) The bond shall provide that:(A) the surety will give prompt notice to the permittee and the Permit Board of any notice received or action filed alleging the insolvency or bankruptcy of the surety or the permittee, or alleging any violations of regulatory requirements which could result in suspension or revocation of the surety's license to do business;(B) in the event the surety becomes unable to fulfill its obligations under the bond for any reason, notice shall be given immediately to the permittee and the Permit Board;(C) upon the incapacity of a surety company by reason of bankruptcy, insolvency, or suspension or revocation of a charter or license, the permittee shall be deemed to be without bond coverage and shall promptly notify the Permit Board. The Permit Board, upon notification received through the procedures of § 4303(e)(6)(A) or from the permittee, shall, in writing, notify the operator who is without bond coverage and specify a reasonable period, not to exceed 90 days, to replace bond coverage. If an adequate bond is not posted by the end of the period allowed, the operator shall cease coal extraction and shall comply with the provisions of § 53107 and shall immediately begin to conduct reclamation operations in accordance with the reclamation plan. Mining operations shall not resume until the Permit Board has determined that an acceptable bond has been posted.(7) A surety bond shall be executed by the operator and a corporate surety licensed to do business in Mississippi.(f) Collateral bonds, except for letters of credit and cash accounts, shall be subject to the following conditions. (1) The Department shall obtain possession of and keep in custody all collateral deposited by the applicant, until authorized for release or replacement as provided in this Subchapter.(2) The Permit Board shall value collateral at their current market value, not face value.(3) The Permit Board shall require that all collateral bonds comply with the provisions of § 105. Collateral Bond.(4) The Permit Board shall require that certificates of deposit be assigned to the Commission, in writing, and upon the books of the bank issuing such certificates.(5) The Permit Board shall not accept an individual certificate of deposit for a denomination in excess of $100,000 or maximum insurable amount as determined by FDIC and FSLIC.(6) The Permit Board shall require the banks issuing certificates of deposit to waive all rights of set off or liens which it has or might have against those certificates.(7) The Permit Board shall only accept automatically renewable certificates of deposit.(8) The Permit Board shall value certificates of deposit for full or partial fulfillment of the bonding requirement at the certificate's face value and shall not allow future accrued interest to be considered in that valuation.(9) The estimated bond value of all collateral posted as assurance under this Section shall be subject to a margin which is the ratio of bond value to market value, as determined by the Permit Board. The margin shall reflect legal and liquidation fees, as well as value depreciation, marketability and fluctuations which might affect the net cash available to the Department to complete reclamation.(10) The bond value of collateral may be evaluated at any time, but it shall be evaluated as part of permit renewal and, if necessary, the performance bond amount increased or decreased. In no case shall the bond value of collateral exceed the market value.(11) Persons with an interest in collateral posted as a bond, and who desire notification of actions pursuant to the bond, shall request the notification in writing to the Department at the time collateral is offered.(g) Letters of credit shall be subject to the following conditions.(1) The letter may only be issued by a bank organized or authorized to do business in the United States.(2) Letters of credit shall be irrevocable during their term. A letter of credit used as security in areas requiring continuous bond coverage shall be forfeited and shall be collected by the Commission if not replaced by other suitable bond or letter of credit at least 30 days before its expiration date.(3) The letter must be payable only to the Commission in part or in full upon demand and receipt from the Commission of a notice of forfeiture issued in accordance with Rule 47.(4) The Permit Board shall not accept a letter of credit in excess of 10 percent of the bank's capital surplus account as shown on a balance sheet certified by a certified public accountant.(5) The Permit Board shall not accept letters of credit from a bank for any person, on all permits held by that person, in excess of three times the company's maximum single obligation as provided by state law or, in the absence of state law, as provided in § 4303(g)(4).(6) The Permit Board may provide in the letter of credit that the amount shall be confessed to judgment upon forfeiture.(7) The letter of credit shall provide that: (A) the bank will give prompt notice to the permittee and the Department of any notice received or action filed alleging the insolvency or bankruptcy of the bank, or alleging any violations of regulatory requirements which could result in suspension or revocation of the bank's charter or license to do business;(B) in the event the bank becomes unable to fulfill its obligations under the letter of credit for any reason, notice shall be given immediately to the permittee and the Department;(C) upon the incapacity of a bank by reason of bankruptcy, insolvency, or suspension or revocation of a charter or license, the permittee shall be deemed to be without bond coverage and shall promptly notify the Department. The Department, upon notification received through the procedures of § 4303(g)(7)(A) or from the permittee, shall, in writing, notify the operator who is without bond coverage and specify a reasonable period, not to exceed 90 days, to replace bond coverage. If an adequate bond is not posted by the end of the period allowed, the operator shall cease coal extraction and shall comply with the provisions of § 53107 and shall immediately begin to conduct reclamation operations in accordance with the reclamation plan. Mining operations shall not resume until the Permit Board has determined that an acceptable bond has been posted.(8) Persons with an interest in the letter of credit, and who desire notification of actions pursuant to the letter, shall request the notification in writing to the Department at the time the letter is offered.(h) Cash accounts shall be subject to the following conditions: (1) The Permit Board may authorize the operator to supplement the bond through the establishment of a cash account in one or more federally-insured or equivalently protected accounts made payable upon demand to, or deposited directly with, the Commission. The total bond including the cash account shall not be less than the amount required under terms of performance bonds including any adjustments, less amounts released in accordance with Rule 45.(2) Any interest paid on a cash account shall be retained in the account and applied to the bond value of the account unless the Permit Board has approved the payment of interest to the operator.(3) Certificates of deposit may be substituted for a cash account with the approval of the Permit Board.(4) The Permit Board shall not accept an individual cash account in an amount in excess of $100,000 or the maximum insurable amount as determined by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation.11 Miss. Code. R. § 8-2.4-43-4303