17.24.146 BONDING: LETTERS OF CREDIT
(1) The department may accept as a bond a letter of credit subject to the following conditions:
(a) The letter must be issued by a bank organized or authorized to do business in the United States.
(b) The letter must be irrevocable prior to a release by the department pursuant to 82-4-338 , MCA.
(c) The letter must be payable to the department in part or in full upon demand and receipt from the department of a notice that the person has failed to comply with a provision of the Act, the rules adopted thereunder, or the permit, license, or exclusion, the failure of which authorizes forfeiture of the bond under the Act.
(d) The letter of credit must provide that, upon expiration, if the department has not notified the bank in writing that substitute bond has been provided or is not required, the bank will immediately pay the department the full amount of the letter less any previous drafts.
(e) The letter must not be for an amount in excess of 10% of the bank's capital surplus account as shown on a balance sheet certified by a certified public accountant.
(f) The department may not accept a letter of credit from a bank for any person, on all permits, licenses, or exemptions held by that person, in excess of three times the company's maximum single obligation as provided in (e) above.
(2) If the department determines that the bank has become unable to fulfill its obligations under the letter of credit, the department shall, in writing, notify the operator 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 mineral extraction and shall comply with the provisions of 82-4-341 , MCA, and shall immediately begin to conduct reclamation operations in accordance with the Act, this subchapter and reclamation plan. Mining operations must not resume until the department has determined that an acceptable bond has been posted.
History: 82-4-321, MCA; IMP, 82-4-338, 82-4-341, 82-4-360, MCA; NEW, 1994 MAR p. 2952, Eff. 11/11/94; TRANS, from DSL, 1996 MAR p. 2852; AMD, 1999 MAR p. 640, Eff. 4/9/99; AMD, 2002 MAR p. 3590, Eff. 12/27/02.