Section NR 135.40 - Financial assurance(1) NOTIFICATION. The regulatory authority shall provide written notification to the operator of the amount of financial assurance required under sub. (3).(2) FILING. Following approval of the nonmetallic reclamation permit, and as a condition of the permit, the operator shall file a financial assurance with the regulatory authority. The financial assurance shall provide that the operator shall faithfully perform all requirements in this chapter, an applicable reclamation ordinance and the reclamation plan. Financial assurance shall be payable exclusively to the regulatory authority that has jurisdiction and who issues the approval for the reclamation plan. In cases where the regulatory authority changes from one jurisdiction to another all financial assurance shall be made payable to the regulatory authority that currently has primary regulatory responsibility in that jurisdiction.(3) AMOUNT AND DURATION OF FINANCIAL ASSURANCE. The amount of financial assurance shall equal as closely as possible the cost to the regulatory authority of hiring a contractor to complete either final reclamation or progressive reclamation according to the approved reclamation plan. The amount of financial assurance shall be reviewed periodically by the regulatory authority to assure it equals outstanding reclamation costs. Any financial assurance filed with the regulatory authority shall be in an amount equal to the estimated cost to the regulatory authority for reclaiming all sites the operator has under project permits. The regulatory authority may accept a lesser initial amount of financial assurance provided that the permittee initiates a process to continuously increase the amount of financial assurance until it is adequate to effect reclamation. An escrow account may be established that is based on production gross sales and serves to provide regular payments to an account that is designed to grow to the amount necessary to guarantee performance of reclamation by the expected time of final reclamation. The period of the financial assurance is dictated by the period of time required to establish the post mining land use declared and approved of in the mine reclamation plan. This may extend beyond the permit if required to accomplish successful and complete implementation of the reclamation plan.(4) FORM AND MANAGEMENT. Financial assurance shall be provided by the operator and shall be by a bond or an alternate financial assurance. Financial assurance shall be payable to the regulatory authority and released upon successful completion of the reclamation measures specified in the reclamation plan. Alternate financial assurances may include, but are not limited to cash, certificates of deposits, irrevocable letters of credit, irrevocable trusts, established escrow accounts, demonstration of financial responsibility by meeting net worth requirements, or government securities. Any interest from the financial assurance shall be paid to the operator. Certificates of deposit shall be automatically renewable or other assurances shall be provided before the maturity date. Financial assurance arrangements may include, at the discretion of the regulatory authority, a blend of different options for financial assurance including a lien on the property on which the nonmetallic mining site occurs or a combination of financial assurance methods.(5) MULTIPLE PROJECTS. Any operator who obtains a permit from the regulatory authority for 2 or more nonmetallic mining sites may elect, at the time the second or subsequent site is approved, to post a single financial assurance in lieu of separate financial assurance instruments for each nonmetallic mining site. When an operator elects to post a single financial assurance in lieu of separate financial assurances for each mining site, no financial assurances previously posted on individual mining sites shall be released until the new financial assurance has been accepted by the regulatory authority.(6) MULTIPLE JURISDICTIONS. In cases where more than one regulatory authority has jurisdiction, a cooperative financial security arrangement may be developed and implemented by the regulatory authorities to avoid requiring the permittee needing to prove financial assurance with more than one regulatory authority for the same nonmetallic mining site. Financial assurance is required for each site and 2 or more sites of less than one acre by the same operator, except that governmental units are not required to obtain financial assurance.(7) CERTIFICATION OF COMPLETION AND RELEASE. (a) The operator shall notify the regulatory authority, by filing a notice of completion, at the time that he or she determines that reclamation of any portion of the mining site or the entire site is complete. The regulatory authority shall inspect the mine site or portion thereof that was the subject of the notice of completion to determine if reclamation has been carried out in accordance with the approved reclamation plan. The regulatory authority may partially release the financial assurance if it determines that compliance with a portion of the reclamation plan has been achieved and requires no waiting period. After determining that reclamation is complete, the regulatory authority shall issue a certificate of completion and shall release the financial assurance.(b) The regulatory authority shall make a determination of whether or not the certification in par. (a) can be made within 60 days that the request is received. (c) A regulatory authority may make a determination under this subsection that: 1. Reclamation is not yet complete;2. It is not possible to assess whether reclamation is complete due to weather conditions, snow cover or other relevant factors;3. Reclamation is complete in a part of the mine; or4. Reclamation is fully complete.(8) FORFEITURE. Financial assurance shall be forfeited if any of the following occur: (a) A permit is revoked under s. NR 135.25 and the appeals process has been completed.(b) An operator ceases mining operations and fails to reclaim the site in accordance with the reclamation plan.(9) CANCELLATION. Financial assurance shall provide that it may not be cancelled by the surety or other holder or issuer except after not less than a 90-day notice to the regulatory authority in writing by registered or certified mail. Not less than 30 days prior to the expiration of the 90-day notice of cancellation, the operator shall deliver to the regulatory authority a replacement proof of financial assurance. In the absence of this replacement financial assurance, all mining shall cease until the time it is delivered and in effect.(10) CHANGING METHODS OF FINANCIAL ASSURANCE. The operator of a nonmetallic mining site may change from one method of financial assurance to another. This may not be done more than once a year unless required by an adjustment imposed pursuant to sub. (12). The operator shall give the regulatory authority at least 60 days' notice prior to changing methods of financial assurance and may not actually change methods without the written approval of the regulatory authority.(11) BANKRUPTCY NOTIFICATION. The operator of a nonmetallic mining site shall notify the regulatory authority by certified mail of the commencement of voluntary or involuntary proceeding under bankruptcy code, 11 USC, et seq., naming the operator as debtor, within 10 days of commencement of the proceeding.(12) ADJUSTMENT OF FINANCIAL ASSURANCE. Financial assurance may be adjusted when required by the regulatory authority. The regulatory authority may notify the operator in writing that adjustment is necessary and the reasons for it. The regulatory authority may adjust financial assurance based upon prevailing or projected interest or inflation rates, or the latest cost estimates for reclamation.(13) NET WORTH TEST. (a) Only an operator that meets the definition of "company" in s. 289.41(1) (b), Stats., may use the net worth method of providing financial assurance.(b) The operator shall submit information to the regulatory authority in satisfaction of the net worth test requirements of s. 289.41(4), Stats. The criteria in s. 289.41(6) (b), (d), (e), (f), (g), (h) and (i), Stats., shall apply.(c) An operator using the net worth test to provide financial assurance for more than one mine shall use the total cost of compliance for all mines in determining the net worth to reclamation cost ratio in accordance with s. 289.41(6), Stats.(d) The department determinations under the net worth test shall be done in accordance with s. 289.41(5), Stats.(e) In addition, the operator shall submit a legally binding commitment to faithfully perform all compliance and reclamation work at the mine site that is required under an applicable nonmetallic mining reclamation ordinance.Wis. Admin. Code Department of Natural Resources NR 135.40
Cr. Register, September, 2000, No. 537, eff. 12-1-00.