Reclamation Performance Bonds
The Surface Mining Control and Reclamation Act of 1977 (SMCRA or the Act) provides that, as a prerequisite for obtaining a coal mining permit, a person must post a reclamation bond to ensure that the regulatory authority will have sufficient funds to reclaim the site if the permittee fails to complete the reclamation plan approved in the permit.
There are three major types of reclamation bonds: corporate surety bonds, collateral bonds (cash; certificates of deposit; first-lien interests in real estate; letters of credit; federal, state, or municipal bonds; and investment-grade securities), and self bonds (legally binding corporate promises without separate surety or collateral, available only to permittees who meet certain financial tests). State regulatory programs vary somewhat in terms of which financial instruments are acceptable. A few states also have exercised their discretion to exclude the self-bond option. << Read More >>
Bonding Instruments and Contracts
- Directive REG-28: Bond Forms and Procedures
NOTE: “Please disregard the appendices with respect to forms that must be submitted by the permit applicant or permittee. Readers should instead refer to the link below, which contains all bond forms currently approved by OMB under the Paperwork Reduction Act."
- Link to Bond Forms
Director's Policy Advisory: Self-Bonding (August 9, 2016)
Reclamation Cost Estimate and Determining Bond Amount
Alternative Bonding Systems:
Secretarial MBO on Alternative Bonding Systems (December 4, 1990)
- Enclosure 1: Bonding Committee Report ("Alternative Bonding Systems: An Analytical Approach and Identified Factors to Consider for Evaluating Alternative Bonding Systems" NOTE: This Report is referenced in Directive STP-1, "Processing of Proposed State Regulatory Programs and State/Tribal Abandoned Mine Land Reclamation Plans."
- Enclosure 2: Summary of Discussions Concerning Assessment of "Alternative Bonding Systems" (November 9, 1990)
Director Memorandum (January 18, 1991)