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Article VI - Performance Bonds

      (225 ILCS 720/Art. VI heading)ARTICLE VI: PERFORMANCE BONDS

(225 ILCS 720/6.01) (from Ch. 96 1/2, par. 7906.01)     Sec. 6.01. Requirement of a Bond.     (a) After a mining and reclamation permit application has been approved but before a permit is issued, the applicant shall file with the Department, on a form prescribed and furnished by the Department, a performance bond payable to the People of the State of Illinois, and conditional on the faithful performance of, and compliance with, all requirements of the permit and this Act. The bond shall cover that area of land within the permit area on which the operator will initiate and conduct mining and reclamation operations within the term of the permit. Such bond shall be signed by the operator as principal, and by a good and sufficient corporate surety, licensed to do business in Illinois, as surety.     (b) The Department may accept the bond of the applicant, without separate surety, when the applicant demonstrates to the Department's satisfaction the existence of a suitable agent to receive service of process, a history of financial solvency and continuous operation, and a current financial soundness sufficient for authorization to self‑insure or bond the required amount. (Source: P.A. 88‑185.)

(225 ILCS 720/6.02) (from Ch. 96 1/2, par. 7906.02)     Sec. 6.02. Amount of Bond. The amount of the bond shall be determined by the Department. It shall be sufficient to assure the completion of the reclamation plan specified in the approved permit if the work has to be performed by the Department in the event of forfeiture. The Department shall by rule prescribe standards for determination of the amount of bonds. Such standards shall include the probable difficulty of reclamation, topography, geology, hydrology, revegetation potential, and other standards related to the purposes of this Act. In no case shall the bond for the entire area under one permit be less than the greater of $600 per acre or $10,000. (Source: P.A. 81‑1015.)

(225 ILCS 720/6.03) (from Ch. 96 1/2, par. 7906.03)     Sec. 6.03. Duration of Bond. (a) Liability under the bond shall be for the duration of the mining operations and reclamation, and for a period coincident with the operator's responsibility for revegetation requirements under the permit, this Act and rules under this Act.     (b) Liability under the bond for areas used for the disposal of slurry and gob shall continue for the longer of the period specified in subsection (a) or while such areas are in active use. (Source: P.A. 81‑1015.)

(225 ILCS 720/6.04) (from Ch. 96 1/2, par. 7906.04)     Sec. 6.04. Cancellation. A bond with separate surety filed in accordance with this Article shall not be cancelled by the surety except after not less than 90 days notice to the Department. A surety shall not at any time cancel any portion of a bond covering land already affected. If the license to do business in Illinois of any surety on a bond filed with the Department pursuant to this Act shall be suspended or revoked, the operator, within 30 days after receiving notice thereof from the Department, shall substitute for such surety a good and sufficient corporate surety licensed to do business in Illinois. On failure of the operator to make substitution of surety as herein provided, the Department may suspend the permit of the operator until such substitution has been made. (Source: P.A. 81‑1015.)

(225 ILCS 720/6.05) (from Ch. 96 1/2, par. 7906.05)     Sec. 6.05. Alternatives to a Bond. In lieu of a performance bond, the operator may deposit as security cash, negotiable government securities, or negotiable certificates of deposit of any bank organized or transacting business in the United States, or any combination thereof, with the Department in an amount equal to or greater than the amount of the surety bond required by Section 6.02. Such deposits shall be made, held and disposed of as provided in this Act and by the Department by rule. (Source: P.A. 81‑1015.)

(225 ILCS 720/6.06) (from Ch. 96 1/2, par. 7906.06)     Sec. 6.06. Changes in Amount of Bond. The amount of the bond or cash and securities shall be increased or reduced from time to time as the land affected by mining operations changes, and as the cost of future reclamation changes whether as a result of cost inflation or deflation, changes in costs, new information, or other cause. The Department shall by rule provide standards and procedures for such adjustments of a bond. (Source: P.A. 81‑1015.)

(225 ILCS 720/6.07) (from Ch. 96 1/2, par. 7906.07)     Sec. 6.07. Forfeiture.     (a) The Attorney General, on request of the Department, shall institute proceedings to have the bond of the operator forfeited for violation by the operator of any of the provisions of this Act or for noncompliance with any lawful rule or regulation promulgated by the Department thereunder. Before making such request of the Attorney General, the Department shall notify the operator in writing of the alleged violation or non‑compliance and shall afford the operator the right to appear before the Department at a hearing to be held not less than 30 days after the receipt of such notice by the operator. At the hearing the operator may present for the consideration of the Department statements, documents and other information with respect to the alleged violation. After the conclusion of the hearing, the Department shall either withdraw the notice of violation or shall request the Attorney General to institute proceedings to have the bond of the operator forfeited as to the land involved.     (b) The Department shall prescribe by rule the events and conditions on the basis of which it may request the Attorney General to institute bond forfeiture proceedings. Such rules shall be no less stringent than the Regulations.     (c) In the event that the Department requests the Attorney General to institute proceedings to have the bond forfeited, the Department shall send written notification to the permittee and, if applicable, the surety on the bond, stating the reasons for its decision and the amount to be forfeited.     (d) The amount of forfeiture shall be based on the actual cost of the necessary work by a third party to remedy the violation, except that the amount shall not exceed the amount of the bond or deposit for the area in which the violation occurred.     (e) Any operator against whom forfeiture proceedings have been required shall not be issued a permit for further mining in Illinois unless he provides additional assurances satisfactory to the Department that such proceedings will not again become necessary.     (f) In the event the bond or deposit for a surface coal mining operation on lands eligible for remining is forfeited, funds appropriated for expenditure under the Abandoned Mined Lands and Water Reclamation Act may be used if the amount of the bond or deposit is not sufficient to provide for adequate reclamation or abatement. (Source: P.A. 90‑490, eff. 8‑17‑97.)

(225 ILCS 720/6.08) (from Ch. 96 1/2, par. 7906.08)     Sec. 6.08. Release of bonds.     (a) A permittee may file a request with the Department for the release of all or part of a performance bond or deposit. Within 30 days after an application for such release has been filed with the Department, the operator shall submit a copy of a public notice placed at least once a week for 4 successive weeks in a newspaper of general circulation in the locality of the mining operation. Such public notice shall be considered part of the bond release application and shall contain a notification of the precise location of the land affected, the number of acres, the permit and the date it was approved, the amount of the bond filed and the portion sought to be released, the type and approximate dates of reclamation work performed, and a description of the results achieved as they relate to the operator's approved reclamation. In addition, as part of any bond release application, the applicant shall submit copies of letters which he has sent to adjoining property owners, local governmental bodies, county boards, planning agencies, and sewage and water treatment authorities, or water companies in the locality in which the mining and reclamation operations took place, notifying them of his intention to seek release from the bond.     (b) Within 30 days after receipt of the notification and request, the Department shall conduct an inspection and evaluation of the reclamation work involved. Such evaluation shall consider, among other things, the degree of difficulty to complete any remaining reclamation, whether pollution of surface and subsurface water is occurring, the probability of continuance or future occurrence of such pollution, and the estimated cost of abating such pollution.     (c) Any person with a valid legal interest which might be adversely affected by release of the bond or deposit, or the responsible officer or head of any Federal, State, or local governmental agency which has jurisdiction by law or special expertise with respect to any environmental, social, or economic impact involved in the operation, or is authorized to develop and enforce environmental standards with respect to such operations, may file written objections to the proposed release with the Department within 30 days after the last publication of the notice provided in subsection (a) of this Section. If written objections are filed, and a hearing is requested, the Department shall inform all interested parties of the time and place of the hearing, and shall hold a public hearing in the locality of the mining operation proposed for bond or deposit release within 30 days after the request for such hearing. At the option of an objector, hearings shall be held at the State capital. The Department shall advertise the date, time and location of such public hearings in a newspaper of general circulation in the locality for 2 consecutive weeks.     (d) The Department may release in whole or in part said bond or deposit if the Department is satisfied the reclamation covered by the bond or deposit or portion thereof has been accomplished as required by this Act according to the following schedule:         (1) When the operator completes the backfilling,

regrading, and drainage control of a bonded area in accordance with an approved reclamation plan, a maximum of 60 per cent of the bond or collateral for the applicable permit area may be released.

(2) After revegetation has been established on the

regraded mined lands in accordance with the approved reclamation plan, an additional amount of the bond or deposit may be released. When determining the amount of bond or deposit to be released after successful revegetation has been established, the Department shall retain that amount of bond or deposit for the revegetated area which would be sufficient for a third party to pay the cost of reestablishing revegetation and for the period specified for operator responsibility. No part of the bond or deposit shall be released under this paragraph so long as the lands to which the release would be applicable are contributing suspended solids to streamflow or runoff outside the permit area in excess of the requirements set by this Act or until soil productivity for prime farmlands has returned to equivalent levels of yield as nonmined land of the same soil type in the surrounding area under equivalent management practices.

(3) When the operator has successfully completed all

mining and reclamation activities, the remaining portion of the bond may be released, but not before the expiration of the period specified for operator responsibility.

(4) No bond shall be fully released until all

reclamation requirements of the permit and this Act are fully met.

(e) The Department shall notify the permittee in writing of its decision to release or not to release all or part of the performance bond or deposit (1) within 60 days after the filing of the request, if no public hearing is held under subsection (c) of this Section, or (2) if a public hearing has been held under subsection (c) of this Section, within 30 days thereafter.     (f) If the Department disapproves the application for release of the bond or deposit or portion thereof, the Department shall state in writing the reasons for disapproval and shall recommend corrective actions necessary to secure said release. An opportunity for a public hearing shall be provided.     (g) If the Department approves the application, it shall notify the municipality and county in which the mining operation is located by certified mail at least 30 days prior to the release of all or a portion of the bond or deposit.     (h) The Department may by rule provide procedures for the administration of this Section, including procedures for hearings and informal conferences.     (i) Surface coal mining operations on lands eligible for remining shall not affect the eligibility of those lands for reclamation and restoration under the Abandoned Mined Lands and Water Reclamation Act after the release of the bond or deposit for any such operation under this Section. (Source: P.A. 90‑490, eff. 8‑17‑97.)