(b) The bond or substituted security must:

1. (1) Be effective prior to the date of issuance of the permit by the division; and
2. (2) Continue in effect until released by the division.

(c)

1. (1) The bond amount must be sufficient to ensure performance of the reclamation according to the approved reclamation plan for the permitted area in the event the reclamation must be done by the division through an independent contractor.
2. (2) In the event the division determines the proposed bond amount to be inadequate, the applicant/operator and any surety or indemnifier on the bond will be notified that the value of the required bond or substituted security must be increased as provided in The Arkansas Open-Cut Land Reclamation Act, Arkansas Code § 15-57-301 et seq.

(d) The operator may submit any of the following three (3) types of bonds:

1. (1) A surety bond;
2. (2) A collateral bond with supporting collateral consisting of irrevocable letters of credit or certificates of deposit in favor of the division; or
3. (3) A self bond with unencumbered right to certain property to be held by the division.

(e)

1. (1) Recommended bond forms shall be provided by the division.

2. (2) A variation of the language in all but the self bond form may be acceptable provided:

   1. (A) The requirements of The Arkansas Open-Cut Land Reclamation Act, Arkansas Code § 15-57-301 et seq., and this part are incorporated; and
   2. (B) The division approves the language.

(f) In the event self bonding is used, the following conditions apply:

1. (1) The applicant/operator must use the self bond form provided by the division;
2. (2) The applicant/operator shall pay to have the collateral to be offered appraised by a licensed appraiser approved by the applicant/operator and the division;

3. (3) The applicant/operator must:

   1. (A) Have unencumbered ownership of the collateral; and
   2. (B) Provide proof of such ownership to the division;
4. (4) The value of the collateral as bond will be no more than eighty percent (80%) of the fair market value of the collateral as established by the appraiser;
5. (5) Any collateral that decreases in value due to usage, i.e., rolling stock, will not be acceptable;
6. (6) In the event the collateral consists of real property, an environmental audit of the area must be provided to the division; and
7. (7) Where applicable, a lien will be filed against the collateral until the affected area is reclaimed and released by the division.

(g)

1. (1) In the event incremental mining and bonding is to be used, the bond amount for each increment must be determined by the operator and approved by the division.
2. (2) The accepted amount for the first increment must then be posted with the division prior to issuance of the permit.
3. (3) The approved bond amount for each succeeding increment must be posted before the land can be affected.

(j)

1. (1) If the license to do business of any corporate surety upon a bond filed with the division pursuant to The Arkansas Open-Cut Land Reclamation Act, Arkansas Code § 15-57-301 et seq., and this part shall be suspended or revoked, the operator, within thirty (30) days after receiving notice of such suspension or revocation, shall substitute for the surety a licensed corporate surety.
2. (2) In the event the operator fails to substitute the bond or substituted security upon cancellation or loss of value of its existing bond, the division shall suspend the permit of the operator until the substitution is made.