(a) Replacement upon request of permittee.

1. (1) The regulatory authority may allow you, the permittee, to replace existing performance bonds and financial assurances with other performance bonds and financial assurances that provide equivalent coverage.
2. (2) The regulatory authority may not release any existing performance bond or financial assurance until you have submitted, and the regulatory authority has approved, an acceptable replacement.

(b) Replacement by order of the regulatory authority.

1. (1) Upon the incapacity of a bank, surety, or other responsible financial entity by reason of bankruptcy, insolvency, or suspension or revocation of a charter or license, you will be deemed to be without bond coverage and you must promptly notify the regulatory authority.
2. (2) Upon receipt of notification from a bank, surety, or other responsible financial entity under § 800.16(e) of this part or from you under paragraph (b)(1) of this section, the regulatory authority must issue an order requiring that you submit replacement bond or financial assurance coverage within a reasonable time, not to exceed 90 days.

3. (3) If you do not post adequate bond or financial assurance by the end of the time allowed under paragraph (b)(2) of this section, the regulatory authority must issue a notice of violation requiring that you cease surface coal mining operations immediately. The notice of violation also must require that you either -

   1. (i) Post adequate bond or financial assurance coverage before you may resume surface coal mining operations; or
   2. (ii) Reclaim the site in accordance with the provisions of § 816.132 or § 817.132 of this chapter.