A. If a permittee refuses or is unable to conduct or complete the reclamation or closeout plan, if the terms of the permit are not met, or if the permittee defaults on the conditions under which the financial assurance was accepted, the director shall take the following action to forfeit all or part of the financial assurance for the permit area or an increment of the permit area:

1. (1) Send written notification by certified mail, return receipt requested, to the permittee and the surety, if any, informing them of the determination to forfeit all or part of the financial assurance, including the reasons for the forfeiture and the amount to be forfeited. The amount shall be based on the estimated total cost of achieving reclamation or closeout.

2. (2) Advise the permittee and surety, if applicable, of the conditions under which forfeiture may be avoided. Such conditions may include, but are not limited to:

   1. (a) An agreement by the permittee or another party to perform reclamation or closeout operations in accordance with the conditions of the permit, the reclamation or closeout plan, the act and 19.10 NMAC and a demonstration that such a party has the ability to satisfy the conditions; or
   2. (b) The director may allow a surety to complete the reclamation or closeout plan, or the portion of the reclamation or closeout plan applicable to the financial assurance phase or increment, if the surety can demonstrate an ability to complete the reclamation or closeout plan in accordance with the approved reclamation or closeout plan. Except where the director approves partial release authorized under 19.10.12.1210 NMAC, no surety liability shall be released until successful completion of all reclamation or closeout under the terms of the permit, including applicable liability periods of 19.10.12.1204 NMAC.

B. In the event forfeiture of the financial assurance is required by this part, the director shall:

1. (1) proceed to collect the forfeited amount as provided by applicable laws if actions to avoid forfeiture have not been taken; and
2. (2) use funds collected from the forfeiture to complete the reclamation or closeout, or portion thereof, on the disturbed area or increment to which financial assurance coverage applies.

E. In the event the amount of financial assurance forfeited was more than the amount necessary to complete reclamation or closeout and all costs of forfeiture, the excess funds shall be returned by the director to the party from whom they were collected.

[7-12-94, 2-15-96; 19.10.12.1211 NMAC - Rn, 19 NMAC 10.2.12.1211, 05-15-2001]

History of 19.10.12 NMAC:

Pre-NMAC History: Material in this part was derived from that previously filed with the commission of public records - state records center and archives as:

Rule 12, Financial Assurance Requirements, filed 07-12-94.

History of Repealed Material: [Reserved]

Other History:

Rule 12, Financial Assurance Requirements, filed 07-12-94, renumbered and reformatted as Subpart 12 of 19 NMAC 10.2, New Mexico Mining Act Implementation, filed 01-31-96.

19 NMAC 10.2, Subpart 12, Financial Assurance Requirements, filed 01-31-96 was renumbered and reformatted to 19.10.12 NMAC, effective 05-15-2001.