Section R11-2-807. Letters of Credit

A.       An owner or operator may satisfy the requirements of this Article by obtaining an irrevocable stand-by letter of credit. The letter of credit shall be effective to receive financial assur- ance approval. The issuing institution shall be an entity which has the authority to issue letters of credit, is federally insured, and whose letter-of-credit operations are regulated and exam- ined by a federal or state agency.

B.       The letter of credit shall be irrevocable and issued for a period set to exceed 1 year by at least 90 days and in an amount at least equal to the costs estimated in the approved reclamation plan for reclamation. The letter of credit shall provide that the expiration date will automatically renew as approved by the State Mine Inspector for a period of at least 1 year, unless the issuing institution has canceled the letter of credit by sending notice of cancellation by certified mail to the owner or opera-

tor and to the State Mine Inspector 120 days in advance of can- cellation. If the letter of credit is canceled by the issuing institution, the owner or operator shall obtain alternate finan- cial assurance that meets the requirements of the Act and this Chapter within 120 days after the notice of cancellation.

C.       The letter of credit shall indicate the conditions on which the state of Arizona may draw on the letter of credit.

D.       The property owner or operator may, with notification to the State Mine Inspector, cancel the letter of credit if alternate financial assurance that meets the requirements of the Act and this Chapter is substituted or if the owner or operator is released from the requirements of this Article under A.R.S. § 27-996, R11-2-817, or R11-2-822.

Historical Note

Adopted effective January 6, 1997 (Supp. 97-1).