Napa County Municipal Code Art. IV Security

A. All applicants, as a condition of approval of a permit issued under the provisions of this chapter, shall be required to execute an agreement and provide adequate security made payable to the county and the Department of Conservation guaranteeing without proof of loss compliance with the master mining plan, the conditions of the permit involved, and all of the requirements of this chapter and the Surface Mining and Reclamation Act.

B. Liability under any security required as a condition of approval of the permit shall continue until all reclamation work required by the approved master mining plan has been completed. In addition, the period of liability shall continue, and adequate security shall be retained to ensure the continued viability of the reclamation effort for a period of not less than five years, beginning with the last year of augmented seeding, fertilizing or other concluding work of the reclamation. This liability shall begin anew whenever additional reclamation is required on the mining site prior to bond release. The minimum security to be retained to guarantee the continued viability of the reclamation effort shall be as follows:

1. If the security guarantees the cost of all reclamation, ten percent of the aggregate cost of all reclamation; or

2. If the security posted was limited to each phase of the operation, the lesser of ten percent of the aggregate cost of all reclamation or the actual cost of reseeding or taking similar steps to ensure the continued viability of the reclamation.

The planning director may require greater security than the minimum if the probable cost of ensuring the long-term viability of the reclamation exceeds the above minimums.

C. If the county determines, following a public hearing, that an operator is financially incapable of performing reclamation in accordance with its approved reclamation plan or has abandoned its operation without reclamation, the county shall take such actions to forfeit the assurances as are described in subparagraphs (b) and (d) of Public Resources Code Section 2773.1.

(Ord. 1150 § 2 (part), 1998)

A. The security required by Section 16.12.400 shall be in an amount equal to the estimated cost to the county if it were required to complete the reclamation required by the master mining plan, including any additional costs which may reasonably be expected to arise from public contracting requirements and further including an amount to account for inflationary factors, such amount not to exceed the inflationary increase associated with reclamation activities during the preceding five years. If the master mining plan submitted provides for mining in phases, the security may be limited to the cost of reclaiming the land impacted by the current phase of the mining operation if, upon application by the permittee, the planning commission or, on appeal, the board of supervisors, determines that:

1. The security of the county will not be impaired by accepting such lesser security,

2. Each phase of the mining operation will be completed prior to the next phase commencing,

3. Each phase of the mining excavation will impact on discrete parcels, and

4. Reclamation of a completed phase of the mining operation will commence simultaneously with the mining of the land involved in the succeeding phase.

B. Approval of any such lesser security shall be subject to the conditions that the security will equal or exceed the estimated cost of reclaiming the current phase of the permittee's mining operation and that, in addition to the aforementioned security, the approving body may at any time, after notice and hearing, require the permittee to increase the security to such an amount as represents the current estimated cost of reclaiming all land impacted by the permit to date, or all permits heretofore issued shall terminate.

(Ord. 1150 § 2 (part), 1998)

The amount of financial assurances for any one year shall be adjusted annually to account for the new land disturbed by surface mining operations, inflation, and reclamation of lands pursuant to the approved reclamation plan. The permittee shall annually file a revised cost estimate with the county on which said adjustment shall be based. Failure to file such an estimate shall be considered cause to revoke the permit after notice and hearing.

(Ord. 1150 § 2 (part), 1998)

A. If at any time the conditions under which a security was approved no longer prevail, the county may revoke the permit unless, within ninety days after notice is given, the permittee posts such sufficient or additional security as may be required by the planning director to ensure completion of reclamation.

B. If upon incapacity of a surety for any reason including, but not limited to, bankruptcy, insolvency or suspension or revocation of its license, and after receipt of a written demand by the county that additional security be provided, the permittee fails to provide additional security within sixty days, the permittee shall be in violation of the permit and mining operations shall immediately be discontinued until new and adequate security is provided.

(Ord. 1150 § 2 (part), 1998)

A. Within fifteen days of receipt of the agreement and associated security required under Section 16.12.400(A), the planning director shall review the materials provided for completeness. If the submittal is incomplete, the applicant shall be notified of the deficiencies found.

B. Upon a determination that the agreement and security package received is complete, the planning director shall distribute copies thereof to county counsel for review as to the acceptability of the documents contained therein.

C. Upon receipt of both an agreement and a security revised to reflect the comments received under subsection (B) of this section, the planning director shall submit copies of these documents along with the related costs estimates and the approved reclamation plan to the Department of Conservation for review. Pursuant to state law, forty-five days shall be provided for comment. The submittal shall contain a certification by the planning director that these financial assurances or assurance modifications meet all the requirements contained in the State Board Reclamation Regulations (Sections 3500 et seq. and 3700 et seq. of Title 14 of the California Code of Regulations).

D. The planning director and county counsel shall review the written comments received from the Department of Conservation and seek modification by the permittee of the agreement and/or security as necessary. The revised documents provided shall be returned to the Department of Conservation for final approval.

E. The board of supervisors shall review the approved agreement and security and either accept them in the submitted or a modified form or reject them.

F. Following acceptance of an agreement and the related security, the planning director shall forward copies of these documents to the operator, owner, and Department of Conservation.

(Ord. 1150 § 2 (part), 1998)

The security referred to in Section 16.12.400 shall be one of the following, subject to the approval of the board of supervisors and the State Board:

A. A surety bond or bonds by one or more duly authorized admitted sureties;

B. Irrevocable letters of credit;

C. Trust funds;

D. A deposit in trust with the Napa County treasurer, in a manner acceptable to the Napa County auditor-controller, of cash or negotiable bonds of the kind approved for securing deposits of public monies; or

E. Other securities specified by the State Board.

(Ord. 1150 § 2 (part), 1998)

A. Surety bonds shall be subject to, at a minimum, the following conditions:

1. The bond shall be on the relevant state-approved surety bond form found in Sections 115.1 through 115.5 of Title 11 of the California Code of Regulations, Section 25;

2. A rider shall be attached to each bond that:

a. Prohibits the issuer at any time during the period of liability from canceling the bond for any reason including, but not limited to, nonpayment of premium,

b. Waives the provisions of Section 2819 of the California Civil Code,

c. Provides that the surety, the owner, and the operator are jointly and severally liable, and

d. Provides that, in the event the issuer is unwilling to fulfill its obligations under the bond for any reason, notice shall immediately be given by the surety to the county and the Department of Conservation.

B. If the permittee has posted bonds for other mining operations in this or any other state, the history of such bonds shall be provided, including:

1. Names of sureties, if any, for outstanding bonds;

2. Amounts of outstanding bonds;

3. Names of any surety which denied any bond; and

4. Unsatisfied claims against any bond.

C. Surety bond coverage for lands not disturbed may be canceled, provided that the surety gives at least ninety days' notice prior to the effective date of cancellation to the permittee, the county, and the Department of Conservation of the intent to cancel. Such notice shall be by certified mail and shall not be effective until received by the permittee, the county, and the Department of Conservation.

D. All bonds currently in existent shall be re-issued on the standard bond form referenced under subsection (A)(1) of this section, and the rider specified under subsection (A)(2) of this section provided by July 1, 1999 or upon each bond's renewal, whichever comes first.

(Ord. 1252 § 11, 2005: Ord. 1150 § 2 (part), 1998)

Letters of credit shall be subject to the following conditions:

A. The letter may only be issued by a bank organized or authorized to do business in the United States;

B. The letter must be irrevocable prior to a release by the county and the Department of Conservation;

C. The letter must be payable to the county and the Department of Conservation in part or in full within thirty days following demand and receipt from the county or the Department of Conservation of a copy of final notice of noncompliance served on the permittee; and

D. The letter of credit shall provide that the bank will give prompt notice to the permittee, the county, and the Department of Conservation of any notice received or action filed alleging the insolvency or bankruptcy of the bank, or alleging any violations of regulatory requirements which could result in suspension or revocation of the bank's charter or license to do business, and that in the event the bank becomes unable to fulfill its obligations under the letter of credit for any reason, notice shall be given immediately to the permittee, the county, and the Department of Conservation.

(Ord. 1150 § 2 (part), 1998)

A trust fund shall be permitted only if all of the following conditions are met:

A. The permittee designates the name and address of a suitable agent to receive service of process in California;

B. The permittee, or the permittee's parent organization in the event the permittee is a subsidiary corporation, has a net worth, certified by an independent certified public accounting firm acceptable to the planning director and the Department of Conservation, of no less than six times the total amount of trust fund obligations on all permits issued to the applicant for surface mining and reclamation operations;

C. The permittee, or the permittee's parent organization in the event the permittee is a subsidiary corporation, has a history of financial solvency and continuous operation as a business entity for ten years prior to filing the application;

D. The security agreement has been executed by the permittee in the following manner:

1. If a corporation, then by two corporate officers in their official capacity who are authorized to sign the agreement by a resolution of the board of directors, a copy of which shall be provided.

2. To the extent the history or assets of a parent organization are relied upon, then the parent organization and every parent organization of which it is a subsidiary, whether first-tier or further removed, in the manner specified in subsection (D)(1) of this section.

3. If the permittee is a partnership, all of its general partners and their parent organization or principal investors.

4. If the permittee is a married individual, the permittee's spouse.

E. The security agreement specifies that it is a binding obligation, jointly and severally, on all who execute it;

F. The trust is irrevocable with the county and the Department of Conservation as beneficiaries. A bank or other entity acceptable to the county and the Department of Conservation shall act as trustee; and

G. The instruments establishing the trust are in a form acceptable to the county, the permittee, and the Department of Conservation and are subject to all of the following terms and conditions:

1. Deposits in the trust we insulated from creditors of the permittee;

2. The trust funds may be expended by the trustee, upon approval by the planning director and the Department of Conservation, for the sole purpose of paying for the cost of performing the reclamation required by the master mining plan. Such payments may be requested by the permittee. Upon notice from the county and the permittee that reclamation is completed, the trustee shall pay to the permittee any unexpended trust funds, retaining only that portion required to insure the long-term viability of the reclamation plan;

3. The planning director and the Department of Conservation shall receive from the trustee a copy of all records showing transactions in the trust; and

4. Payments for reclamation costs from the trust fund shall be made solely as directed by the permittee; provided, however, that payments for reclamation costs from the trust fund shall be made solely as directed by the county or the Department of Conservation, unless and until the zoning administrator finds and notifies the trustee that the permittee is in compliance with the master mining plan, if either of the following conditions exist:

a. The permittee receives from the planning director or the Department of Conservation an initial notice of noncompliance with respect to its reclamation obligation pursuant to Section 16.12.610(A) and the permittee does not, within ten days of receipt of that initial notice, either appeal the existence of such noncompliance or, within thirty days of receipt of the initial notice, bring its operation into compliance with the master mining plan, or

b. If after appeal it is determined that the permittee has failed to comply with the master mining plan.

Payments from the trust fund for reclamation shall continue as directed by the permittee if, after appeal, it is determined that the permittee is in substantial compliance with the master mining plan.

(Ord. 1150 § 2 (part), 1998)

The permittee may replace any existing security other than a collateral bond with other forms of security, if the liability that has accrued against the operator and owner is transferred to such replacement security. The existing security shall not be released until the permittee has submitted and the county has approved an acceptable replacement security.

(Ord. 1150 § 2 (part), 1998)

The security shall be partially released only after an application to and a finding by the board of supervisors that the requirements of a specific phase of the reclamation has been met; provided, however, that no partial release shall occur if such release would reduce the total remaining liability to an amount less than that necessary for the county to complete the approved reclamation plan.

(Ord. 1150 § 2 (part), 1998)

A. No reclamation or phase of reclamation shall be deemed complete until the work has been inspected by the planning director and a certificate of acceptance has been executed by him indicating the county's acceptance of such reclamation work.

B. Within sixty days after the county has been notified by the operator of the completion of the reclamation, or any phase thereof, the planning director shall inspect the site and either file a certificate of acceptance or notify the operator and owner in writing of the items found to be unfinished.

C. Upon the acceptance by the county of the reclamation work or any phase of it, the portion of the improvement security guaranteeing that work, less the security required to be retained by Section 16.12.400(B), shall be released.

(Ord. 1150 § 2 (part), 1998)