DAR File No. 27814

School and Institutional Trust Lands, Administration

R850-24-200

Insurance Requirements

NOTICE OF PROPOSED RULE

DAR File No.: 27814
Filed: 04/14/2005, 11:22
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to include coal and geothermal steam to the types of resources requiring insurance under the general provisions.

Summary of the rule or change:

The amendment to this rule expands the insurance requirements under the general provisions to cover all mineral and material resources that may be permitted or leased rather than just for "sand, gravel and cinders" as stated in Section R850-24-200.

State statutory or constitutional authorization for this rule:

Subsections 53C-1-302(1)(a)(ii), 53C-2-201(1)(a), and 53C-2-402(1)

Anticipated cost or savings to:

the state budget:

It is not anticipated that there will be any cost or savings to the state as a result of this rule amendment. Insurance and bonding requirements have always been in place for all mineral and material resources and this amendment simply clarifies the resources covered under the general provisions.

local governments:

There are no anticipated costs or savings to local government as this amendment does not change any requirements, but simply clarifies the resources the provision pertains to.

other persons:

There are no anticipated costs or savings to other persons as a result of this amendment. Insurance and bonding requirements have always been in place and this just clarifies the resources this provision applies to.

Compliance costs for affected persons:

There are no additional compliance costs for affected persons. Insurance and bonding have always been requirements for holding a lease and this amendment will not add any additional costs for holding a lease.

Comments by the department head on the fiscal impact the rule may have on businesses:

Since businesses subject to this rule have already anticipated that the application of the rule would be consistent with the proposed modification, we do not expect that they will experience any additional costs. Kevin S. Carter, Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Direct questions regarding this rule to:

Thomas B. Faddies at the above address, by phone at 801-538-5150, by FAX at 801-355-0922, or by Internet E-mail at tomfaddies@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

05/31/2005

This rule may become effective on:

06/01/2005

Authorized by:

Kevin S. Carter, Director

RULE TEXT

R850. School and Institutional Trust Lands, Administration.

R850-24. General Provisions: Mineral and Material Resources, Mineral Leases and Material Permits.

R850-24-200. Insurance Requirements.

Prior to the issuance of a permit [for sand, gravel and cinders,]or lease for mineral and material resources, the applicant may be required to obtain insurance of a type and in an amount acceptable to the agency. Proof of insurance shall be in the form of a certificate of insurance containing sufficient information to satisfy the agency that insurance provisions of the permit have been complied with.

1. Such insurance, if required, shall be placed with an insurer with a financial rating assigned by the Best Insurance Guide of A:X or higher, unless this requirement is waived in writing by the agency.

2. The agency shall retain the right to review the coverage, form, and amount of the insurance required at any time and to require the permittee to obtain insurance sufficient in coverage, form, and amount to provide adequate protection upon 30 days written notice.

KEY: mineral leases, material permits, mineral resources, lease operations

[April 1, 2005]June 1, 2005

53C-1-302(1)(a)(ii)

53C-2-201(1)(a)

53C-2-402(1)

ADDITIONAL INFORMATION

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For questions regarding the content or application of this rule, please contact Thomas B. Faddies at the above address, by phone at 801-538-5150, by FAX at 801-355-0922, or by Internet E-mail at tomfaddies@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.