2011 Kentucky Revised Statutes CHAPTER 349 COALBED METHANE DEVELOPMENT 349.120 Well operators to execute bonds or blanket bonds in favor of department -- Establishment of coalbed methane well plugging fund -- Operators' civil and criminal liability.
KY Rev Stat § 349.120 (1996 through Reg Sess) What's This?
349.120 Well operators to execute bonds or blanket bonds in favor of department -Establishment of coalbed methane well plugging fund -- Operators' civil and
criminal liability.
(1)
(2)
When any person submits to the department an application for a permit to drill a
coalbed methane well, or to reopen, deepen, or temporarily abandon any coalbed
methane well which is not covered by a surety bond, the department shall, except as
provided in this section, require from the well operator a bond in the sum of five
thousand dollars (,000). The bonds shall be made in favor of the Department for
Natural Resources, conditioned that the wells upon abandonment shall be plugged
in accordance with the administrative regulations and that all records required by
the department be filed as specified. All bonds shall remain in effect until the
plugging of the well is approved by the department, or the bond is released by the
department. Any well operator in lieu of the bond may file with the department a
blanket bond in a sum of one hundred thousand dollars (0,000), covering all
coalbed methane wells drilled or to be drilled in the Commonwealth by the
principal in the bond, and the acceptance and approval by the department of the
blanket bond shall be in full compliance with the above provision requiring an
individual well bond. The department may establish a bond in a sum greater than
five thousand dollars (,000) for an individual well or blanket bond in sum greater
than one hundred thousand dollars (0,000) if the department determines that the
particular circumstances of the drilling of the well or wells warrant an increase in
the bond amount. A deposit in cash or a bank-issued irrevocable letter of credit may
serve in lieu of either of the individual well or blanket bonds. A certificate of
deposit, the principal of which is pledged in lieu of a bond and whose interest is
payable to the party making the pledge, may also be accepted by the department. If
an operator is required to post individual well bonds exceeding a total of five
thousand dollars (,000) or elects to post a blanket bond, the certificate of deposit
shall be accepted by the department in lieu of that portion of the amount of the
bonds exceeding five thousand dollars (,000). The bond or bonds referred to in
this section shall be executed by the well operator as principal and, if a surety bond,
by a corporate surety authorized to do business in the Commonwealth. A deposit in
cash shall serve in lieu of either of the above bonds; all cash bonds accepted by the
department shall be deposited into an interest-bearing account, with the interest
thereon payable to the special agency account known as the coalbed methane well
plugging fund, created in subsection (3) of this section, to be used in accordance
with the purposes described therein.
A successor to the well operator shall post bond, pay a twenty-five dollar () fee
per well to the department, and notify the department in writing in advance of
commencing use or operations of a well or wells. The successor shall assume the
obligations of this chapter as to a particular well or wells and relieve the original
permittee of responsibility under this chapter with respect to the well or wells. It
shall be the responsibility of the selling operator to require the successor operator to
post bond before use or operation is commenced by the successor and relief of
responsibility under this chapter is granted to the original permittee.
(3)
All sums received through the forfeiture of bonds shall be placed in the State
Treasury and credited to a special agency account to be designated as the coalbed
methane well plugging fund, which shall be in an interest-bearing account with the
interest thereon payable to the fund. This fund shall be available to the department
and shall be expended for the plugging of any abandoned coalbed methane wells
coming within the authority of the department pursuant to this chapter. The
plugging of any coalbed methane wells pursuant to this subsection shall not be
construed to relieve the operator or any other person from civil or criminal liability
which would exist except for the plugging. Any unencumbered and any unexpended
balance of this fund remaining at the end of any fiscal year shall not lapse but shall
be carried forward for the purpose of the fund until expended or until appropriated
by subsequent legislative action.
Effective: July 13, 2004
History:Created 2004 Ky. Acts ch. 65, sec. 24, effective July 13, 2004.
Legislative Research Commission Note (6/20/2005). 2005 Ky. Acts chs. 11, 85, 95, 97,
98, 99, 123, and 181 instruct the Reviser of Statutes to correct statutory references to
agencies and officers whose names have been changed in 2005 legislation confirming
the reorganization of the executive branch. Such a correction has been made in this
section.
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