KRS 353.562: Kentucky Abandoned Storage Tank and Orphan Well Reclamation

Program -- Kentucky abandoned storage tank and orphan well

reclamation fund -- Use of funds received from federal Infrastructure

Investment and Jobs Act -- Initial grants -- Grant types.

(1) (a) There is hereby created the Kentucky Abandoned Storage Tank and

Orphan Well Reclamation Program. The purpose of the program is to:

1. Remediate and reclaim abandoned storage tanks;

2. Properly plug and abandon eligible wells; and

3. Address imminent threats to human health, safety, or the

environment posed by oil and gas facilities located in the

Commonwealth.

(b) Reclamation of abandoned storage tank facilities and eligible wells under

the program shall include:

1. Removing necessary well and tank infrastructure;

2. Proper plugging and abandonment of eligible wells;

3. Proper abandonment of tanks posing an imminent threat to human

health, safety, or the environment;

4. Implementation of best management practices at sites associated

with eligible wells or abandoned storage tank facilities; or

5. Removing primary and secondary sources of contamination of the

land, air, and water.

(c) Orphan wells and abandoned storage tank facilities determined by the

cabinet to be eligible for plugging, removal, reclamation, and cleanup

funds from the Kentucky abandoned storage tank and orphan well

reclamation fund shall be addressed in accordance with this section and

KRS 353.561, 353.563, and 353.564.

(2) The Kentucky abandoned storage tank and orphan well reclamation fund is

hereby created as an interest-bearing, restricted, agency account. The fund

shall be administered by the cabinet. Interest credited to the account shall be

retained in the account. Notwithstanding KRS 45.229, any moneys remaining

in the fund at the close of the fiscal year shall not lapse but shall be carried

forward into the succeeding fiscal year to be used for the purposes authorized

and set forth in this section and KRS 353.561, 353.563, and 353.564.

(3) The fund established in subsection (2) of this section may utilize and expend

funds as authorized by the biennial budget.

(4) Moneys in the fund shall be for carrying out the purpose provided in subsection

(1) of this section, including any administrative costs incurred by the cabinet

during the implementation of this section and KRS 353.561, 353.563, and

353.564. The fund may receive moneys from federal and state grants or

appropriations, and from any other proceeds received for the purposes of this

section and KRS 353.561, 353.563, and 353.564. Separate accounts may be

established within the fund to segregate moneys received and expended for

different programs operated by the Kentucky Abandoned Storage Tank and

Orphan Well Reclamation Program.

(5) (a) Funds may be expended for costs incurred in the:

1. Remediation and reclamation of abandoned storage tank facilities;

2. Proper plugging, remediation, reclamation, and abandonment of

eligible wells; or

3. Proper remediation, reclamation, and abandonment of abandoned

storage tank facilities posing an imminent threat.

(b) These funds may be expended in accordance with this section and after

the cabinet determines that:

1. The well qualifies as an eligible well as defined in KRS 353.510;

2. There is no person identified or found with continuing legal

responsibility for the abandoned storage tank facility; or

3. Reclamation or remedial measures are necessary to respond to an

imminent threat to human health, safety, or the environment, posed

by an abandoned storage tank facility or improperly abandoned well.

(6) Reclamation measures paid for by the fund shall include the following:

(a) Removal and disposal of abandoned storage tank facilities;

(b) Reclamation of lands affected by abandoned storage tank facilities,

including:

1. Proper removal or abandonment of flow lines;

2. Removal or treatment of contaminated soil to no more than three (3)

feet in depth;

3. Elimination of all berms, dikes, and other structures utilized as spill

prevention, control, and countermeasure structures;

4. Grading, stabilization, and seeding of the surface where the tank or

tank battery was located; and

5. Implementation of best management practices at sites associated

with abandoned storage facilities; and

(c) Reclamation of lands affected by eligible wells, including:

1. Proper removal or abandonment of flow lines;

2. Removal and disposal of surface production equipment;

3. Grading, stabilization, and seeding of the surface where the well

was located;

4. Implementation of best management practices at sites associated

with eligible wells; and

5. Removal or treatment of contaminated soil to no more than three (3)

feet in depth.

(7) If during the course of removing and reclaiming an abandoned storage tank

facility or plugging and reclaiming an eligible well, the division observes

evidence of soil contamination below three (3) feet depth, the division shall

consult with the Department for Environmental Protection to determine whether

further action is necessary to protect public health and the environment.

Nothing contained in this section shall be construed to obligate the fund to

provide additional moneys for removal or treatment of contaminated soil other

than provided in subsection (6)(b)2. and (c)5. of this section.

(8) Any person performing reclamation measures pursuant to this section shall

comply with applicable local, state, and federal laws and regulations.

(9) The cabinet shall have the authority to:

(a) Contract for services provided by and engage in cooperative projects with

other government agencies or private parties in the furtherance of any

remedial or reclamation project authorized and undertaken pursuant to

this section and KRS 353.561, 353.563, and 353.564;

(b) Enter into agreements with those government agencies or private parties

to compensate those agencies and private parties with funds from the

account; and

(c) Accept and deposit into separate accounts within the fund any federal,

state, and other funds for the purposes of subsection (10) of this section

and KRS 353.561, 353.563, and 353.564.

(10) Moneys received by the Commonwealth from the Infrastructure Investment and

Jobs Act, Pub. L. No. 117-58, shall be placed into a separate account within

the fund to administer and award contracts which are committed to and issued

for the purposes of Pub. L. No. 117-58 and any federal rules and guidance

issued pursuant thereto. Moneys received by the Commonwealth under Pub. L.

No. 117-58:

(a) May be used for the plugging and abandonment of wells and the

remediation and reclamation of associated pipelines, facilities, and

infrastructure eligible for funding under this section; and

(b) Shall be maintained and expended in a manner as provided by any

federal rules and guidance issued pursuant to Pub. L. No. 117-58.

(11) Except for the modification allowed for initial grants in subsection (12) of this

section, the number of eligible wells in the vendor's scope of work for contracts

issued pursuant to subsection (10) of this section for all grant types established

under Pub. L. No. 117-58 shall be limited as follows:

(a) One-third (1/3) of the contracts issued in a twelve (12) month period shall

be limited to no more than ten (10) wells;

(b) One-third (1/3) of the contracts issued in a twelve (12) month period shall

be limited to no more than twenty-five (25) wells; and

(c) One-third (1/3) or the remaining contracts issued within a twelve (12)

month period shall not have a limit on the number of wells in the scope of

work.

(12) The cabinet may adjust the number of wells within a bid package issued

pursuant to subsections (10) and (11) of this section as needed in order to

comply with any deadlines imposed under Pub. L. No. 117-58 for initial grants,

provided that the overall percentages required in subsection (11) of this section

are achieved at the end of each twelve (12) month period.

(13) As used in this section, "grant types" means the initial, formula, and

performance grant categories that states can use to apply for moneys to clean

up orphan wells described in the December 17, 2021, guidance to states

issued by the United States Department of the Interior.