{"data":{"id":"us-ky/krs-349.120","jurisdiction":"us-ky","citation":"KRS 349.120","heading":"Well operators to execute bonds or blanket bonds in favor of department --","body":"Establishment of coalbed methane well plugging fund -- Operators' civil and\ncriminal liability.\n(1) When any person submits to the department an application for a permit to dri ll a\ncoalbed methane well, or to reopen, deepen, or temporarily abandon any coalbed\nmethane well which is not covered by a surety bond, the department shall, except as\nprovided in this section, require from the well operator a bond in the sum of five\nthousand dollars ($5,000). The bonds shall be made in favor of the Department for\nNatural Resources, conditioned that the wells upon abandonment shall be plugged\nin accordance with the administrative regulations and that all records required by\nthe department b e filed as specified. All bonds shall remain in effect until the\nplugging of the well is approved by the department, or the bond is released by the\ndepartment. Any well operator in lieu of the bond may file with the department a\nblanket bond in a sum of on e hundred thousand dollars ($100,000), covering all\ncoalbed methane wells drilled or to be drilled in the Commonwealth by the\nprincipal in the bond, and the acceptance and approval by the department of the\nblanket bond shall be in full compliance with the above provision requiring an\nindividual well bond. The department may establish a bond in a sum greater than\nfive thousand dollars ($5,000) for an individual well or blanket bond in sum greater\nthan one hundred thousand dollars ($100,000) if the department  determines that the\nparticular circumstances of the drilling of the well or wells warrant an increase in\nthe bond amount. A deposit in cash or a bank -issued irrevocable letter of credit may\nserve in lieu of either of the individual well or blanket bonds. A certificate of\ndeposit, the principal of which is pledged in lieu of a bond and whose interest is\npayable to the party making the pledge, may also be accepted by the department. If\nan operator is required to post individual well bonds exceeding a total o f five\nthousand dollars ($5,000) or elects to post a blanket bond, the certificate of deposit\nshall be accepted by the department in lieu of that portion of the amount of the\nbonds exceeding five thousand dollars ($5,000). The bond or bonds referred to in\nthis section shall be executed by the well operator as principal and, if a surety bond,\nby a corporate surety authorized to do business in the Commonwealth. A deposit in\ncash shall serve in lieu of either of the above bonds; all cash bonds accepted by the\ndepartment shall be deposited into an interest -bearing account, with the interest\nthereon payable to the special agency account known as the coalbed methane well\nplugging fund, created in subsection (3) of this section, to be used in accordance\nwith the purposes described therein.\n(2) A successor to the well operator shall post bond, pay a twenty -five dollar ($25) fee\nper well to the department, and notify the department in writing in advance of\ncommencing use or operations of a well or wells. The successor  shall assume the\nobligations of this chapter as to a particular well or wells and relieve the original\npermittee of responsibility under this chapter with respect to the well or wells. It\nshall be the responsibility of the selling operator to require the successor operator to\npost bond before use or operation is commenced by the successor and relief of\nresponsibility under this chapter is granted to the original permittee.\n(3) All sums received through the forfeiture of bonds shall be placed in the State\nTreasury and credited to a special agency account to be designated as the coalbed\nmethane well plugging fund, which shall be in an interest -bearing account with the\ninterest thereon payable to the fund. This fund shall be available to the department\nand shall be expended for the plugging of any abandoned coalbed methane wells\ncoming within the authority of the department pursuant to this chapter. The\nplugging of any coalbed methane wells pursuant to this subsection shall not be\nconstrued to relieve the opera tor or any other person from civil or criminal liability\nwhich would exist except for the plugging. Any unencumbered and any unexpended\nbalance of this fund remaining at the end of any fiscal year shall not lapse but shall\nbe carried forward for the purpos e of the fund until expended or until appropriated\nby subsequent legislative action.","path":["KRS Chapter 349"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=32747","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:35Z","sha256":"4432850a25697a2ec0fbdbb9b895149797ade8b113a44c72f36476cdd25f0f4b","source_id":"us-ky","stale":false,"prev":"us-ky/krs-349.115","next":"us-ky/krs-349.125"},"notice":"GroundRules: Original legal text. Not legal advice."}