{"data":{"id":"us-ky/krs-353.417","jurisdiction":"us-ky","citation":"KRS 353.417","heading":"Application procedures -- Duties of cabinet -- Criteria -- Requirements --","body":"Administrative regulations.\n(1) Every Class VI underground injection control permit application filed under this\nsection shall:\n(a) Be on a form prescribed by the cabinet;\n(b) Be certified by the applicant; and\n(c) Contain all information specified by administrative regulations promulgated\nby the cabinet in accordance with KRS Chapter 13A.\n(2) (a) Upon filing an application for a Class VI permit, an applicant shall:\n1. Pay a fee in an amount set by the cabinet; and\n2. Submit proof of public notice of the application pursuant to KRS\n353.419.\n(b) The fee shall be deposited into the carbon dioxide sequestration facility\nadministrative fund established in KRS 353.437.\n(3) In addition to obtaining a Class VI underground injection control permit, the\napplicant shall secure drilling permits from the cab inet for each well described in\nthe approved Class VI permit.\n(4) If, prior to approval of an application, the cabinet determines that the proposed\nsequestration facility contains commercially valuable minerals, the cabinet shall\nensure that the interests of the mineral owners or mineral lessees:\n(a) Will not be adversely affected; or\n(b) Have been addressed in a written agreement entered into by the mineral\nowners, mineral lessees, and the sequestration operator pursuant to KRS\n353.429.\n(5) To be considere d an administratively complete application, a Class VI permit\napplication shall include documentation that:\n(a) The sequestration operator has the written consent of those persons having\nownership interests in at least seventy -five percent (75%) of the pro posed\nsequestration reservoir's pore space acreage; and\n(b) A pooling order has been requested pursuant to KRS 353.449 for up to\ntwenty-five percent (25%) of the proposed sequestration reservoir's pore space\nacreage for nonconsenting, unknown, and missing pore space owners.\n(6) The cabinet shall not begin technical review of an administratively complete\napplication until the sequestration operator has:\n(a) Demonstrated that it possesses through the requisite consent and the petition\nfor a pooling order in a ccordance with KRS 353.449, the legal right to utilize\none hundred percent (100%) of the pore space acreage of the proposed\nsequestration reservoir; and\n(b) Provided documentation demonstrating the legal right to enter onto and\nconduct all surface activiti es and operations associated with the proposed\nsequestration facility.\n(7) If the cabinet determines that a bona fide dispute exists regarding the applicant's\nlegal right, consistent with subsections (5) and (6) of this section, to utilize any of\nthe pore space acreage of the proposed sequestration reservoir, the cabinet shall:\n(a) Suspend technical permit review pending resolution of the property dispute by\na court of competent jurisdiction or resolution by the parties; or\n(b) Require the applicant to revise the permit application to exclude the contested\npore space acreage.\n(8) A Class VI permit shall not be issued under this section unless the cabinet finds\nthat:\n(a) The application and proposed operations comply with all requirements\nestablished by the c abinet, including any applicable Class VI underground\ninjection control administrative regulations, and all applicable provisions of\nstate and federal law;\n(b) The sequestration facility is suitable and feasible for carbon dioxide injection\nand sequestration;\n(c) The sequestration operator has made a good -faith effort to obtain the written\nconsent of all persons who own the sequestration reservoir's pore space;\n(d) The applicant has demonstrated the legal right to utilize one hundred percent\n(100%) of the sequestration reservoir's pore space acreage;\n(e) The application contains documentation sufficient to demonstrate the legal\nright to enter onto and conduct all surface activities and operations associated\nwith the proposed sequestration facility;\n(f) The proposed sequestration facility will not endanger surface waters or any\nUSDW;\n(g) The creation, operation, and maintenance of the sequestration facility will not\nappreciably endanger human health or the environment;\n(h) Adequate horizontal and vertical boun daries of the sequestration reservoir are\ndefined, including buffer areas, to ensure that the sequestration facility is\noperated safely and prudently;\n(i) The sequestration operator will establish monitoring facilities and protocols to\nassess the location and migration of carbon dioxide injected for sequestration\nand to ensure compliance with all Class VI permit, statutory, and\nadministrative regulation requirements;\n(j) All nonconsenting pore space owners are or will be justly and reasonably\ncompensated in  accordance with the administrative regulations and\nprocedures set forth in and promulgated under this section by the cabinet; and\n(k) The sequestration operator demonstrates financial responsibility as\ndetermined by the cabinet pursuant to subsections (10) and (11) of this section\nand applicable administrative regulations.\n(9) The cabinet shall render a decision on a permit application in accordance with KRS\n353.421.\n(10) (a) A permit sha ll not be issued under this section unless the sequestration\noperator posts qualifying financial responsibility sufficient to cover the cost\nof:\n1. Corrective action;\n2. Well plugging of Class VI injection wells and monitoring wells;\n3. Post-injection site care and facility closure;\n4. Emergency and remedial response; and\n5. Addressing endangerment of underground sources of drinking water.\n(b) The financial responsibility instruments shall contain protective conditions for\ncoverage for cancellation, renewal , and continuation provisions. The\nsequestration operator shall have detailed written estimates, in current dollars,\nof the cost of performing the activities contained in paragraph (a)1. to 5. of\nthis subsection. The cost estimates shall be separate for ea ch phase and shall\nbe based on the costs of the cabinet to hire third parties to perform the\nrequired activity.\n(c) For the duration of the permit, the sequestration operator shall annually adjust\nthe cost estimates of each activity and provide the informa tion to the cabinet.\nAny decrease or increase in the initial cost estimate shall be subject to the\ncabinet's approval. If at any time the current cost estimate:\n1. Increases to an amount greater than the face amount of the financial\nresponsibility instrume nts currently in use, the sequestration operator\nshall submit to the cabinet within sixty (60) days, written evidence of an\nincrease of the face amount of the existing financial responsibility\ninstruments or substitute another instrument in the increased amount; or\n2. Decreases to an amount lesser than the face amount of the financial\nresponsibility instruments, those instruments may be reduced to the\namount of the current estimate upon receipt of written approval from the\ncabinet.\n(d) The cabinet shall per form an annual evaluation of the qualifying financial\nresponsibility to determine if the amount of financial responsibility provided\nby the sequestration operator is sufficient to secure the operator's obligations\nunder state and federal law. A cabinet det ermination under this subsection is\nconsidered final. If the cabinet determines the amount of financial\nresponsibility is insufficient, the sequestration operator shall:\n1. Provide an adjustment of the cost estimate to the cabinet within sixty\n(60) days of notification by the cabinet; and\n2. Adjust the financial responsibility instruments in accordance with\nparagraph (c) of this subsection.\n(e) The initial deposit, use, and length of pay -in periods for trust funds or escrow\naccounts are subject to the cabin et's approval. The sequestration operator may\nmake periodic deposits into a trust fund or escrow account throughout the\noperational period to ensure sufficient funds are available to carry out the\nrequired activities on the date on which they may occur. Th e cabinet shall\nconsider project-specific risk assessments, projected timing of activities, and\ninterest accumulation in determining whether sufficient funds are available to\nconduct the required activities.\n(11) (a) In demonstrating and maintaining financ ial responsibility as determined by\nthe cabinet, the sequestration operator shall provide financial responsibility\nfrom the following list of qualifying instruments:\n1. Trust funds;\n2. Surety or cash bonds;\n3. Letters of credit;\n4. Insurance;\n5. Self-insurance; or\n6. Any other instrument the cabinet finds satisfactory.\n(b) The cabinet may promulgate administrative regulations in accordance with\nKRS Chapter 13A to allow self -insurance as a financial responsibility\nmechanism for some or all of the costs and o bligations of the sequestration\noperator under terms and conditions as the cabinet deems necessary to ensure\ncompletion of all obligations of the Class VI permit. To account for the risks\nof default and resulting responsibility obligations incurred by the carbon\ndioxide sequestration facility trust fund established in KRS 353.441, the\ncabinet's terms and conditions may include:\n1. Corporate guarantees;\n2. Securing performance by lien or collateral; and\n3. Adjustments in assessed contributions by the sequest ration operator to\nthe carbon dioxide sequestration facility trust fund established in KRS\n353.411.\n(c) All qualifying financial instruments are subject to the cabinet's approval.\n(12) (a) The cabinet shall not issue a permit under this section or approve an\napplication to transfer a sequestration facility to a successor operator pursuant\nto subsection (13) of this section, and an operator shall not be eligible to\nreceive any permits or become a successor operator under this section if:\n1. The applicant has falsified or otherwise misrepresented any information\non or relating to the permit application;\n2. The applicant has failed to abate or reach an agreement with the cabinet\nregarding an una ppealed violation of KRS 353.411 to 353.459 or the\nadministrative regulations promulgated thereunder;\n3. A control person of the applicant has a forfeiture of a financial\nresponsibility instrument;\n4. The applicant is a control person for another operator that has a\nforfeiture of a financial responsibility instrument;\n5. A control person for the applicant served as a control person for another\noperator when an unresolved financial responsibility instrument\nforfeiture occurred;\n6. The applicant is or has a c ontrol person who controls or is controlled by\nanother operator that has a forfeiture of a bond; or\n7. The cabinet determines that an activity of the applicant is currently in\nviolation of this chapter or KRS Chapter 149, 151, 224, 349, 350, 351,\nor 352 or any administrative regulation promulgated thereunder.\n(b) The cabinet:\n1. May restore the eligibility of applicants, operators, and control persons\nwho are deemed permit -ineligible pursuant to paragraph (a)1. of this\nsubsection upon resubmission of the ap plication correcting the false or\nmisrepresented information;\n2. Shall restore the eligibility of applicants, operators, or control persons\nwho are deemed permit -ineligible pursuant to paragraph (a)2. of this\nsubsection upon satisfactory abatement of the v iolation and payment of\nany civil penalties;\n3. Shall restore the eligibility of applicants, operators, or control persons\nwho are deemed permit -ineligible pursuant to paragraph (a)3. to 6. of\nthis subsection upon entry of and satisfactory compliance with an agreed\norder between the operator and the cabinet that resolves all the\noperator's outstanding violations, requires payment of any civil\npenalties, and provides restitution to the cabinet for any costs associated\nwith the forfeiture, plugging, and prope r abandonment of a well in\nexcess of the financial responsibility instruments forfeited to the cabinet\nby the operator; and\n4. a. Shall provisionally restore the eligibility of applicants who are\ndeemed permit -ineligible pursuant to paragraph (a)7. of this\nsubsection upon either submittal of proof that the violation is in\nthe process of being corrected to the satisfaction of the cabinet or a\ndemonstration that the applicant has filed and is pursuing a good -\nfaith administrative or judicial appeal to contest the violation. If\nthe Circuit Court affirms the violation, then the applicant shall,\nwithin thirty (30) days of the judicial action, submit proof that the\nviolation is in the process of being corrected to the satisfaction of\nthe cabinet. Provisional restor ation of permit eligibility related to\nparagraph (a)7. of this subsection may be withdrawn at any time if\nthe cabinet determines that the applicant no longer satisfies the\nrequirements of this section.\nb. The cabinet shall fully restore the eligibility of applicants who are\ndeemed permit -ineligible pursuant to paragraph (a)7. of this\nsubsection upon either submittal of proof that the violation has\nbeen corrected to the satisfaction of the cabinet or that the\nviolations have been ordered vacated in a final d ecision of the\nsecretary or a reviewing court after all appeals have been\nexhausted.\n(13) A permit issued pursuant to this section shall not be transferred by sale, assignment,\nlease, or otherwise, except upon the written approval by the cabinet of a joint\napplication submitted by both the transferor and the transferee. The joint application\nfor transfer shall be on a form prescribed by the cabinet and accompanied by a fee\nin an amount set by the cabinet. Fees under this subsection shall be deposited in the\ncarbon dioxide sequestration facility administrative fund established in KRS\n353.437. The transferee shall file financial responsibility with the application in an\namount and form that the cabinet deems satisfactory to cover the costs of the\nactivities listed in subsection (10)(a) of this section. All rights and liabilities under\nthe permit shall pass to the transferee upon written approval of the transfer by the\ncabinet.\n(14) The cabinet shall conduct periodic reviews of each permit issued pursuant to thi s\nsection. The cabinet shall review each permit at least once every five (5) years from\nthe date of the permit issuance and whenever the cabinet has reason to believe,\nbased on available information, that the permit may no longer be in compliance\nwith KRS 353.411 to 353.459. During permit review, the cabinet shall review all\nprovisions of the existing permit, including the adequacy of the financial\nresponsibility required by this section. The cabinet may, by determination issued to\nthe permit holder, requir e revision or modification of the permit provisions,\nincluding requiring the posting of additional financial responsibility, in order to\nensure compliance with this section.","path":["KRS Chapter 353"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57861","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:39Z","sha256":"375e18afe7d2ff9ec89ea723b2860a9314c519c9b4f7acad0dc71885a0c884ed","source_id":"us-ky","stale":false,"prev":"us-ky/krs-353.415","next":"us-ky/krs-353.419"},"notice":"GroundRules: Original legal text. Not legal advice."}