Kentucky Administrative Regulations › Title 405 - ENERGY AND ENVIRONMENT CABINET - DEPARTMENT FOR NATURAL RESOURCES › Chapter 30 - Oil Shale Operations › Section 405 KAR 30:040 - Amount and duration of performance bonds

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO:
				KRS
				350.060
NECESSITY, FUNCTION, AND CONFORMITY:
				KRS
				350.600 requires the Environmental and Public
				Protection Cabinet to develop administrative regulations for oil shale
				operations to minimize and prevent their adverse effects on the citizens and
				the environment of the Commonwealth. This administrative regulation sets forth
				specified criteria upon which to base determination of bond amounts and
				requires certain periods of liability during which bonds must remain in
				effect.
Section 1. Determination of
			 Bond Amounts. The standard applied by the cabinet in determining the amount of
			 performance bond shall be the estimated cost to the cabinet if it had to
			 perform the reclamation, restoration and abatement work required of a person
			 who conducts oil shale operations under KRS Chapter 350, all other applicable
			 statutes, and the administrative regulations promulgated pursuant thereto, as
			 well as such additional work as would be required to achieve compliance with
			 the standards for revegetation under these oil shale administrative
			 regulations. The amount of bond shall be further based on, but not be limited
			 to, such other cost information as may be required by or available to the
			 cabinet. In calculating the initial amount of the performance bond, the cabinet
			 shall take into consideration the three (3) phases of reclamation and the
			 percentages to be released upon completion of each phase. The three (3) phases
			 of reclamation and the percentages to be released upon completion of each phase
			 are set forth in
			 405
			 KAR 30:070 entitled Procedures, Criteria and Schedule
			 for Release of Performance Bonds.
Section
			 2. Minimum Amount. For oil shale operation permits the minimum
			 amount of bond shall be $20,000.
Section
			 3. Period of Liability.
(1)
			 Liability under performance bonds applicable to a permit shall continue until
			 completion of all reclamation work required of persons who conduct oil shale
			 operations under the requirements of these oil shale administrative regulations
			 and the conditions of the permit have been completed.
(2) In addition to the period necessary to
			 achieve compliance with the requirements of all applicable statutes and
			 administrative regulations and the conditions of the permit, the period of
			 liability under performance bonds shall continue for a period of seven (7)
			 years beginning with the last year of substantially augmented seeding,
			 fertilizing, irrigation or other work. The period of liability shall begin
			 again whenever substantially augmented seeding, fertilizing, irrigation or
			 other work is required or conducted on the site prior to bond release. A
			 portion of a bonded area requiring extended liability because of substantial
			 augmentation may be separated from the original area and bonded separately upon
			 approval by the cabinet; provided, however, that such separation comes only
			 following a good faith attempt to reclaim the entire permit area. The original
			 bond amount shall apply to the area which has not required substantial
			 augmentation. A new bond, in an amount determined by the cabinet, shall be
			 posted for the area which has been substantially augmented. Before determining
			 that extended liability should apply to only a portion of the original bonded
			 area, the cabinet shall determine that such area portion:
(a) Is not significant in extent in relation
			 to the entire area under bond; and
(b) Is limited to a distinguishable
			 contiguous portion of the bonded area.
(3) If the cabinet approves a long-term
			 intensive agricultural postmining land use, pursuant to these oil shale
			 administrative regulations, the seven (7) year period of liability shall
			 commence at the date of initial planting for such long-term intensive
			 agricultural land use. Such approval shall not constitute a grant of an
			 exception to the bond-liability periods of this section.
(4) If an area is separated under subsection
			 (2) of this section, that portion shall be bonded separately and the period of
			 liability shall commence anew. The period of liability for the remaining area
			 shall continue in effect without extension. The amount of bond on the original
			 bonded area may be adjusted in accordance with Section 4 of this administrative
			 regulation.