Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
350.020,
350.060,
350.062,
350.064,
350.093,
350.095,
350.100,
350.110,
350.151,
350.465,
350.500
- 350.521
NECESSITY, FUNCTION, AND CONFORMITY: KRS Chapter 350 authorizes
the cabinet to promulgate administrative regulations to ensure bonds are
adequate to perform reclamation in the event of forfeiture. This administrative
regulation establishes information related to the operation of the Kentucky
Reclamation Guaranty Fund.
Section 1.
Applicability. This administrative regulation shall apply only to an entity
seeking to obtain by transfer the permit of a current member of the KRGF who
was a member of the former Kentucky Voluntary Bond Pool.
Section 2. Performance Bond Subsidization.
(1) Performance bond subsidization shall be
extended to an applicant who was not a member of the former voluntary bond pool
fund prior to its dissolution if the:
(a)
Applicant intends to obtain its permit by transfer from a member of the former
Kentucky Voluntary Bond Pool;
(b)
Permit to which the applicant intends to succeed meets one (1) or more of the
criteria for the cabinet to seek bond forfeiture under
405 KAR 10:050,
Section 3;
(c) Applicant meets the
requirements of this administrative regulation; and
(d) Commission determines it is in the best
interest of the KRGF pursuant to
KRS
350.509(1).
(2) If the commission determines
the criteria for performance bond subsidization extension have been met, the
bonds previously issued by the KRGF to the member of the former voluntary bond
pool fund shall be substituted for bonds newly issued by the KRGF in accordance
with the provisions of
405 KAR
10:015, Section 5.
(3) Subsequent to the extension of
performance bond subsidization for the issuance of a successor permit pursuant
to subsection (2) of this section, the KRGF may extend additional subsidization
to the permittee for the permit to enable the permittee to complete mining and
reclamation operations, if the commission determines it is in the best interest
of the KRGF. The commission shall review an applicant's ability to meet the
approval requirements of this administrative regulation upon application for
additional subsidization.
(4) Only
a permit with a bond previously covered by the former voluntary bond pool fund
shall be eligible for performance bond subsidization. Other permits held by the
applicant shall not be subsidized by the KRGF.
Section 3. Applicant Criteria.
(1) Applicants for extension of performance
bond subsidization shall submit an application on the Application for
Performance Bond Subsidization for Permit Succession, RGF-4 form, which shall
include:
(a) Identification of the permittee
which the applicant wishes to succeed;
(b) Identification of permits the applicant
intends to obtain by transfer;
(c)
Information regarding the financial standing and compliance record of the
applicant; and
(d) Any other
information the commission needs to make a determination.
(2)
(a) The
commission shall consider applications on a case-by-case basis and meeting the
criteria under this section shall not be grounds for automatic performance bond
subsidization. An applicant shall be allowed thirty (30) calendar days after
receipt of the commission's deter- mination to contest the determination in
writing.
(b) The written notice
shall include:
1. An explanation of the nature
of the contest; and
2. The
documentation relied upon by the applicant.
(3) The applicant for extended performance
bond subsidization shall be in good financial standing. The financial standing
of the applicant shall be determined based upon the financial information
required in the application and other information available to the KRGF and the
cabinet. The commission shall consider the financial ratios of:
(a) Current assets to current
liabilities;
(b) Net income to net
sales;
(c) Total liabilities to
stockholders' equity;
(d) Net
income to owners' equity;
(e)
Owners' equity to total assets; and
(f) The sum of cash, marketable securities,
and net receivables, to current liabilities.
(4) The applicant for extended performance
bond subsidization shall have held, under the same name or other name as
provided in subsection (5) of this section, a permit issued by the cabinet to
conduct surface mining operations in Kentucky or by an authorized agency
governing surface mining operations in another state or territory, for a period
of at least five (5) of the seven (7) years immediately preceding the
application for extended performance bond subsidization, and have exhibited an
approved compliance record as detailed by Section 4 of this administrative
regulation.
(5) If the applicant
cannot satisfy the requirements of subsection (4) of this section, then the
following types of permits held by persons other than the applicant may be used
to satisfy those requirements:
(a) A permit
issued to a person who owns fifty (50) percent or more of the
applicant;
(b) A permit issued to a
person who is owned fifty (50) percent or more by a person meeting the
requirements of subsection (4) of this section; or
(c) A permit issued to a person whose
combined ownership of the applicant is fifty (50) percent or more, provided
each person meets the requirements set forth in subsection (4) of this
section.
Section
4. Determination of Compliance Record.
(1) An applicant shall be deemed to have an
approved compliance record if the applicant, each person who owns or controls
the applicant, each person who is owned or controlled by the applicant, and
each person who is under common ownership and control with the applicant meet
all of the criteria established in paragraphs (a) through (i) of this
subsection. Each party established in this subsection shall have:
(a) Never committed a violation for mining
without having first obtained the required permit;
(b) Never forfeited a bond or had a permit
revoked;
(c) Never avoided
forfeiture of a bond because a surety performed reclamation work in order to
avoid forfeiture;
(d) Never been
determined to have demonstrated a pattern of violations;
(e) Not been issued more than one (1) order
for cessation and immediate compliance for failure to complete required
remedial measures in the most recent thirty-six (36) months of operation and
the order was abated as ordered in a timely manner and was not for a violation
of contemporaneous reclamation requirements under
405 KAR
16:020 or
405 KAR
18:020 or other applicable state or federal statute or
regulation;
(f) Not been issued
more than one (1) order for cessation and immediate compliance for creating an
imminent danger to the health and safety of the public or causing significant,
imminent environmental harm in the most recent thirty-six (36) months of
operation and the order was abated as ordered in a timely manner;
(g) Not committed more than one (1) violation
of contemporaneous reclamation requirements under
405 KAR
16:020 or
405 KAR
18:020 or other applicable state or federal statute or
regulation in the most recent thirty-six (36) months of operation and the
violation was abated in a timely manner, except the commission may by unanimous
vote exclude violations that have been terminated with no civil
penalty;
(h) Not committed more
than three (3) violations of KRS Chapter 350 or 405 KAR Chapters 7 through 24
or other applicable state or federal statute or regulation on any one (1)
permit in any twelve (12) month period of the most recent thirty-six (36)
months of operation, except the commission may by unanimous vote exclude the
twelve (12) month period on one (1) permit during which the largest number of
violations occurred and may by unanimous vote exclude violations that were
timely abated and terminated with no civil penalty; and
(i) Not had civil penalties remaining unpaid
more than thirty (30) days after they were due and payable, within the most
recent thirty-six (36) months of operation.
(2) To the extent the information is
available, the commission shall take into account the performance of the
applicant and each person who owns or controls, is owned or controlled by, or
is under common ownership or control with the applicant, in other states and on
federal lands and Indian lands under criteria similar or equivalent to those in
this section.
Section 5.
Compliance Review for Continued Subsidization.
(1) The commission shall review the
compliance record of former applicants for extended bond
subsidization.
(2) If the
commission determines that the permittee no longer satisfies any of the
criteria in Section 4(1) of this administrative regulation, it shall advise the
cabinet that the permittee is no longer eligible for performance bond
subsidization.
(3) Upon receipt of
this notice, the cabinet shall immediately order the permittee to cease surface
coal mining operations on that permit until it has obtained alternate bond
coverage.
(4) During the period of
cessation, the permittee shall maintain the permit in compliance with the
requirements of KRS Chapter 350 and 405 KAR Chapters 7 through 24.
Section 6. Permit Specific Bond.
(1) For each permit obtained by transfer from
a member of the former voluntary bond pool fund, a permit-specific bond at a
rate of $2,000 per acre shall be posted.
(2) Permit specific bonds posted pursuant to
this section shall be released in accordance with the provisions of
405 KAR
10:015, Section 2.
Section 7. Incorporation by Reference.
(1) "Application for Performance Bond
Subsidization for Permit Succession", RGF-4, April 2014, is incorporated by
reference.
(2) This material may be
inspected, copied, or obtained, subject to applicable copyright law, at the
Kentucky Department for Natural Resources, 300 Sower Boulevard, Frankfort, KY
40601, Monday through Friday, 8 a.m. to 4:30 p.m.
STATUTORY AUTHORITY:
KRS
350.060,
350.062,
350.064,
350.093,
350.095,
350.100,
350.151,
350.465,
350.518(5)