Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
350.020,
350.060,
350.064,
350.093,
350.095,
350.130,
350.131,
350.151,
350.465,
30 C.F.R. Parts 730-733, 735,
800.50,
917,
30 U.S.C. 1253,
1255
NECESSITY, FUNCTION, AND CONFORMITY: KRS Chapter 350 requires
the cabinet to regulate surface coal mining and reclamation operations in a
manner as to ensure that satisfactory reclamation is accomplished. This
administrative regulation establishes the procedures and criteria by means of
which a bond may be forfeited to the cabinet. This administrative regulation
establishes that certain violations of KRS Chapter 350 and administrative
regulations promulgated pursuant to that chapter may cause a bond to be
forfeited. This administrative regulation establishes that a hearing may be
requested before forfeiture can be effected. This administrative regulation
establishes the method to determine the amount of bond forfeiture. This
administrative regulation establishes criteria under which unused forfeited
bond funds shall be returned to the person from whom they were
collected.
Section 1. General.
(1) The cabinet shall forfeit all of the
remaining bond amount for any permit or increment pursuant to the procedures
and criteria of this administrative regulation.
(2) The cabinet may withhold forfeiture if
the permittee or the surety agrees to a compliance schedule to correct the
violations of the permit or bond conditions.
(3) The cabinet shall withhold forfeiture and
allow the surety or other financial institution providing bond to complete the
reclamation plan if the surety or other financial institution can demonstrate
the ability to complete the reclamation plan, including achievement of the
capability to support the postmining land use approved by the cabinet, and will
undertake to do so within a reasonable time frame and agrees to a compliance
schedule. Neither the surety company nor other financial institution shall
employ anyone to perform the measures who has been barred from mining pursuant
to the provisions of KRS Chapter 350.
Section 2. Procedures.
(1) Except as established in subsection (2)
of this section, if forfeiture of the bond is required by Section 3 of this
administrative regulation, the cabinet shall:
(a) Send written notification by certified
mail, return receipt requested, to the permittee, and to the surety on the
bond, if applicable, of the cabinet's determination to initiate forfeiture of
the bond and the reasons for the forfeiture;
(b) Advise the permittee and surety, if
applicable, of their right to challenge the determination pursuant to
400
KAR 1:110, Section 9; and
(c) If no hearing is requested within thirty
(30) days following notification and the bond proceeds are not received, enter
a final order of forfeiture and proceed in an action for collection on the
bond.
(2) The cabinet
may, as an alternative to following the procedures of subsection (1) of this
section, initiate formal hearing procedures concerning forfeiture of the bond
alone or in conjunction with the cabinet's action for other appropriate
remedies against the permittee pursuant to
400
KAR 1:110, Section 5.
(3) The cabinet shall utilize funds collected
from bond forfeiture to complete the reclamation plan on the permit area or
increment on which bond coverage applied, and to cover associated
administrative expenses. The funds shall be deposited in an appropriate account
for the payment of these costs. Funds remaining after reclamation shall be
returned to the person from whom the forfeiture proceeds were received, subject
to the cabinet's right to attach or setoff the proceeds under state
law.
(4) In the event the amount
forfeited is insufficient to pay for the full cost of reclamation, the
permittee or operator shall be liable for remaining costs. The cabinet may
complete, or authorize completion of, reclamation of the bonded area and may
recover from the permittee or operator all costs of reclamation in excess of
the amount forfeited.
(5) Return of
unused forfeited bond funds for interim or permanent program permit area
overlapped by permanent program permit area. If the cabinet has not completed
the reclamation plan on a permit area under 30 C.F.R. Part 715 for which the
bond was forfeited on or after July 15, 1988, or if the cabinet has not
completed the reclamation plan on a permit area under 405 KAR Chapters 7-24 for
which the bond was forfeited, and if the permit area and any related off-permit
disturbances are entirely contained within the permit area of a subsequent
valid permit under 405 KAR Chapters 7-24 for which the bond is in force, the
cabinet shall retain the funds from the forfeited bond until the entire
overlapped permit area and any related off-permit disturbances have been
disturbed by the overlapping permittee and then shall return the unused funds
to the person from whom the forfeiture proceeds were received, subject to the
cabinet's right to attach or set off the proceeds under state law.
Section 3. Criteria for
Forfeiture.
(1) A bond for a permit area or
increment shall be forfeited, if the cabinet finds that:
(a) The permittee has violated any of the
terms or conditions of the bond and has failed to take corrective
action;
(b) The permittee has
failed to conduct the surface mining and reclamation operations in accordance
with KRS Chapter 350, the conditions of the permit or 405 KAR Chapters 7
through 24 within the time required;
(c) The permit for the area or increment
under bond has been revoked or the operation terminated, unless the permittee,
surety, or other financial institution providing bond assumes liability
pursuant to an agreement for the completion of reclamation; or
(d) The permittee, surety, or other financial
institution providing bond has failed to comply with a compliance schedule
approved pursuant to Section 1(2) or (3) of this administrative
regulation.
(2) A bond
may be forfeited if the cabinet finds that:
(a)
1. The
permittee has become insolvent; or
2. A creditor of the permittee has attached
or executed judgment against the permittee's equipment, materials, or
facilities, at the permit area; and
(b) The permittee cannot demonstrate or prove
the ability to continue to operate in compliance with KRS Chapter 350, 405 KAR
Chapters 7 through 24, and the permit.
(3) The cabinet may forfeit a bond solely
upon the permittee's failure to pay penalties or fines (if all reclamation
requirements have been fully met) and retain the bond proceeds, or portion
thereof as necessary to offset the penalty or fine owed (including
administrative costs incurred by the cabinet), but the cabinet shall forfeit a
bond under this circumstance only after the five (5) year liability period has
expired; except that for surety bonds or bonds secured by a letter of credit.
(a) In no event shall the cabinet take any
action to forfeit a surety bond or bond secured by a letter of credit under
this circumstance until reclamation phase I and II monies have been released
and the five (5) year liability period has expired; and
(b) If a forfeiture of a surety bond or a
bond secured by a letter of credit under this circumstance has occurred, the
cabinet shall not retain the surety bond or bond secured by letter of credit or
any proceeds thereof and the permittee shall continue to be responsible for
payment of the penalties or fines as well as administrative costs incurred by
the cabinet.
Section
4. Forfeiture Amount. The cabinet shall forfeit the entire amount
of the bond for the permit area or increment.
STATUTORY AUTHORITY: KRS Chapter 13A, 350.020, 350.028,
350.060, 350.064, 350.130, 350.151, 350.465, 30 C.F.R. Parts 730-733, 735,
800.50,
917,
30 U.S.C. 1253,
1255