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, classification of permits, reporting and payment of
fees, and penalties.
Section 1.
Classification of Mine Permit Types.
(1) The
commission shall review and assign classification of mine types pursuant to
KRS
350.509(1)(e) for the
purposes of assessing the fees in accordance with
KRS
350.518. Permits shall be assigned to one (1)
of the following classifications:
(a) Surface
coal mining operations containing activities defined in
405 KAR
8:001, Section 1(125), for which coal removal is
ongoing on a regular or intermittent basis in accordance with an approved
permit;
(b) Underground coal mining
operations containing activities defined in
405 KAR
8:001, Section 1(136), for which coal removal is
ongoing on a regular or intermittent basis in accordance with an approved
permit;
(c) Combined surface and
underground mining operations containing activities defined in both
405 KAR
8:001, Section 1(126) and 1(136), for which coal
removal is ongoing on a regular or intermittent basis in accordance with an
approved permit;
(d) Non-production
permits include operations approved for mining support, maintenance and other
facilities, or operations or activities pursuant to
KRS
350.010(1), but do not
include permitted coal removal operations, as established in paragraphs (a),
(b), and (c) of this subsection; or
(e) Dormant permits, including expired
permits, which shall include:
1. Permits for
which all coal removal operations are complete, but an initial release of
performance bond has not been granted, pursuant to
405
KAR 10:040, Section 2;
2. Permits in temporary cessation, pursuant
to
405 KAR
16:010, Section 7, and
405 KAR
18:010, Section 5;
3. Permits for which a deferment has been
granted, pursuant to
405 KAR
16:020, Section 5(1); and
4. Permits in paragraphs (a), (b), and (c) of
this subsection that report no production in a quarter.
(2) Upon initial disturbance of an
issued permit or resumption of coal production operations following a period of
temporary cessation or deferment, pursuant to
405 KAR
16:020, Section 5(1), the permittee shall notify the
ORGF within ten (10) days of the initial disturbance or resumption on Kentucky
Reclamation Guaranty Fund Notification of Permit Activity, Form RGF -3. The
suspension provisions of Section 4(2) of this administrative regulation shall
apply for failure to provide notification to the ORGF.
(3) The commission shall assign
classifications, pursuant to
KRS
350.509(1)(e), utilizing the
following information:
(a) Member production
records submitted pursuant to Section 2 of this administrative
regulation;
(b) Issued
permits;
(c) Cabinet inspection
records;
(d) Permit, license, and
other records on file with the Kentucky Office of Mine Safety and Licensing,
and the U.S. Mine Safety and Health Administration; and
(e) Any other permittee documents and records
as deemed necessary by the Commission, pursuant to
KRS
350.509(7).
(4) A permit subject to
KRS
350.518(2)(e) and (f) shall
be exempt from the requirements of
405 KAR
10:090.
Section 2. Member Production Records, Fee
Reporting, and Payments.
(1) Each permittee
in the Kentucky Reclamation Guaranty Fund shall:
(a) Report coal production from each
permitted surface coal mining operation on a quarterly basis for coal mined and
sold, beginning January 1, 2014;
(b) Maintain records on a quarterly basis
that report the tonnage of coal mined and sold for each permit.
1. Coal producing permits shall be assigned a
classification by the commission in accordance with Section 1 of this
administrative regulation.
2.
Tonnage shall be reported based on the weight of coal at the time of
sale.
3. Coal mined and sold from
permits that combine surface and underground operations shall report both
underground and surface production separately;
(c) Retain records of coal mined and sold for
a period of six (6) years from the end of the quarter in which a report was
due; and
(d) Provide records
necessary to substantiate the accuracy of reports and payments upon the request
of the ORGF.
(2)
Reporting of tonnage and payment of fees shall be recorded on the Kentucky
Reclamation Guaranty Fund Quarterly Fee Report, RGF-1, for each permit for
which coal was mined and sold during the previous quarter or has coal reserves
available to be mined. The reporting of tonnage shall be accompanied by the fee
required in
405 KAR 10:090.
(a) The reporting and payment period shall be
quarterly with the first quarterly reporting period being January 1 through
March 31. The report shall be submitted, and fees shall be received, no later
than the 30th day of the month following the end of a reporting period.
1. A permittee shall submit all reports and
payments for permits issued with the same permittee name on one (1)
form.
2. The report shall be
submitted even if the member has no coal mined and sold during the reporting
period.
3. Reports are not required
to be submitted for permits that have expired and a permit renewal is not being
pursued, or for permits that have achieved at least a phase I bond release for
the entire permit area.
(b) Payments received by the fund after the
30th day of the month following the reporting quarter, non-payment of fees, or
underpayment of fees shall be subject to the penalty provisions of Section 4(1)
of this administrative regulation.
Section 3. Non-production and Dormancy Fees
and Payments.
(1) Beginning January 1, 2014
permittees in the KRGF are required to pay non-production and dormancy fees to
the KRGF for surface coal mining permits not subject to the tonnage fees in
405 KAR 10:090.
(a) Non-production and dormancy fees shall
not apply to permits or increments that have been granted phase I bond release,
have not been initially disturbed by the permittee after permit issuance, or
contain underground acreage only.
1. Payment
of the non-production and dormancy fees shall be in four (4) quarterly
installments.
2. For non-production
permits issued and not initially disturbed, the non-production annual fee shall
be assessed for the calendar quarter after initial disturbance and be pro-rated
for the remaining quarters of the calendar year.
(b) Permits that are used exclusively for
coal preparation and processing operations, loading activities, disposal of
refuse operations, coal haulage and access roads, mine maintenance and other
support facilities, and other permits not subject to the tonnage fees in
405 KAR 10:090,
Section 1, as determined by the commission shall pay the non-production fee of
ten (10) dollars per acre.
(c) Any
permits, or expired permits, not subject to the ten (10) dollar non-production
fee in paragraph (b) of this subsection, and the tonnage fees in
405 KAR 10:090,
Section 1, shall pay a dormancy fee of six (6) dollars per acre.
(d) The commission shall evaluate a permit
that may meet multiple classifications and assign the permit a classification
for assessment of fees.
(e) Members
who provided written notice to the ORGF that they will opt-out of the fund and
subsequently post full cost performance bonds prior to April 30, 2014 on all
permits held by the member, shall not be subject to the fees listed in
paragraphs (b) and (c) of this subsection.
(2) Non-production and dormancy fees shall be
assessed to each eligible permit based on the total bonded acreage, or fraction
thereof, on record with the DNR as of January 1 of each calendar year. Permits
that have coal production and pay tonnage fees in accordance with Section 2 of
this administrative regulation in each calendar quarter shall not be subject to
the payment of dormancy fees assessed pursuant to this section. A permittee
that receives an assessment notification for dormancy fees in accordance with
subsection (1)(c) of this section, and does not report coal mined and sold in a
calendar quarter, shall pay the dormancy fee for that quarter.
(a) Payment of the non-production and
dormancy fees shall be made in four (4) separate equal quarterly installments
beginning with the January 1 through March 31, 2014 quarter. Members shall be
allowed to prepay the entire annual dormancy and non-production fees in a lump
sum prior to April 30 of each calendar year. Fees received from prepayments
shall not be refundable to the member.
(b) The ORGF shall notify each member on or
before January 31 of each calendar year those permits that are classified and
subject to dormancy or non-production fees. The notification shall include the
permit classification, total bonded acreage subject to assessment for each
permit, and the quarterly payment amount due by permit.
(c) A permittee shall be allowed thirty (30)
calendar days after receipt of the initial assessment each year to provide
written notice to the ORGF to contest the assessed dormancy or non-production
fees.
1. The written notice shall include an
explanation of the nature of the contest, the documentation relied upon by the
permittee, and the specific permit and increments where the alleged error
exists.
2. The ORGF shall review
the information provided by the permittee and provide a response in writing of
its decision to retain or modify the assessment.
3. The permittee shall not be subject to
penalties for late payment if a decision is not issued by the ORGF prior to the
payment due date.
(d)
Quarterly installment payments shall be received in the ORGF no later than the
30th day of the month following the previous calendar quarter on the Kentucky
Reclamation Guaranty Fund Quarterly Fee Report, RGF-1.
(e) Late payment or non-payment of fees shall
subject members to penalties in Section 4(1) of this administrative
regulation.
(f) All payments shall
be in the form of a check, cashier's check, certified check, money order, or
electronic funds transfer, and be made payable to the Kentucky State
Treasurer.
Section
4. Penalties.
(1) Late Payment
or Non-Payment of Fees and Initial Assessments.
(a) Permittees shall be subject to penalties
of five (5) percent of the original fee for each month or fraction thereof
elapsing between the due date and the date on which the payment is submitted
for the failure to submit the following records and fees:
1. Quarterly production records within thirty
(30) days of the end of the reporting quarter;
2. Payment of required tonnage fees within
thirty (30) days of the end of the reporting quarter;
3. Non-production fees within thirty (30)
days of the end of the reporting quarter;
4. Dormancy fees within thirty (30) days of
the end of the reporting quarter; or
5. Initial capitalization assessments within
thirty (30) days of the date of receipt of notice.
(b) Upon a determination by the ORGF that a
permittee has underreported production or underpaid the amount due in any
reporting quarter, the permittee shall submit the corrected information or
payment within ten (10) days of notification that the report or payment is
deficient or insufficient.
(c) A
penalty of five (5) percent of the fee shall be assessed for the underpayment
of tonnage fees if the payment is not received within ten (10) days of
notification.
(d) Penalties for
late payment, underpayment, or non-payment of fees or initial assessments shall
be at a minimum of $100.
(e)
Payments of fees, penalties, or initial assessments that are more than thirty
(30) days in arrears shall render the permittee subject to permit suspension
pursuant to
405 KAR
12:020.
(2) Defrauding the commission. Any permittee
submitting fraudulent production reports, misidentifying the method of coal
production to obtain a lower fee payment, withholding documentation requested
by the commission, or otherwise attempting to defraud the fund or commission
shall be subject to permit suspension by the cabinet upon receipt of
notification by the commission.
Section 5. Incorporation by Reference.
(1) The following material is incorporated by
reference:
(a) "Kentucky Reclamation Guaranty
Fund Quarterly Fee Report", RGF-1, November 2016; and
(b) "Kentucky Reclamation Guaranty Fund
Notification of Permit Activity", Form RGF -3, June 2013.
(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,
350.500
- 350.521