North Dakota Administrative Code
Title 43 - Industrial Commission
Article 43-02 - Mineral Exploration and Development
Chapter 43-02-02 - Subsurface Mineral Exploration and Development
Section 43-02-02-11 - Bond
Current through Supplement No. 392, April, 2024
Before any person receives a permit to explore for or produce subsurface minerals, the person shall submit to the commission and obtain its approval of a surety bond or cash bond. An alternate form of security may be approved by the commission after notice and hearing, as provided by law. The operator of a well or facility shall be the principal on the bond covering such activity. Each such surety bond shall be executed by a responsible surety company authorized to transact business in North Dakota.
1. Bond amounts and limitations for projects that involve drill holes:
When the principal on the bond is drilling or operating a number of wells within the state or proposes to do so, the principal may submit a bond conditioned as provided by law. A well with an approved temporary abandoned status shall have the same status as an exploratory, mineral, or injection well. The commission may, after notice and hearing, require higher bond amounts than those required by this section. Such additional amounts for bonds must be related to the economic value of the well or wells and the expected cost of plugging and well site reclamation, as determined by the commission.
2. Bond terms. Bonds shall be conditioned upon full compliance with North Dakota Century Code chapter 38-12, and all administrative rules and orders of the commission, and continues until any of the following occurs:
3. Transfer of property under bond. Transfer of property does not release the bond. In case of transfer of property or other interest in a well, extraction facility, or surface mining facility and the principal desires to be released from the bond covering the well or facility, such as producers, not ready for plugging, the principal must proceed as follows:
The principal shall submit to the commission a form 8-sm reciting that a certain property or properties, describing each by quarter-quarter, section, township, and range, is to be transferred to a certain transferee, naming such transferee, for the purpose of ownership or operation. The date of assignment or transfer must be stated and the form signed by a party duly authorized to sign on behalf of the principal.
On said transfer form the transferee shall recite the following: "The transferee has read the foregoing statement and accepts such transfer and the responsibility of such property under the transferee's one-well bond, surface mining facility bond, or extraction facility bond." Such acceptance must be signed by a party authorized to sign on behalf of the transferee and the transferee's surety.
4. Bond termination. The commission shall, in writing, advise the principal and any sureties on any bond as to whether the plugging and reclamation is approved. If approved, liability under such bond may be formally terminated upon receipt of a written request by the principal. The request must be signed by an officer of the principal or a person authorized to sign for the principal.
5. Director's authority. The director is vested with the power to act for the commission as to all matters within this section, except requests for alternative forms of security, which may only be approved by the commission.
The commission may refuse to accept a bond if the operator or surety company has failed in the past to comply with statutes, rules, or orders relating to the operation of wells; if a civil or administrative action brought by the commission is pending against the operator or surety company; or for other good cause.
General Authority: NDCC 38-12-02
Law Implemented: NDCC 38-12-02