Rules & Regulations of the State of Tennessee
Title 0400 - Environment and Conservation
Subtitle 0400-45 - Division of Water Resources
Chapter 0400-45-06 - Underground Injection Control (Transferred from 1200-04-06)
Section 0400-45-06-.19 - BONDS REQUIRED FOR PERMITTED WELLS

Universal Citation: TN Comp Rules and Regs 0400-45-06-.19

Current through September 24, 2024

(1) A surety bond or cash bond is required from the owner or operator of an injection well for Class I, II and III wells adequate to allow proper plugging and abandonment of the well(s) and may be required for Class V wells at the Commissioner's discretion. Such bonds are penal in nature. Such surety bond or cash bond is required to be in force for a well from the time a permit has been granted until the well has been properly abandoned. Bonds shall be in favor of the Commissioner, conditioned that the well shall meet all the requirements of this Chapter and be plugged and abandoned in accordance with this Chapter. An individual well bond shall be released upon the proper plugging of the well and the filing of a plugging and abandonment report, driller's log, downhole surveys, and other data as required.

(2) At any time other than after the issuance of a notice of noncompliance or forfeiture, the surety may notify the Commissioner in writing of its desire to terminate its liability under the bond by giving written notice to the Commissioner. The Commissioner shall thereupon require the principal in the bond to file a new bond, or to effect a change of owners on the well within sixty (60) days. If the principal can no longer be contacted, then any interested party may seek to change ownership on the well. If a new bond is filed by the principal, or a change in ownership is approved by the Commissioner, liability under the original bond shall cease and terminate as to acts and operations occurring after the effective date of the new bond or approval of change in ownership and the original bond shall be released upon written request from the surety. If a new bond is not filed within sixty (60) days, or a change in ownership has not been approved, the Commissioner shall revoke the permit secured by the bond and require the principal to plug and abandon the well in accordance with the Underground Injection Control rules. In the event of the failure of the principal to plug the well, the surety may either cause the well to be plugged, or forfeit the amount of the bond to the Commissioner. This action will be initiated by the issuance of a notice of noncompliance. The surety will then have thirty (30) days in which to plug the well. If the well has not been plugged within that time limit, then a notice of forfeiture will be issued. The surety will then have twenty-one (21) days within which to petition the Tennessee Water Quality Control Board for a hearing relative to the bond forfeiture, pursuant to the Administrative Procedures Act, T.C.A. §§ 4-5-101 et seq. If a hearing is requested, no further action will be taken against the bond until such hearing has taken place and a final order given by the Board. If the well has been plugged in the interim, then notice of forfeiture will be cancelled and the bond released.

(3) Any of the following shall serve as bonds:

(a) A surety bond executed by the well operator as principal and by a corporate surety authorized to do business in Tennessee; or

(b) cash; or

(c) a certified check; or

(d) a certificate of Deposit, if made out exactly as follows: "Owner Name and Tennessee Department of Environment and Conservation or Tennessee Department of Environment and Conservation"; and does not contain any terms or conditions that provide that the issuing bank may charge against the deposit any debt of the depositor(s) owing to it (set-off terms); or any terms or conditions that provide anyone whose signature appears on the signature card to withdraw from funds the account. The owner shall be entitled to any interest earned on a certificate of deposit as the same becomes due and payable. The treasurer of the State of Tennessee shall receive and hold originals of such certificates in the name of the State of Tennessee, in trust, for the purpose for which such deposit is made, and shall at all times be responsible for the custody and safekeeping of such deposits; provided, however, that the certificate may be returned to the issuing financial institution as may be necessary for renewal from time to time; or

(4) Forfeiture

(a) The Commissioner shall cause a notice of noncompliance to be served upon the owner/operator and surety if the requirements for proper plugging and abandonment of a well or wells have not been complied with within the time limits set forth by this rule. Compliance for proper plugging and abandonment shall include the submission of all required records and data.

(b) The notice shall specify in what respects the owner has failed to comply with this rule or orders of the Water Quality Control Board.

(c) If the owner has not reached an agreement with the Commissioner, or has not complied with the requirements set forth within thirty (30) days after the mailing of the notice, the bond shall then be forfeited to the Commissioner, and the money used to properly plug the well(s). Such bonds are penal in nature, and the full amount of the bond shall be forfeited.

(5) Notice of Noncompliance

(a) At any time the Commissioner causes a notice of noncompliance to be served upon the principal, the surety shall be afforded the opportunity to act in behalf of the principal within the time set forth in regard to proper plugging of the well or wells and submission of required well records, downhole data and plugging reports. Should the principal and surety fail to comply within the time provided, then and only in that event, the bond shall be forfeited and used to plug the well. When a bond is forfeited under this rule, the Commissioner shall give notice to the Attorney General, who shall institute proceedings to collect the forfeiture.

Authority: T.C.A. §§ 69-3-101 et seq. and 4-5-201 et seq.

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