Rules & Regulations of the State of Tennessee
Title 0400 - Environment and Conservation
Subtitle 0400-52 - Drilling, Re-Entering, Plugging and Abandoning Exploratory and Exploitation Oil and Gas Wells (Transferred from 1040-02)
Chapter 0400-52-01 - Bond (Transferred from 1040-02-01)
Section 0400-52-01-.03 - RECLAMATION BOND

(1) A reclamation bond is required to be filed with the Supervisor at the time an operator's permit application is submitted, and shall be effective from the time the initial surface disturbances begin until the well is plugged and the site and access roads are reclaimed. The bond shall be for the sum of $1,500 per well site. The bond shall be in favor of the Department, and shall be a performance bond, conditioned that the well site and access roads shall be reclaimed in accordance with the rules and regulations of the Board. Upon satisfactory completion of regrading and revegetation of all disturbed areas except active work areas and access roads needed for oil or gas production, the Supervisor shall release one-third of the reclamation bond, or reduce the amount of the reclamation bond by one-third. Access roads that will continue to be used by the landowner for other legitimate purposes and maintained in usable condition, which condition reduces erosion to a practical minimum, shall not have to be revegetated by the operator. Such usage shall be established by the landowner by sworn affidavit. After plugging of the well and final reclamation of the well site, and after plantings have survived two growing seasons with an established ground cover of at least 90% herbaceous and/or woody species of which at least 80% are perennial species, the supervisor shall release the remainder of the reclamation bond.

(2) This paragraph shall be applicable only when the same Bonding Agent is responsible for both the plugging and reclamation bonds on a well. The Bonding Agent may notify the Supervisor in writing of its desire to terminate its liability under the reclamation bond by giving written notice to the Supervisor. The Supervisor shall thereupon require the Principal in the reclamation bond to file a new bond, or to effect a change of operators on the well within 60 days. If the Principal can no longer be contacted, then any interested party may seek a change of operations on the well in accordance with subparagraph (2)(a) of Rule 0400-52-02-.02. If a new reclamation bond is filed by the Principal, or a change of operators is approved by the Supervisor, 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 the change of operators, and the original bond shall be released upon written request by the Bonding Agent. If a new reclamation bond is not filed, or a change of operators has not been approved within 60 days, the Supervisor shall revoke the permit secured by the plugging and reclamation bonds and require the Principal to plug the well and reclaim the well site and access roads in accordance with the rules and regulations of the Board. In the event of the failure of the Principal to plug the well and reclaim the well site and access roads, the Bonding Agent may either cause the well to be plugged and the well site and access roads to be reclaimed, or forfeit the amount of the bonds to the Department. This action shall be initiated by the issuance of notices on noncompliance as provided for under Rule 0400-52-01-.07. The Bonding Agent shall then have 30 days in which to plug the well and reclaim the well site and access roads. If the well has not been plugged and the well site and access roads have not been reclaimed within that time limit then notices of forfeiture shall be issued as provided for under Rule 0400-52-01-.06. The Bonding Agent shall then have 21 days in which to petition the Board for a hearing relative to the bond forfeitures, pursuant to the Administrative Procedures Act T.C.A. § 4-5-101 et seq. If a hearing is requested, no further action shall be taken against the plugging and reclamation bonds until such hearing has taken place and a final order has been given by the Board. In the event the Bonding Agent causes the well to be plugged and the well site and access roads to be reclaimed the plugging bond shall be released, and the amount of the reclamation bond shall be reduced by one-third, to $1,000, unless such reduction has previously taken place. The remainder of the reclamation bond shall be released only after plantings have survived two growing seasons with an established ground cover of at least 90% herbaceous and/or woody species provided that at least 80% are perennial species.