Section 43-02-02.3-05 - BondBefore 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 the well or facility. Each such surety bond shall be executed by a responsible surety company authorized to transact business in North Dakota.
1. Bond amounts for surface mining facilities. For surface mining facilities, the amount of the bond will be five thousand dollars per acre [.40 hectare]. The applicant may file either the entire bond for the permit term or an incremental bond schedule and bond required for the first scheduled increment. Increments must be of sufficient size and configuration to provide for efficient reclamation operations. When the operator elects to increment the amount of the bond, the operator shall:
a. Furnish a legal description of each incremental area.b. Furnish a schedule when each increment will require bond.c. Furnish the estimated costs for the commission to complete the reclamation plan for the initial increment.d. Provide the estimated cost to complete the reclamation plan for the next increment at least ninety days prior to the expected starting date of mining.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:a. The testholes or wells have been satisfactorily plugged which shall include practical reclamation of the well site and appurtenances thereto, and all logs, plugging records, and other pertinent data required by statute or rules and orders of the commission are filed and approved.b. The mined lands or lands disturbed by any method of exploration or production of subsurface minerals have been restored and approved by the director.c. The liability on the bond has been transferred to another bond and such transfer approved by the commission.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, such as producers not ready for plugging, and the principal desires to be released from the bond covering the well or facility, the principal must proceed as follows: a. The principal must notify the director in writing of all proposed transfers of property at least thirty days before the closing date of the transfer. The director may, for good cause, waive this requirement. The principal shall submit to 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 for the purpose of ownership or operation to a certain transferee, naming such transferee. 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.
b. When the commission has approved the transfer and acceptance and accepted it under the transferee's bond, the transferor shall be released from the responsibility of well plugging and site reclamation. If such wells include all the wells within the responsibility of the transferor's bond, such bond will be released by the commission upon written request. Such request must be signed by an officer of the transferor or a person authorized to sign for the transferor. The director may refuse to transfer any well from a bond if the well is in violation of a statute, rule, or order.c. The transferee (new operator) of any extraction facility, surface mining facility, or injection well shall be responsible for the plugging and site reclamation of any such property. For that purpose, the transferee shall submit a new bond or, in the case of a surety bond, produce the written consent of the surety of the original or prior bond that the latter's responsibility shall continue and attach to such well. The original or prior bond shall not be released as to the plugging and reclamation responsibility of any such transferor until the transferee submits to the commission an acceptable bond to cover such well. All liability on bonds shall continue until the plugging and site reclamation of such property is completed and approved.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 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.6. The director shall periodically review the amount of bond. The director may require adjustments to the amount of bond to reflect inflationary increases or increases in the anticipated costs of reclamation. 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; a civil or administrative action brought by the commission is pending against the operator or surety company; or for other good cause.
N.D. Admin Code 43-02-02.3-05
General Authority: NDCC 38-12-02
Law Implemented: NDCC 38-12-02