Bond or security
- • execution
- • cancellation
- • waiver
(1) No permit for prospect wells shall be granted until the applicant has filed with the State Department of Geology and Mineral Industries a bond or alternative form of financial security acceptable to the department in the sum established by rule by the governing board of the department. The amount of the bond or security shall be a sum of not less than $10,000 for each hole to be drilled or a blanket bond in the amount of not less than $50,000 for all prospect wells which are included within the application and to be drilled by the applicant.
(2) The bond or alternative form of financial security shall be conditioned upon compliance with the requirements of this chapter and rules adopted and orders issued pursuant to this chapter and shall secure the state against all losses, charges and expenses, including court costs and attorney fees, incurred by it in obtaining such compliance.
(3) With the consent of the department, any bond or acceptable alternative form of financial security submitted as required by this section may be terminated or canceled. However, the department shall not consent to the termination or cancellation of any bond or security until the prospect wells covered by such bond or security have been properly and safely abandoned pursuant to the abandonment plan required by the permit or another bond or security for the prospect wells has been submitted and approved by the department.
(4) For those applications concerning prospect wells on federal lands, the department may waive the requirements of subsections (1) to (3) of this section upon receipt of suitable proof of compliance by the applicant with federal bond requirements which would, in the opinion of the department, be unnecessarily duplicated by the requirements of this section. [1975 c.552 §4c; 1977 c.87 §1; 1979 c.163 §2; 1995 c.146 §1]
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