R649-13-8. Forfeiture of Performance Bonds

(1) The division shall take action to forfeit a performance bond if any of the following occur: (a) the operator refuses or cannot conduct plugging and site restoration; (b) the operator refuses or cannot repair a well or remediate pollution; (c) the operator fails to comply with conditions of a permit issued by the division; or (d) the operator defaults on the conditions under which the bond was accepted. (2) In the event the division forfeits a bond, the matter will be considered by the board before the division taking any action to plug a well. (3) After proper notice and hearing, the board may order the division to do the following: (a) use funds collected from bond forfeiture to complete the plugging and restoration of the well or wells to which bond coverage applies; (b) enter into a written agreement with the operator or another party to perform plugging and restoration operations in accordance with a compliance schedule established by the division as long as such party has the ability to perform the necessary work; (c) allow a surety to complete the plugging and restoration, if the surety can demonstrate an ability to complete the plugging and restoration; or (d) take other actions the board deems reasonable and appropriate. (4) In the event the amount forfeited is insufficient to pay for the full cost of the plugging and restoration, the division may complete or authorize completion of plugging and restoration and may recover from the operator and its principals all costs of plugging and restoration in excess of the amount forfeited. (e) In the event the amount forfeited was more than the amount necessary to complete plugging and restoration, the unused funds shall be returned by the division to the party from whom they were collected. (f) In the event the bond is forfeited and there exists any unplugged well or wells previously covered under the forfeited bond, the operator must establish new bond coverage in accordance with this rules or, upon an order from the division or the board, cease operations until adequate bonding is provided.