AN ACT relating to coalbed methane development and making an appropriation therefor.
     Create a new KRS Chapter 349 relating to coalbed methane development; declare the importance of coalbed methane development in the Commonwealth and find that development of a process to extract coalbed methane does not imply ownership of coalbed methane; establish definitions; establish a 5-member Coalbed Methane Review Board; establish the authority, jurisdiction, responsibilities and duties of the review board; authorize the Department of Natural Resources to receive applications for permits to drill coalbed methane wells and require a coalbed methane operator making an application for a coalbed methane permit to submit a plat; require that the plat become a public record subject to inspection; require notifications to surface, adjoining landowners, and subsurface owners; require descriptions of mineral tract boundaries and of drilling operations; require an operator to submit a groundwater protection plan to the department if the well is within 1/2 mile of a water supply used for residential or domestic purposes and permit deviation from the requirement; establish submission requirements for a person filing an application to drill a coalbed methane well; provide a method for interested parties to make objections to the Department of Natural Resources concerning the drilling of a coalbed methane well; prescribe rules for the plugging and abandonment of a coalbed methane well; authorize the Department of Natural Resources to receive and oversee the plugging and abandonment of coalbed methane wells; establish rules and procedures for a mine licensee to obtain authorization to mine through a coalbed methane well; authorize the review board to issue orders and issue mine-through certificates to mine operators to allow mine-through operations; prescribe a method for determining compensation to all parties with an interest in a coalbed methane well; establish a method for appeals of the review board's authorization for mine-through certificates and provide a method for the escrow of funds; prohibit the waste of coalbed methane and provide for certain exceptions from the definition of waste; establish submission, authorization, and bonding requirements for an application to obtain a permit to drill a coalbed methane well; authorize voluntary pooling agreements for operators and owners of coalbed methane; establish requirements and procedures for stimulating a workable coal seam; prohibit stimulation of a coal seam absent a filed agreement to stimulate; prohibit coalbed methane operations absent necessary permits including surface discharge and underground injection; require notification of state and federal agencies with jurisdiction over the protection of surface waters and groundwater and coordinate permit review; authorize the review board to consider and order the stimulating of the coalbed; establish the authority, powers, and rules of procedure for review board hearings; authorize the review board to promulgate and enforce administrative regulations; authorize the review board to hear and rule upon appeals of departmental actions on permits, field rules, drilling units, pooling, and unitization; establish spacing requirements for both vertical and horizontal coalbed methane wells; establish a 500 - foot horizontal setback from a workable coalbed; authorize the review board to act upon applications and prescribe pooling for coalbed methane wells when the ownership is in dispute; authorize the department to receive applications to pool; establish requirements for pooling applications; permit persons aggrieved by an action of the review board to bring civil action; establish requirements, procedures, and defenses for civil actions; establish requirements and procedures for the installation and removal of casings in a coalbed methane well; authorize the department to bid for the plugging of coalbed methane wells; establish reclamation requirements for coalbed methane wells; establish a coalbed methane well plugging fund to receive funds paid on the sale of equipment removed from a well that is being plugged and bond forfeitures; authorize the expenditure of funds from the coalbed methane well plugging fund for plugging coalbed methane wells; authorize the department to supervise the drilling, casing, plugging, and filling of coalbed methane wells; authorize the department to adopt rules and conduct hearings; require applicants for a permit to drill a coalbed methane well to submit a bond whose amount will be determined by the department based on the cost of reclamation, restoration, and abatement work; prescribe a minimum bond of $5,000; allow a person to submit a blanket bond; require a successor to a well to bond and pay a fee of $25; establish termination of operations requirements for coalbed methane well operators; require applicants for coalbed methane drilling permits where there is severance of surface and subsurface to comply with KRS 353.5901 and 353.595; establish reclamation requirements where there is a situation other than complete severance of the surface and subsurface rights; set an expiration date for coalbed methane drilling permits and allow for the extension of the permit for one year; establish an affirmative defense for willful trespass arising from coalbed methane drilling operations; authorize the department to bring suit in Circuit Court for violations and to seek restraint of operations; allow persons to protect water resources affected by coalbed methane operations; require the operator of a coalbed methane well to replace water to the person affected; establish penalties for violations; establish contractual rights of mineral rights owners; provide that ownership of coalbed methane is not affirmed; prohibit rules and requirements affecting coalbed methane permits to apply to non-coalbed methane permits unless converted; require that provisions be liberally construed; and require gathering lines associated with wells to be regulated under KRS 353.500(2).

     Mar 3-introduced in Senate
     Mar 5-laid on clerk's desk; taken from clerk's desk; 1st reading; to Agriculture and Natural Resources (S)