38-01-01. Definitions. [Repealed]

Repealed by S.L. 1979, ch. 398, § 9.

Law Reviews.

North Dakota Law Review: Energy Symposium: Article: Rethinking A Twenty-First Century Model For Energy Development, 87 N.D. L. Rev. 691 (2011).

38-01-02. Weighmen and check weighmen — Oath or affirmation — Violation of provisions governing — Prosecution. [Repealed]

Repealed by S.L. 1971, ch. 347, § 20.

38-01-03. Use of fraudulent means in weighing output of coal prohibited. [Repealed]

Repealed by S.L. 1971, ch. 347, § 20.

38-01-04. Limitation on hours of labor per day — Exceptions. [Repealed]

Repealed by S.L. 1971, ch. 347, § 20.

38-01-05. Penalty for employing minors under eighteen years of age in mining industry. [Repealed]

Repealed by S.L. 1971, ch. 347, § 20.

Note.

For present general provisions, see N.D.C.C. ch. 34-07.

38-01-06. Road over mine may be acquired by condemnation proceedings. [Repealed]

Repealed by S.L. 1991, ch. 386, § 2.

38-01-07. Damages for condemnation of road over mine — Undertaking in lieu of damages — Conditions of undertaking. [Repealed]

Repealed by S.L. 1991, ch. 386, § 2.

38-01-07.1. Road may be closed for surface coal mining operations.

A surface coal mining operator may petition the board of county commissioners to temporarily close or relocate a section line road or other road if the road interferes with the operator’s conduct of surface coal mining operations. The board of county commissioners, if so petitioned, may, after notice and public hearing, temporarily close or relocate the section line road or other road, providing the road is not required due to readily accessible alternate routes of travel and the closing or relocation does not deprive adjacent landowners access to their property. If a road is closed as provided for in this section, the board of county commissioners may require that after completion of surface coal mining operations the operator restore the road to as good a condition as existed prior to the closing of the road.

38-01-07.2. Notice required.

Within thirty days after the board of county commissioners receives a petition to temporarily close or relocate a section line road or other road, the board shall fix a time and place for hearing, and the petitioner, at least ten days prior to the time fixed for the hearing, shall cause notice to be served personally or by mail on all surface owners of the land through which the road passes. The petitioner shall also cause notice to be published once each week for two successive weeks in a newspaper having a general circulation in the county in which the road is located, with the last publication being at least ten days prior to the time fixed for hearing.

38-01-08. Penalties for violation of provisions of title relating to coal mines. [Repealed]

Repealed by S.L. 1979, ch. 398, § 9.

38-01-09. Owner or operator of lignite mine not to discriminate against certain persons — Penalty. [Repealed]

Repealed by S.L. 1971, ch. 347, § 20.

38-01-10. Exploration organizations — Agent — Service of process.

Each person, firm, association, partnership, corporation, or limited liability company exploring for oil, gas, coal, or other minerals in this state shall appoint an agent who must be registered with the secretary of state for the purpose of accepting service for any nonresident representative of the person or organization.

Whenever such a person or organization fails to appoint or maintain a registered agent in this state, or whenever the registered agent cannot with reasonable diligence be found at the registered office, the secretary of state is an agent of such person or organization upon whom any such process, notice, or demand may be served. Service on the secretary of state of any such process, notice, or demand must be made by delivering to and leaving with the secretary of state, or any clerk having charge of the corporation department of the office of the secretary of state, duplicate copies of such process, notice, or demand. In the event any such process, notice, or demand is served on the secretary of state, the secretary of state shall immediately cause one of the copies thereof to be forwarded by registered or certified mail, addressed to the person or organization at the person’s or organization’s registered office or to the nonresident representative at that person’s filed address, as the case may be. Any such service on the secretary of state shall be returnable in not less than thirty days.

The secretary of state shall keep a record of all processes, notices, and demands served upon the secretary of state under this section, and shall record therein the time of such service and the secretary of state’s action with reference thereto.

Nothing in this section limits or affects the right to serve any process, notice, or demand required or permitted by law to be served in any other manner permitted by law.

38-02-01. Length of lode claim — Limitations.

The length of any lode claim located within this state may not exceed one thousand five hundred feet [457.2 meters] along the vein or lode.

38-02-02. Width of lode claims — Extension — Reduction.

The width of lode claims is one hundred fifty feet [45.72 meters] on each side of the center of the vein or crevice, except that any county, at any general election by a majority of the votes cast on the question at such election, may determine upon a greater width not exceeding three hundred feet [91.44 meters] on each side of the center of the vein or lode. By a like vote, any county may determine upon a width less than that specified in this section, except that a width of less than twenty-five feet [7.62 meters] on each side of the vein or lode is prohibited.

38-02-03. Discoverer of lode to file location certificate — Contents of certificate.

The discoverer of a lode, within sixty days from the date of discovery, shall record the discoverer’s claim in the office of the recorder of the county in which such lode is situated by filing for record a location certificate containing all of the following:

1. The name of the lode.
2. The name of the locator.
3. The date of location.
4. The number of feet [meters] in length claimed on each side of the discovery shaft.
5. The number of feet [meters] width claimed on each side of the vein or lode.
6. The general course of the lode as near as may be.

Any certificate which does not contain such information and a description to identify the claim with reasonable certainty is void.

38-02-04. Duty of discoverer of lode before filing certificate of location.

Before filing a location certificate, the discoverer shall:

1. Locate the discoverer’s claim by sinking a discovery shaft thereon sufficient to show a well-defined mineral vein or lode.
2. Post at the point of discovery on the surface a plain sign or notice containing the name of the lode, the name of the locator, the date of discovery, the number of feet [meters] claimed in length on either side of the discovery, and the number of feet [meters] in width claimed on each side of the lode.
3. Mark the surface boundaries of the lode as is provided in section 38-02-07.

38-02-05. Tunnel, opencuts, crosscuts, adits, or drilling equivalent to discovery shaft.

Any opencut, crosscut, or tunnel at a depth sufficient to disclose the mineral vein or lode, an adit of at least ten feet [3.05 meters] in along the lode from the point where the lode may be discovered, or the drilling of a hole or holes in the manner, and under the conditions and requirements hereinafter set forth, is equivalent to a discovery shaft. The hole or holes must be not less than one and one-half inches [3.81 centimeters] in diameter, must be sufficiently deep to reach and cut or expose the mineral vein or lode, and must be protected at the surface opening against injury to livestock. The discoverer shall designate one of the holes thus drilled as the discovery hole, in the event that more than one such hole has been drilled.

38-02-06. Discovery shaft to be sunk on lode within sixty days.

From the time of uncovering or disclosing a lode, the discoverer has sixty days within which to sink a discovery shaft thereon.

38-02-07. Surface boundaries of lode — How marked.

The surface boundaries of the lode must be marked by eight substantial posts hewed or blazed on the side facing the claim and plainly marked with the name of the lode and the corner, end, or side of the claim that they respectively represent and sunk in the ground as follows:

1. One at each corner.
2. One at the center of each side line.
3. One at each end of the lode.

If it is impracticable on account of rock or precipitous ground to sink such posts, they may be placed in a monument of stone.

38-02-08. What location in location certificate construed to contain.

The location as described in the location certificate of any lode claim must be construed to include all surface ground within the surface lines thereof, and all lodes and ledges throughout their entire depth the top or apex of which lies inside of such lines extended vertically, with such parts of all lodes or ledges as continue by dip beyond the side lines of the claim. Such location may not include any portion of such lodes or ledges beyond the end lines of the claim, or the end lines continued, whether by dip or otherwise, nor beyond the side lines in any manner other than by the dip of the lode.

38-02-09. Location claim not extended beyond the exterior line.

If the top or apex of the lode in its longitudinal course extends beyond the exterior lines of the claim at any point on the surface, or as extended vertically downward, such lode may not be followed in its longitudinal course beyond the point where it is intersected by the exterior.

38-02-10. Owner or occupant of surface may demand security from miner.

If the right to a mine is separate from the ownership or right of occupancy to the surface, the owner or rightful occupant of the surface may demand satisfactory security from the miner, and if such security is refused, may enjoin such miner from working until the same is given. The injunctional order must fix the amount of the bond.

38-02-11. Additional certificate to correct or extend boundaries may be filed by locator or assigns — Limitations.

If the locator of any mining claim, or the locator’s assigns, shall apprehend that the original certificate was defective, erroneous, or that the requirements of the law had not been complied with before filing, or is desirous of changing the locator’s surface boundaries, or of taking in any part of an overlapping claim which has been abandoned, such locator or the locator’s assigns may file an additional certificate subject to the provisions of this chapter. Such relocation may not interfere with the existing rights of others at the time of such relocation. No such relocation, nor the record thereof, may preclude the claimant from proving any such title as the claimant may have held under previous locations.

38-02-12. Amount of work to be done annually to hold possession of claim.

The amount of work to be done or the improvements to be made during each year to hold possession of a mining claim must be the same as that prescribed by the applicable laws of the United States. The period within which the work required to be done annually on any unpatented claim so located commences on the first day of January succeeding the date of the location of such claim.

38-02-13. Abandoned lode claims — Regulations governing relocation.

The relocation of an abandoned lode claim must be made by:

1. Sinking a new discovery shaft and fixing new boundaries in the same manner as if it were the location of a new claim; or
2. Sinking the original shaft, cut, or adit to a sufficient depth to comply with sections 38-02-04 and 38-02-08, and the erection of new, or the adoption of the old, boundaries, and the renewal of any posts which have been removed or destroyed.

In either case, a new location stake must be erected. In any case, whether the whole or part of an abandoned claim is taken, the location certificate must state that the whole or any part of the new location is located as abandoned property.

38-02-14. Certificate containing more than one location is void — Exception.

No location certificate may claim more than one location, whether the location is made by one or several locators. If the certificate purports to claim more than one location, it is absolutely void except as to the first location therein described. If the locations are described together in the certificate so that it is not clear which location first is described, the certificate is void as to all locations.

38-02-15. Actions relating to disputed mining property — Surveys ordered — Regulations governing.

In an action in any district court of this state wherein the title or right of possession to any mining claim is in dispute, the court, upon the application of any of the parties to such suit, may enter an order for such survey of the underground as well as the surface of such part of the property in dispute as may be necessary to a just determination of the question involved. Such order must designate some competent surveyor who is not related to any of the parties to such suit and who is not interested in the result of the same. Upon the application of the party adverse to such application, the court may appoint some competent surveyor selected by such adverse applicant, who shall attend upon such survey and observe the method of making the same. Such second survey must be made at the cost of the party requesting it. Such order may specify the names of witnesses named by either party, not exceeding three on each side, to examine such property, and such witnesses may enter into such property and examine the same. The court may cause the removal of any rock, debris, or other obstacle in any of the drifts or shafts of such property when such removal is shown to be necessary to a just determination of the question involved. No order may be made for a survey and inspection except upon notice of the application for such order of at least six days, and not then except by an agreement of the parties or upon the affidavit of two or more persons that such survey and inspection are necessary to the just determination of the suit. Such affidavit must state the facts in the case and wherein the necessity for the survey exists. Such order may not be made unless it appears that the party asking for the same had been refused the privilege of survey and inspection by the adverse party.

38-02-16. Writs of injunction for restitution of property issued by district courts — Circumstances — Effect. [Repealed]

Repealed by S.L. 1961, ch. 249, § 1.

38-02-17. Conspiracies and mobs against mines — Penalty. [Repealed]

Repealed by S.L. 1961, ch. 249, § 1.

38-02-18. Trial against conspiracies or mobs taking mining property — Proof required. [Repealed]

Repealed by S.L. 1961, ch. 249, § 1.

38-08-01. Declaration of policy.

It is hereby declared to be in the public interest to foster, to encourage, and to promote the development, production, and utilization of natural resources of oil and gas in the state in such a manner as will prevent waste; to authorize and to provide for the operation and development of oil and gas properties in such a manner that a greater ultimate recovery of oil and gas be had and that the correlative rights of all owners be fully protected; and to encourage and to authorize cycling, recycling, pressure maintenance, and secondary recovery operations in order that the greatest possible economic recovery of oil and gas be obtained within the state to the end that the landowners, the royalty owners, the producers, and the general public realize and enjoy the greatest possible good from these vital natural resources.

38-08-02. Definitions.

As used in this chapter, unless the context otherwise requires:

1. “Abandoned pipeline” means an underground gathering pipeline that is no longer in service, is physically disconnected from in-service facilities, and is not intended to be reactivated for future use.
2. “Certificate of clearance” means a permit prescribed by the commission for the transportation or the delivery of oil or gas or product and issued or registered in accordance with the rule, regulation, or order requiring such permit.
3. “Commission” means the industrial commission.
4. “Field” means the general area underlaid by one or more pools.
5. “Gas” means and includes all natural gas and all other fluid hydrocarbons not hereinbelow defined as oil.
6. “Illegal gas” means gas which has been produced from any well within this state in excess of the quantity permitted by any rule, regulation, or order of the commission, or any gas produced or removed from the well premises in violation of any rule, regulation, or order of the commission, or any gas produced or removed from the well premises without the knowledge and consent of the operator.
7. “Illegal oil” means oil which has been produced from any well within the state in excess of the quantity permitted by any rule, regulation, or order of the commission, or any oil produced or removed from the well premises in violation of any rule, regulation, or order of the commission, or any oil produced or removed from the well premises without the knowledge and consent of the operator.
8. “Illegal product” means any product derived in whole or in part from illegal oil or illegal gas.
9. “Oil” means and includes crude petroleum oil and other hydrocarbons regardless of gravity which are produced at the wellhead in liquid form and the liquid hydrocarbons known as distillate or condensate recovered or extracted from gas, other than gas produced in association with oil and commonly known as casinghead gas.
10. “Owner” means the person who has the right to drill into and produce from a pool and to appropriate the oil or gas the person produces therefrom either for that person or others or for that person and others.
11. “Person” means and includes any natural person, corporation, limited liability company, association, partnership, receiver, trustee, executor, administrator, guardian, fiduciary, or other representative of any kind, and includes any department, agency, or instrumentality of the state or of any governmental subdivision thereof; the masculine gender, in referring to a person, includes the feminine and the neuter genders.
12. “Pipeline facility” means a pipeline, pump, compressor, storage, and any other facility, structure, and property incidental and necessary or useful in the interconnection of a pipeline or for the transportation, distribution, and delivery of energy-related commodities to points of sale or consumption or to the point of distribution for consumption located within or outside of this state.
13. “Pool” means an underground reservoir containing a common accumulation of oil or gas or both; each zone of a structure which is completely separated from any other zone in the same structure is a pool, as that term is used in this chapter.
14. “Producer” means the owner of a well or wells capable of producing oil or gas or both.
15. “Product” means any commodity made from oil or gas and includes refined crude oil, crude tops, topped crude, processed crude, processed crude petroleum, residue from crude petroleum, cracking stock, uncracked fuel oil, fuel oil, treated crude oil, residuum, gas oil, casinghead gasoline, natural-gas gasoline, kerosene, benzine, wash oil, waste oil, blended gasoline, lubricating oil, blends or mixtures of oil with one or more liquid products or byproducts derived from oil or gas, and blends or mixtures of two or more liquid products or byproducts derived from oil or gas, whether hereinabove enumerated or not.
16. “Reasonable market demand” means the demand for oil or gas for reasonable current requirements for consumption and use within and without the state, together with such quantities as are reasonably necessary for building up or maintaining reasonable working stocks and reasonable reserves of oil or gas or product.
17. “Reserve pit” means an excavated area used to contain drill cuttings accumulated during oil and gas drilling operations and mud-laden oil and gas drilling fluids used to confine oil, gas, or water to its native strata during the drilling of an oil and gas well.
18. “Underground gathering pipeline” means an underground gas or liquid pipeline with associated above ground equipment which is designed for or capable of transporting crude oil, natural gas, carbon dioxide, or water produced in association with oil and gas which is not subject to chapter 49-22.1. As used in this subsection, “associated above ground equipment” means equipment and property located above ground level, which is incidental to and necessary for or useful for transporting crude oil, natural gas, carbon dioxide, or water produced in association with oil and gas from a production facility. As used in this subsection, “equipment and property” includes a pump, a compressor, storage, leak detection or monitoring equipment, and any other facility or structure.
19. “Waste” means and includes:
    1. Physical waste, as that term is generally understood in the oil and gas industry.
    2. The inefficient, excessive, or improper use of, or the unnecessary dissipation of reservoir energy.
    3. The locating, spacing, drilling, equipping, operating, or producing of any oil or gas well or wells in a manner which causes, or tends to cause, reduction in the quantity of oil or gas ultimately recoverable from a pool under prudent and proper operations, or which causes or tends to cause unnecessary or excessive surface loss or destruction of oil or gas.
    4. The inefficient storing of oil.
    5. The production of oil or gas in excess of transportation or marketing facilities or in excess of reasonable market demand.
20. The word “and” includes the word “or” and the use of the word “or” includes the word “and”. The use of the plural includes the singular and the use of the singular includes the plural.

38-08-03. Waste prohibited.

Waste of oil and gas is prohibited.

38-08-04. Jurisdiction of commission.

1. The commission has continuing jurisdiction and authority over all persons and property, public and private, necessary to enforce effectively the provisions of this chapter. The commission has authority, and it is its duty, to make such investigations as it deems proper to determine whether waste exists or is imminent or whether other facts exist which justify action by the commission. The commission has the authority:
   1. To require:
      1. Identification of ownership of oil or gas wells, producing leases, tanks, plants, structures, and facilities for the transportation or refining of oil and gas.
      2. The making and filing with the industrial commission of all resistivity, radioactivity, and mechanical well logs and the filing of directional surveys, if taken, and the filing of reports on well location, drilling, and production.
      3. The drilling, casing, operation, and plugging of wells in such manner as to prevent the escape of oil or gas out of one stratum into another, the intrusion of water into oil or gas strata, the pollution of freshwater supplies by oil, gas, or saltwater, and to prevent blowouts, cavings, seepages, and fires.
      4. The furnishing of a reasonable bond with good and sufficient surety, conditioned upon the full compliance with this chapter, and the rules and orders of the industrial commission, including without limitation a bond covering the operation of any underground gathering pipeline transferring oil or produced water from a production facility for disposal, storage, or sale purposes, except that if the commission requires a bond to be furnished, the person required to furnish the bond may elect to deposit under such terms and conditions as the industrial commission may prescribe a collateral bond, self-bond, cash, or any alternative form of security approved by the commission, or combination thereof, by which an operator assures faithful performance of all requirements of this chapter and the rules and orders of the industrial commission.
      5. That the production from wells be separated into gaseous and liquid hydrocarbons, and that each be accurately measured by such means and upon such standards as may be prescribed by the commission.
      6. The operation of wells with efficient gas-oil and water-oil ratios, and to fix these ratios.
      7. Certificates of clearance in connection with the transportation or delivery of oil, gas, or any product.
      8. Metering or other measuring of oil, gas, or product related to production in pipelines, gathering systems, storage tanks, barge terminals, loading racks, refineries, or other places, by meters or other measuring devices approved by the commission.
      9. Every person who produces, sells, purchases, acquires, stores, transports, refines, disposes of, or processes oil, gas, saltwater, or other related oilfield fluids in this state to keep and maintain within this state complete and accurate records of the quantities thereof, which records must be available for examination by the commission or its agents at all reasonable times, and to file with the commission reports as the commission may prescribe with respect to oil or gas or the products thereof. An oil and gas production report need not be notarized but must be signed by the person submitting the report.
      10. The payment of fees for services performed. The amount of the fee shall be set by the commission based on the anticipated actual cost of the service rendered. Unless otherwise provided by statute, all fees collected by the commission must be deposited in the general fund of this state, according to procedures established by the state treasurer.
      11. The filing free of charge of samples and core chips and of complete cores when requested in the office of the state geologist within six months after the completion or abandonment of the well.
      12. The placing of wells in abandoned-well status which have not produced oil or natural gas in paying quantities for one year. A well in abandoned-well status must be promptly returned to production in paying quantities, approved by the commission for temporarily abandoned status, or plugged and reclaimed within six months. If none of the three preceding conditions are met, the industrial commission may require the well to be placed immediately on a single-well bond in an amount equal to the cost of plugging the well and reclaiming the well site. In setting the bond amount, the commission shall use information from recent plugging and reclamation operations. After a well has been in abandoned-well status for one year, the well’s equipment, all well-related equipment at the well site, and salable oil at the well site are subject to forfeiture by the commission. If the commission exercises this authority, section 38-08-04.9 applies. After a well has been in abandoned-well status for one year, the single-well bond referred to above, or any other bond covering the well if the single-well bond has not been obtained, is subject to forfeiture by the commission. A surface owner may request a review of the temporarily abandoned status of a well that has been on temporarily abandoned status for at least seven years. The commission shall require notice and hearing to review the temporarily abandoned status. After notice and hearing, the surface owner may request a review of the temporarily abandoned status every two years.
   2. To regulate:
      1. The drilling, producing, and plugging of wells, the restoration of drilling and production sites, and all other operations for the production of oil or gas.
      2. The shooting and chemical treatment of wells.
      3. The spacing of wells.
      4. Operations to increase ultimate recovery such as cycling of gas, the maintenance of pressure, and the introduction of gas, water, or other substances into producing formations.
      5. Disposal of saltwater and oilfield wastes.
         1. The commission shall give all affected counties written notice of hearings in such matters at least fifteen days before the hearing.
         2. The commission may consider, in addition to other authority granted under this section, safety of the location and road access to saltwater disposal wells, treating plants, and all associated facilities.
      6. The underground storage of oil or gas.
   3. To limit and to allocate the production of oil and gas from any field, pool, or area and to establish and define as separate marketing districts those contiguous areas within the state which supply oil and gas to different markets, and to limit and allocate the production of oil and gas for each separate marketing district.
   4. To classify wells as oil or gas wells for purposes material to the interpretation or enforcement of this chapter, to classify and determine the status and depth of wells that are stripper well property as defined in section 57-51.1-01, to certify to the tax commissioner which wells are stripper wells as defined in section 57-51.1-01 and the depth of those wells, and to certify to the tax commissioner which wells involve secondary or tertiary recovery operations as defined in section 57-51.1-01, and the date of qualification for the oil extraction tax exemption for secondary and tertiary recovery operations.
   5. To adopt and to enforce rules and orders to effectuate the purposes and the intent of this chapter and the commission’s responsibilities under chapter 57-51.1. When adopting a rule, issuing an order, or creating a policy, the commission shall give due consideration to the effect of including locations within this state which may also be under the jurisdiction of the federal government or a tribal government. When reporting information resulting from adopting a rule, issuing an order, or creating a policy that affects locations within this state which may also be under the jurisdiction of the federal government or a tribal government, the commission shall provide sufficient information to indicate the effect of including locations that may also be under the regulatory jurisdiction of the federal government or a tribal government.
   6. To provide for the confidentiality of well data reported to the commission if requested in writing by those reporting the data for a period not to exceed six months. However, the commission may release:
      1. Volumes injected into a saltwater injection well.
      2. Information from the spill report on a well on a site at which more than ten barrels of fluid, not contained on the well site, was released for which an oilfield environmental incident report is required by law.
2. A person controlling or operating a well, pipeline, receiving tank, storage tank, treating plant, or other receptacle or production facility associated with oil and gas, or with water production, injection, processing, or well servicing, shall report to the commission any leak, spill, or release of fluid. A report to the commission is not required if the leak, spill, or release is crude oil, produced water, or natural gas liquids in a quantity of less than ten barrels cumulative over a fifteen-day time period, remains on the site or facility, and is on a well site where the well was spud after September 1, 2000, or on a facility, other than a well site, constructed after September 1, 2000.
3. Any written violation notice issued by the commission regarding the notification of a fire, leak, spill, blowout, or leak and spill cleanup must be placed in the well file or facility file and the files must be available for review by the surface owner.

38-08-04.1. Commission may employ examiners.

The industrial commission may use hearing examiners under such rules and regulations as the commission may prescribe.

38-08-04.2. Director of mineral resources — Director of oil and gas — Delegation to director of oil and gas.

The industrial commission is authorized to appoint a director of mineral resources who shall serve at the pleasure of the commission. The director of mineral resources shall carry out the duties of the director of oil and gas along with the duties of director of mineral resources. The commission may set the salary of the director of mineral resources. The commission may delegate to the director of oil and gas all powers the commission has under this title and under rules enacted under this title.

38-08-04.3. State geologist to assist commission. [Repealed]

Repealed by S.L. 1991, ch. 387, § 2.

38-08-04.4. Commission authorized to enter into contracts.

The commission may enter public and private contractual agreements for the plugging or replugging of oil and gas or injection wells, the removal or repair of related equipment, the reclamation of abandoned oil and gas or injection well sites, the reclamation of saltwater handling facility sites, the reclamation of treating plant sites, and the reclamation of oil and gas-related pipelines and associated facilities, including reclamation as a result of leaks or spills from a pipeline or associated facility, if any of the following apply:

1. The person or company drilling or operating the well or equipment cannot be found, has no assets with which to properly plug or replug the well or reclaim the site, cannot be legally required to plug or replug the well or to reclaim the site, pipeline, or associated pipeline facility, or damage is the result of an illegal dumping incident.
2. There is no bond covering the well to be plugged or the site to be reclaimed or there is a bond but the cost of plugging or replugging the well or reclaiming the site, pipeline, or associated pipeline facility exceeds the amount of the bond or damage is the result of an illegal dumping incident.
3. The well, equipment, pipeline, or associated pipeline facility is leaking or likely to leak oil, gas, or saltwater or is likely to cause a serious threat of pollution or injury to the public health or safety.

Sealed bids for any well plugging or reclamation work under this section must be solicited by placing a notice in the official county newspaper of the county in which the work is to be done and in such other newspapers of general circulation in the area as the commission may deem appropriate. Bids must be addressed to the commission and must be opened publicly at the time and place designated in the notice. The contract must be let to the lowest responsible bidder, but the commission may reject any or all bids submitted. If a well or equipment is leaking or likely to leak oil, gas, or saltwater or is likely to cause a serious threat of pollution or injury to the public health or safety, the commission, without notice or the letting of bids, may enter into contracts necessary to mitigate the problem.

The contracts for the plugging or replugging of wells or the reclamation of well sites must be on terms and conditions as prescribed by the commission, but at a minimum the contracts shall require the plugging and reclamation to comply with all statutes and rules governing the plugging of wells and reclamation of sites.

38-08-04.5. Abandoned oil and gas well plugging and site reclamation fund — Continuing appropriation — Budget section report.

There is created an abandoned oil and gas well plugging and site reclamation fund.

1. Revenue to the fund must include:
   1. Fees collected by the oil and gas division of the industrial commission for permits or other services.
   2. Moneys received from the forfeiture of drilling and reclamation bonds.
   3. Moneys received from any federal agency for the purpose of this section.
   4. Moneys donated to the commission for the purposes of this section.
   5. Moneys received from the state’s oil and gas impact fund.
   6. Moneys recovered under the provisions of section 38-08-04.8.
   7. Moneys recovered from the sale of equipment and oil confiscated under section 38-08-04.9.
   8. Moneys transferred from the cash bond fund under section 38-08-04.11.
   9. Such other moneys as may be deposited in the fund for use in carrying out the purposes of plugging or replugging of wells or the restoration of well sites.
   10. Civil penalties assessed under section 38-08-16.
2. Moneys in the fund may be used for the following purposes:
   1. Contracting for the plugging of abandoned wells.
   2. Contracting for the reclamation of abandoned drilling and production sites, saltwater disposal pits, drilling fluid pits, and access roads.
   3. To pay mineral owners their royalty share in confiscated oil.
   4. Defraying costs incurred under section 38-08-04.4 in reclamation of saltwater handling facilities, treating plants, and oil and gas-related pipelines and associated facilities.
   5. Reclamation and restoration of land and water resources impacted by oil and gas development, including related pipelines and facilities that were abandoned or were left in an inadequate reclamation status before August 1, 1983, and for which there is not any continuing reclamation responsibility under state law. Land and water degraded by any willful act of the current or any former surface owner are not eligible for reclamation or restoration. The commission may expend up to five million dollars per biennium from the fund in the following priority:
      1. For the restoration of eligible land and water that are degraded by the adverse effects of oil and gas development including related pipelines and facilities.
      2. For the development of publicly owned land adversely affected by oil and gas development including related pipelines and facilities.
      3. For administrative expenses and cost in developing an abandoned site reclamation plan and the program.
      4. Demonstration projects for the development of reclamation and water quality control program methods and techniques for oil and gas development, including related pipelines and facilities.
   6. For transfer by the office of management and budget, upon request of the industrial commission, to the environmental quality restoration fund for use by the department of environmental quality for the purposes provided under chapter 23.1-10, if to address environmental emergencies relating to oil and natural gas development, including the disposal of oilfield waste and oil or natural gas production and transportation by rail, road, or pipeline. If a transfer requested by the industrial commission has been made under this subdivision, the department of environmental quality shall request the office of management and budget to transfer from subsequent deposits in the environmental quality restoration fund an amount sufficient to restore the amount transferred from the abandoned oil and gas well plugging and site reclamation fund.
3. This fund must be maintained as a special fund and all moneys transferred into the fund are appropriated and must be used and disbursed solely for the purposes in this section.
4. The commission shall report to the budget section of the legislative management on the balance of the fund and expenditures from the fund each biennium.

38-08-04.6. Oil and gas reservoir data fund — Appropriation.

There is hereby established an oil and gas reservoir data fund to be used for defraying the costs of providing reservoir data compiled by the commission to state, federal, and county departments and agencies and members of the general public. All moneys collected pursuant to section 38-08-04 for providing reservoir data under this section must be deposited in the oil and gas reservoir data fund. This fund must be maintained as a special fund and all moneys transferred into the fund are hereby appropriated and must be used and disbursed solely for the purpose of paying the current cost of providing such information as determined by the commission, based on actual costs.

38-08-04.7. Right of entry.

The commission, its agents, employees, or contractors shall have the right to enter any land for the purpose of plugging or replugging a well or the restoration of a well site as provided in section 38-08-04.4.

38-08-04.8. Recovery for costs of plugging and reclamation.

If the commission, its agents, employees, or contractors, plugs or replugs a well or reclaims a well site, pipeline facility, production facility, saltwater handling facility, or treating plant under the provisions of sections 38-08-04.4, 38-08-04.5, 38-08-04.7, 38-08-04.8, 38-08-04.9, and 38-08-04.10, the state has a cause of action for all reasonable expenses incurred in the plugging, replugging, or reclamation against the operator at the time the well is required to be plugged and the well or facility is required to be abandoned or any or all persons who own a working interest in the well, pipeline facility, production facility, saltwater handling facility, or treating plant at the time the well is required to be plugged and the well, pipeline facility, production facility, saltwater handling facility, or treating plant abandoned as a result of the ownership of a lease or mineral interest in the property on which the well, pipeline facility, production facility, saltwater handling facility, or treating plant is located. The term “working interest owner” does not mean a royalty owner or an overriding royalty interest owner. The commission shall seek reimbursement for all reasonable expenses incurred in plugging any well or reclaiming any well site, pipeline facility, production facility, saltwater handling facility, or treating plant through an action instituted by the attorney general. The liability of any working interest owner under this section shall be limited to that proportion of the reasonable expenses incurred by the commission that the interest of any such working interest owner bears to the entire working interest in the well. Any money collected in a suit under this section must be deposited in the state abandoned oil and gas well plugging and site reclamation fund. Any suit brought by the commission for reimbursement under this section may be brought in the district court for Burleigh County, the county in which the plugged well or reclaimed well site, pipeline facility, production facility, saltwater handling facility, or treating plant is located, or the county in which any defendant resides.

38-08-04.9. Confiscation of equipment and salable oil to cover plugging and reclamation costs.

When the commission intends to exercise or has exercised its right to plug a well or reclaim a well site, pipeline facility, production facility, saltwater handling facility, or treating plant, the commission, as compensation for its costs, may confiscate any equipment and salable oil at the well site, pipeline facility, production facility, saltwater handling facility, or treating plant. The equipment subject to confiscation is limited to that owned by the operator, former operator, or working interest owner. If the commission exercises its authority under this section and there is salable oil at the well site, that oil must be confiscated. The commission shall pay the mineral owners the royalty interest in the oil confiscated at the well site. In determining the mineral owners and their royalty interests, the commission may rely upon the most recent division order it is able to obtain. If one is unavailable or the commission finds the order unreliable, the commission may rely upon any other source of information the commission deems reasonable to determine and pay mineral owners. A confiscation must be by an order of the commission after notice and hearing. A confiscation order transfers title to the commission.

38-08-04.10. Penalties and other relief.

The plugging or replugging of a well or reclamation of a well site by the commission, its agents, employees, or contractors, shall not prevent the commission from seeking penalties or other relief provided by law from any person who is required by statutes, rules, or order of the commission to plug or replug a well or reclaim the surface.

38-08-04.11. Cash bond fund for plugging oil and gas wells and reclamation of oil and gas well sites — Appropriation.

1. There is hereby created a cash bond fund for the plugging of abandoned oil and gas wells and the reclamation of abandoned oil and gas well sites.
2. From all moneys held or controlled by the commission under subdivision d of subsection 1 of section 38-08-04, there is to be deposited in the cash bond fund such amount as determined by the commission but such amount may not exceed an amount equal to an annual return of two percent of the cash bond deposit.
3. Moneys in the cash bond fund are hereby appropriated to the commission to be used for the following purposes:
   1. Defraying costs incurred in the plugging of abandoned oil and gas wells, and related activities.
   2. Defraying costs incurred in the reclamation of abandoned oil and gas drilling and production sites, saltwater disposal pits, drilling fluid pits, and access roads, and related activities.

38-08-04.12. Reclamation of land disturbed by oil and gas activity.

1. Any land disturbed by construction of well sites, treating plants, saltwater handling facilities, access roads, underground gathering pipelines and associated facilities, and from remediation of leaks or spills within the jurisdiction of the commission shall be reclaimed as close as practicable to its original condition as it existed before the construction of the well site or other disturbance. The commission, with the consent of the appropriate government land manager or surface owner, may waive the requirement of reclamation of the site and access road after a well is plugged or treating plant or saltwater handling facility is decommissioned. The commission shall record documentation of the waiver with the recorder of the county in which the site or road is located.
2. This section may not be construed to require removal of a properly reclaimed reserve pit or a properly abandoned underground gathering pipeline.
3. A person may not bring a legal proceeding under this section, unless the person has exhausted all administrative remedies.

38-08-05. Drilling permit required.

1. A person may not commence operations for the drilling of a well for oil or gas without obtaining a permit from the industrial commission under rules as may be adopted by the commission and paying to the commission a fee for each well in an amount to be determined by the commission. The applicant shall provide notice to the owner of any permanently occupied dwelling located within one thousand three hundred twenty feet [402.34 meters] of the proposed oil or gas well.
2. Unless waived by the owner or if the commission determines that the well location is reasonably necessary to prevent waste or to protect correlative rights, the commission may not issue a drilling permit for an oil or gas well that will be located within five hundred feet [152.4 meters] of an occupied dwelling. If the commission issues a drilling permit for a location within one thousand feet [300.48 meters] of an occupied dwelling, the commission may impose conditions on the permit:
   1. For wells permitted on new pads built after July 31, 2013, the conditions imposed under this subdivision may include, upon request of the owner of the permanently occupied dwelling, requiring that the location of all flares, tanks, and treaters utilized in connection with the permitted well be located at a greater distance from the occupied dwelling than the oil and gas well bore if the location can be accommodated reasonably within the proposed pad location; or
   2. As the commission determines reasonably necessary to minimize impact to the owner of the occupied dwelling.

38-08-06. Commission shall determine market demand and regulate the amount of production.

The commission shall determine market demand for each marketing district and regulate the amount of production as follows:

1. The commission shall limit the production of oil and gas within each marketing district to that amount which can be produced without waste, and which does not exceed the reasonable market demand.
2. Whenever the commission limits the total amount of oil or gas which may be produced in the state or a marketing district, the commission shall allocate or distribute the allowable production among the pools therein on a reasonable basis, giving, where reasonable under the circumstances to each pool with small wells of settled production, an allowable production which prevents the general premature abandonment of such wells in the pool.
3. Whenever the commission limits the total amount of oil or gas which may be produced in any pool in this state to an amount less than that amount which the pool could produce if no restriction was imposed, which limitation is imposed either incidental to, or without, a limitation of the total amount of oil or gas produced in the marketing district wherein the pool is located, the commission shall allocate or distribute the allowable production among the several wells or producing properties in the pool on a reasonable basis, preventing or minimizing reasonable avoidable drainage, so that each property will have the opportunity to produce or to receive its just and equitable share, subject to the reasonable necessities for the prevention of waste.
4. In allocating the market demand for gas as between pools within marketing districts, the commission shall give due regard to the fact that gas produced from oil pools is to be regulated in a manner as will protect the reasonable use of its energy for oil production.
5. The commission is not required to determine the reasonable market demand applicable to any single pool, except in relation to all other pools within the same marketing district, and in relation to the demand applicable to the marketing district. In allocating allowables to pools, the commission may consider, but is not bound by, nominations of purchasers to purchase from particular fields, pools, or portions thereof. The commission shall allocate the total allowable for the state in such manner as prevents undue discrimination between marketing districts, fields, pools, or portions thereof resulting from selective buying or nomination by purchasers.

38-08-06.1. Natural gas well status determinations and findings. [Repealed]

Repealed by S.L. 1997, ch. 318, § 1.

38-08-06.2. Discrimination in the processing and purchasing of gas prohibited.

Gas produced in this state must be processed and purchased without discrimination between producers in the same reservoir, recognizing the right of the purchaser to establish reasonable quality standards for acceptance of gas, which must be applied without discrimination among producers. After notice and hearing, for good cause, the commission may relieve any person of the duty to process and purchase gas produced in this state without discrimination.

38-08-06.3. Information statement to accompany payment to royalty owner — Penalty.

Any person who makes a payment to an owner of a royalty interest in land in this state for the purchase of oil or gas produced from that royalty interest shall provide with the payment to the royalty owner an information statement that will allow the royalty owner to clearly identify the amount of oil or gas sold and the amount and purpose of each deduction made from the gross amount due. The statement must be on forms approved by the industrial commission and contain the information that the commission prescribes by rule. A person who fails to comply with the requirements of this section is guilty of a class B misdemeanor.

38-08-06.4. Flaring of gas restricted — Imposition of tax — Payment of royalties — Industrial commission authority.

1. As permitted under rules of the industrial commission, gas produced with crude oil from an oil well may be flared during a one-year period from the date of first production from the well.
2. After the time period in subsection 1, flaring of gas from the well must cease and the well must be:
   1. Capped;
   2. Connected to a gas gathering line;
   3. Equipped with an electrical generator that consumes at least seventy-five percent of the gas from the well;
   4. Equipped with a system that intakes at least seventy-five percent of the gas and natural gas liquids volume from the well for beneficial consumption by means of compression to liquid for use as fuel, transport to a processing facility, production of petrochemicals or fertilizer, conversion to liquid fuels, separating and collecting over fifty percent of the propane and heavier hydrocarbons; or
   5. Equipped with other value-added processes as approved by the industrial commission which reduce the volume or intensity of the flare by more than sixty percent.
3. An electrical generator and its attachment units to produce electricity from gas and a collection system described in subdivision d of subsection 2 must be considered to be personal property for all purposes.
4. For a well operated in violation of this section, the producer shall pay royalties to royalty owners upon the value of the flared gas and shall also pay gross production tax on the flared gas at the rate imposed under section 57-51-02.2.
5. The industrial commission may enforce this section and, for each well operator found to be in violation of this section, may determine the value of flared gas for purposes of payment of royalties under this section and its determination is final.
6. A producer may obtain an exemption from this section from the industrial commission upon application that shows to the satisfaction of the industrial commission that connection of the well to a natural gas gathering line is economically infeasible at the time of the application or in the foreseeable future or that a market for the gas is not available and that equipping the well with an electrical generator to produce electricity from gas or employing a collection system described in subdivision d of subsection 2 is economically infeasible.

38-08-07. Commission shall set spacing units.

The commission shall set spacing units as follows:

1. When necessary to prevent waste, to avoid the drilling of unnecessary wells, or to protect correlative rights, the commission shall establish spacing units for a pool. Spacing units when established must be of uniform size and shape for the entire pool, except that when found to be necessary for any of the purposes above mentioned, the commission is authorized to divide any pool into zones and establish spacing units for each zone, which units may differ in size and shape from those established in any other zone.
2. The size and shape of spacing units are to be such as will result in the efficient and economical development of the pool as a whole.
3. An order establishing spacing units for a pool must specify the size and shape of each unit and the location of the permitted well thereon in accordance with a reasonably uniform spacing plan. Upon application, if the commission finds that a well drilled at the prescribed location would not produce in paying quantities, that surface conditions would substantially add to the burden or hazard of drilling such well, or that the drilling of such well at a location other than the prescribed location is otherwise necessary either to protect correlative rights, to prevent waste, or to effect greater ultimate recovery of oil and gas, the commission is authorized to enter an order permitting the well to be drilled at a location other than that prescribed by such spacing order; however, the commission shall include in the order suitable provisions to prevent the production from the spacing unit of more than its just and equitable share of the oil and gas in the pool.
4. An order establishing units for a pool must cover all lands determined or believed to be underlaid by such pool, and may be modified by the commission from time to time to include additional areas determined to be underlaid by such pool. When found necessary for the prevention of waste, or to avoid the drilling of unnecessary wells, or to protect correlative rights, an order establishing spacing units in a pool may be modified by the commission to increase or decrease the size of spacing units in the pool or any zone thereof, or to permit the drilling of additional wells on a reasonably uniform plan in the pool, or any zone thereof, or an additional well on any spacing unit thereof.

38-08-08. Integration of fractional tracts.

1. When two or more separately owned tracts are embraced within a spacing unit, or when there are separately owned interests in all or a part of the spacing unit, then the owners and royalty owners thereof may pool their interests for the development and operation of the spacing unit. In the absence of voluntary pooling, the commission upon the application of any interested person shall enter an order pooling all interests in the spacing unit for the development and operations thereof. Each such pooling order must be made after notice and hearing, and must be upon terms and conditions that are just and reasonable, and that afford to the owner of each tract or interest in the spacing unit the opportunity to recover or receive, without unnecessary expense, that owner’s just and equitable share. Operations incident to the drilling of a well upon any portion of a spacing unit covered by a pooling order must be deemed, for all purposes, the conduct of such operations upon each separately owned tract in the drilling unit by the several owners thereof. That portion of the production allocated to each tract included in a spacing unit covered by a pooling order must, when produced, be deemed for all purposes to have been produced from such tract by a well drilled thereon. For the purposes of this section and section 38-08-10, any unleased mineral interest pooled by virtue of this section before August 1, 2009, is entitled to a cost-free royalty interest equal to the acreage weighted average royalty interest of the leased tracts within the spacing unit, but in no event may the royalty interest of an unleased tract be less than a one-eighth interest. An unleased mineral interest pooled after July 31, 2009, is entitled to a cost-free royalty interest equal to the acreage weighted average royalty interest of the leased tracts within the spacing unit or, at the operator’s election, a cost-free royalty interest of sixteen percent. The remainder of the unleased interest must be treated as a lessee or cost-bearing interest.
2. Each such pooling order must make provision for the drilling and operation of a well on the spacing unit, and for the payment of the reasonable actual cost thereof by the owners of interests in the spacing unit, plus a reasonable charge for supervision. In the event of any dispute as to such costs, the commission shall determine the proper costs. If one or more of the owners shall drill and operate, or pay the expenses of drilling and operating the well for the benefit of others, then, the owner or owners so drilling or operating shall, upon complying with the terms of section 38-08-10, have a lien on the share of production from the spacing unit accruing to the interest of each of the other owners for the payment of the owner’s or owners’ proportionate share of such expenses. All the oil and gas subject to the lien must be marketed and sold and the proceeds applied in payment of the expenses secured by such lien as provided for in section 38-08-10.
3. In addition to any costs and charges recoverable under subsections 1 and 2, if the owner of an interest in a spacing unit elects not to participate in the risk and cost of drilling a well thereon, the owner paying for the nonparticipating owner’s share of the drilling and operation of a well may recover from the nonparticipating owner a risk penalty for the risk involved in drilling the well. The recovery of a risk penalty is as follows:
   1. If the nonparticipating owner’s interest in the spacing unit is derived from a lease or other contract for development, the risk penalty is two hundred percent of the nonparticipating owner’s share of the reasonable actual costs of drilling and completing the well and may be recovered out of, and only out of, production from the pooled spacing unit, as provided by section 38-08-10, exclusive of any royalty or overriding royalty.
   2. If the nonparticipating owner’s interest in the spacing unit is not subject to a lease or other contract for development, the risk penalty is fifty percent of the nonparticipating owner’s share of the reasonable actual costs of drilling and completing the well and may be recovered out of production from the pooled spacing unit, as provided by section 38-08-10, exclusive of any royalty provided for in subsection 1.
   3. The owner paying for the nonparticipating owner’s share of the drilling and operation of a well may recover from the nonparticipating owner a risk penalty for the risk involved in drilling and completing the well only if the paying owner has made an unsuccessful, good-faith attempt to have the unleased nonparticipating owner execute a lease or to have the leased nonparticipating owner join in and participate in the risk and cost of drilling the well. Before a risk penalty may be imposed, the paying owner must notify the nonparticipating owner with proof of service that the paying owner intends to impose a risk penalty and that the nonparticipating owner may object to the risk penalty by either responding in opposition to the petition for a risk penalty or if no such petition has been filed, by filing an application or request for hearing with the industrial commission.

38-08-09. Voluntary agreements for unit operation valid.

An agreement for the unit or cooperative development and operation of a field or pool, in connection with the conduct of repressuring or pressure maintenance operations, cycling or recycling operations, including the extraction and separation of liquid hydrocarbons from natural gas in connection therewith, or any other method of operation, including water floods, is authorized and may be performed and may not be held or construed to violate any of the statutes of this state relating to trusts, monopolies, or contracts and combinations in restraint of trade, if the agreement is approved by the commission as being in the public interest, protective of correlative rights, and reasonably necessary to increase ultimate recovery or to prevent waste of oil or gas. Such agreements bind only the persons who execute them, and their heirs, successors, assigns, and legal representatives.

38-08-09.1. Legislative finding.

The legislative assembly finds and determines that it is desirable and necessary, under the circumstances and for the purposes hereinafter set out, to authorize and provide for unitized management, operation, and further development of the oil and gas properties to which sections 38-08-09.1 through 38-08-09.16 are applicable, to the end that a greater ultimate recovery of oil and gas may be had therefrom, waste prevented, the drilling of unnecessary wells eliminated, and the correlative rights of the owners in a fuller and more beneficial enjoyment of the oil and gas rights be protected.

38-08-09.2. Power and authority of commission.

The commission is hereby vested with continuing jurisdiction, power, and authority, including the right to describe and set forth in its orders all those things pertaining to the plan of unitization which are fair, reasonable, and equitable and which are necessary or proper to protect, safeguard, and adjust the respective rights and obligations of the several persons affected, and it is its duty to make and enforce such orders and do such things as may be necessary or proper to carry out and effectuate the purposes of sections 38-08-09.1 through 38-08-09.16.

38-08-09.3. Matters to be found by commission — Requisites of petition.

If upon the filing of a petition therefor and after notice and hearing, all in the form and manner and in accordance with the procedure and requirements hereinafter provided, the commission shall find:

1. That the unitized management, operation, and further development of a common source of supply of oil and gas or portion thereof is reasonably necessary in order to effectively carry on pressure-maintenance or repressuring operations, cycling operations, water flooding operations, or any combination thereof, or any other form of joint effort calculated to substantially increase the ultimate recovery of oil and gas from the common source of supply;
2. That one or more of said unitized methods of operation as applied to such common source of supply or portion thereof are feasible, will prevent waste, and will with reasonable probability result in the increased recovery of substantially more oil and gas from the common source of supply than would otherwise be recovered;
3. That the estimated additional cost, if any, of conducting such operations will not exceed the value of the additional oil and gas so recovered; and
4. That such unitization and adoption of one or more of such unitized methods of operation is for the common good and will result in the general advantage of the owners of the oil and gas rights within the common source of supply or portion thereof directly affected,

it shall make a finding to that effect and make an order creating the unit and providing for the unitization and unitized operation of the common source of supply or portion thereof described in the order, all upon such terms and conditions, as may be shown by the evidence to be fair, reasonable, equitable, and which are necessary or proper to protect, safeguard, and adjust the respective rights and obligations of the several persons affected, including royalty owners, owners of overriding royalties, oil and gas payments, carried interests, mortgagees, lien claimants, and others, as well as the lessees. The petition must set forth a description of the proposed unit area with a map or plat thereof attached, must allege the existence of the facts required to be found by the commission as hereinabove provided and must have attached thereto a proposed plan of unitization applicable to such proposed unit area and which the petitioner or petitioners consider to be fair, reasonable, and equitable.

38-08-09.4. Order — Units and unit areas — Plan of unitization.

The order of the commission must define the area of the common source of supply or portion thereof to be included within the unit area and prescribe with reasonable detail the plan of unitization applicable thereto.

Each unit and unit area must be limited to all or a portion of a single common source of supply.

A unit may be created to embrace less than the whole of a common source of supply only where it is shown by the evidence that the area to be so included within the unit area is of such size and shape as may be reasonably required for the successful and efficient conduct of the unitized method or methods of operation for which the unit is created, and that the conduct thereof will have no material adverse effect upon the remainder of such common source of supply.

The plan of unitization for each such unit and unit area must be one suited to the needs and requirements of the particular unit dependent upon the facts and conditions found to exist with respect thereto. In addition to such other terms, provisions, conditions, and requirements found by the commission to be reasonably necessary or proper to effectuate or accomplish the purposes of sections 38-08-09.1 through 38-08-09.16, and subject to the further requirements hereof, each such plan of unitization must contain fair, reasonable, and equitable provisions for:

1. The efficient unitized management or control of the further development and operation of the unit area for the recovery of oil and gas from the common source of supply affected. Under such a plan, the actual operations within the unit area may be carried on in whole or in part by the unit itself, or by one or more of the lessees within the unit area as unit operator subject to the supervision and direction of the unit, dependent upon what is most beneficial or expedient. The designation of the unit operator must be by a vote of the working interest owners in the unit in a manner provided by the plan of unitization and not by the commission, and the unit-operating agreement must contain a provision that the owners of a simple majority of the working interest in the unit area may vote to change the unit operator.
2. The division of interest or formula for the apportionment and allocation of the unit production, among and to the several separately owned tracts within the unit area such as will reasonably permit persons otherwise entitled to share in or benefit by the production from such separately owned tracts to produce or receive, in lieu thereof, their fair, equitable, and reasonable share of the unit production or other benefits thereof. A separately owned tract’s fair, equitable, and reasonable share of the unit production must be measured by the value of each such tract for oil and gas purposes and its contributing value to the unit in relation to like values of other tracts in the unit, taking into account acreage [hectarage], the quantity of oil and gas recoverable therefrom, location on structure, its probable productivity of oil and gas in the absence of unit operations, the burden of operation to which the tract will or is likely to be subjected, or so many of said factors, or such other pertinent engineering, geological, or operating factors, as may be reasonably susceptible of determination. Unit production as that term is used in sections 38-08-09.1 through 38-08-09.16 means and includes all oil and gas produced from a unit area from and after the effective date of the order of the commission creating the unit regardless of the well or tract within the unit area from which the same is produced.
3. The manner in which the unit and the further development and operation of the unit area shall or may be financed and the basis, terms, and conditions on which the cost and expense thereof shall be apportioned among and assessed against the tracts and interests made chargeable therewith, including a detailed accounting procedure governing all charges and credits incident to such operations. Upon and subject to such terms and conditions as to time and legal rate of interest as may be fair to all concerned, reasonable provision must be made in the plan of unitization for carrying or otherwise financing owners who are unable to promptly meet their financial obligations in connection with the unit and, in addition to the unit expense assessed against each tract and chargeable to each owner, the recovery of a risk penalty from each owner electing not to participate in the unit expense. The recovery of the risk penalty is as follows:
   1. If the nonparticipating owner’s interest in the unit is derived from a lease or other contract for development, the risk penalty is two hundred percent of the nonparticipating owner’s share of the unit expense and may be recovered out of, and only out of, production from the unit, exclusive of any royalty or overriding royalty.
   2. If the nonparticipating owner’s interest in the unit is not subject to a lease or other contract for development, the penalty is fifty percent of the nonparticipating owner’s share of the unit expense and may be recovered out of production from the unit exclusive of any royalty provided for in section 38-08-09.13.
   3. The owner paying for the nonparticipating owner’s share of the unit expense may recover from the nonparticipating owner a risk penalty for the risk involved in the unit expense only if the paying owner has made an unsuccessful, good-faith attempt to have the unleased nonparticipating owner execute a lease or to have the leased nonparticipating owner join in and participate in the risk of the unit expense. Before a risk penalty may be imposed, the paying owner must notify the nonparticipating owner with proof of service that the paying owner intends to impose a risk penalty and that the nonparticipating owner may object to the risk penalty by either responding in opposition to the petition for a risk penalty or if no such petition has been filed, by filing an application or request for hearing with the industrial commission.
4. The procedure and basis upon which wells, equipment, and other properties of the several lessees within the unit area are to be taken over and used for unit operations, including the method of arriving at the compensation therefor, or of otherwise proportionately equalizing or adjusting the investment of the several lessees in the project as of the effective date of unit operation.
5. The creation of an operating committee to have general overall management and control of the unit and the conduct of its business and affairs and the operations carried on by it, together with the creation or designation of such other subcommittees, boards, or officers to function under authority of the operating committee as may be necessary, proper, or convenient in the efficient management of the unit, defining the powers and duties of all such committees, boards, or officers and prescribing their tenure and time and method for their selection.
6. The time when the plan of unitization shall become and be effective.
7. The time when and conditions under which and the method by which the unit must or may be dissolved and its affairs wound up; however, the unit may be dissolved ten years after the unit agreement becomes effective upon a petition to the commission by the royalty owners who are credited with at least the percentage of interest of the royalty production and proceeds thereof required to ratify the unit agreement on the date the unit agreement was initially approved by the commission, and a subsequent hearing and order by the commission. The commission may not dissolve any unit if the dissolution would be likely to result in waste or the violation of the correlative rights of any owner. This provision does not limit or restrict any other authority which the commission has.

38-08-09.5. Ratification or approval of plan by lessees and owners.

At the time of filing of the petition for the approval of a unit agreement and the filing of the unit agreement, the commission shall schedule a hearing. At least forty-five days prior to the hearing, the applicant shall give notice of the hearing and shall mail, postage prepaid, a copy of the application and the proposed plan of unitization to each affected person owning an interest of record in the unit outline, at such person’s last-known post-office address. In addition, the applicant shall file with the commission engineering, geological, and all other technical exhibits to be used at the hearing, and further, the notice must specify that such material is filed and is available for inspection. Service is complete in the mailing of the notice of hearing and unit agreement to each interest owner as described in this section and the filing of an affidavit of mailing with the commission. No order of the commission creating a unit and prescribing its plan of unitization becomes effective until the plan of unitization has been signed, or in writing ratified or approved by those persons who, under the commission’s order, will be required to pay more than fifty-five percent of the costs of the unit operation and by the owners of more than fifty-five percent of the royalty interests, excluding overriding royalties, production payments, and other interests carved out of the working interest, and in addition it is required that when there is more than one person who will be obligated to pay costs of the unit operation, at least two nonaffiliated such persons and at least two royalty interest owners, are required as voluntary parties, and the commission has made a finding either in the order creating the unit or in a supplemental order that the plan of unitization has been so signed, ratified, or approved by lessees and royalty owners owning the required percentage interest. If the plan of unitization has not been signed, ratified, or approved by lessees and royalty owners owning the required percentage interest at the time the order creating the unit is made, the commission shall, upon petition and notice, hold such additional hearings as may be requested or required to determine if and when the plan of unitization has been so signed, ratified, or approved by lessees and royalty owners owning the required percentage interest and shall, in respect to such hearings, enter a finding of its determination in such regard. In the event lessees and royalty owners, or either, owning the required percentage interest have not signed, ratified, or approved the plan of unitization within six months from the date on which the order creating the unit is made, the order ceases to be of further force and effect and shall be revoked by the commission.

38-08-09.6. Unlawful operation.

From and after the effective date of an order of the commission creating a unit and prescribing the plan of unitization applicable thereto, the operation of any well producing from the common source of supply or portion thereof within the unit area defined in the order by persons other than the unit or persons acting under its authority or except in the manner and to the extent provided in such plan of unitization is unlawful and is hereby prohibited.

38-08-09.7. Status and powers of unit — Liability for expenses — Liens.

Each unit created under the provisions of sections 38-08-09.1 through 38-08-09.16 is a body politic and corporate, capable of suing, being sued, and contracting as such in its own name. Each such unit is authorized on behalf and for the account of all the owners of the oil and gas rights within the unit area, without profit to the unit, to supervise, manage, and conduct the further development and operations for the production of oil and gas from the unit area, pursuant to the powers conferred, and subject to the limitations imposed by the provisions of sections 38-08-09.1 through 38-08-09.16 and by the plan of unitization.

The obligation or liability of the lessee or other owners of the oil and gas rights in the several separately owned tracts for the payment of unit expense is at all times several and not joint or collective and in no event may a lessee or other owner of the oil and gas rights in the separately owned tract be chargeable with, obligated or liable, directly or indirectly, for more than the amount apportioned, assessed, or otherwise charged to that person’s interest in such separately owned tract pursuant to the plan of unitization and then only to the extent of the lien provided for within sections 38-08-09.1 through 38-08-09.16.

Any nonsigning working interest owner may withdraw from the unit to which that person’s interest is committed by transferring, without warranty of title, either express or implied, to the unit operator on the behalf of the other working interest owners, all of that person’s working interest in all unit equipment and in all wells used in unit operations. The instrument of transfer must be delivered to the unit operator. Such transfer relieves the withdrawing working interest owner from any liability for unit operations except any incurred pursuant to sections 38-08-09.1 through 38-08-09.16. The interest so transferred is owned by the other working interest owners in proportion to their respective participation in the unit. The unit operator, on the behalf of the other working interest owners, in proportion to their respective interests so acquired, shall pay the transferor for the transferor’s interest in unit equipment and wells the net salvage value thereof as determined by agreement between the transferor and the unit operator. In the event such net salvage value is not agreed upon within sixty days after such transfer, then either party may request a hearing of the matter before the commission, and, after notice and hearing, the commission shall determine such value.

Subject to such reasonable limitations as may be set out in the plan of unitization, the unit has a first and prior lien upon the leasehold production (exclusive of such interests which are free of costs, such as royalties, overriding royalties, and production payments) in and to each separately owned tract, the interest of the owners thereof in and to the unit production in the possession of the unit, to secure the payment of the amount of the unit expense charged to and assessed against such separately owned tract. The interest of the lessee or other persons who by lease, contract, or otherwise are obligated or responsible for the cost and expense of developing and operating a separately owned tract for oil and gas in the absence of unitization, must, however, be primarily responsible for and charged with any assessment for unit expense made against such tract. Any landowner royalty or any overriding royalty, or any production payment which is a part of the unit production allocated to each separately owned tract must in all events be regarded as royalty to be distributed to and among, or the proceeds thereof paid to the royalty owners free and clear of all unit expense and free of any lien thereof.

38-08-09.8. Modification of property rights, leases, and contracts — Title to property — Distribution of proceeds — Effect of operations.

Property rights, leases, contracts, and all other rights and obligations must be regarded as amended and modified to the extent necessary to conform to the provisions and requirements of sections 38-08-09.1 through 38-08-09.16 and to any valid and applicable plan of unitization or order of the commission made and adopted pursuant hereto, but otherwise to remain in full force and effect.

Nothing contained in sections 38-08-09.1 through 38-08-09.16 may be construed to require a transfer to or vesting in the unit of title to the separately owned tracts or leases thereon within the unit area, other than the right to use and operate the same to the extent set out in the plan of unitization; nor may the unit be regarded as owning the unit production. The unit production and the proceeds from the sale thereof are owned by the several persons to whom the same is allocated under the plan of unitization. All property, whether real or personal, which the unit may in any way acquire, hold, or possess may not be acquired, held, or possessed by the unit for its own account but must be so acquired, held, and possessed by the unit for the account and as agent of the several lessees and is the property of such lessees as their interests may appear under the plan of unitization, subject, however, to the right of the unit to the possession, management, use, or disposal of the same in the proper conduct of its affairs.

The amount of the unit production allocated to each separately owned tract within the unit, and only that amount, regardless of the well or wells in the unit area from which it may be produced, and regardless of whether it be more or less than the amount of the production from the well or wells, if any, on any such separately owned tract, must for all intents, uses, and purposes be regarded and considered as production from such separately owned tract, and, except as may be otherwise authorized in sections 38-08-09.1 through 38-08-09.16, or in the plan of unitization approved by the commission, must be distributed among or the proceeds thereof paid to the several persons entitled to share in the production from such separately owned tract in the same manner, in the same proportions, and upon the same conditions that they would have participated and shared in the production or proceeds thereof from such separately owned tract had not said unit been organized, and with the same legal force and effect. If adequate provisions are made for the receipt thereof, the share of the unit production allocated to each separately owned tract must be delivered in kind to the persons entitled thereto by virtue of ownership of oil and gas rights therein or by purchase from such owners subject to the rights of the unit to withhold and sell the same in payment of unit expense pursuant to the plan of unitization, and subject further to the call of the unit on such proportions of the gas for operating purposes as may be provided in the plan of unitization.

Operations carried on under and in accordance with the plan of unitization must be regarded and considered as a fulfillment of and compliance with all of the provisions, covenants, and conditions, express or implied, of the several oil and gas mining leases upon lands included within the unit area, or other contracts pertaining to the development thereof, insofar as said leases or other contracts may relate to the common source of supply or portion thereof included in the unit area. Wells drilled or operated on any part of the unit area no matter where located must for all purposes be regarded as wells drilled on each separately owned tract within such unit area.

Nothing herein or in any plan of unitization may be construed as increasing or decreasing the express or implied covenants of a lease in respect to a unit source of supply or lands not included within the unit area of a unit. However, when an oil and gas lease covers and affects lands partially within and partially without the unit area, unit operations and unit production allocated to the lease, as provided in this section, may not be deemed operations on or production from the lease as to the lands covered by the lease lying outside the unit area after two years from the effective date of the order of the commission creating and approving the unit or the expiration of the primary term of the lease, whichever is the later date. After the later date, the lease as to lands outside the unit area may be maintained in force and effect only in accordance with the terms and provisions contained in the lease.

38-08-09.9. Enlargement of area — Creation of new units — Amendment of plan.

The unit area of a unit may be enlarged at any time by the commission, subject to the limitations provided in this chapter to include adjoining portions of the same common source of supply, including the unit area of another unit, and a new unit created for the unitized management, operation, and further development of the enlarged unit area, or the plan of unitization may be otherwise amended, all in the same manner, upon the same conditions and subject to the same limitations as provided with respect to the creation of a unit in the first instance, except, that where an amendment to a plan of unitization relates only to the rights and obligations as between lessees, or the amendment to a plan of unitization or the enlargement of a unit area is found by the commission to be reasonably necessary in order to effectively carry on the joint effort, to prevent waste, and to protect correlative rights, and that such will result in the general advantage of the owners of the oil and gas rights within the unit area and the proposed enlarged unit area, and the persons and owners in the proposed added unit area have ratified or approved the plan of unitization as required by section 38-08-09.5, then the amendment to a plan of unitization or the enlargement of a unit area need not be ratified or approved by royalty owners of record in the existing unit area provided that written notice thereof is mailed to the royalty owners by the operator of a unit not more than forty days nor less than thirty days prior to the commission hearing. The notice must describe the plan for the unit amendment or enlargement together with the participation factor to be given each tract in the unit area and in the proposed area and must contain the time and place of the commission hearing. An affidavit of mailing verifying the notice must be filed with the commission. The notice must further provide that in the event ten percent of the royalty interests or working interests in the existing unit area file with the commission at least ten days prior to the commission proceeding an objection to the plan of enlargement, the commission shall require that the unit amendment or enlargement be approved by more than fifty-five percent of all royalty interests and working interests in the existing and proposed areas.

38-08-09.10. Reasonableness of plan.

A plan of unitization may not be considered fair and reasonable if it contains a provision for operating charges which include any part of district or central office expenses other than reasonable overhead charges.

38-08-09.11. Participating by public lands.

The proper board or officer of the state having the control and management of state land, and the proper board or officer of any political, municipal, or other subdivision or agency of the state, are hereby authorized and have the power on behalf of the state or of such political, municipal, or other subdivision or agency thereof, with respect to land or oil and gas rights, subject to the control and management of such respective body, board, or officer, to consent to or participate in any plan or program of unitization adopted pursuant to sections 38-08-09.1 through 38-08-09.16.

38-08-09.12. Receipts as income.

Neither the unit production, nor proceeds from the sale thereof, nor other receipts may be treated, regarded, or taxed as income or profits of the unit; but instead, all such receipts are the income of the several persons to whom or to whose credit the same are payable under the plan of unitization. To the extent the unit may receive or disburse said receipts, it shall only do so as a common administrative agent of the persons to whom the same are payable.

38-08-09.13. Definitions.

For the purposes of sections 38-08-09.1 through 38-08-09.16, unless the context otherwise requires:

1. “Lessee” refers not only to lessees under oil and gas leases but also includes owners of unleased mineral rights having the right to develop the same for oil and gas to the extent of a seven-eighths interest.
2. “Oil and gas” refers not only to oil and gas as such in combination one with the other, but shall have general reference to oil, gas, casinghead gas, casinghead gasoline, gas-distillate, or other hydrocarbons, or any combination or combinations thereof, which may be found in or produced from a common source of supply of oil, oil and gas, or gas-distillate.
3. “Person” means and includes any individual, corporation, limited liability company, partnership, common-law or statutory trust, association of any kind, the state of North Dakota, or any subdivision or agency thereof acting in a proprietary capacity, guardian, executor, administrator, fiduciary of any kind, or any other entity or being capable of owning an interest in and to a unit source of supply of oil and gas.
4. “Unit expense” includes and means any and all cost and expense in the conduct and management of its affairs or the operations carried on by it.
5. Any reference to a separately owned tract, although in general terms broad enough to include the surface and all underlying common sources of supply of oil and gas, shall have reference thereto only in relation to the unit source of supply or portion thereof embraced within the unit area of a particular unit.

38-08-09.14. Severability of provisions. [Repealed]

Repealed by S.L. 1983, ch. 82, § 154.

38-08-09.15. Agreement not violative of laws governing monopolies or restraint of trade.

No agreement between or among lessees or other owners of oil and gas rights in oil and gas properties, entered into pursuant hereto or with a view or for the purpose of bringing about the unitized development or operation of such properties, may be held to violate any of the statutes of this state prohibiting monopolies or acts, arrangements, agreements, contracts, combinations, or conspiracies in restraint of trade or commerce.

38-08-09.16. Appeals.

Any person adversely affected by an order of the commission made under sections 38-08-09.1 through 38-08-09.16 may appeal from such order to the district court of the county in which the land or a part thereof involved in the unit lies, in the manner provided in section 38-08-14.

38-08-09.17. Unit of more than one pool — Unit source of supply.

The commission upon its own motion may, and upon petition of any interested person shall, after notice therefor, hold a hearing to consider the need for the operation as a unit of two or more pools or parts thereof separated vertically in one field, and has the power to create such a unit and provide for the unitization and unitized operation of the unit source of supply. “Unit source of supply” means those pools or parts thereof to be produced by such unit operation as designated by order of the industrial commission. The petition, the hearing, the commission’s findings and order, and all other matters must be in the form and manner and in accordance with the procedure and requirements hereinabove set forth in sections 38-08-09.1 through 38-08-09.16; provided, however, whenever and wherever the words “common source of supply” appear in said sections, the words “unit source of supply” must be substituted in lieu thereof and all other provisions of the sections shall otherwise apply.

38-08-10. Development and operating costs of integrated fractional tracts.

A person to whom another is indebted for expenses incurred in drilling and operating a well on a drilling unit required to be formed as provided for in section 38-08-08, may, in order to secure payment of the amount due, fix a lien upon the interest of the debtor in the production from the drilling unit or the unit area, as the case may be, by filing for record, with the recorder of the county where the property involved, or any part thereof, is located, an affidavit setting forth the amount due and the interest of the debtor in such production. The person to whom the amount is payable may, at the expense of the debtor, store all or any part of the production upon which the lien exists until the total amount due, including reasonable storage charges, is paid or the commodity is sold at foreclosure sale and delivery is made to the purchaser. The lien may be foreclosed as provided for with respect to foreclosure of a lien on chattels.

38-08-11. Rules covering practice before commission.

1. The commission may adopt rules governing the practice and procedure before the commission, which rules must be adopted pursuant to the provisions of chapter 28-32.
2. When an emergency requiring immediate action is found to exist, the commission may issue an emergency order without notice or hearing, reciting the existence of the emergency and requiring that necessary action be taken to meet the emergency, which order is effective upon issuance. No emergency order may remain in effect for more than forty days.
3. Any notice required by this chapter must be given at the election of the commission either in accordance with chapter 28-32 or by one publication in a newspaper of general circulation in the state capital and in a newspaper of general circulation in the county where the land affected, or some part thereof, is situated. The notice must issue in the name of the state, must be signed by the chairman or secretary of the commission, and must specify the style and number of the proceeding, the time and place of the hearing, and must briefly state the purpose of the proceeding. Should the commission elect to give notice by personal service, such service may be made by any officer authorized to serve process, or by any agent of the commission, in the same manner as is provided by law for the service of summons in civil actions in the courts of the state. Proof of the service by such agent must be by the affidavit of the person making personal service. In proceedings that do not involve a complaint and a specifically named respondent, including agency hearings on applications seeking some right or authorization from the commission, the notice of hearing must be given at least fifteen days before the hearing, except in cases of emergency.
4. The commission may act upon its own motion or upon the petition of any interested person. On the filing of a petition concerning any matter within the jurisdiction of the commission, the commission shall fix a date for a hearing and give notice. Upon the filing of a petition of any interested party, the commission shall enter and serve its order upon all parties to the proceeding as required in section 28-32-39.

38-08-12. Commission has power to summon witnesses, administer oaths, and to require production of records.

1. The commission has the power to summon witnesses, to administer oaths, and to require the production of records, books, and documents for examination at any hearing or investigation conducted by it. No person may be excused from attending and testifying, or from producing books, papers, and records before the commission or a court, or from obedience to the subpoena of the commission or a court, on the ground or for the reason that the testimony or evidence, documentary or otherwise, required of the person may tend to incriminate the person or subject the person to a penalty or forfeiture; provided, that nothing herein contained may be construed as requiring any person to produce any books, papers, or records, or to testify in response to any inquiry not pertinent to some question lawfully before such commission or court for determination. No natural person may be subjected to criminal prosecution or to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which, in spite of the person’s objection, the person may be required to testify or produce evidence, documentary or otherwise, before the commission or court, or in obedience to its subpoena; provided, that no person testifying may be exempted from prosecution and punishment for perjury committed in so testifying.
2. In case of failure or refusal on the part of any person to comply with the subpoena issued by the commission, or in case of the refusal of any witness to testify as to any matter regarding which the person may be interrogated, any court in the state, upon the application of the commission, may in termtime or vacation issue an attachment for such person and compel the person to comply with such subpoena, and to attend before the commission and produce such records, books, and documents for examination, and to give the person’s testimony. Such court has the power to punish for contempt as in the case of disobedience to a like subpoena issued by the court, or for refusal to testify therein.

38-08-13. Party adversely affected may apply for reconsideration.

Any party adversely affected by any order of the commission may file a written petition for reconsideration in accordance with section 28-32-40. The commission shall grant or deny any such petition in whole or in part in accordance with the provisions of section 28-32-40 and rules adopted pursuant to it.

38-08-14. Party adversely affected may appeal to district court.

1. Any party adversely affected by an order entered by the commission may appeal, pursuant to chapter 28-32, from the order to the district court for the county in which the oil or gas well or the affected property is located. However, if the oil or gas well or the property affected by the order is located in or underlies more than one county, any appeal may be taken to the district court for any county in or under which any part of the affected property is located.
2. At the time of filing of the notice of appeal, if an application for the suspension of the order is filed, the commission may enter an order suspending the order complained of and fixing the amount of a supersedeas bond. Within ten days after the entry of an order by the commission which suspends the order complained of and fixes the amount of the bond, the appellant shall file with the commission a supersedeas bond in the required amount and with proper surety. Upon approval of the bond, the order of the commission suspending the order complained of is effective until its final disposition upon appeal. The bond must run in favor of the commission for the use and benefit of any person who may suffer damage by reason of the suspension of the order in the event the same is affirmed by the district court. If the order of the commission is not superseded, it must continue in force and effect as if no appeal was pending, unless a stay is ordered by the court to which the appeal is taken under section 28-32-48.
3. Orders of the commission must be sustained by the district court if the commission has regularly pursued its authority and its findings and conclusions are sustained by the law and by substantial and credible evidence.

38-08-15. Acquisition and handling illegal oil and gas prohibited — Seizure of illegal oil and gas and sale thereof.

1. The sale, purchase, acquisition, transportation, refining, processing, or handling of illegal oil, illegal gas, or illegal product is hereby prohibited. However, no penalty by way of fine may be imposed upon a person who sells, purchases, acquires, transports, refines, processes, or handles illegal oil, illegal gas, or illegal product unless:
   1. Such person knows, or is put on notice, of facts indicating that illegal oil, illegal gas, or illegal product is involved; or
   2. Such person fails to obtain a certificate of clearance with respect to such oil, gas, or product where prescribed by order of the commission, or fails to follow any other method prescribed by an order of the commission for the identification of such oil, gas, or product.
2. Illegal oil, illegal gas, and illegal product are declared to be contraband and are subject to seizure and sale as herein provided; seizure and sale to be in addition to any and all other remedies and penalties provided in this chapter for violations relating to illegal oil, illegal gas, or illegal product. Whenever the commission believes that any oil, gas, or product is illegal, the commission acting by the attorney general, shall bring a civil action in rem in the district court of the county where such oil, gas, or product is found, to seize and sell the same, or the commission may include such an action in rem for the seizure and sale of illegal oil, illegal gas, or illegal product in any suit brought for an injunction or penalty involving illegal oil, illegal gas, or illegal product. Any person claiming an interest in oil, gas, or product affected by any such action in rem has the right to intervene as an interested party in such action.
3. Actions for the seizure and sale of illegal oil, illegal gas, or illegal product must be strictly in rem and must proceed in the name of the state as plaintiff against the illegal oil, illegal gas, or illegal products as defendant. No bond or similar undertaking may be required of the plaintiff. Upon the filing of the petition for seizure and sale, the attorney general shall issue a summons, with a copy of the complaint attached thereto, which must be served in the manner provided for service in civil actions, upon any and all persons having or claiming any interest in the illegal oil, illegal gas, or illegal product described in the petition. Service must be completed by the filing of an affidavit by the person making the service, stating the time and manner of making such service. Any person who fails to appear and answer within the period of thirty days is forever barred by the judgment based on such service. The posting of copies of the summons and petition as above provided operates to place the state in constructive possession of the oil, gas, or product described in the petition. In addition, if the court, on a properly verified petition, or affidavits, or oral testimony, finds that grounds for seizure and for sale exist, the court shall issue an immediate order of seizure, describing the oil, gas, or product to be seized and directing the sheriff of the county to take such oil, gas, or product into the sheriff’s custody, actual or constructive, and to hold the same subject to the further order of the court. The court, in such order of seizure, may direct the sheriff to deliver the oil, gas, or product seized by the sheriff under the order to an agent appointed by the court, as the agent of the court; such agent to give bond in an amount and with such surety as the court may direct, conditioned upon the agent’s compliance with the orders of the court concerning the custody and disposition of such oil, gas, or product.
4. Any person having an interest in oil, gas, or product described in an order of seizure and contesting the right of the state to the seizure and sale thereof may, prior to the sale thereof as herein provided, obtain the release thereof, upon furnishing bond to the sheriff approved by the court, in an amount equal to one hundred fifty percent of the market value of the oil, gas, or product to be released, and conditioned as the court may direct upon redelivery to the sheriff of such product released or upon payment to the sheriff of the market value thereof as the court may direct, if and when ordered by the court, and upon full compliance with the further orders of the court.
5. If the court, after a hearing upon a petition for the seizure and sale of oil, gas, or product, finds that such oil, gas, or product is contraband, the court shall order the sale thereof by the sheriff in the same manner and upon the same notice of sale as provided by law for the sale of personal property on execution of judgment entered in a civil action, except that the court may order that the illegal oil, illegal gas, or illegal product be sold in specified lots or portions and at specified intervals. Upon such sale, title to the oil, gas, or product sold vests in the purchaser free of the claims of any and all persons having any title thereto or interest therein at or prior to the seizure thereof, and the same is legal oil, legal gas, or legal product, as the case may be, in the hands of the purchaser.
6. All proceeds derived from the sale of illegal oil, illegal gas, or illegal product, as above provided, after payment of costs of suit and expenses incident to the sale must be paid to the state treasurer and credited to the general fund.

38-08-16. Civil and criminal penalties.

1. Any person who violates any provision of this chapter, or any rule, regulation, or order of the commission is subject to a civil penalty to be imposed by the commission not to exceed twelve thousand five hundred dollars for each offense, and each day’s violation is a separate offense, unless the penalty for the violation is otherwise specifically provided for and made exclusive in this chapter. Any such civil penalty may be compromised by the commission. All amounts paid as civil penalties must be deposited in the abandoned oil and gas well plugging and site reclamation fund. The penalties provided in this section, if not paid, are recoverable by suit filed by the attorney general in the name and on behalf of the commission, in the district court of the county in which the defendant resides, or in which any defendant resides, if there be more than one defendant, or in the district court of any county in which the violation occurred. The payment of the penalty may not operate to legalize any illegal oil, illegal gas, or illegal product involved in the violation for which the penalty is imposed, or to relieve a person on whom the penalty is imposed from liability to any other person for damages arising out of the violation.
2. Notwithstanding any of the other provisions of this section, a person who willfully violates any provision of this chapter, or any rule or order of the commission that pertains to the prevention or control of pollution or waste is guilty of a class C felony unless the penalty for the violation is otherwise specifically provided for and made exclusive in this chapter. The criminal penalty provided for in this subsection may only be imposed by a court of competent jurisdiction.

38-08-17. Action to restrain violation or threatened violation.

1. Whenever it appears that any person is violating or threatening to violate any provision of this chapter, or any rule, regulation, or order of the commission, the commission shall bring suit against such person in the district court of any county where the violation occurs or is threatened, to restrain such person from continuing such violation or from carrying out the threat of violation. In any such suit, the court has jurisdiction to grant to the commission, without bond or other undertaking, such prohibitory and mandatory injunctions as the facts may warrant, including temporary restraining orders, preliminary injunctions, temporary, preliminary or final orders restraining the movement or disposition of any illegal oil, illegal gas, or illegal product, any of which the court may order to be impounded or placed in the custody of an agent appointed by the court.
2. If the commission fails to bring suit to enjoin a violation or threatened violation of any provision of this chapter, or any rule, regulation, or order of the commission, within ten days after receipt of written request to do so by any person who is or will be adversely affected by such violation, the person making such request may bring suit in the person’s own behalf to restrain such violation or threatened violation in any court in which the commission might have brought suit. The commission must be made a party defendant in such suit in addition to the person violating or threatening to violate a provision of this chapter, or a rule, regulation, or order of the commission, and the action must proceed and injunctive relief may be granted to the commission without bond in the same manner as if suit had been brought by the commission.

38-08-18. Existing regulations still in force. [Repealed]

Omitted.

38-08-19. Common purchasers — Discrimination in purchasing prohibited.

1. Every person, association of persons, corporation, or limited liability company now engaged or hereafter engaging in the business of purchasing crude petroleum in this state shall be a common purchaser thereof.
2. Every common purchaser of crude petroleum shall, without discrimination in favor of one producer or royalty owner as against another in the same marketing district as determined by the commission, purchase all oil tendered to it at the wellhead or at its receiving terminal, which has been lawfully produced, provided that no common purchaser may be required to purchase crude petroleum of inferior quality or grade, or which is unsuitable for its operations.
3. Whenever a common purchaser is unable to purchase all of the oil tendered to it hereunder, it shall purchase ratably from each marketing district, field, pool, or well, with respect to which such tenders are made. As between wells, purchases shall be considered ratable only if such purchases are made in proportion to the allowables which are or would be assigned to such wells under existing commission rules and regulations, and, as between marketing districts or fields or pools, purchases may be considered ratable if such purchases are made in proportion to the sum of the allowables which are or would be assigned to all wells from which tenders are made in each such marketing district or field or pool.
4. Every common purchaser of crude petroleum is hereby expressly prohibited from discriminating in favor of its own production or that of an affiliate as against that of others, and the oil produced by such common purchaser or by an affiliate of such common purchaser must be treated as that of any other producer for the purposes of ratable taking.
5. It is unlawful for any common purchaser to discriminate between oil transported from the wellhead to its receiving terminal in favor of one carrier of crude oil as against another, and nothing herein may be construed to prevent any person, association of persons, corporation, or limited liability company from transporting crude oil from wellhead to receiving terminal of said common purchaser from properties in which such person, association of persons, corporation, or limited liability company may own an interest, and such person, association of persons, corporation, or limited liability company may not be deemed to be in the business of purchasing, or of purchasing and selling crude petroleum within the meaning of this section. Nothing herein may be construed to prohibit any common purchaser from requiring that proper and reasonable facilities be erected and maintained at its receiving terminal by any person, association of persons, corporation, or limited liability company transporting crude oil to such terminal, requiring that a surety bond be posted indemnifying said common purchaser from liability for the transporter’s failure to properly account to the owners of crude oil so transported, or posting a just and reasonable handling charge for accepting delivery at its receiving terminal.
6. The provisions of this section cover the purchase, or purchase and sale of crude petroleum, and that gathering, handling, marketing, and all other charges assessed by a common purchaser against crude oil produced within this state must be just and reasonable. The commission, after notice and hearing as provided in section 38-08-11, may determine the justness and reasonableness of charges on its own motion or upon motion of any interested person.

38-08-20. Commingling of production — Central production facility — Metering of production — Testing of meters.

A producer may not commingle production from two or more oil or gas wells with diverse ownership in a storage facility without prior approval of the commission after notice and opportunity for hearing. If the commingling of production is for the express purpose of separating, metering, holding, and marketing of production, the owner of the wells shall apply to the commission for approval of the proposed commingling of production at a storage facility. If wells producing into a centralized storage facility have diverse ownership, the production from each well must be measured by meters approved and tested by or under the direction of the commission or production must be measured by some other method the commission has approved after notice and opportunity for hearing. If wells producing into a centralized storage facility have common ownership, including the common ownership of the working interest, the common ownership of the royalty ownership, and the common ownership of any overriding royalty owners, the production from each well need not be measured on meters approved by the commission if the owner of the wells demonstrates to the commission that the production from each well can be accurately determined at reasonable intervals by other means.

38-08-20.1. Testing upon request of a royalty owner.

Upon request by a royalty owner to test an oil and gas meter or measuring device, the commission shall test the meter or measuring device or contract for the testing by a qualified meter tester who is independent of any operator or purchaser of production from the metered well.

38-08-21. Regulation of carbon dioxide and nitrogen gas.

The commission is vested with the authority and duty to regulate the exploration, development, and production of carbon dioxide, coal bed methane gas, helium gas, and nitrogen gas within the state, in the same manner, insofar as is practicable, as it regulates oil or gas as defined in this chapter.

38-08-22. Regulation of welders by oil and gas division of industrial commission — Continuing appropriation. [Repealed]

Repealed by S.L. 1995, ch. 358, § 1.

38-08-23. Plats.

Any person reclaiming a drilling pit or reserve pit after the completion of oil and gas drilling operations shall record an accurate plat certified by a registered surveyor showing the location of the well and notice that an abandoned drilling pit or reserve pit may be on the location within six months of the completion of the reclamation with the recorder of the county in which the drilling pit or reserve pit is located. A plat filed for record in accordance with this section may be recorded without acknowledgment or further proof as required by chapter 47-19 and without the auditor’s certificate referred to in section 11-18-02.

38-08-24. Carbon sequestration and storage projects — Priority. [Repealed]

Repealed by S.L. 2009, ch. 318, § 2.

38-08-25. Hydraulic fracturing — Use of carbon dioxide — Designated as acceptable recovery processes.

1. Notwithstanding any other provision of law, the legislative assembly designates hydraulic fracturing, a mechanical method of increasing the permeability of rock to increase the amount of oil and gas produced from the rock; and the use of carbon dioxide for enhanced recovery of oil, gas, and other minerals acceptable recovery processes in this state.
2. It is in the public interest to promote the use of carbon dioxide to benefit the state, to help ensure the viability of the state’s coal and power industries, and to benefit the state economy. Carbon dioxide is a potentially valuable commodity, and increasing its availability is important for commercial, industrial, or other uses, including enhanced recovery of oil, gas, and other minerals.
3. It is in the public interest to encourage and authorize cycling, recycling, pressure maintenance, secondary recovery operations, and enhanced recovery operations utilizing carbon dioxide for the greatest possible economic recovery of oil and gas.
4. It is in the public interest for a person conducting operations authorized by the commission under this chapter to use as much of a subsurface geologic formation as reasonably necessary to allow for unit operations for enhanced oil recovery, utilization of carbon dioxide for enhanced recovery of oil, gas, and other minerals, disposal operations, or any other operation authorized by this chapter.
5. Notwithstanding any other provision of law, a person conducting unit operations for enhanced oil recovery, utilization of carbon dioxide for enhanced recovery of oil, gas, and other minerals, disposal operations, or any other operation authorized by the commission under this chapter may utilize subsurface geologic formations in the state for such operations or any other permissible purpose under this chapter. Any other provision of law may not be construed to entitle the owner of a subsurface geologic formation to prohibit or demand payment for the use of the subsurface geologic formation for unit operations for enhanced oil recovery, utilization of carbon dioxide for enhanced recovery of oil, gas, and other minerals, disposal operations, or any other operation conducted under this chapter. As used in this section, “subsurface geologic formation” means any cavity or void, whether natural or artificially created, in a subsurface sedimentary stratum.
6. The commission may adopt and enforce rules and orders to effectuate the purposes of this section.

38-08-26. Submission of geographic information system data on oil and gas underground gathering pipelines required.

1. The commission shall create a geographic information system database for collecting pipeline shape files as submitted by each underground gathering pipeline owner or operator. The shape files and the resulting geographic information system database are exempt from any disclosure to parties outside the commission and are confidential except as provided in this section. The information may be used by the commission in furtherance of the commission’s duties.
2. An owner or operator of an underground gathering pipeline shall submit to the commission, in a time period no longer than one hundred eighty days of putting any underground gathering pipeline into service, a shape file showing the centerline of the pipeline. Upon abandonment of any underground gathering pipeline, the owner or operator shall submit, in a time period no longer than one hundred eighty days of abandonment, to the commission an updated shape file reflecting the pipeline or portion of a pipeline that has been abandoned. For an oil and gas underground gathering pipeline that is in service after August 1, 2011, and before August 1, 2013, the owner or operator or most recent owner or operator shall submit, within eighteen months from August 1, 2013, shape files for all existing underground gathering pipelines, including any known abandoned pipeline.
3. Upon a written request by the owner or tenant of the real property regarding underground gathering pipelines located within the bounds of the real property owned or leased by that property owner or tenant, the commission shall provide to the owner or tenant the requested information. The commission may not include information, if available, on any underground gathering pipeline that exists outside the bounds of the real property owned or leased by the requesting party.
4. Upon request by the tax commissioner, the commission may allow access to information contained in the geographic information system database to the tax commissioner to be used for the sole purpose of administering the valuation and assessment of centrally assessed underground gathering pipeline property under chapter 57-06. The information obtained under this subsection is confidential and may be used only for the purposes identified in this subsection.
5. The surface owner may share information contained in the geographic information system database.

38-08-27. Controls, inspections, and engineering design on crude oil and produced water underground gathering pipelines.

The application of this section is limited to an underground gathering pipeline that is designed or intended to transfer crude oil or produced water from a production facility for disposal, storage, or sale purposes and which was placed into service after August 1, 2015. Upon request, the operator shall provide the commission the underground gathering pipeline engineering construction design drawings and specifications, list of independent inspectors, and a plan for leak protection and monitoring for the underground gathering pipeline. Within sixty days of an underground gathering pipeline being placed into service, the operator of that pipeline shall file with the commission an independent inspector’s certificate of hydrostatic or pneumatic testing of the underground gathering pipeline.

History. S.L. 2015, ch. 254, § 2, effective April 20, 2015.

Effective Date.

This section became effective April 20, 2015, pursuant to an emergency clause in section 10 of chapter 254, S.L. 2015.

38-08.1-01. Definitions.

As used in this chapter, unless the context requires otherwise:

1. “Commission” means the industrial commission.
2. “Geophysical exploration” means any method of obtaining petroleum-related geophysical surveys.
3. “Operator of the land” means the surface owner or the surface owner’s tenant of the land upon or within one-half mile [.80 kilometer] of the land on which geophysical operations are to be conducted.
4. “Permitting agent” means a person who secures a permit from an operator of the land to conduct geophysical exploration activities.
5. “Person” means and includes any natural person, corporation, limited liability company, association, partnership, receiver, trustee, executor, administrator, guardian, fiduciary, or other representative of any kind, and includes any department, agency, or instrumentality of the state or of any governmental subdivision thereof.

38-08.1-02. Enforcement by commission — Persons required to comply with chapter.

Notwithstanding any other provision of this chapter, the commission is the primary enforcement agency governing geophysical exploration in this state. Any person in this state engaged in geophysical exploration or engaged as a subcontractor of a person engaged in geophysical exploration shall comply with this chapter; provided, however, that compliance with this chapter by a crew or its employer constitutes compliance herewith by that person who has engaged the service of the crew, or its employer, as an independent contractor.

38-08.1-03. Deemed doing business within state — Resident agent.

A person must be deemed doing business within this state when engaged in geophysical exploration within the boundaries of this state, and shall, if not already qualified to do business within the state under chapter 10-19.1, 10-32.1, 45-10.2, 45-22, or 45-23 prior to such exploration, file with the secretary of state an authorization provided under the governing statute of the organization.

38-08.1-03.1. Surety bond — Certificate — Release.

1. A geophysical exploration contractor desiring to engage in geophysical exploration in this state shall file with the commission a good and sufficient surety bond in the amount of fifty thousand dollars if the contractor intends to conduct shot hole operations or in the amount of twenty-five thousand dollars if the contractor intends to use any other method of geophysical exploration. Each subcontractor engaged by the geophysical exploration contractor for the drilling or plugging of seismic shot holes must file with the commission a good and sufficient surety bond in the amount of ten thousand dollars. The bond must be in a form prescribed by the commission and must indemnify all owners of property within the state, including the state and its political subdivisions, against physical damages to property which may result from geophysical exploration and the plugging of drill holes. The bond must cover all geophysical exploration and plugging operations conducted within one year of the date the bond is issued and must be automatically renewed unless the commission and the person covered by the bond receive notice sixty days before any anniversary date of the surety’s intent not to renew the bond. If the surety does not renew the geophysical exploration contractor’s bond, the surety’s liability under the bond ceases six years from the date that geophysical exploration or reclamation covered by the bond was last conducted in the state. If the surety does not renew the drilling or plugging bond, the surety’s liability under the bond ceases two years from the date the drilling and plugging covered by the bond was last conducted in this state. A person required to post a bond under this subsection may post cash or a certificate of deposit in lieu of the bond under rules adopted by the commission.
2. The aggregate liability of the surety on the bond may in no event exceed the amount of the bond.
3. Upon filing the bond required by this section and presenting a certificate of authority to transact business in this state issued under section 10-19.1-136, a certificate of incorporation issued under chapter 10-19.1, or some other certificate issued by the secretary of state showing the name of the person designated as resident agent for service of process, the commission shall issue to the person desiring to engage in geophysical exploration or plugging operations or any subcontractor of that person a certificate showing that the bond has been filed and showing the name and address of the surety company and the name of the person designated resident agent for service of process.
4. The proceeds of a surety bond become the property of the commission or the cash or certificate of deposit posted in lieu of a surety bond may not be returned to that person if the principal or person posting the bond, cash, or certificate of deposit fails to comply with this chapter and rules adopted by the commission under this chapter. This must be determined by the commission after notice and hearing in accordance with rules adopted by the commission. Notice of the hearing must be given to the principal and surety on the bond or to the person posting the cash or certificate of deposit by mailing a copy of the notice of hearing and a copy of a complaint, stating the grounds for forfeiture to them, filed by the commission. This must be done by certified mail, return receipt requested, and addressed to their last-known address listed with the commission. If the principal or surety or person posting the cash or certificate of deposit has a defense to, or otherwise wishes to contest the complaint of the commission, that person must file a written statement or answer setting forth the defense with the commission at least three business days before the commission hearing. Any defense or reason for contesting the complaint is waived if that person fails to do so. The commission may treat the failure to file a defense or reason to contest the complaint or the failure to appear at the hearing as default by the party. If the commission determines the principal on the bond or the person posting the cash or certificate of deposit as security has complied with this chapter and rules adopted by the commission under this chapter, including the proper plugging of wells and seismic holes and reclamation of the surrounding affected area, with respect to all operations secured by the bond, the commission shall release the obligation of the bond or return the cash or certificate of deposit upon its next anniversary date.

38-08.1-04. Application for permit to engage in geophysical exploration.

Any person desiring to engage in geophysical exploration before actually engaging in the exploration shall file an application for a permit to engage in geophysical exploration with the commission. The application for a permit for geophysical exploration must include the following:

1. The name, address, and telephone number of the person intending to engage in geophysical exploration or plugging operations and the name and telephone number of any local representative who may be contacted by the commission concerning geophysical exploration activities.
2. The name, address, and telephone number of any subcontractors, including drilling and plugging subcontractors, to be employed by the person intending to conduct geophysical exploration or plugging operations.
3. The name and address of the resident agent for service of process of the person intending to engage in geophysical exploration.
4. The date upon which geophysical exploration is to begin.
5. The approximate number and depth of any drill holes and the specific location of any drill holes or a description of the property on which the geophysical exploration is to be conducted described by township, range, section, and quarter section.
6. A fee of up to one hundred dollars.

The person making application for a geophysical exploration permit shall file an amended application whenever there is any new information or a change in the information contained in the application on file with the commission.

38-08.1-04.1. Exploration permit.

1. Upon filing a complete application for permit to explore pursuant to section 38-08.1-04, the commission may issue to any person desiring to engage in geophysical exploration a “geophysical exploration permit”. A person may not engage in geophysical exploration activities in this state without having first obtained a geophysical exploration permit from the commission.
2. The permit must show, at a minimum:
   1. The name of the person.
   2. The name and address of the resident agent for service of process.
   3. That an application to engage in geophysical exploration has been duly filed.
   4. That a good and sufficient surety bond has been filed by the person, naming the surety company and giving its address.
3. The permit must be signed by the director of the commission’s oil and gas division or the director’s designee. The permit is valid for one year.
4. Within seven days of initial contact between the permitting agent and the operator of the land, the permitting agent shall provide the operator of the land and each landowner owning land within one-half mile [.80 kilometer] of the land on which geophysical exploration activities are to be conducted a written copy of section 38-08.1-04.1 and chapter 38-11.1.
5. The permitting agent shall notify the operator of the land at least seven days before the commencement of any geophysical exploration activity, unless waived by mutual agreement of both parties. The notice must include the approximate time schedule and the location of the planned activity.
6. The permit or a photostatic copy thereof must be carried at all times by a member of the crew during the period of geophysical exploration and must be exhibited upon demand of the landowner or tenant operator or county or state official.
7. The permitholder shall notify the county auditor or the auditor’s designee at least twenty-four hours, excluding Saturdays and holidays, before the permitholder commences geophysical exploration in the county. Notice must include the approximate time schedule and location of the planned activity.

38-08.1-04.2. Notification of issuance of permit — Revocation — Suspension.

The commission shall immediately forward notice of the issuance of a permit to the board of county commissioners of the county in which the lands are located. The commission may revoke the permit of any person engaging in geophysical exploration upon a showing that that person has violated any applicable requirement pertaining to geophysical exploration. The commission shall notify that person, by the most effective written means, of the permit revocation. Upon notification, the person engaging in geophysical exploration may, within fifteen days, request a hearing before the commission on the matter. The commission shall either affirm, modify, or deny the permit revocation. The commission may also suspend the permit temporarily in those cases where climate and physical conditions are such as to cause harm, damage, or undue stress to roads, bridges, pastures, crops, or other physical features. For these same reasons, a board of county commissioners, upon notice to the permitholder and the commission, also may suspend, for not longer than forty-eight hours, a permit for operations within the county.

38-08.1-05. Duty to file record showing where work performed.

Within thirty days following any calendar month in which geophysical exploration is begun by any person within this state, such person shall file with the commission and shall send to the owner or occupier of any land upon which work is begun, a record showing the township, range, section, and quarter section in the county in which such work was performed and the date upon which such work was commenced. The notice also must include the actual shot point location and the amount of explosive charge, if any, in each drill hole.

38-08.1-06. Duty to plug drill holes.

1. Drill holes must be plugged and abandoned as required by this section.
2. The seismic company responsible for the plugging and abandonment of seismic shot holes shall notify the commission in writing that it intends to plug and abandon the drill hole. The required notice must be received by the commission at least twenty-four hours before the time plugging activities are scheduled to begin. The notice must include the date and time the activities are expected to commence, the location by section, township, and range of the holes to be plugged, and the name and telephone number of the person in charge of the plugging operations. A copy of the notice must be sent to the landowner or lessee at the same time it is sent to the commission. The seismic company shall notify the commission in writing upon completion of the plugging operation.
3. All seismic shot holes must be plugged as soon after being used as reasonably is practicable; however, they may not remain unplugged for a period of more than thirty days unless, upon application, the commission grants an extension which may not exceed ninety days. All seismic shot holes must be temporarily capped during the period between drilling and final plugging.
4. The plug must have permanently affixed to it a durable nonrusting metal or plastic tag or plate imprinted with the name of the operator responsible for the plugging of the hole and the operator’s permit number.
5. The surface around each seismic shot hole must be restored to its original condition insofar as restoration is practicable and all stakes, markers, cables, ropes, wires, primacord, cement or mud stacks, and any other debris or material not native to the area must be removed from the drill site and lawfully disposed of.

38-08.1-06.1. Plugging requirements — Rules — Liability for damage.

All seismic holes must be plugged in accordance with rules adopted by the commission. The commission shall review and revise its rules governing plugging requirements as technology in the field evolves. The seismic company is liable for all damages resulting from failure to comply with rules adopted by the commission pursuant to this section.

38-08.1-07. Civil and criminal penalties.

1. A person who violates any provision of this chapter or commission rule or order is subject to a civil penalty imposed by the commission not to exceed one thousand dollars for each offense, and each day’s violation is a separate offense. A penalty imposed under this section, if not paid, may be recovered by the commission in the district court of the county in which the defendant resides, or in which any defendant resides if there is more than one defendant, or in the district court of any county in which the violation occurred. Payment of the penalty does not legalize the activity for which the penalty was imposed, or relieve the person upon whom the penalty was imposed from liability to any other person for damage caused by the violation.
2. Notwithstanding this section, a person who willfully violates any provision of this chapter or a commission rule or order is guilty of a class C felony.

38-08.1-08. Commission to adopt rules.

The commission may adopt and enforce rules to implement this chapter.

38-09-01. Interest in oil, gas, and mineral rights to be reserved on transfer of state lands.

In every transfer of land, whether by deed, contract, lease, or otherwise, by the state of North Dakota, or by any department thereof, fifty percent of all oil, natural gas, or minerals which may be found on or underlying such land shall be reserved to the state of North Dakota. Any deed, contract, lease, or other transfer of any such land made after February 20, 1941, which does not contain such reservation must be construed as if such reservation were contained therein. The provisions of this section apply to all lands owned by this state or by any department thereof regardless of how title thereto was acquired.

38-09-01.1. State lands may be conveyed to United States free of reservations.

Whenever the United States of America or any of its agencies or agents shall desire or be required to acquire or approve title to lands owned by the state of North Dakota, or any of its agencies, the officers, boards, or commissions having power to convey such lands have power to convey the same free from any reservation of oil, gas, and minerals and rights thereto, and free of reservations of archaeological materials.

38-09-01.2. Reservations may be released to United States.

Whenever the state of North Dakota, or any of its agencies, has conveyed lands to any person and has reserved oil, gas, or minerals or rights therein or archaeological materials and the United States of America or any of its agencies or agents shall desire or be required to acquire or approve title to such lands, the officers, boards, or commissions which have originally conveyed such lands, or the successors in power to such officers, boards, or commissions are authorized to release to the United States of America or its agency or agent everything so reserved. The officer, board, or commission having power so to release has full power to fix and determine the consideration, if any, and terms upon which such release shall be given and any moneys or other consideration received for such releases must be covered into the fund for the benefit of which such reservations were made.

38-09-01.3. Sale of state lands to former owner, spouse, or lineal descendants free of reservations.

Whenever the state or any of its departments sell lands to any person, from whom the state derived the title to such lands, or to the person’s spouse or lineal descendants in the first degree, the lands must be sold free of any reservation of minerals provided for in section 38-09-01.

38-09-01.4. Release of reservations in case of prior sale. [Repealed]

Repealed by omission from this code.

Note.

Held unconstitutional by North Dakota supreme court as violating section 185 of the North Dakota constitution by making a gift to a particular class of persons. Solberg v. State Treas., 78 N.D. 806, 53 N.W.2d 49 (1952).

38-09-01.5. Instrument evidencing release to be furnished — Fees.

When the purchase price of such lands has been fully paid to the state or its departments, an instrument evidencing such release must be furnished on application and payment of fees under rules to be prescribed by the state and its departments, but in no case may the fee therefor exceed ten cents an acre [.40 hectare].

38-09-01.6. State may continue to lease reserved minerals — Assignment of unexpired leases upon release.

Pending application and payment of fee under section 38-09-01.5, the state and its departments may continue to lease reserved minerals and to collect rentals and other income from such leases, and where lands have been sold on contract for deed, such rentals and other income must be applied as payment on the contract for deed. On release of minerals reserved, any unexpired mineral leases and rentals and income thereafter becoming due must be assigned to the person entitled to the release as prescribed in section 38-09-01.5.

38-09-02. Township, city, school district, or park district may lease land for oil and gas development.

The governing body of any township, city, school district, or park district in this state may lease the grounds or lands of such political subdivision, or any part thereof, for oil and gas development for a primary term of not more than ten years, and may renew or extend any such lease from time to time for as long thereafter as oil or gas is or can be produced on the land described therein.

38-09-03. Provisions may be inserted in lease for consolidation of adjoining lands — Royalty — How shared.

Any oil or gas lease made by any of the political subdivisions mentioned in section 38-09-02 may provide that the lessee may consolidate the land covered by such lease with other adjoining lands for the purpose of joint development and operation of the entire consolidated premises as a unit. In such a case, the lessor shall share in the royalty on oil and gas produced from the consolidated tract in the proportion that the area of the land covered by such lease bears to the total area of such consolidated tract.

38-09-04. Leases and occupancy not to interfere with use of land by subdivision — Drilling wells — Limitation.

A lease made by a political subdivision under the provisions of section 38-09-02 and the occupancy of the lands under such lease may not interfere materially with the purposes for which such lands are used and occupied by the political subdivision. No oil or gas well may be drilled or located within one hundred feet [30.48 meters] of any public building upon any such land.

38-09-05. Board of county commissioners may adopt oil and gas leases on lands subject to delinquent taxes.

Any oil and gas lease on lands which are subject to delinquent tax charges may be confirmed, approved, and adopted by the board of county commissioners on behalf of the county if such lease is executed by the owner or owners of:

1. The right of redemption to the land described in the lease;
2. The title to such lands; or
3. Any interest therein.

The power conferred under the provisions of this section applies to lands against which tax charges have been adjusted by contract and to lands which have been forfeited to the county under tax proceedings and held by the county under tax deeds sufficient to constitute color of title in the county.

38-09-06. Oil and gas leases adopted by resolution of board of county commissioners — Addition of new provisions to leases.

The confirmation, approval, and adoption of an oil and gas lease under the provisions of section 38-09-05 must be by a proper resolution duly and regularly passed by the board of county commissioners at a regular or special meeting thereof. The board may insert in such resolution such provisions other than or in addition to those contained in the original lease as the board may consider for the best interests of the county. If new terms or provisions are added to the lease, the resolution must provide that such terms and provisions are binding upon the county and upon the lessee and the lessee’s assigns upon the execution of a written acceptance endorsed upon a certified copy of such resolution by the lessee, the lessee’s assigns, or successors in interest.

38-09-07. Certified copies of resolutions adopting oil or gas leases may be recorded — Constructive notice.

A copy of a resolution of the board of county commissioners confirming, approving, or adopting oil and gas leases, when certified by the county auditor of the county, may be recorded in the office of the recorder of such county. Upon the recording of a certified copy of any such resolution, the same is constructive notice to all subsequent purchasers, encumbrancers, lessees, and other persons dealing with oil and gas leases or with rights in and to the properties referred to in such resolution, of all of the terms, conditions, and provisions that are set out in the resolution.

38-09-08. Land forfeited to county — Lease binding upon county and lessee.

If any land which is affected by a resolution adopted by the board of county commissioners pursuant to the provisions of section 38-09-07 and subject to delinquent tax charges or tax charges which have been adjusted by contract is forfeited to the county under tax proceedings by a tax deed sufficient to constitute color of title in the county to such lands, the oil and gas lease affected by the resolution becomes and remains binding upon the county and its grantees and upon the lessee and the lessee’s assigns and successors in interest with like force and effect as though the county had become a party to such lease as of the date of the tax deed to the county.

38-09-09. Payment of bonuses, rents, royalties on lands subject to taxes — Crediting amount paid to county.

The lessee, or the lessee’s assigns and successors in interest, may pay all bonuses, rentals, and royalties due under any oil and gas lease on lands subject to delinquent taxes or to taxes adjusted by contract, to the lessor, or the lessor’s assigns or successors in interest, until such time as a tax deed describing such land is executed and delivered to the county. Upon the execution and delivery of a tax deed sufficient to constitute color of title in the county and upon the confirmation, approval, and adoption of the oil and gas lease by the county either with or without additional provisions, the lessee shall pay all rentals and royalties to the county as long as the county continues to hold the land. The amounts received by the county as bonuses, rentals, or royalties must be credited upon the tax charges against the property.

38-09-10. Payment of bonuses, rents, and royalties after termination of county’s interest in lands.

All bonuses, rents, and royalties becoming due and payable to any county under any provision of this chapter under an oil and gas lease must be paid to the lessor, or to the lessor’s assigns or successors in interest, in accordance with and pursuant to the terms of the original lease, if:

1. The land described in the lease is redeemed or the title of the county is obtained by the lessor or the lessor’s assigns from the county and such redemption or transfer from the county is made a matter of record in the office of the recorder of the county in which the land is situated;
2. The title or color of title of the county in and to the lands described in the lease is set aside or declared void by the final decree of a court having jurisdiction of such matter; and
3. Notice in either event is given to the lessee or to the lessee’s assigns or successors in interest by registered or certified mail directed to such lessee, or to the lessee’s assigns or successors in interest, at the address appearing in the office of the recorder of the county in which the land is situated.

38-09-11. Board of county commissioners may demise or let lands for drilling or mining purposes.

Real and personal property which a county may have acquired through purchase or forfeiture or by operation of law may be demised, leased, or let by the board of county commissioners for the purpose of:

1. Mining thereon;
2. Operating thereon for gas and oil;
3. Laying pipelines thereon; or
4. Establishing and maintaining thereon tanks, power stations, and structures for the production, saving, sale, or caring for the mine product, gas, or oil.

38-09-12. County may not engage in mining or oil business.

The provisions of section 38-09-11 authorize the board of county commissioners to include in the lease and to carry out any provision which any individual owner could include or carry out except that the board of county commissioners may not:

1. Enter into any of the lines of business mentioned in such section.
2. Expend or bind the county to the expenditure, by contract or otherwise, of any moneys or property.

38-09-13. Disposition of moneys collected by counties and political subdivisions on mining, oil, and gas leases.

All moneys received by any county from mining, oil, or gas lease and from royalties on any such lease must be paid to the county treasurer. Such amounts must be allocated to the state and county, and to any city, township, school district, or other taxing subdivision which has levied any tax thereon, in the proportions which the tax interests of the state, county, and other taxing subdivisions respectively bear to the tax charges to which the moneys are applicable. Moneys derived by the county from lands which are not subject to any tax charge must be paid into the general fund of the county. Moneys received by any township, city, school district, or park district under the provisions of this chapter other than for credit upon taxes must be placed in the general fund of the taxing subdivision receiving the same.

38-09-14. Public lands — Leasing for exploration and for production of oil and gas — Method.

No lands, owned in whole or in part, or on which a reservation of oil and gas rights has been made in a conveyance thereof, by the state of North Dakota or by any department or agency thereof or by any county or other political subdivision of this state, may be leased for oil and gas exploration or production except as provided for in sections 38-09-14 through 38-09-20.

38-09-15. Public offering of leases — State.

Before leasing any land or interest therein or any mineral rights reserved therein, the state of North Dakota or any of its departments or agencies shall first give notice in accordance with the rules of the board of university and school lands. The leasing must be held at the time and place specified in the notice, and the notice must contain the information required by the rules of the board of university and school lands and such other information as may be deemed by the state or department or agency thereof to be applicable. Should publication of any notice of the leasing of mineral rights be inadvertently omitted by any newspaper or should the notice contain typographical errors, the state or department or agency may, in its discretion, proceed with the scheduled leasing if it appears that the omission or error is not prejudicial to the state’s interest.

38-09-15.1. Sale of private mineral interests at public offerings for state mineral leases.

The state or any of its departments and agencies when making a public offering for lease of state-owned mineral interests may allow private owners of mineral interests common to the state’s mineral interests to offer their mineral interests at the public offering to be conducted by the state. The state-owned and privately owned mineral interests must be offered separately at the public offering. Privately owned mineral interests may only be offered when the common state-owned mineral interest is being offered. The private mineral owners shall submit a signed and notarized lease form to the state at the time they submit their minerals for inclusion in a public offering together with a current title opinion for the mineral interests certified by an attorney licensed to practice law in the state of North Dakota. The lease to be used by the private mineral owners must be on a form prescribed by the board of university and school lands in which the lease term, royalty rate, and rental rate are consistent with the state-owned mineral lease term and rates. The executed lease must be submitted to the leasing agency prior to the cutoff date for the public offering as established by the leasing agency. The private mineral interests must be advertised in the same manner as provided for in section 38-09-15. No bid may be accepted unless the bidder, at the time of the leasing, tenders or pays to the leasing official an amount equal to the bonus offered for the lease. The payment must be in the form of a thirty-day sight draft payable upon approval of title. The leasing official, in exchange for tender of the bonus, shall deliver to the successful bidder the executed lease. The leasing agency shall, as soon as practical after the sale, forward the thirty-day draft to the private mineral owners. The person must agree to warrant and defend title to the mineral interest being offered for lease before being allowed to offer the mineral interest for sale under this section. When a person agrees to offer a mineral interest at a public offering that interest may not be withdrawn from the offering. A person offering a mineral interest at a public offering under this section shall agree to pay prior to sale an equitable share of the costs incurred by the state in making that public offering. Nothing in this section may be construed or interpreted to impose any liability or obligation upon the state or any of its departments, agencies, agents, or employees by reason of any acts or omissions done under this section.

38-09-16. Public offering of leases — Counties and political subdivisions.

Before leasing any lands or interest therein or any mineral rights reserved in any conveyance thereof, any county or other political subdivisions thereof shall advertise the same in like manner as provided in section 38-09-15 and with like content of such notice and the leasing must be held at the office of the county auditor if owned by the county or if by any other political subdivision, at the office of the clerk or auditor thereof.

38-09-17. Bidding or offers.

Offers for leasing may be made in writing and such bids must be opened at the time of the leasing and bids may be offered orally at the time of the leasing. Such bids must be made upon the basis of acceptance of a lease upon the rental basis herein provided, plus such bonus as the bidder may offer. The leasing agency may reject all bids and no bid may be accepted unless the bidder shall, at the time of the leasing, tender or pay to the leasing official an amount equal to the first year’s rental for such oil and gas rights, plus any bonus offered for such lease.

38-09-18. Terms of lease — Unit operation.

All leases for the purposes as hereinbefore provided shall be made by the state of North Dakota and all agencies and departments and political subdivisions thereof for not less than twenty-five cents per acre [.40 hectare] per year for deferred drilling and shall be made with a royalty reservation of not less than one-eighth of all oil and gas produced from said land as long as oil and gas may be produced from said land. The term one-eighth as used herein must be construed to mean one-eighth of such interest as may be owned by the lessor. All leases hereunder must be made for a period of not less than five years and must continue in effect under the terms thereof as long as oil or gas may be produced thereon in commercial quantities. The state of North Dakota and all agencies, departments, and political subdivisions thereof, are specifically authorized to enter into agreements for the consolidation of land covered by leases on lands under the jurisdiction of such bodies with other adjoining or neighboring lands for the purpose of joint development and operation of the entire consolidated premises as a unit. In such a case, such agreement must provide that the lessor shall share in the royalty on oil and gas produced from a consolidated tract in the proportion that the area of the land covered by such lease bears to the total area of such consolidated tract, or upon such other royalty sharing basis as may appear equitable to the governing body controlling or administering such lands; and operations or production on such consolidated tract shall have the same effect as operations or production under the terms of each such lease included therein.

38-09-19. Lease void if not let as provided herein — Exceptions.

No lease of public land for exploration or development of oil and gas production is valid unless advertised and let as hereinbefore provided, except:

1. Where the acreage or mineral rights owned by the state or its departments and agencies or political subdivisions is less than the minimum drilling unit under well spacing regulations, nonoperative oil and gas leases may be executed through private negotiation upon the same terms as provided in section 38-09-18, except that the state, or its departments and agencies or political subdivisions may prescribe any period or term of such lease it deems advisable, plus a reasonable bonus payment and a sum sufficient to pay all costs involved.
2. The state or its departments and agencies or its political subdivisions shall have power to ratify all oil and gas leases executed by the purchaser of state lands under a contract for deed or other land purchase contract. In such instances, if all taxes upon the property and contract payments are current, all bonus, delayed rental or other lease payments under such leases must be paid to the purchaser under the land purchase contract. Where such purchaser has delinquent payments upon the land purchase contract or where there are delinquent taxes upon the property, all delinquent payments and taxes must be paid prior to the ratification of the oil and gas lease upon the premises.
3. All unexpired nonoperative oil and gas leases heretofore executed by the state, or its departments or agencies or political subdivisions are hereby ratified.

38-09-20. Rules and regulations.

The state of North Dakota and its departments and agencies, the board of county commissioners of each county, and the governing body of any political subdivisions are hereby authorized to establish rules and regulations for the leasing of lands for the purposes set forth in sections 38-09-14 through 38-09-20, not inconsistent herewith. Such rules may require the deposit by any applicant for a lease of an amount sufficient to cover the publication costs.

38-09-21. Approval of oil and gas leases.

All oil and gas mining leases made and executed prior to March 13, 1951, by the Bank of North Dakota, through its president, as agent for the state treasurer, as trustee for the state of North Dakota on lands or mineral interests acquired by the state treasurer, as trustee for the state of North Dakota, except such leases as have been released or have expired or have been forfeited, are hereby validated, and said leases are hereby confirmed and declared to be fully effective and operative to vest in the lessees of said leases, their successors or assigns, all of the estates, rights, titles, privileges, and interest therein set forth.

38-10-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

1. “District court” means the district court having jurisdiction of the estate of which the personal representative involved is administrator, executor, or guardian, as the case may be.
2. “Estate” means the estate of a person who died testate or intestate and the estate of a minor or of an individual who is incompetent or a spendthrift under guardianship.
3. “Lease for production” means any lease of property of an estate for the purpose of mining or of drilling and operating for oil, including the laying of pipelines and the building of tanks, power stations, and other structures upon the lands described in such lease for the purpose of producing, saving, and taking care of products of the mine or well.
4. “Personal representative” means an executor of the last will or the administrator of the estate of a deceased person, or a guardian of the estate of a minor or of an incompetent or spendthrift.

38-10-02. Personal representative may lease for production or sell mineral or oil rights in lands of estate.

A personal representative, upon compliance with the provisions of this chapter, may give a lease for production covering real property in the estate or may sell the oil, gas, or minerals in or under such real property separately from the surface rights.

38-10-03. Term of lease for production — Conditions and limitations in lease.

A lease for production made by a personal representative may be made subject to the confirmation of the district court, for a period of not more than ten years, and it may be extended thereafter as long as oil or gas is produced from such land by the lessee or the lessee’s assigns or the lessee or the lessee’s assigns are engaged in continuous drilling or reworking operations. Such a lease must be made upon such terms and in consideration of such bonuses, royalties, rentals, and payments as may be agreed upon except that in no case may the royalty be:

1. Less than equal to a one-eighth part of all oil produced and saved from the leased premises;
2. Less than equal to a one-eighth part of the gross proceeds at the prevailing market rate at the well for all gas used off the premises, when gas only is found on the leased premises; nor
3. Less than one-eighth of the gross proceeds at the prevailing market rate at the well for gas, during all times that such gas is used, when gas is produced from any oil well and used off the premises or for the manufacture of casinghead gasoline or dry commercial gas.

No lease for production is effective for a period of more than two years from its date unless mining or a well is commenced on such land within such time, except that the lease may provide that the lessee may pay a delay rental in an amount that may be specified in the lease. Such payment operates as a rental and covers the privilege of deferring the commencement of mining or of a well for one year. A lease may provide for the payment of successive delay rentals which defers the commencement of mining or of a well for like successive periods. Any lease made by a personal representative under the authority of this section may provide for the pooling or unitization of the lease land, or any part or parts thereof, and of any mineral or royalty interest therein, with land adjoining or in the vicinity of the leased land, or any mineral or royalty interest therein, so as to form a unit for development and purpose of operation. Operations or production on any such unitized area shall have the same effect as operations or production on the leased land. The lease may provide for payment of a proportionate part of the royalties on production from any such unitized area to the personal representative in lieu of the royalties provided in the lease as to the area so unitized. A personal representative, upon compliance with the provisions of this chapter, may also enter into agreements pooling or unitizing existing leases. Upon the execution, approval, and delivery of a production lease, all persons interested in the estate are bound thereby during the entire period thereof.

38-10-04. Lease for production made by personal representative to be approved by county court — Notice — Recording. [Repealed]

Repealed by S.L. 1973, ch. 257, § 82.

38-10-05. Personal representative may sell mineral, oil, and gas rights separately from surface rights.

Whenever it appears to the satisfaction of the district court that it is necessary for the payment of the family allowance or of claims, expenses of administration, or legacies, or that it is for the advantage, benefit, or best interests of the estate of a decedent, minor, or incompetent, and of the persons interested therein, that the whole or some undivided fractional part of the oil, gas, or other minerals in or under, or that may be produced from, land belonging to the estate should be sold separately from the surface rights, the personal representative may sell the same, upon order of the district court.

38-10-06. Petition required to obtain order of license — Contents of petition — Citation issued on petition.

To obtain an order of the district court for the sale of oil, gas, or other mineral rights, a verified petition must be presented to and filed with the court setting forth the matters required by law to be contained in a petition for the sale of real estate and in addition thereto setting forth the quantity of the interest in the oil, gas, or other minerals desired to be sold and the probable amount to be realized on the sale thereof. A citation must be issued on the petition and served in the manner provided by law for the service of citations in district court. If all persons interested in the estate join in the petition or signify in writing their assent thereto or waive service of notice thereof, the hearing may be had at any time.

38-10-07. Objections to petition for confirmation of lease or for order of license to sell.

Any person interested in the estate may file written objections to a petition for the approval and confirmation of a lease for production or to a petition for an order of license to sell oil, gas, or mineral rights. The petition and the objections thereto must be heard, the hearings thereon conducted, and the witnesses examined in the manner provided in title 30 for hearings on petitions for the sale of real property belonging to an estate.

38-10-08. Order of license to sell oil, gas, or mineral rights and procedure thereafter.

If it appears to the district court, after the hearing provided for in this chapter, that it is necessary, or for the advantage, benefit, and best interests of the estate and of the persons interested therein, to sell the whole or some fractional part of the oil, gas, or minerals in and under, and that may be produced from, land belonging to the estate, the court may enter its order of license authorizing the sale of the whole or any fractional part thereof separately from the surface rights. Thereafter, further proceedings must be had and conducted in compliance with the provisions of sections 30.1-13-04, 30.1-18-03, 30.1-18-04, 30.1-18-11, 30.1-18-15, and 30.1-19-08.

38-10-09. Sales of oil, gas, or mineral rights made subject to existing lease.

Sales of oil, gas, or mineral rights made under the provisions of this chapter must be made subject to the terms of any then existing oil, gas, or mineral lease and must cover and include all or a fractional part of the oil royalty, gas rental or royalty, and mineral rental or royalty to be paid under such lease.

38-10-10. Conveyance of oil, gas, or mineral rights to include right of ingress and egress.

In addition to the whole or fractional part of all oil, gas, and other minerals in or under, or that may be produced from, the land, the conveyance must convey the right of ingress and egress at all times for the purpose of mining, drilling, and exploring such lands for oil, gas, and other minerals, and removing the same therefrom, with the right to remove any or all equipment in connection therewith at any time.

38-10-11. Property directed by will to be disposed of — Duty of executor.

If property is directed by a will to be sold or if authority is given in a will to sell property, the executor may sell the whole or any fractional part of the oil, gas, or other minerals in or under, or that may be produced from, land belonging to the estate in the same manner as the executor may sell the property under title 30.1.

38-10-12. Appointment of trustee to execute mineral lease if contingent future interests are involved.

If lands, or any estate or interest therein, are subject to any contingent future interest, legal or equitable, by way of remainder, reversion, or possibility of reverter, upon the happening of a condition subsequent, or otherwise, created by deed, will, or otherwise, and whether a trust is involved or not, and it is made to appear that it will be advantageous to the present and ultimate owners of said lands or estate or interest therein, the district court of the county in which the land or a portion thereof is situated has the power, pending the happening of any contingency and the vesting of such future interest or interests, to declare a trust in said lands or estate or interest therein, appoint a trustee therefor, and to authorize such trustee to sell, on such terms and containing such conditions as the court may prescribe, execute and deliver a valid oil, gas, coal, or other mineral lease covering said lands or estate or interest therein. If a trust is in existence and there is a trustee serving under the trust, the trustee appointed by the court under this section must be the same trustee or trustees as are serving under the existing trust. All proceedings must substantially comply with that provided for the administration of trusts in chapters 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15, 59-16, 59-17, 59-18, and 59-19.

38-10-13. Who may institute proceedings.

The proceedings provided for by section 38-10-12 may be instituted upon the petition of any one or more of the parties who have a present interest or a contingent interest in the land or estate or interest therein.

38-10-14. Disposition of income and royalties.

All bonuses, rental payments and royalties from such leases must be paid to the trustee until the lessee is furnished with notice of the termination of the trust. Any bonuses or rental payments must be distributed by the trustee to the life tenant or other persons entitled thereto. The trustee is authorized to invest royalties from such leases in such investments as may appear to be in the best interests of the life tenant and remaindermen. Income from investments must be paid to the life tenant or other person entitled thereto.

38-11-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

1. “Agency” means and includes any department, agency, instrumentality, or political subdivision of the state of North Dakota.
2. “Mineral” means and includes any valuable inert or lifeless substance formed or deposited in its present position through natural agencies, and which is found within the earth or beneath the soil, except that it does not mean oil or gas, topsoil, or surface rocks.
3. “State” means and includes the state of North Dakota, its departments, agencies, instrumentalities, and political subdivisions.

38-11-02. Leases of certain mineral rights in state lands.

The state may issue prospecting permits or issue leases for the purpose of prospecting for and mining minerals contained in any portion of lands owned by this state or that may be contained in state lands sold with a reservation of mineral deposits.

38-11-02.1. Board of university and school lands to oversee all mineral leasing.

The board of university and school lands shall supervise the issuance of all prospecting permits and leases for the exploration and mining of state-owned minerals. Any agency of the state that desires to issue mineral prospecting permits or mineral leases shall do so in accordance with the standards, terms, conditions, policies, rules, and regulations promulgated by the board of university and school lands. The board of university and school lands does not have the authority to mandate or to prohibit mineral leasing or mineral prospecting on lands not under its immediate control, but it has authority to establish standards, policies, terms, conditions, rules, and regulations for such activity.

38-11-02.2. Authority of the board.

The authority given the board of university and school lands by section 38-11-02.1 includes, but is not limited to:

1. The approval of all forms used by agencies for mineral prospecting and mineral leasing.
2. The setting of minimum bonuses, minimum delay rentals, and minimum royalties.
3. The setting of terms and conditions relating to prospecting, mining, surface damages, and reclamation.
4. The method and manner of negotiations or sales for leasing or prospecting.

38-11-02.3. Authority of other agencies.

Any agency has the following authority over lands under its immediate control:

1. To designate lands as open or closed to mineral leasing or mineral prospecting.
2. To finally approve or disapprove a mineral leasing or mineral prospecting offer.
3. To attach special conditions to mineral prospecting permits or mineral leases in addition to those of the board of university and school lands.
4. To conduct its own mineral prospecting and mineral leasing negotiations or sales in accordance with the standards, policies, terms, conditions, rules, and regulations of the board of university and school lands.

38-11-02.4. Agencies may contract with board.

An agency may contract with the board of university and school lands for the purpose of conducting the mineral prospecting or mineral leasing negotiations or sale on behalf of the agency. The board may collect such costs as the agency and the board might agree as consideration for conducting the negotiations or sale.

38-11-03. Terms of lease — Ratification — Restoration of land. [Repealed]

Repealed by S.L. 1977, ch. 322, § 9.

38-11-04. Offering of mineral leases to be public.

Prior to the execution of a mineral lease by any agency of the state of North Dakota, that agency owning or controlling the mineral interest shall first give notice in accordance with the rules of the board of university and school lands. The notice must contain the information required by the rules of the board of university and school lands and such other information as may be deemed by the leasing agency to be applicable. The leasing must be by public auction held at the time and place specified in the notice.

38-11-05. Bidding or offers. [Repealed]

Repealed by S.L. 1977, ch. 322, § 9.

38-11-06. Leasing of islands and beds of navigable rivers and lakes. [Repealed]

Repealed by S.L. 1977, ch. 322, § 9.

38-11-07. Royalty scale. [Repealed]

Repealed by S.L. 1977, ch. 322, § 9.

38-11-08. Other royalty provisions. [Repealed]

Repealed by S.L. 1977, ch. 322, § 9.

38-11-09. Rejection of bids. [Repealed]

Repealed by S.L. 1977, ch. 322, § 9.

38-11-10. Rules and regulations.

The board of university and school lands is authorized to promulgate such rules and regulations as may be necessary to carry out the provisions of this chapter and to provide such terms and conditions in leases upon state minerals as may be in the best interests of the state.

38-11.1-01. Legislative findings.

The legislative assembly finds the following:

1. It is incumbent on the state to protect the public welfare of North Dakota which is largely dependent on agriculture and to protect the economic well-being of individuals engaged in agricultural production, while at the same time preserving and facilitating exploration through the utilization of subsurface pore space in accordance with an approved unitization or similar agreement, an oil and gas lease, or as otherwise permitted by law.
2. Exploration for and development of oil and gas reserves in this state interferes with the use, agricultural or otherwise, of the surface of certain land.
3. Owners of the surface estate and other persons should be justly compensated for injury to their persons or property and interference with the use of their property occasioned by oil and gas development.
4. This chapter may not be construed to alter, amend, repeal, or modify the law concerning title to pore space under section 47-31-03.

38-11.1-02. Purpose and interpretation.

It is the purpose of this chapter to provide the maximum amount of constitutionally permissible protection to surface owners and other persons from the undesirable effects of development of minerals. This chapter is to be interpreted in light of the legislative intent expressed herein. Sections 38-11.1-04 and 38-11.1-04.1 must be interpreted to benefit surface owners, regardless of whether the mineral estate was separated from the surface estate and regardless of who executed the document which gave the mineral developer the right to conduct drilling operations on the land. Sections 38-11.1-06 through 38-11.1-10 must be interpreted to benefit all persons.

38-11.1-03. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

1. “Agricultural production” means the production of any growing grass or crop attached to the surface of the land, whether or not the grass or crop is to be sold commercially, and the production of any farm animals, including farmed elk, whether or not the animals are to be sold commercially.
2. “Drilling operations” means the drilling of an oil and gas well and the production and completion operations ensuing from the drilling which require entry upon the surface estate and which were commenced after June 30, 1979, and oil and gas geophysical and seismograph exploration activities commenced after June 30, 1983.
3. “Land” means the solid material of earth, regardless of ingredients, but excludes pore space.
4. “Mineral developer” means the person who acquires the mineral estate or lease for the purpose of extracting or using the minerals for nonagricultural purposes.
5. “Mineral estate” means an estate in or ownership of all or part of the minerals underlying a specified tract of land.
6. “Minerals” means oil and gas.
7. “Pore space” means a cavity or void, naturally or artificially created, in a subsurface sedimentary stratum.
8. “Surface estate” means an estate in or ownership of the surface of a particular tract of land.
9. “Surface owner” means any person who holds record title to the surface estate on which a drilling operation occurs or is conducted.

38-11.1-03.1. Inspection of well site.

Upon request of the surface owner or adjacent landowner, the department of environmental quality shall inspect and monitor the well site on the surface owner’s land for the presence of hydrogen sulfide. If the presence of hydrogen sulfide is indicated, the department of environmental quality shall issue appropriate orders under chapter 23.1-06 to protect the health and safety of the surface owner’s health, welfare, and property.

38-11.1-04. Damage and disruption payments.

The mineral developer shall pay the surface owner a sum of money equal to the amount of damages sustained by the surface owner and the surface owner’s tenant, if any, for lost land value, lost use of and access to the surface owner’s land, and lost value of improvements caused by drilling operations. The amount of damages may be determined by any formula mutually agreeable between the surface owner and the mineral developer. When determining damage and disruption payments, consideration must be given to the period of time during which the loss occurs and the surface owner must be compensated for harm caused by exploration only by a single sum payment. The payments contemplated by this section only cover land directly affected by drilling operations. Payments under this section are intended to compensate the surface owner for damage and disruption; any reservation or assignment of such compensation apart from the surface estate except to a tenant of the surface estate is prohibited. In the absence of an agreement between the surface owner and a tenant as to the division of compensation payable under this section, the tenant is entitled to recover from the surface owner that portion of the compensation attributable to the tenant’s share of the damages sustained.

38-11.1-04.1. Notice of operations.

1. Before the initial entry upon the land for activities that do not disturb the surface, including inspections, staking, surveys, measurements, and general evaluation of proposed routes and sites for oil and gas drilling operations, the mineral developer shall provide at least seven days’ notice by registered mail or hand delivery to the surface owner unless waived by mutual agreement of both parties. The notice must include:
   1. The name, address, telephone number, and, if available, the electronic mail address of the mineral developer or the mineral developer’s designee;
   2. An offer to discuss and agree to consider accommodating any proposed changes to the proposed plan of work and oil and gas operations before commencement of oil and gas operations; and
   3. A sketch of the approximate location of the proposed drilling site.
2. Except for exploration activities governed by chapter 38-08.1, the mineral developer shall give the surface owner written notice by registered mail or hand delivery of the oil and gas drilling operations contemplated at least twenty days before commencement of drilling operations unless mutually waived by agreement of both parties. If the mineral developer plans to commence drilling operations within twenty days of the termination date of the mineral lease, the required notice under this section may be given at any time before commencement of drilling operations. The notice must include:
   1. Sufficient disclosure of the plan of work and operations to enable the surface owner to evaluate the effect of drilling operations on the surface owner’s use of the property;
   2. A plat map showing the location of the proposed well; and
   3. A form prepared by the director of the oil and gas division advising the surface owner of the surface owner’s rights and options under this chapter, including the right to request the department of environmental quality to inspect and monitor the well site for the presence of hydrogen sulfide.
3. The notice required by this section must be given to the surface owner at the address shown by the records of the county treasurer’s office at the time the notice is given and is deemed to have been received seven days after mailing by registered mail or immediately upon hand delivery.
4. If a mineral developer fails to give notice as provided in this section, the surface owner may seek appropriate relief in the court of proper jurisdiction and may receive punitive as well as actual damages.

38-11.1-05. Notice of drilling operations. [Repealed]

Repealed by S.L. 2011, ch. 265, § 7.

38-11.1-06. Protection of surface and ground water — Other responsibilities of mineral developer.

If the domestic, livestock, or irrigation water supply of any person who owns an interest in real property within one-half mile [804.67 meters] of where geophysical or seismograph activities are or have been conducted or within one mile [1.61 kilometers] of an oil or gas well site has been disrupted, or diminished in quality or quantity by the drilling operations and a certified water quality and quantity test has been performed by the person who owns an interest in real property within one year preceding the commencement of drilling operations, the person who owns an interest in real property is entitled to recover the cost of making such repairs, alterations, or construction that will ensure the delivery to the surface owner of that quality and quantity of water available to the surface owner prior to the commencement of drilling operations. Any person who owns an interest in real property who obtains all or a part of that person’s water supply for domestic, agricultural, industrial, or other beneficial use from an underground source has a claim for relief against a mineral developer to recover damages for disruption or diminution in quality or quantity of that person’s water supply proximately caused from drilling operations conducted by the mineral developer. Prima facie evidence of injury under this section may be established by a showing that the mineral developer’s drilling operations penetrated or disrupted an aquifer in such a manner as to cause a diminution in water quality or quantity within the distance limits imposed by this section. An action brought under this section when not otherwise specifically provided by law must be brought within six years of the time the action has accrued. For purposes of this section, the claim for relief is deemed to have accrued at the time it is discovered or might have been discovered in the exercise of reasonable diligence.

A tract of land is not bound to receive water contaminated by drilling operations on another tract of land, and the owner of a tract has a claim for relief against a mineral developer to recover the damages proximately resulting from natural drainage of waters contaminated by drilling operations.

The mineral developer is also responsible for all damages to person or property resulting from the lack of ordinary care by the mineral developer or resulting from a nuisance caused by drilling operations. This section does not create a cause of action if an appropriator of water can reasonably acquire the water under the changed conditions and if the changed conditions are a result of the legal appropriation of water by the mineral developer.

38-11.1-07. Notification of injury — Statute of limitations.

Any person, to receive compensation, under sections 38-11.1-08 and 38-11.1-09, shall notify the mineral developer of the damages sustained by the person within two years after the injury occurs or would become apparent to a reasonable person. Any claim for relief for compensation brought under this chapter must be commenced within the limitations period provided in section 28-01-16.

38-11.1-08. Agreement — Offer of settlement.

Unless both parties provide otherwise by written agreement, at the time the notice required by subsection 2 of section 38-11.1-04.1 is given, the mineral developer shall make a written offer of settlement to the person seeking compensation for damages when the notice required by subsection 2 of section 38-11.1-04.1 is given. The person seeking compensation may accept or reject any offer so made.

38-11.1-08.1. Loss of production payments.

The mineral developer shall pay the surface owner a sum of money equal to the amount of damages sustained by the surface owner and the surface owner’s tenant, if any, for loss of agricultural production and income caused by oil and gas production and completion operations. The amount of damages may be determined by any formula mutually agreeable between the surface owner and the mineral developer. When determining damages for loss of production, consideration must be given to the period of time during which the loss occurs and the damages for loss of production must be paid annually unless the surface owner elects to receive a single lump sum payment. Payments under this section are intended to compensate the surface owner for loss of production. Any reservation or assignment of such compensation apart from the surface estate, except to a tenant of the surface estate, is prohibited. In the absence of an agreement between the surface owner and a tenant as to the division of compensation payable under this section, the tenant is entitled to recover from the surface owner that portion of the compensation attributable to the tenant’s share of the damages sustained.

38-11.1-09. Rejection — Legal action — Fees and costs.

If the person seeking compensation rejects the offer of the mineral developer, that person may bring an action for compensation in the court of proper jurisdiction. If the amount of compensation awarded by the court is greater than that which had been offered by the mineral developer, the court shall award the person seeking compensation reasonable attorney’s fees, any costs assessed by the court, and interest on the amount of the final compensation awarded by the court from the day drilling is commenced. The rate of interest awarded must be the prime rate charged by the Bank of North Dakota on the date of the judgment.

38-11.1-09.1. Mediation of disputes.

Within one year after a compensation offer made under section 38-11.1-08 is rejected, either the mineral developer or surface owner may involve the North Dakota mediation service or other civil mediator. Involvement of a mediator may comply with Rule 8.8 of the North Dakota Rules of Court for purposes of alternative dispute resolution compliance. The cost of the mediator must be mediated between the parties. If the parties are unable to reach an agreement regarding the cost of the mediator through mediation, each party shall pay an equal portion of the mediator’s compensation. If the mediation is provided by the North Dakota mediation service, compensation of the mediator must be the actual cost of the mediator to the North Dakota mediation service.

38-11.1-09.2. Mediation service.

The North Dakota mediation service may mediate disputes related to easements for oil and gas-related pipelines and associated facilities.

38-11.1-10. Application of chapter.

The remedies provided by this chapter do not preclude any person from seeking other remedies allowed by law. This chapter does not apply to the operation, maintenance, or use of a motor vehicle upon the highways of this state as these terms are defined in section 39-01-01.

38-11.2-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

1. “Agricultural production” means the production of any grass or crop attached to the surface of the land, whether or not the grass or crop is to be sold commercially, and the production of any farm animals, whether or not the animals are to be sold commercially.
2. “Drilling operations” means the drilling of a subsurface mineral extraction well and the injection, production, and completion operations ensuing from the drilling which require entry upon the surface estate, and includes subsurface mineral exploration activities.
3. “Mineral developer” means the person who acquires the mineral estate or lease for the purpose of extracting or using the subsurface minerals for nonagricultural purposes.
4. “Mineral estate” means an estate in or ownership of all or part of the subsurface minerals underlying a specified tract of land.
5. “Subsurface mineral” means any naturally occurring element or compound recovered under the provisions of chapter 38-12, but for the purpose of this chapter excludes coal, commercial leonardite, oil and gas, sand and gravel, and rocks crushed for sand and gravel.
6. “Subsurface mineral exploration activities” means any method of obtaining information relative to locating and defining subsurface minerals that results in surface disturbance.
7. “Surface estate” means an estate in or ownership of the surface of a particular tract of land.
8. “Surface owner” means any person who holds record title to the surface of the land as an owner.

38-11.2-02. Inspection of well site.

Upon request of another state agency, the surface owner, or an adjacent landowner, the department of environmental quality shall conduct a site visit and evaluate site-specific environmental data as necessary to ensure compliance with applicable environmental protection laws and regulations relating to air, water, and land management under the jurisdiction of the department.

38-11.2-03. Notice of drilling operations.

1. The mineral developer shall give the surface owner written notice of the drilling operations contemplated at least twenty days prior to the commencement of the operations, unless waived by agreement of both parties.
2. This notice must be given to the record surface owner at that person’s address as shown by the records of the county recorder at the time the notice is given.
3. This notice must sufficiently disclose the plan of work and operations to enable the surface owner to evaluate the effect of drilling operations on the surface owner’s use of the property. Included with this notice must be a copy of this chapter.
4. If a mineral developer fails to give notice as provided under this section, the surface owner may seek any appropriate relief in the court of proper jurisdiction and may receive punitive as well as actual damages.

38-11.2-04. Damage and disruption payments — Statute of limitations.

1. The mineral developer shall pay the surface owner a sum of money equal to the amount of damages sustained by the surface owner and the surface owner’s tenant, if any, for loss of agricultural production and income, lost land value, lost use of and access to the surface owner’s land, and lost value of improvements caused by drilling operations. The amount of damages may be determined by any formula agreeable between the surface owner and the mineral developer. When determining damages, consideration must be given to the period of time during which the loss occurs.
2. The surface owner may elect to be paid damages in annual installments over a period of time.
3. The surface owner must be compensated for harm caused by subsurface mineral exploration only by a single sum payment.
4. The payments contemplated by this section only cover land directly affected by drilling operations.
5. Payments under this section are intended to compensate the surface owner for damage and disruption. Any reservation or assignment of such compensation apart from the surface estate except to a tenant of the surface estate is prohibited. In the absence of an agreement between the surface owner and a tenant as to the division of compensation payable under this section, the tenant is entitled to recover from the surface owner that portion of the compensation attributable to the tenant’s share of the damages sustained.
6. To receive compensation under this section, any person shall notify the mineral developer of the damages sustained by the person within two years after the injury occurs or would become apparent to a reasonable person.

38-11.2-05. Agreement — Offer of settlement.

Unless both parties provide otherwise by written agreement, the mineral developer shall make a written offer of settlement to the person seeking compensation for damages when the notice required by section 38-11.2-03 is presented. The person seeking compensation may accept or reject any offer so made.

38-11.2-06. Rejection — Legal action — Fees and costs.

If the person seeking compensation rejects the offer of the mineral developer, that person may bring an action for compensation in the court of proper jurisdiction. The court, in its discretion, may award the person seeking compensation reasonable attorney’s fees, any costs assessed by the court, and interest on the amount of the final compensation awarded by the court from the day drilling operations are commenced. The rate of interest awarded must be the prime rate charged by the Bank of North Dakota on the date of the judgment.

38-11.2-07. Protection of surface and ground water — Other responsibilities of mineral developer.

1. The mineral developer shall conduct or have conducted an inventory of water wells located within one-half mile [804.67 meters] of where subsurface mineral exploration activities are conducted, if such exploration activities appear reasonably likely to encounter ground water, or within one mile [1.61 kilometers] of a subsurface mineral production site.
2. The mineral developer shall conduct or have conducted a certified water quality and quantity test within one year preceding the commencement of subsurface mineral production operations on each water well or water supply located on the involved real property and as identified by the surface owner of that real property. Results of water quality tests conducted under this subsection must be reported in a prescribed format to the department of environmental quality, which shall maintain a database of the results. The water quality test must be collected as prescribed by the department of environmental quality and analyzed by a state-certified laboratory.
3. If the domestic, livestock, or irrigation water supply of any person who owns an interest in real property within one-half mile [804.67 meters] of where subsurface mineral exploration activities are or have been conducted or within one mile [1.61 kilometers] of a subsurface mineral production site has been disrupted, or diminished in quality or quantity by the drilling operations, the person who owns an interest in real property is entitled to recover the cost of making such repairs, alterations, or construction that will ensure the delivery to the surface owner of that quality and quantity of water available to the surface owner prior to the commencement of drilling operations.
4. Any person who owns an interest in real property who obtains all or a part of that person’s water supply for domestic, agricultural, industrial, or other beneficial use has a claim for relief against a mineral developer to recover damages for disruption or diminution in quality or quantity of that person’s water supply proximately caused from drilling operations conducted by the mineral developer.
5. Prima facie evidence of injury under this section may be established by a showing that the mineral developer’s drilling operations penetrated or disrupted an aquifer in such a manner as to cause a diminution in water quality or quantity within the distance limits imposed by this section, or by showing the mineral developer did not conduct or have conducted the testing required under subsection 2.
6. If a person refuses to consent to the testing of a water well or water supply on land owned by the person, as required under subsection 2, the person forfeits any claim for relief under subsection 3 or 4.
7. An action brought under this section when not otherwise specifically provided by law must be brought within six years of the time the action has accrued. For purposes of this section, the claim for relief is deemed to have accrued at the time it is discovered or might have been discovered in the exercise of reasonable diligence.
8. A tract of land is not bound to receive water contaminated by drilling operations on another tract of land and the owner of a tract has a claim for relief against a mineral developer to recover the damages proximately resulting from natural drainage of waters contaminated by drilling operations.
9. The mineral developer is also responsible for all damages to person or property resulting from the lack of ordinary care by the mineral developer or resulting from a nuisance caused by drilling operations.
10. This section does not create a cause of action if an appropriator of water can reasonably acquire the water under the changed conditions and if the changed conditions are a result of the legal appropriation of water by the mineral developer.

38-11.2-08. Application of chapter.

The remedies provided by this chapter do not preclude any person from seeking other remedies allowed by law. This chapter does not apply to the operation, maintenance, or use of a motor vehicle upon the highways of this state as these terms are defined in section 39-01-01.

38-12-01. Definitions.

As used in this chapter, unless the context otherwise requires:

1. “Commission” means the industrial commission of the state of North Dakota.
2. “Extraction facility” means any well or mine or other extractive process operated for the purpose of recovering subsurface minerals.
3. “Operator” means any person who, duly authorized, is in charge of the development of a lease or the operation of a producing property.
4. “Owner” means the person who has the right to explore for, develop, and produce subsurface minerals and to appropriate the subsurface minerals the owner produces either for the owner or for the owner and others.
5. “Person” means and includes any natural person, corporation, limited liability company, association, partnership, receiver, trustee, executor, administrator, guardian, fiduciary, or other representative of any kind, and includes any department, agency, or instrumentality of the state or of any governmental subdivision thereof; the masculine gender, in referring to a person, includes the feminine and the neuter genders.
6. “Producer” means the owner of an extraction facility which is or has been capable of producing subsurface minerals.
7. “Subsurface minerals” means all naturally occurring elements and their compounds, volcanic ash, precious metals, carbonates, and natural mineral salts of boron, bromine, calcium, fluorine, iodine, lithium, magnesium, phosphorus, potassium, sodium, thorium, uranium, and sulfur, and their compounds, but does not include sand and gravel and rocks crushed for sand and gravel.

38-12-02. Jurisdiction of commission.

The commission has jurisdiction and authority over all persons and property, public and private, necessary to enforce effectively the provisions of this chapter. Subject to the provisions of section 38-08-21, the director of mineral resources shall act as a supervisor charged with the duty of enforcing the regulations and orders of the commission applicable to the subsurface mineral resources of this state and the provisions of this chapter. The commission has authority to make such investigations as it deems proper to determine whether facts exist which justify action by the commission. The commission acting through the director of mineral resources has the authority:

1. To require:
   1. The furnishing of a reasonable bond with good and sufficient surety, conditioned upon the full compliance with the provisions of this chapter, and the rules and orders of the commission prescribed to govern the exploration, development, and production of subsurface minerals on state and private lands within the state of North Dakota. The person required to furnish the bond may elect to deposit a collateral bond, self-bond, cash, or any alternative form of security approved by the commission, or combination thereof, by which a permittee assures faithful performance of all requirements of this chapter and the rules and orders of the industrial commission.
   2. The delivery, free of charge, to the state geologist of the basic exploration data collected by the operator, within thirty days of field collection of such data. This data must include:
      1. Sample cuts, core chips, or whole cores.
      2. Sample logs, radioactivity logs, resistivity logs, or other types of electrical or mechanical logs.
      3. Elevation and location information on the data collection points.
      4. Other pertinent information as may be requested by the state geologist.
   3. The filing of monthly production reports in the manner prescribed by the commission and any other reports deemed necessary by the commission.
   4. The conducting of all exploration, development, and production operations in such a manner as to prevent pollution of freshwater supplies, to provide for the protection of the environment and public safety, and to ensure the optimum recovery of the mineral resource.
   5. The reclamation of all land disturbed by operations regulated by this chapter to a condition consistent with prior land use and productive capacity.
2. To regulate the drilling and abandonment of exploration test holes and producing wells and all other exploration, development, production, and reclamation operations.
3. To promulgate and to enforce rules, regulations, and orders to effectuate the purposes and the intent of this chapter.
4. To inspect all exploration, development, and production sites. For the purposes of this subsection, the director of mineral resources or the director’s representative shall have access to all exploration, development, or production installations for purposes of inspection and shall have the authority to require the operator’s aid if it is necessary and is requested.

The data so submitted is confidential for a period of one year when so requested by the operator and such period may be further extended upon approval by the commission.

38-12-03. Permit required.

It is unlawful to commence operations for the exploration, development, or production of subsurface minerals without first obtaining a permit from the director of mineral resources, under such rules and regulations as may be prescribed by the commission and paying to the commission a fee for each such permit in an amount to be prescribed by the commission.

38-12-04. Procedure.

The administrative procedure involved in the adopting of any rules or regulations or the issuance of any orders by the commission under the provisions of this chapter must be in accordance with the provisions of chapter 38-08 governing the procedure in the administration of the Oil and Gas Conservation Act; provided, however, that in the event an emergency is found to exist by the commission which in its judgment requires the making, revoking, changing, amending, modifying, altering, enlarging, renewal, or extension of a rule, regulation, or order without first having a hearing, such emergency rule, regulation, or order has the same validity as if a hearing with respect to the same had been held after due notice. The emergency rule, regulation, or order permitted by this section may remain in force no longer than fifteen days from its effective date, and in any event, it expires when the rule, regulation, or order made after due notice and hearing with respect to the subject matter of such emergency rule, regulation, or order becomes effective.

38-12-05. Penalty — Injunction — Provisions applicable.

The provisions of sections 38-08-16 and 38-08-17 are applicable to the provisions of this chapter and to the rules, regulations, and orders of the commission promulgated hereunder.

38-12.1-01. Legislative findings.

The legislative assembly of the state of North Dakota finds that:

1. The discovery and evaluation of coal or commercial leonardite deposits is advantageous in an industrial society.
2. Coal or commercial leonardite occurs hidden under the ground and must be searched for by diverse techniques, and that the search, exploration, or prospecting for coal or commercial leonardite is a necessary and expensive prerequisite to coal or commercial leonardite extraction and for land use planning in coal-bearing or commercial leonardite-bearing areas.
3. It is to the benefit of society to allow coal or commercial leonardite exploration and to require the information generated from exploration to be available to the office of the state geologist.

38-12.1-02. Declaration of policy.

It is hereby declared to be in the public interest to have persons engaged in coal or commercial leonardite exploration or evaluation report their findings to the office of the state geologist so that data on the location, quantity, and quality of coal or commercial leonardite, and the characteristics of associated material, will be available to assist the state in determining what the attitude of the state should be regarding future development of coal or commercial leonardite resources.

38-12.1-03. Definitions.

As used in this chapter, unless the context otherwise requires:

1. “Coal” means a dark-colored, compact, and earthy organic rock with less than forty percent inorganic components, based on dry material, formed by the accumulation and decomposition of plant material. The term includes lignite in both oxidized and nonoxidized forms, whether or not the material is enriched in radioactive materials. The term does not include commercial leonardite.
2. “Coal exploration” means:
   1. The use of any technique which when applied to the surface of the land will aid in the discovery or evaluation of coal or commercial leonardite or aid in determining the quantity and quality of coal or commercial leonardite present. It includes drilling or digging, excavating, core sample drilling and collection, diamond drilling, trenching, or any other type of penetration of the surface of the earth; or
   2. Environmental data gathering activities conducted for the purpose of establishing the conditions of an area prior to applying for a permit under chapter 38-14.1. The provisions of sections 38-12.1-04 and 38-12.1-05 are not applicable to such environmental data gathering activities unless the natural land surface will be substantially disturbed or such activities are located on lands designated unsuitable for mining under section 38-14.1-05.
3. “Commercial leonardite” means a dark-colored, soft, earthy rock formed from the oxidation of lignite coal, and is produced from a mine that has as its only function for supply for purposes other than gasification or combustion to generate electricity.
4. “Commission” means the industrial commission of the state of North Dakota.
5. “Permit area” means a county.
6. “Person” means and includes any natural person, corporation, limited liability company, association, partnership, receiver, trustee, executor, administrator, guardian, fiduciary, or other representative of any kind, and includes any department, agency, or instrumentality of the state or of any governmental subdivision thereof; the masculine gender, in referring to a person, includes the feminine and the neuter genders.
7. “Road” means a surface or right of way for purposes of travel by land vehicles used in coal or commercial leonardite exploration. A road consists of the entire area of the right of way, including the roadbed, shoulders, parking and side areas, approaches, structures, ditches, and surface.

38-12.1-04. Jurisdiction of commission.

The commission has jurisdiction and authority over all persons and property, both public and private, necessary to effectively enforce the provisions of this chapter. The director of mineral resources shall act as a supervisor charged with the duty of enforcing the regulations and orders of the commission applicable to the provisions of this chapter. The commission has authority to make such investigations as it deems proper to determine whether facts exist which justify action by the commission. The commission acting through the director of mineral resources has the authority:

1. To require:
   1. The furnishing of a reasonable bond with good and sufficient surety, conditioned upon the full compliance with the provisions of this chapter, and the rules and orders of the commission prescribed to govern the exploration for coal or commercial leonardite on state and private lands and roads used in coal or commercial leonardite exploration within the state of North Dakota. The person required to furnish the bond may elect to deposit a collateral bond, self-bond, cash, or any alternative form of security approved by the commission, or combination thereof, by which a permittee assures faithful performance of all requirements of this chapter and the rules and orders of the industrial commission.
   2. The delivery, free of charge, to the state geologist of the basic data collected during the course of the exploration within a reasonable time as may be prescribed by the state geologist. The data so submitted is confidential and available only to the office of the state geologist for official purposes for a period of two years, and such period of confidentiality must, upon application, be extended for one-year periods by the state geologist, for a total period not to exceed ten years unless it is demonstrated that such period should be further extended in order to prevent possible resulting harm to the person, or the person’s successors and assigns, who delivered such basic data to the state geologist. The basic data must include, if specifically requested by the state geologist and if the information has been developed by or for a person conducting the exploration:
      1. Sample cuts.
      2. Drillers’ logs, sample logs, radioactivity logs, resistivity logs, or other types of electrical or mechanical logs.
      3. Elevation and location information on the data collection points.
      4. Other pertinent information as may be required by the state geologist.
2. To require the plugging, covering, or reburial in an appropriate manner so as to protect environmental quality, general health and safety, and economic values of all holes, pits, or trenches excavated during the course of coal or commercial leonardite exploration.
3. To promulgate and enforce rules, regulations, and orders to effectuate the provisions, purpose, and intent of this chapter.
4. To inspect all drilling or exploration sites. For the purposes of this subsection, the director of mineral resources or the director’s representative shall have access to all drilling or exploration installations regulated by this chapter for the purpose of inspection and sampling and shall have the authority to require the operators’ aid if the director finds it necessary and requests it.
5. Notwithstanding any of the other provisions of this section, the commission acting through the director of mineral resources shall require that any lands substantially disturbed in coal or commercial leonardite exploration, including excavations, roads, and drill holes, and the removal of necessary facilities and equipment be reclaimed in accordance with the applicable performance standards of section 38-14.1-24. Reclamation must be accomplished to protect environmental quality, general health and safety, and economic values.

38-12.1-05. Notice and drilling permit required — Exceptions — Limits on coal or commercial leonardite removal.

1. It is unlawful to commence operations for drilling for the exploration for coal or commercial leonardite without first obtaining a permit from the director of mineral resources, under such rules and regulations as may be prescribed by the commission, and paying to the commission a fee of one hundred dollars for each such permit area. The permit application must include a description of the exploration area and the period of proposed exploration. The permit must be granted within thirty days after a proper application has been submitted.
2. This permit may not be required:
   1. In an area where a permit to conduct surface coal mining operations is in effect pursuant to chapter 38-14.1;
   2. For holes drilled to guide excavating equipment in an operating mine;
   3. In areas where a drill hole is required by any other state agency; or
   4. For environmental data gathering activities that do not substantially disturb the land, unless the environmental data gathering activities are located on land designated unsuitable for mining under section 38-14.1-05.
3. No person may remove more than two hundred fifty tons [226.80 metric tons] of coal or commercial leonardite pursuant to an exploration permit without first obtaining a permit from the public service commission.

38-12.1-06. Procedure.

The provisions of section 38-12-04 are applicable to the provisions of this chapter.

38-12.1-07. Action to restrain violation or threatened violation.

Whenever it appears that any person is violating or threatening to violate any provision of this chapter or any rule, regulation, or any order of the commission, the commission shall bring suit against such person in the district court of any county where the violation occurs or is threatened, to restrain such person from continuing such violation or from carrying out the threat of violation. In any such suit, the court shall have jurisdiction to grant to the commission, without bond or other undertaking, such prohibitory and mandatory injunctions as the facts may warrant.

38-12.1-08. Civil and criminal penalties — Unclassified.

1. Any person, including a director, officer, or agent of a corporate permittee, who violates this chapter or any permit condition or regulation implementing this chapter is subject to a civil penalty not to exceed five thousand dollars per day of such violation.
2. Any person, including a director, officer, or agent of a corporate permittee, who knowingly or willfully violates this chapter or any permit condition or regulation implementing this chapter or who knowingly reports information required by this chapter falsely is subject, upon conviction, to a criminal penalty of not more than ten thousand dollars or by imprisonment for not more than one year.
3. Any corporation or any person who controls the activity of a corporation who violates this chapter or any permit condition or rule implementing this chapter is subject to a civil penalty not to exceed five thousand dollars per day of such violation.

38-13-01. Appointment of trustee to execute mineral lease and other documents if owner or claimant is absent — Administration of trust.

Repealed by S.L. 2007, 1048, § 2.

Note.

Section 38-13-01 was amended by section 12 of chapter 549, S.L. 2007. Pursuant to section 1-02-09, the section is treated as repealed.

38-13-02. Who may institute proceedings. [Repealed]

Repealed by S.L. 2007, 1048, § 2.

38-13-03. Disposition of income and royalties. [Repealed]

Repealed by S.L. 2007, 1048, § 2.

38-13-04. Filing of addresses. [Repealed]

Repealed by S.L. 2007, 1048, § 2.

38-13.1-01. Trusts for unlocatable mineral, leasehold, or royalty interest owners — Creation.

A person that owns a mineral, leasehold, or royalty interest underlying a tract of land may petition the district court of the county in which the tract or a portion of the tract is located to declare a trust in favor of other persons also owning or claiming an interest in the mineral, leasehold, or royalty interest underlying the tract if the place of residence and present whereabouts of the other persons are unknown and cannot reasonably be ascertained. In requesting the appointment of a trustee, the petitioner must show that a diligent but unsuccessful effort to locate the absent owner or claimant has been made and that appointment of a trustee will be in the best interest of all owners of an interest in the mineral, leasehold, or royalty interest. After determining that these conditions have been met, the court shall appoint the county treasurer as trustee and shall authorize the county treasurer to execute and deliver an oil, gas, or other mineral lease, a ratification, a division order, or any other related document or instrument on the terms and the conditions as the court may approve. A trust in existence on August 1, 2007, may be transferred to the county treasurer of the county in which the mineral, leasehold, or royalty interest is located.

38-13.1-02. No further liability for petitioner.

If a trust in favor of unlocatable owners or claimants of an interest the mineral, leasehold, or royalty interest has been created and all bonuses, rental payments, royalties, and other income due to the unlocatable owners being or have been paid to the trustee, the person petitioning for creation of the trust is not liable for further claims by unlocatable owners for bonuses, rental payments, royalties, and other income produced after the creation of the trust.

38-13.1-03. Administration of trust.

The administration of the trust must comply with the appropriate provisions regulating trusts contained in title 59. Except as provided in this section, trustee or attorney’s fees may not be paid from the trust proceeds. All bonuses, rental payments, royalties, and other income must be paid to the trustee until the trust is terminated and notice of its termination is given to all interested parties. The trustee shall distribute all moneys held in the trust to the person entitled to the money upon the order of the district court. A trust in favor of unlocatable owners must be kept in force until the unlocatable owners of the mineral interests in question have successfully claimed their share of the funds held in trust and have filed the notice as provided in section 38-13.1-04. The creation of a trust in favor of unlocatable owners does not affect the right of a surface owner who succeeds to ownership of a mineral interest upon its lapse under chapter 38-18.1. A person who succeeds to ownership under chapter 38-18.1 owns the mineral interest and the proceeds from the mineral interest from the date of succession. The trustee shall invest funds in a prudent manner. Upon receipt, fifty percent of the moneys paid to the trustee must be credited to the general fund of the county in which the mineral interest is located to defray the costs of administration. Funds held in trust are subject to the laws governing abandoned property as provided in chapter 47-30.2.

38-13.1-04. Filing of addresses — Fee.

A person claiming an interest in the mineral, leasehold, or royalty interest underlying a tract of land that is the subject of a trust proceeding under section 38-13.1-01 may record with the recorder of each county in which the land is located a notice containing the person’s address and a description of the person’s mineral, leasehold, or royalty interest. Recording the notice creates a rebuttable presumption that the person owns the interest claimed.

38-14.1-01. Declaration of findings and intent.

The legislative assembly finds and declares that:

1. Many surface coal mining operations may result in disturbances of surface areas that adversely affect the public welfare by diminishing the utility of land for commercial, industrial, residential, cultural, educational, scientific, recreational, agricultural, and forestry purposes, by causing erosion, by polluting the water, by destroying fish and wildlife habitats, by impairing natural beauty, by damaging the property of citizens, by creating hazards dangerous to life and property, by degrading the quality of life in local communities, and by counteracting governmental programs and efforts to conserve soil, water, other natural resources, and cultural resources.
2. The expansion of coal mining to meet the nation’s energy needs makes even more urgent the establishment of appropriate standards to minimize damage to the environment and to productivity of the soil and to protect the health and safety of the public.
3. Surface mining and reclamation technology as now developed requires effective and reasonable regulation of surface coal mining operations in accordance with the requirements of this chapter to minimize so far as practicable the adverse social, economic, and environmental effects of such mining operations.
4. Surface coal mining operations contribute to the economic well-being, security, and general welfare of the state and should be conducted in an environmentally sound manner.
5. Surface coal mining and reclamation operations should be so conducted as to aid in maintaining and improving the tax base, to provide for the conservation, development, management, and appropriate use of all the natural resources of affected areas for compatible multiple purposes, and to ensure the restoration of affected lands designated for agricultural purposes to the level of productivity equal to or greater than that which existed in the permit area prior to mining.
6. Warrantless inspections are necessary in this state to ensure effective enforcement of surface coal mining and reclamation operation requirements.

38-14.1-02. Definitions.

Wherever used or referred to in this chapter, unless a different meaning clearly appears from the context:

1. “Alluvial valley floors” means the unconsolidated stream-laid deposits holding streams where water availability is sufficient for subirrigation or flood irrigation agricultural activities but does not include upland areas which are generally overlain by a thin veneer of colluvial deposits composed chiefly of sediment from sheet erosion, deposits by unconcentrated runoff or slope wash, together with talus, other mass movement accumulation, and windblown deposits.
2. “Approximate original contour” means that surface configuration achieved by backfilling and grading an area affected by surface coal mining operations so that the reclaimed area closely resembles the general surface configuration of the land prior to being affected by surface coal mining operations and blends into and complements the surrounding undisturbed land.
3. “Coal” means a dark-colored compact and earthy organic rock with less than forty percent inorganic components, based on dry material, formed by the accumulation and decomposition of plant material. The term includes consolidated lignitic coal, in both oxidized and nonoxidized forms, having less than eight thousand three hundred British thermal units per pound [453.59 grams], moist and mineral matter free, whether or not the material is enriched in radioactive materials. The term does not include commercial leonardite.
4. “Commercial leonardite” means a dark-colored, soft, earthy organic rock formed from the oxidation of lignite coal, and is produced from a mine that has as its only function for supply for purposes other than gasification or combustion to generate electricity.
5. “Commission” means the public service commission, or such other department, bureau, or commission as may lawfully succeed to the powers and duties of that commission. The commission is the state regulatory authority for all purposes relating to the Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 445 et seq.].
6. “Extended mining plan” means a written statement setting forth the matters specified in section 38-14.1-15 and covering the estimated life of the surface coal mining operation.
7. “Final cut” means the last pit created in a surface mining pit sequence.
8. “Highwall” and “endwall” mean those sides of the pit adjacent to unmined land.
9. “Imminent danger to the health and safety of the public” means the existence of any condition or practice, or any violation of a permit or other requirement of this chapter in a surface coal mining and reclamation operation, which condition, practice, or violation could reasonably be expected to cause substantial physical harm to persons outside the permit area before such condition, practice, or violation can be abated. A reasonable expectation of death or serious injury before abatement exists if a rational person, subjected to the same conditions or practices giving rise to the peril, would not expose the person’s self to the danger during the time necessary for abatement.
10. “Operator” means any individual, person, partnership, firm, association, society, joint stock company, company, cooperative, corporation, limited liability company, or other business organization, or any department, agency, or instrumentality of the state, local, or federal government, or any governmental subdivision thereof including any publicly owned utility or publicly owned corporation of the state, local, or federal government, engaged in or controlling a surface coal mining operation. Operator does not include those who remove or intend to remove two hundred fifty tons [226.80 metric tons] or less of coal or commercial leonardite from the earth by coal or commercial leonardite mining within twelve consecutive calendar months in any one location or who remove any coal or commercial leonardite pursuant to reclamation operations under chapter 38-14.2.
11. “Other minerals” means clay, stone, sand, gravel, metalliferous and nonmetalliferous ores, and any other solid material or substances of commercial value occurring within five hundred feet [152.4 meters] or less of the land surface and which are excavated in solid form from natural deposits on or in the earth, exclusive of coal or commercial leonardite and those minerals which occur naturally in liquid or gaseous form.
12. “Other suitable strata” means those portions of the overburden determined by the commission to be suitable for meeting the requirements of subsections 2 and 17 of section 38-14.1-24 and based on data submitted by the permit applicant.
13. “Overburden” means all of the earth and other materials, with the exception of suitable plant growth material, which lie above natural deposits of coal or commercial leonardite and also means such earth and other materials, with the exception of suitable plant growth material, disturbed from their natural state by surface coal or commercial leonardite mining operations.
14. “Performance bond” means a surety bond, collateral bond, self-bond, deposit, a bond issued under the state surface mining and reclamation bond fund, any alternative form of security approved by the commission, or combination thereof, by which a permittee assures faithful performance of all requirements of this chapter.
15. “Permit” means a permit to conduct surface coal mining and reclamation operations issued by the commission.
16. “Permit applicant” means a person or operator applying for a permit.
17. “Permit area” means the area of land approved by the commission for surface coal mining operations which shall be readily identifiable by appropriate markers on the site.
18. “Permit renewal” means the extension of the permit term for areas within the boundaries of the initial or existing permit, upon the expiration of the initial or existing permit term.
19. “Permit revision” means the modification of permit provisions during the term of the permit and includes changes in the mining and reclamation plans, incidental boundary extensions, and the transfer, assignment, or sale of rights granted under the permit.
20. “Permit term” means a period of time beginning with the date upon which a permit is given for surface coal mining and reclamation operations under the provisions of this chapter, and ending with the expiration of the next succeeding five years plus any renewal of the permit granted under this chapter.
21. “Permittee” means a person or operator holding a permit.
22. “Person” means an individual, partnership, firm, association, society, joint stock company, company, cooperative, corporation, limited liability company, or other business organization.
23. “Pit” means a tract of land, from which overburden, coal, or commercial leonardite, or any combination of overburden, coal, or commercial leonardite has been or is being removed for the purpose of surface coal mining operations.
24. “Prime farmland” means lands as prescribed by commission regulation that have the soil characteristics and moisture supply needed to produce sustained high yields of adapted crops economically when treated and managed, including management of water, according to modern farming methods. Furthermore, such lands historically have been used for intensive agricultural purposes and are large enough in size to constitute a viable economic unit.
25. “Prime soils” means those soils that have the required soil characteristics (including slope and moisture supply) needed to produce sustained high yields of adapted crops, as determined by the state conservationist of the United States department of agriculture soil conservation service.
26. “Reclaimed” or “reclaim” means conditioning areas affected by surface coal mining operations to make them capable of supporting the uses which they were capable of supporting prior to any mining, or higher or better uses, pursuant to subsection 2 of section 38-14.1-24.
27. “Reclamation plan” means a plan submitted by an applicant for a permit which sets forth a plan for reclamation of the proposed surface coal mining operations pursuant to subsection 2 of section 38-14.1-14.
28. “Refuse” means all waste material directly connected with the production of coal or commercial leonardite mined by surface coal mining operations.
29. “Soil amendments” means those materials added by the operator to the replaced overburden or suitable plant growth material, or both, to improve the physical or chemical condition of the soil in its relation to plant growth capability.
30. “Soil classifier” means a professional soil classifier as defined in subsection 4 of section 43-36-01.
31. “Soil survey” means the identification and location of all suitable plant growth material within the proposed permit area and an accompanying report that describes, classifies, and interprets for use such materials.
32. “State program” means the program established by the state of North Dakota in accordance with the requirements of section 503 of the federal Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 47030 U.S.C. 1253] to regulate surface coal mining and reclamation operations on lands within the state of North Dakota.
33. “Suitable plant growth material” means that soil material (normally the A, B, and portions of the C horizons) located within the proposed permit area which, based upon a soil survey, is found by the commission to be the most acceptable as a medium for plant growth when respread on the surface of regraded areas.
34. “Surface coal mining and reclamation operations” means surface coal mining operations and all activities necessary and incidental to the reclamation of such operations after July 1, 1979.
35. “Surface coal mining operations” means:
    1. Activities affecting the surface of lands in connection with a surface coal or commercial leonardite mine. Such activities include extraction of coal or commercial leonardite from coal or commercial leonardite refuse piles, excavation for the purpose of obtaining coal or commercial leonardite, including such common methods as contour, strip, auger, box cut, open pit, and area mining, the uses of explosives and blasting, and in situ distillation or retorting, leaching or other chemical or physical processing, and the cleaning, concentrating, or other processing or preparation, and loading of coal or commercial leonardite at or near the minesite, except that such activities do not include coal or commercial leonardite exploration subject to chapter 38-12.1, or the extraction of coal or commercial leonardite incidental to reclamation operations under chapter 38-14.2; and
    2. The areas upon which such activities occur or where such activities disturb the natural land surface. Such areas shall also include any adjacent land the use of which is incidental to any such activities, all adjacent lands affected by the construction of new roads or the improvement or use of existing roads to gain access to the site of such activities and for haulage, and excavations, workings, impoundments, dams, refuse banks, dumps, stockpiles, overburden piles, spoil banks, culm banks, tailings, holes or depressions, repair areas, storage areas, processing areas, shipping areas, and other areas upon which are sited structures, facilities, or other property or materials on the surface, resulting from or incident to such activities.
36. “Unwarranted failure to comply” means the failure of a permittee to prevent the occurrence of any violation of the permittee’s permit or any requirement of this chapter due to indifference, lack of diligence, or lack of reasonable care, or the failure to abate any violation of such permit or this chapter due to indifference, lack of diligence, or lack of reasonable care.

38-14.1-03. Powers and duties of the commission.

The commission shall have and may exercise the following powers and duties:

1. To establish a program to protect society and the environment from the adverse effects of surface coal mining operations.
2. To assure that surface coal mining operations are so conducted as to protect the environment.
3. To assure that adequate procedures are undertaken to reclaim surface areas as contemporaneously as possible with the surface coal mining operations.
4. To assure that surface coal mining operations are not conducted where reclamation as required by this chapter is not feasible.
5. To assure that appropriate procedures are provided for public participation in the development, revision, and enforcement of regulations, standards, reclamation plans, or programs established by the commission under this chapter.
6. To encourage the voluntary cooperation of persons or affected groups to achieve the purposes of this chapter.
7. To encourage and support training, research, experiments, and demonstrations, to utilize the expertise of other state agencies, and to collect and disseminate information relating to surface mining and reclamation of lands and waters affected by surface mining.
8. To examine and act upon all plans and specifications submitted by the permit applicant for the method of operation, backfilling, grading, and for the reclamation of the area of land affected by the permit applicant’s operation.
9. To attach conditions to all permits and permit revisions as necessary to carry out the provisions of this chapter.
10. To issue permits for surface coal mining operations in accordance with the requirements of this chapter and the Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 445; 30 U.S.C. 1201 et seq.].
11. To promulgate such regulations as may be necessary to carry out the purposes and provisions of this chapter and the Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 445; 30 U.S.C. 1201 et seq.].
12. To adopt rules consistent with state law in consultation with the state geologist, department of environmental quality, and department of water resources for the protection of the quality and quantity of waters affected by surface coal mining operations.
13. To promulgate regulations requiring the training, examination, and certification of persons engaged in or directly responsible for blasting or use of explosives in surface coal mining and reclamation operations.
14. To exercise general supervision and administration and enforcement of this chapter and all regulations and orders promulgated thereunder and all incidental powers necessary to carry out the purposes of this chapter, including the utilization of the powers of other state agencies by delegation to those other state agencies, by cooperative agreement or regulation, certain responsibilities to avoid duplication of effort, to promote the efficient use of personnel, and to assure effective reclamation of surface mined lands in the state of North Dakota.
15. To make investigations and inspections which may be deemed necessary to ensure compliance with any provision of this chapter. The commission or its authorized representatives, upon presentation of appropriate credentials, shall have the right of entry without a warrant for the purposes of such investigations or inspections.
16. To issue such orders as may be necessary to effectuate the purposes of this chapter and enforce the same by all appropriate administrative and judicial procedures.
17. To hold any hearings and informal conferences necessary for the proper administration of this chapter.
18. To reclaim, in keeping with this chapter, any land with respect to which a performance bond has been forfeited.
19. To exercise those additional powers and duties relative to the designation of lands unsuitable for surface coal mining operations granted in section 38-14.1-04.
20. To take all action necessary and appropriate including the promulgation of regulations for all provisions of this chapter to secure for this state the benefits of and to implement the Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 445; 30 U.S.C. 1201 et seq.] and similar federal acts.
21. To advise, consult, and cooperate with other agencies of the state, other states and interstate agencies, and with affected groups, political subdivisions, and industries in furtherance of the purposes of this chapter.
22. To accept and administer loans and grants from the federal government and from other sources, public or private, for carrying out any functions pursuant to this chapter, which loans and grants may not be expended for other than the purposes for which provided.
23. To provide by regulation standards and procedures for specific variances to any permittee so long as the permittee affirmatively demonstrates that the requested variance provides equal or greater protection to the environment and to public health and safety and will achieve reclamation consistent with the purposes of this chapter.
24. To provide by regulation for the conservation and utilization of other minerals found within the permit area during surface coal mining and reclamation operations in consultation with the state geologist and to approve plans for the use of such other minerals outside the permit area so long as the permittee affirmatively demonstrates that such removal is lawful and will provide equal or greater protection to the environment and to public health and safety and will achieve reclamation consistent with the purposes of this chapter.
25. To exercise the full reach of the state constitutional powers wherever necessary to ensure the protection of the public interest through effective control of surface coal mining operations.
26. To establish a performance bonding system and an alternative to the performance bonding system which achieve the objectives and purposes of this chapter.

38-14.1-04. Powers and duties of the commission relative to designation of lands unsuitable for surface coal mining operations.

The commission has the following powers and duties:

1. To be responsible for surface coal mining lands review.
2. To develop a database and an inventory system which will permit proper evaluation of the capacity of different land areas of the state to support and permit reclamation of surface coal mining operations.
3. To develop a method or methods for implementing land use planning decisions concerning surface coal mining operations.
4. To develop procedures ensuring proper notice, opportunities for public participation, including a public hearing prior to making a designation or redesignation, pursuant to this chapter.
5. To develop procedures whereby determinations of the unsuitability of land for surface coal mining, as provided for in this chapter, are integrated as closely as possible with land use planning and regulation processes at the state and local levels.
6. To develop a planning process in order to designate which, if any, land areas are unsuitable for all or certain types of surface coal mining operations, providing said decisions are based upon competent and scientifically sound data and information and accomplished pursuant to the procedures of sections 38-14.1-05 and 38-14.1-06.

38-14.1-04.1. Reclamation research advisory committee. [Repealed]

Repealed by S.L. 1997, ch. 321, § 1.

38-14.1-04.2. Advisory committee responsibilities. [Repealed]

Repealed by S.L. 1997, ch. 321, § 1.

38-14.1-04.3. Reclamation research objectives. [Repealed]

Repealed by S.L. 1997, ch. 321, § 1.

38-14.1-05. Areas unsuitable for all or certain surface coal mining operations.

1. Upon petition pursuant to section 38-14.1-06, the commission shall designate an area as unsuitable for all or certain types of surface coal mining operations if the commission determines, after hearings conducted in accordance with this chapter, that reclamation pursuant to the requirements of this chapter is not technologically and economically feasible.
2. Upon petition pursuant to section 38-14.1-06, and after hearings conducted in accordance with this chapter, the commission may designate an area as unsuitable for certain types of surface coal mining operations if such operations will:
   1. Be incompatible with existing state or local land use plans or programs;
   2. Affect fragile or historic lands in which such operations could result in significant damage to important historic, cultural, scientific, and aesthetic values and natural systems;
   3. Affect renewable resource lands in which such operations could result in a substantial loss or reduction of productivity of long-range water supply or food or fiber products, and such lands include aquifers and aquifer recharge areas; or
   4. Affect natural hazard lands in which such operations could substantially endanger life and property, and such lands include areas subject to frequent flooding and areas of unstable geology.
3. Prior to designating any land area as unsuitable for surface coal mining operations, the commission shall prepare a detailed statement on:
   1. The potential coal or commercial leonardite resources of the area;
   2. The demand for coal or commercial leonardite resources; and
   3. The impact of such designation on the environment, the economy, and the supply of coal or commercial leonardite.

38-14.1-06. Right to petition — Notice and hearing — Right to intervene.

1. Any person having an interest which is or may be adversely affected, including state agencies other than the commission, has the right to petition the commission to hold a hearing for the purpose of having an area designated as unsuitable for surface coal mining operations, or to have such designation terminated. Such petition must contain allegations of facts with supporting evidence which would tend to establish the allegations.
2. Prior to designating an area as unsuitable for surface coal mining operations and within ten months after receipt of a complete petition pursuant to subsection 1, the commission shall hold a public hearing in the locality of the affected area.
3. Notice of the hearing must be published in the official newspaper of each county wherein the affected area lies and in other daily newspapers of general circulation in the locality of the affected area at least once a week for four successive weeks prior to the hearing. The names and post-office addresses of surface and subsurface mineral rights owners must be determined as specified by the commission from the records of the county recorder in each affected county. Notice of the hearing must be sent by certified mail to the owners of surface rights and subsurface mineral rights in the affected area and to the county auditor of each county wherein such area lies no later than two weeks prior to the date of the hearing.
4. After a person having an interest which is or may be adversely affected has filed a petition and before the hearing, as required by this section, any person may intervene by filing allegations of facts with supporting evidence which would tend to establish the allegations.
5. Within sixty days after the hearing, the commission shall issue and furnish to all petitioners and any other party to the hearing a written decision regarding the petition and reasons therefor.
6. In the event that all petitioners stipulate agreement prior to the requested hearing, and withdraw their request, such hearing need not be held.
7. If petitions are filed on lands adjacent to or in close proximity to each other, hearings required by each petition may be consolidated by the commission.

38-14.1-07. Mining is prohibited.

After August 3, 1977, and subject to valid existing rights, no surface coal mining operations except those which existed on August 3, 1977, may be permitted:

1. On any lands within the boundaries of units of the North Dakota state park system, the national park system, the national wildlife refuge systems, the national system of trails, the national wilderness preservation system, the national wild and scenic rivers system, including study rivers designated under section 5(a) of the Wild and Scenic Rivers Act [Pub. L. 90-542; 82 Stat. 906; 16 U.S.C. 1271 et seq.] and national recreation areas designated by Act of the Congress of the United States.
2. On any federal lands within the boundaries of any national forest unless the requirements of 30 U.S.C. 1272(e)(2) are met.
3. Within three hundred feet [91.44 meters] of any publicly owned park or places included in the state historic sites registry or the national register of historic places unless approved jointly by the commission and the federal, state, or local agency with jurisdiction over the park or the historic site.
4. Within one hundred feet [30.48 meters] of the outside right-of-way line of any public road, except where mine access roads or haulage roads join such right-of-way line and except that the commission with the approval of the proper authority may permit such roads to be relocated or the area affected to lie within one hundred feet [30.48 meters] of such road, if after public notice and the opportunity for public hearing in the locality a written finding is made by the proper authority that the interests of the public and the landowners affected thereby will be protected.
5. Within five hundred feet [152.4 meters] of any occupied dwelling unless approved by the owner thereof, nor within three hundred feet [91.44 meters] of any public building, school, church, community, or institutional building, or within one hundred feet [30.48 meters] of a cemetery.

38-14.1-08. Mineral exploration not prohibited.

The designation of an area as unsuitable for all or certain types of surface coal mining operations does not prevent the mineral exploration of such an area.

38-14.1-09. Unsuitable lands — Savings provision.

The requirements and provisions of this chapter dealing with designation of lands unsuitable for all or certain types of surface coal mining operations (sections 38-14.1-04 through 38-14.1-08) do not apply:

1. To lands on which surface coal mining operations are being conducted on July 1, 1979, or under a permit issued pursuant to this chapter.
2. To lands where substantial legal and financial commitments in surface coal mining operations were in existence prior to January 4, 1977.
3. To lands where a permit application has been filed pursuant to the provisions of this chapter and the petition to have an area designated as unsuitable for surface coal mining operations has not been filed within thirty days of the last publication of the notice required by subsection 1 of section 38-14.1-18.

38-14.1-10. Necessity of permit — Exception.

It is unlawful for any operator to engage in surface coal mining operations without first obtaining from the commission a permit to do so. All existing surface coal mining operations must on July 1, 1979, comply with this chapter and all rules adopted under the chapter, except that lands from which the coal has been removed before July 1, 1979, are governed by the reclamation standards that were in effect at the time of coal removal from the lands. A person or operator shall engage in the inventorying and evaluation of cultural resources upon compliance with section 55-03-01 and may implement a cultural resource mitigation plan approved by the director of the state historical society before applying for or receiving an approved surface coal mining and reclamation permit.

38-14.1-11. Reapplication for permit under approved state program.

No later than two months following approval of the state program in accordance with the requirements of section 503 of the federal Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 470; 30 U.S.C. 1253], regardless of litigation contesting that approval, all permittees who expect to continue to conduct surface coal mining operations after the expiration of eight months from the approval of such state program shall file an application with the commission for a new permit in accordance with the requirements of section 38-14.1-13. Such application must cover those lands to be surface mined after the expiration of eight months from the approval of the state program. The commission shall process such applications and grant or deny a permit within eight months after the date of approval of the state program.

38-14.1-12. Permits — Term — Termination.

1. All permits for surface coal mining and reclamation operations must comply with the standards of this chapter, any regulations promulgated thereunder, and such other requirements as the commission shall establish.
2. All permits issued pursuant to the requirements of this chapter must be issued for a term not to exceed five years; provided, that if the applicant demonstrates that a specified longer term is reasonably needed to allow the applicant to obtain necessary financing for equipment and the opening of the operation and if the application is full and complete for such specified longer term, the commission may grant a permit for such longer term.
3. A permit terminates if the permittee has not commenced the surface coal mining operations covered by such permit within three years of the issuance of the permit, provided that:
   1. The commission may grant reasonable extensions of time upon a showing that such extensions are necessary by reason of litigation precluding such commencement or threatening substantial economic loss to the permittee, or by reason of conditions beyond the control and without the fault or negligence of the permittee.
   2. With respect to coal to be mined for use in a synthetic fuel facility or specific major electric generating facility, the permittee must be deemed to have commenced surface coal mining operations at such time as the construction of the synthetic fuel or generating facility is initiated.

38-14.1-13. Permit applications — General requirements.

1. Any person or operator desiring to engage in surface coal mining operations shall make written application to the commission for a permit. Application for such permit must be made upon a form furnished by the commission. Included in the application must be:
   1. A bond or security to attach to the lands for which a permit is sought from and after the time a permit is granted pursuant to the requirements of section 38-14.1-16.
   2. A nonrefundable filing fee of five hundred dollars, plus ten dollars for each acre [.40 hectare] included in the permit application.
   3. Mining and reclamation plans and other information required to be submitted pursuant to section 38-14.1-14.
   4. An extended mining plan as required by section 38-14.1-15.
2. Each applicant for a surface coal mining and reclamation permit shall file a copy of the applicant’s application for public inspection with the office of the county auditor for each county where the mining is proposed to occur.
3. Upon request by the permit applicant, the commission, in its discretion, may designate specific information included in the plans required by subdivisions c and d of subsection 1 as exempt from disclosure under section 44-04-18, provided such specific information pertains only to the analysis of the chemical and physical properties of the coal or commercial leonardite (excepting information regarding such mineral or elemental contents which is potentially toxic in the environment). Each request must be accompanied by a statement specifying the need for nondisclosure, which statement must be considered part of the permit application to be filed for public inspection as specified in subsection 2. The confidential information is exempt for a period not to exceed ten years subsequent to the date on which the request for nondisclosure was filed, unless it is demonstrated by the permit applicant that such period should be further extended in order to prevent possible resulting harm to the permit applicant, or the applicant’s successors and assigns.

38-14.1-14. Permit applications — Mining and reclamation plans.

1. The permit application must be submitted in a manner satisfactory to the commission and must contain among other things:
   1. A legal description of the land for which a permit is sought, so that it may be identified and distinguished from other lands.
   2. An identification of all lands, interests in lands, or options on such interests (both surface and subsurface) held by the applicant or pending bids on interests in lands by the applicant, which lands are contiguous to the area to be covered by the permit.
   3. The names and addresses of all of the following:
      1. The permit applicant.
      2. Every legal or equitable owner of record (surface and subsurface) of the property for which a permit is sought.
      3. The holders of record (surface and subsurface) of any leasehold interest in the property.
      4. Any purchaser of record (surface and subsurface) of the property under a real estate contract.
      5. The operator, if the operator is a person different from the permit applicant.
      6. If any of these are business entities other than a single proprietor, the names and addresses of the principals, officers, and resident agent.
   4. The names and addresses of the owners of record of all surface and subsurface areas adjacent to any part of the permit area as prescribed by the commission by regulation.
   5. If the applicant is a partnership, corporation, limited liability company, association, or other business entity, the following where applicable:
      1. The names and addresses of every officer, manager, partner, director, governor, or person performing a function similar to a director, of the permit applicant.
      2. The name and address of any person owning of record ten percent or more of any class of voting stock or membership interests of the applicant.
      3. A list of all names under which the applicant, partner, principal shareholder, or principal member previously operated a surface coal mining operation within any state within the five-year period preceding the date of the application.
   6. A statement of any current or previous surface coal mining permits in any state held by the applicant and the permit identification for said permits and for each pending application.
   7. A schedule listing any and all notices of violation of this chapter, the Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 445; 30 U.S.C. 1201 et seq.], and any law, rule, or regulation of the United States or of the state of North Dakota, or of any department or agency in the United States or of the state of North Dakota pertaining to air or water environmental protection incurred by the applicant in connection with any surface coal mining operation during the three-year period prior to the date of application. The schedule must also indicate the final resolution of any such notice of violation.
   8. A statement of whether the permit applicant, any subsidiary, affiliate, or persons controlled by or under common control with the permit applicant, has ever held any federal or state mining permit which in the five-year period prior to the date of submission of the application has been suspended or revoked, or has had a mining bond or similar security deposited in lieu of bond forfeited and, if so, a brief explanation of the facts involved.
   9. A copy of the permit applicant’s advertisement as required in section 38-14.1-18.
   10. A map or plan, to an appropriate scale, clearly showing the land to be affected within the permit area upon which the applicant has the legal right to enter and commence surface coal mining operations.
   11. A copy of those documents upon which the permit applicant bases the applicant’s legal right to enter and commence surface coal mining operations and whether that right is the subject of pending court litigation.
   12. A description of the type and method of surface coal mining operation that exists or is proposed, the engineering techniques proposed or used, and the equipment used or proposed to be used.
   13. The anticipated or actual starting and termination dates of each phase of the mining operations.
   14. The name of the watershed and location of the surface stream or tributary into which surface and pit drainage will be discharged, including the drainage permit application to the department of water resources, if required.
   15. A determination by the permit applicant of the probable hydrologic consequences of the mining and reclamation operations, both on and off the minesite, with respect to the hydrologic regime, quantity and quality of water in surface and ground water systems, including the dissolved and suspended solids under seasonal flow conditions and the collection of sufficient data for the minesite and surrounding areas so that an assessment can be made by the commission of the probable cumulative impacts of all anticipated mining in the area upon the hydrology of the area and particularly upon water availability.
   16. The climatological factors that are peculiar to the locality of the land to be affected, including the average seasonal precipitation, the average direction and velocity of prevailing winds, and the seasonal temperature ranges.
   17. Topographic maps to an appropriate scale, as prescribed by the commission by regulation, clearly showing the land to be affected as of the date of the application. Such a map, among other things specified by the commission, must show all of the following information:
       1. All manmade features.
       2. All boundaries of the land to be affected.
       3. The boundary lines and names of present owners of record of all surface areas abutting the permit area.
       4. The location of all buildings within one-half mile [804.67 meters] of the permit area.
   18. Cross sections, maps or plans of the land to be affected, including the actual area to be mined, prepared by or under the direction of and certified by a registered professional engineer, a registered land surveyor, or a qualified professional geologist with assistance from experts in related fields, showing pertinent elevation and location of test borings or core samplings and depicting all of the following information:
       1. The nature and depth of the various strata of overburden.
       2. The location of subsurface water, if encountered, and its quality.
       3. The nature and thickness of any coal, commercial leonardite, or rider seam above the coal or commercial leonardite seam to be mined.
       4. The nature of the stratum immediately beneath the coal or commercial leonardite seam to be mined.
       5. All mineral crop lines and the strike and dip of the coal or commercial leonardite to be mined, within the area of land to be affected.
       6. Existing or previous surface mining limits.
       7. The location and extent of known workings of any underground mines, including mine openings to the surface.
       8. The location of aquifers.
       9. The estimated elevation of the water table.
       10. The location of spoil, waste, or refuse areas, suitable plant growth material stockpiling areas and, if necessary, stockpiling areas for other suitable strata.
       11. The location of all impoundments for waste or erosion control.
       12. Any settling or water treatment facility.
       13. Constructed or natural drainways and the location of any discharges to any surface body of water on the area of land to be affected or adjacent thereto.
       14. Profiles at appropriate cross sections of the anticipated final surface configuration that will be achieved pursuant to the applicant’s proposed reclamation plan.
   19. A statement by the applicant of the result of test borings or core samplings from the permit area, including logs of the drill holes, the thickness of the coal or commercial leonardite seam found, an analysis of the chemical properties of such coal or commercial leonardite, the sulfur content of any coal or commercial leonardite seam, chemical analysis of potentially toxic forming sections of the overburden, and chemical analysis of the stratum lying immediately underneath the coal or commercial leonardite to be mined. The provisions of this subdivision may be waived by the commission with respect to the specific application by a written determination that such requirements are unnecessary.
   20. A soil survey of all the suitable plant growth material within the permit area. Such survey must also locate and identify prime soils in the permit area. The survey must be made by a professional soil classifier as described in subsection 4 of section 43-36-01.
   21. Cultural resource information, including all of the following:
       1. A statement evidencing compliance with the requirements of chapter 55-03.
       2. A cultural resource inventory, including all buildings, structures, and objects referred to in section 55-03-01, covering the proposed permit and adjacent area conducted in accordance with guidelines developed by the state historic preservation office and the director of the state historical society.
       3. An evaluation of each cultural resource site which will be affected by any surface coal mining and reclamation operation. The evaluation must include sufficient information to allow the director to determine if the cultural resource site is significant in accordance with the national register criteria [36 CFR 60.4] and guidelines established by the director.
       4. An appropriately scaled map identifying the location of each cultural resource site determined significant by the director within the proposed permit area and the adjacent area.
       5. A description of adverse effects on significant cultural resources that may result from the proposed surface coal mining operations.
       6. A statement that the permit applicant will inform the director and the commission of any discovery within the permitted area of previously unrecorded archaeological, cultural, or historic materials and allow reasonable time for the director to determine the significance of the discovery and, if determined significant, to approve a mitigation plan.
       7. A plan approved by the director that has been or will be used to mitigate adverse effects on significant sites that are known, or a statement that such a plan will be approved and implemented before any adverse effects. Any mitigation plan that has not begun implementation within five years of plan approval is subject to review by the director.
2. Each applicant for a permit shall submit as part of the permit application a reclamation plan that must include, in the degree of detail necessary to demonstrate that reclamation as required by this chapter can be accomplished, a statement of:
   1. The condition of the land to be covered by the permit prior to any mining, including all of the following:
      1. The uses existing at the time of the application, and if the land has a history of previous mining, the uses which preceded any mining.
      2. The capability of the land prior to any mining to support a variety of uses giving consideration to soil and foundation characteristics, topography, vegetative cover, and the soil survey prepared pursuant to subdivision t of subsection 1.
      3. The productivity of the land prior to mining, including appropriate identification of prime farmlands, as well as the average yield of food, fiber, and forage products from such lands obtained under high levels of management.
   2. The use which is proposed to be made of the land following reclamation, including a discussion of the utility and capacity of the reclaimed land to support a variety of alternative uses and the relationship of such use to existing land use policies and plans, the surface owner’s preferred use, and the comments of state and local governments or agencies thereof, which would have to initiate, implement, approve, or authorize the proposed use of the land following reclamation.
   3. The consideration which has been given to maximize the utilization and conservation of the coal or commercial leonardite being recovered so that re-affecting the land in the future can be minimized.
   4. The consideration which has been given to making the surface mining and reclamation operations consistent with surface owner plans and applicable state and local land use plans and programs.
   5. The consideration which has been given to developing the reclamation plan in a manner consistent with local physical, environmental, and climatological conditions, including the use made of hydrologic and geochemical information in addressing problems of subsurface drainage and stability.
   6. A detailed description of how the proposed postmining land use is to be achieved and the necessary support activities which may be needed to achieve the proposed land use.
   7. The engineering techniques proposed to be used in mining and reclamation and a description of the major equipment.
   8. Plans for:
      1. The control of surface water drainage and of water accumulation.
      2. Backfilling, soil stabilization, compacting, grading, and appropriate revegetation.
      3. Soil reconstruction, replacement, and stabilization, pursuant to the performance standards in subsections 5 and 6 of section 38-14.1-24.
   9. A detailed description of the measures to be taken during the mining and reclamation process to assure the protection of:
      1. The quality of surface and ground water systems, both onsite and offsite, from adverse effects of the mining and reclamation process.
      2. The rights of present users to such water.
      3. The quantity of surface and ground water systems, both onsite and offsite, from adverse effects of the mining and reclamation process or to provide alternative sources of water where such protection of quantity cannot be assured.
   10. The steps to be taken to comply with applicable air quality and water quality and quantity laws and regulations and any applicable health and safety standards.
   11. A detailed estimated timetable for the accomplishment of each major step in the reclamation plan.
   12. An estimate of the cost per acre [.40 hectare] of the reclamation, including a statement as to how the applicant plans to comply with each of the requirements set out in section 38-14.1-24.
   13. The results of test borings which the applicant has made of the area to be covered by the permit, or other equivalent information and data, in a form satisfactory to the commission, including the location of subsurface water and an analysis of the chemical properties, including toxic forming properties of the mineral and overburden.
3. Each applicant for a permit shall submit to the commission as part of the permit application a certificate issued by an insurance company authorized to do business in this state certifying that the applicant has a public liability insurance policy in force for the surface coal mining and reclamation operations for which such permit is sought. Such policy must provide for personal injury and property damage protection in an amount adequate to compensate any persons, except employees covered by workforce safety and insurance pursuant to chapter 65-01, damaged as a result of surface coal mining and reclamation operations, including use of explosives, and entitled to compensation under the applicable provisions of state law. Such policy must be maintained in full force and effect during the terms of the permit or any renewal, including the length of all reclamation operations. The policy must include a rider requiring that the insurer notify the commission whenever substantive changes are made in the policy, including any termination or failure to renew. All operations must cease if the policy is terminated or is not renewed.
4. Each applicant for a surface coal mining and reclamation permit shall submit to the commission as part of the permit application a blasting plan which must outline the procedures and standards by which the permittee will meet the provisions of subsection 13 of section 38-14.1-24.

38-14.1-15. Permit applications — Extended mining plan.

1. An applicant shall submit as part of a permit application a plan identifying the lands subject to surface coal mining operations over the estimated life of those operations and the size, sequence, and timing of the subareas for which it is anticipated that individual permits will be sought.
2. The permittee shall annually advise the commission of the status of the plan and shall amend such plan if changes are made in anticipated mining operations or if updated information is available.

38-14.1-16. Performance bond — Amount — Sufficiency of surety — Amount of forfeiture.

1. As part of a surface coal mining and reclamation permit application, the permit applicant shall file with the commission, on a form prescribed and furnished by the commission, a bond for performance payable to the state of North Dakota and conditional upon faithful performance of all the requirements of this chapter and the requirements of all regulations promulgated pursuant to this chapter and all permit terms and conditions.
2. The commission shall set the bond amount sufficient to complete the reclamation plan in event of forfeiture. The bond for the permit area must be at least ten thousand dollars.
3. The bond must cover that area of land within the permit area upon which the permittee will initiate and conduct surface coal mining and reclamation operations for the ensuing year. Prior to initiating and conducting succeeding increments of surface coal mining and reclamation operations within the permit area, the permittee shall file with the commission an additional bond or bonds to cover such increments in accordance with this section.
4. Liability under the bond, subject to allowable releases under subsection 7 of section 38-14.1-17, is for the duration of the surface coal mining and reclamation operation and for a period coincident with the permittee’s responsibility for revegetation requirements in subsection 18 of section 38-14.1-24 and until such time as the lands included in the surface coal mining operation have been approved and released by the commission. The bond must be executed by the permit applicant and a corporate surety licensed to do business in North Dakota, except that the permit applicant may elect to deposit cash, negotiable bonds of the United States or of North Dakota, or negotiable certificates of deposit of any bank organized or transacting business in the state. The cash deposit or market value of such securities must be equal to or greater than the amount of the bond required for the bonded area.
5. Cash or securities so deposited must be deposited upon the same terms as the terms upon which surety bonds may be deposited. Such securities are security for the repayment of such negotiable certificate of deposit.
6. A bond filed as prescribed in subsection 2 for areas not yet affected by surface coal mining and reclamation operations may not be canceled by the surety unless it shall give not less than ninety days’ notice to the commission. For lands on which surface coal mining and reclamation operations are being conducted, the bond may not be canceled by the surety unless a substitute surety assuming liability from the initiation of such operations is obtained and is approved by the commission.
7. If the corporate surety’s license is suspended or revoked, the permittee, after notice from the commission, shall provide a substitute performance bond. If the permittee fails to make substitution within thirty days, the commission may suspend the permit. If substitution is not made within ninety days, the commission shall suspend the permit.
8. The commission may accept the bond of the permit applicant itself without separate surety when the permit applicant demonstrates to the satisfaction of the commission the existence of a suitable agent to receive service of process and a history of financial solvency and continuous operation sufficient for authorization to self-insure or bond such amount.
9. The amount of the bond or deposit required and the terms of each acceptance of the permit applicant’s bond must be adjusted by the commission from time to time as acreages [hectarages] affected by surface coal mining operations are increased or decreased or where the cost of future reclamation changes.
10. The amount of any forfeiture of the bond or security must be the amount prescribed in the permit for each acre [.40 hectare] or portion thereof on which surface coal mining and reclamation operations are being conducted.

38-14.1-17. Release of performance bond — Schedule — Notification — Public hearing.

1. The permittee may file a request with the commission for the release of all or part of a performance bond or deposit furnished subsequent to July 1, 1975. As part of any bond release application, the permittee shall submit:
   1. Within thirty days after filing of the request, a copy of an advertisement placed at least once a week for four successive weeks in the official newspaper of each county in which the surface coal mining operation is located. The advertisement must contain notification of all of the following:
      1. The precise location and the number of acres [hectares] of the land affected.
      2. The permit and the date approved.
      3. The amount of the bond filed and the portion sought to be released.
      4. The type and approximate dates of reclamation work performed and a description of the results achieved as they relate to the permittee’s approved reclamation plan.
      5. The right to file written objections and to request a public hearing or an informal conference as specified in subsection 2.
   2. Copies of letters which the permittee has sent to all owners of surface rights within the permit area proposed for bond release, adjoining property owners, state agencies specified in subsection 2 of section 38-14.1-21, heads of local governmental bodies, including the county commissioners and mayors of municipalities, planning agencies, sewage and water treatment authorities, and water companies in the locality in which the surface coal mining and reclamation operations took place, notifying them of the permittee’s intention to seek release from the bond. The letters must also contain notice of the right to file written objections and request an informal conference or a public hearing as specified in subsection 2.
2. Any person having a valid legal interest which is or may be adversely affected by release of the bond or the responsible officer or head of any state or local governmental agency which has jurisdiction by law or special expertise with respect to any environmental, social, or economic impact involved in the surface coal mining operation or is authorized to develop and enforce environmental standards with respect to such operations has the right to file written objections to the proposed release from bond with the commission and to request an informal conference pursuant to the procedures established in section 38-14.1-19 or a public hearing pursuant to procedures established in subsection 3 of section 38-14.1-30 within thirty days after the last publication of the notice required in subsection 1.
3. Upon receipt of the application for bond release, the commission shall, within thirty days, conduct an inspection and evaluation of the reclamation work involved. Such evaluation must consider, among other things, all of the following:
   1. The degree of difficulty to complete any remaining reclamation.
   2. Whether pollution of surface and subsurface water is occurring.
   3. The probability of continuance or future occurrence of such pollution.
   4. The estimated cost of abating such pollution.
   5. The effectiveness of soil erosion control measures employed.
   6. The level of bonding.
4. Time periods established by subsection 3 do not apply if effective inspections cannot be carried out because of inclement weather.
5. If the commission disapproves the application for release of the bond or portion thereof, the commission shall state the reasons for disapproval, recommend corrective actions necessary to secure said release, and provide the permittee with an opportunity for a formal public hearing pursuant to the procedures of section 38-14.1-30.
6. If the commission decides to release the bond either totally or in part, the commission shall notify the county commissioners and the mayors of the municipalities in the county in which the applicable surface coal mining operation is located by certified mail, at least thirty days prior to the actual release of all or a portion of the bond.
7. The commission may release bond as follows:
   1. When the permittee completes the backfilling, regrading, and drainage control in a bonded area, forty percent of the bond for the area may be released.
   2. After spreading suitable plant growth material or other suitable strata on the regraded land, twenty percent of the bond for the area may be released.
   3. After vegetation is established on the regraded land, additional bond may be released. The commission shall retain sufficient bond to cover third-party revegetation and associated costs for the period set by subsection 18 of section 38-14.1-24, provided:
      1. There may be no release under this subdivision until the requirements of subdivision b of subsection 8 of section 38-14.1-24 are met and prime farmlands are returned to productivity equal to or greater than nonmined prime farmland in the surrounding area under equivalent management practices.
      2. If there is a permanent silt dam impoundment under subsection 7 of section 38-14.1-24, bond may be released if the commission approves the commitments for future maintenance.
   4. When the permittee has successfully completed all surface coal mining and reclamation operations, and after the period set by subsection 18 of section 38-14.1-24, the remaining bond may be released. No bond may be fully released until all reclamation requirements are met.
8. Until reclamation has been accomplished to the satisfaction of the commission and until the bond has been fully released pursuant to subsection 7, control of the affected lands shall remain in the commission, and the commission may not allow use of the land which is inconsistent with reclamation.

The commission shall make written findings with its ruling to release or not to release all or part of the performance bond or deposit within sixty days from the filing of the request for bond release, if no informal conference or public hearing is held, and if there has been an informal conference or a public hearing, within thirty days thereafter.

38-14.1-18. Permit application procedures — Notice requirements.

1. At the time of filing an application for a permit, or for revision of an existing permit, the applicant shall submit to the commission a copy of the applicant’s advertisement of the ownership, precise location, and boundaries of the land proposed to be affected by the permit or permit revision and the location where the application is available for public inspection. Such advertisement must include notification to any person with an interest which is or may be adversely affected that a petition to designate an area as unsuitable for surface coal mining operations that is within the proposed permit area must be filed within thirty days of the last publication of the notice. The permit applicant shall place such advertisement in the official newspaper of each county wherein land to be included within the permit area lies and in other daily newspapers of general circulation in the locality of the proposed surface coal mining operation at least once a week for four consecutive weeks from the date of filing the application for a permit. Affidavits of publication for all advertisements published pursuant to this subsection must be furnished to the commission by the permit applicant.
2. The permit applicant shall also conduct a search of the records of the county recorder for each county for land within the proposed permit area and shall supply the commission with a list of names and addresses of all owners of surface rights of land within the proposed permit area and a list of all subsurface mineral owners within the proposed permit area. The lists must be submitted to the commission along with the application for a permit or permit revision.
3. Upon receipt of an application for a permit, or a revision thereof, the commission shall serve notice upon state agencies specified in subsection 2 of section 38-14.1-21, city and county governmental authorities, planning agencies, sewage and water treatment authorities, and water companies in the locality of the proposed surface coal mining operation of the permit applicant’s intent to surface mine the particularly described tract of land, indicating the application’s permit number and where a copy of the proposed mining and reclamation plan may be inspected, and informing them of their right to submit written comments or objections pursuant to this section with respect to the effect of the proposed surface coal mining operations on the environment within their area of responsibility.
4. In addition, the commission shall send by certified mail to all owners of surface rights of the land to be included within the permit area a notice of the opportunity to submit comments or objections pursuant to this section on the proposed permit application and its effect on the environment and the surface owner. This notice must also inform each surface owner of the surface owner’s right to request an informal conference within the time prescribed in subsection 5 and of the surface owner’s right to request a formal hearing within thirty days of the ruling of the commission pursuant to subsection 3 of section 38-14.1-30.
5. Any person having an interest which is or may be adversely affected, including state agencies other than the commission, has the right to file written comments or objections to the application for a proposed initial or revised permit and to submit a request for an informal conference pursuant to section 38-14.1-19, provided that the written comments or objections and any request for an informal hearing are made within thirty days after the last publication of the advertisement referred to in subsection 1.
6. Any comments, objections, and requests for an informal conference must immediately upon receipt be transmitted to the permit applicant by the commission and must be made available to the public at the same location as is the permit application.

38-14.1-19. Informal conference procedures.

1. If written objections or comments are filed and an informal conference is requested as provided in section 38-14.1-17, 38-14.1-18, or 38-14.1-28, the commission shall schedule such informal conference within forty-five days of the receipt of such request but in no event prior to the expiration of the thirty-day period allowed for submission of comments, objections, and requests in subsection 2 of section 38-14.1-17 or subsections 3, 4, and 5 of section 38-14.1-18.
2. The informal conference must be held in the locality of the proposed mining if the request for such conference so specifies. Date, time, and location of such informal conference must be advertised by the commission in the official newspaper of each county wherein land included in the proposed permit area lies and in other daily newspapers of general circulation in the locality of the proposed surface coal mining operation at least two weeks prior to the scheduled conference date.
3. Upon request of any party to the informal conference, the commission may arrange with the applicant access by the requesting party to the proposed mining area for the purpose of gathering information relative to such conference.
4. An electronic or stenographic record must be made of the informal conference proceedings, unless waived by all parties. Such record must be maintained and must be accessible to the parties until final release of the permittee’s performance bond pursuant to this chapter.
5. In the event all parties requesting the informal conference stipulate agreement prior to the requested informal conference and withdraw their request, such informal conference need not be held.
6. The commission shall issue its written findings and ruling within thirty days of the informal conference. Along with these findings and ruling, notice must be served upon all persons who were parties to the informal conference, informing them of their right, within thirty days of such service, to request that a formal administrative hearing be held by the commission pursuant to section 38-14.1-30 in order to review the findings and ruling.

38-14.1-20. Ruling on permit application — Timing and content.

1. If an informal conference in reference to a permit application has been held pursuant to section 38-14.1-19, the commission shall issue its written findings approving or disapproving the application in whole or in part and stating the reasons for such findings within thirty days of the informal conference. At the time of issuance, copies of the findings, reasons, and the commission’s ruling must be furnished to the permit applicant and all persons who were parties to the informal conference along with the notice of the right to request a formal hearing provided for in section 38-14.1-30.
2. If no informal conference has been held, the commission shall notify the permit applicant within a reasonable time as set forth in regulations, whether the application has been approved or disapproved in whole or in part along with notice of the right to request a formal hearing pursuant to section 38-14.1-30. In setting such reasonable time, the commission shall take into account the time needed for proper investigation of the site, the complexity of the permit application, and whether objections to the application have been filed.
3. Under either subsection 1 or 2, if the application is approved, a permit must be issued subject to the right of any person with an interest which is or may be adversely affected to request formal hearing pursuant to section 38-14.1-30; if the application is disapproved, specific reasons therefor must be set forth in the notification of disapproval together with the requirements for approval.

38-14.1-21. Permit approval or denial standards.

1. Upon the basis of a complete mining application and reclamation plan or a revision thereof as required by this chapter and pursuant to regulations established under this chapter, the commission shall grant, require modification of, or deny the application for a permit and notify the applicant in writing within a reasonable time as established by regulation if no informal conference is held and if an informal conference is held, within thirty days of such conference. The applicant for a permit, or a revision of a permit, has the burden of establishing that the application is in compliance with all the requirements of this chapter. Within ten days after the granting of a permit, the commission shall notify the appropriate local governmental officials in the county in which the area of land to be affected is located that a permit has been issued and shall describe the location of the land.
2. The commission’s approval or modification of the permit or permit revision application must include consideration of the advice and technical assistance of the state historical society, the department of environmental quality, the soil conservation committee, the game and fish department, the state forester, the state geologist, and the department of water resources, and may include those state agencies versed in soils, agronomy, ecology, geology, and hydrology, and other agencies and individuals experienced in reclaiming surface mined lands.
3. No permit or revision application may be approved unless the applicant affirmatively demonstrates and the commission finds in writing on the basis of the information set forth in the application or from information otherwise available which will be documented in the approval and made available to the applicant, that all the following requirements are met:
   1. The permit application is accurate and complete and all the requirements of this chapter and of regulations promulgated by the commission have been complied with.
   2. The permit applicant has demonstrated that reclamation as required by this chapter and by regulations promulgated by the commission can be accomplished under the reclamation plan contained in the permit application.
   3. The assessment of the probable cumulative impact of all anticipated mining in the area on the hydrologic balance specified in subdivision o of subsection 1 of section 38-14.1-14 has been made by the commission and the proposed operation thereof has been designed to prevent material damage to the hydrologic balance outside the permit area.
   4. The area proposed to be mined is not included within an area designated unsuitable for all or certain types of surface coal mining operations pursuant to section 38-14.1-05 or is not within an area under study for such designation in an administrative proceeding, provided the petition to have an area so designated has been filed prior to or within the time period specified in subsection 1 of section 38-14.1-18, or unless in such an area as to which an administrative proceeding has commenced, the permit applicant demonstrates that prior to January 4, 1977, the permit applicant has made substantial legal and financial commitments in relation to the operation for which the applicant is applying for a permit.
   5. The proposed surface coal mining operation, if located west of the one hundredth meridian west longitude, would:
      1. Not interrupt, discontinue, or preclude farming on alluvial valley floors that are irrigated or naturally subirrigated, but, excluding undeveloped rangelands which are not significant to farming on said alluvial valley floors and those lands as to which the commission finds that if the farming that will be interrupted, discontinued, or precluded is of such small acreage [hectarage] as to be of negligible impact on the farm’s agricultural production; or
      2. Not materially damage the quantity or quality of water in surface or underground water systems that supply these alluvial valley floors. This subdivision does not affect those surface coal mining operations which on July 1, 1979, produce coal or commercial leonardite in commercial quantities and are located within or adjacent to alluvial valley floors or have obtained specific permit approval by the commission to conduct surface coal mining operations within said alluvial valley floors.
   6. When the mineral estate has been severed from the surface estate, the applicant has complied with the requirements of chapter 38-18.
4. The commission may delete certain areas from a permit or revision application, reject the application, require the permit applicant to amend the application or any part of such application, including any mining plan, or require any combination of the foregoing, if:
   1. The commission finds that the overburden on any part of the area of land described in the application for a permit is such that experience in the state of North Dakota with a similar type of operation upon land with similar overburden shows that substantial deposition of sediment in streambeds, landslides, water pollution, or permanent destruction of land for agricultural purposes without approved rehabilitation for other uses cannot feasibly be prevented.
   2. The commission finds that the proposed surface coal mining operation will constitute a hazard to a dwelling house, public building, school, church, cemetery, commercial or institutional building, public road, stream, lake, or other public or private property other than property subject to a coal or commercial leonardite lease.
5. When information available to the commission indicates that any surface coal mining operation owned or controlled by the permit applicant is currently in violation of this chapter, the Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 445; 30 U.S.C. 1201 et seq.], or any law or rule of the United States or the state of North Dakota, or of any department or agency of the United States or the state of North Dakota, pertaining to air or water environmental protection, the permit may not be issued until the permit applicant submits proof that such violation has been corrected or is in the process of being corrected to the satisfaction of the regulatory authority with jurisdiction over the violation.
6. In addition to finding the application in compliance with other requirements of this section, if the area proposed to be mined contains prime farmland pursuant to paragraph 3 of subdivision a of subsection 2 of section 38-14.1-14, the commission shall, pursuant to regulations issued by the commission, grant a permit to mine on prime farmland if the commission finds in writing that the permit applicant has the technological capability to restore such mined area, within a reasonable time, to a level of productivity equal to or greater than nonmined prime farmland in the surrounding area under equivalent levels of management and can meet the soil reconstruction standards in subsection 6 of section 38-14.1-24. Nothing in this chapter pertaining to prime farmland applies to any permit issued prior to July 1, 1979, or to any revisions or renewals thereof, or to any existing surface coal mining operations for which a permit was issued prior to July 1, 1979.

Whenever the commission finds that ongoing surface mining operations are causing or are likely to cause any of the conditions set forth in this subsection, it may make such changes in the permit as it may deem necessary to avoid such described conditions.

38-14.1-22. Permit renewal.

1. Any valid permit issued pursuant to this chapter shall carry with it the right of successive renewal upon expiration with respect to areas within the boundaries of the existing permit. The holders of the permit may apply for renewal and such renewal must be issued within a reasonable time as set forth in regulations promulgated by the commission subsequent to fulfillment of the public notice requirements of subsection 1 of section 38-14.1-18 unless it is established that and written findings are made by the commission that:
   1. The terms and conditions of the existing permit are not being satisfactorily met; and
   2. The present surface coal mining and reclamation operation is not in compliance with the provisions of this chapter; or
   3. The renewal requested substantially jeopardizes the operator’s continuing responsibility on existing permit areas; and
   4. The permittee has not provided evidence that the performance bond in effect for said operation will continue in full force and effect for any renewal requested in such application as well as any additional bond the commission might require pursuant to section 38-14.1-16; or
   5. Any additional revised or updated information required by the commission has not been provided.
2. On application for renewal, the burden is on the opponents of renewal.
3. Any permit renewal must be for a term not to exceed the period of the original permit established by this chapter. Application for permit renewal must be made at least one hundred eighty days prior to the expiration of the valid permit.

38-14.1-23. Permit revision.

1. During the term of the permit the permittee may submit an application for a revision of the permit, together with a revised reclamation plan, to the commission.
2. An application for a revision of a permit may not be approved unless the commission finds that reclamation as required by this chapter can be accomplished under the revised reclamation plan. The revision must be approved or disapproved within a reasonable time as established by commission regulation. The commission shall establish guidelines for a determination of the scale or extent of a revision request for which all permit application information requirements and procedures, including notice and hearing, shall apply. Any revisions which propose significant alterations in the reclamation plan are, at a minimum, subject to the notice and hearing requirements of sections 38-14.1-18, 38-14.1-19, and 38-14.1-20.
3. Any extensions to the area covered by the permit except incidental boundary revisions must be made by application for another permit.
4. No transfer, assignment, or sale of the rights granted under any permit issued pursuant to this chapter may be made without the written approval of the commission. The commission shall deny approval to the successor in interest of the permittee if the successor in interest is unable to obtain the bond coverage of the original permittee or its equivalent. If the successor in interest is able to obtain the bond coverage of the original permittee, or its equivalent, the successor in interest may arrange for the continuation of surface mining and reclamation operations according to the approved surface mining and reclamation plan of the original permittee pending commission approval of the transfer, assignment, or sale of the rights granted under said permit and any necessary revision or modification of said permit, provided the successor in interest furnishes the necessary information to the commission within thirty days of succeeding to such interest so that the permit in issue can be properly revised or modified.
5. The commission shall, within a time limit prescribed by commission regulation, review outstanding permits and may require reasonable revision or modification of the permit provisions during the term of such permit. Any such revision or modification must be based upon a written finding and subject to notice and hearing requirements in accordance with sections 38-14.1-18, 38-14.1-19, and 38-14.1-20.
6. A permittee may withdraw any land described in either the permit application required in section 38-14.1-14 or the extended mining plan required in section 38-14.1-15, except land on which surface coal mining operations have commenced, by notifying the commission thereof. If land covered by the permit term is so withdrawn, the amount of the bond or security filed by the permittee pursuant to the provisions of this chapter must be reduced proportionately.

38-14.1-24. Environmental protection performance standards.

General performance standards are applicable to all surface coal mining and reclamation operations and must require the permittee at a minimum to:

1. Conduct surface coal mining operations so as to maximize the utilization and conservation of the coal or commercial leonardite being recovered so that re-affecting the land in the future through surface coal mining can be minimized.
2. Restore the land affected to a condition capable of supporting the uses which it was capable of supporting prior to any mining, or higher or better uses approved by the commission, which may include industrial, commercial, agricultural, residential, recreational, or public facilities. In approving the postmining land use, or changes thereto, the commission shall establish by regulation postmining land use criteria that must be demonstrated by the permittee and considered by the commission in making its decision.
3. Backfill, compact (where advisable to ensure stability or to prevent leaching of toxic materials), and grade to reshape all areas affected by surface coal mining operations to the gentlest topography consistent with adjacent unmined landscape elements in order to develop a postmining landscape that will provide for maximum moisture retention, drainage that will complement the surrounding terrain, maximum stability, minimum soil losses from runoff and erosion, with all highwalls, spoil piles, and depressions eliminated (unless small depressions are needed in order to retain moisture to assist revegetation or as otherwise authorized pursuant to this chapter), and with maximum postmining graded slopes that do not exceed the approximate original contour; provided, however, that:
   1. A different contour or topography may be required by the commission to better achieve the approved postmining land use.
   2. The permittee, at a minimum, shall backfill, grade, and compact (where advisable) using all available overburden and other spoil and waste materials to attain the lowest practicable grade (not to exceed the angle of repose), to provide adequate drainage, and to contain all toxic materials in order to achieve an ecologically sound land use compatible with the surrounding region, in those instances where:
      1. Surface coal mining operations are carried out over a substantial period of time at the same location where the operation transects the coal or commercial leonardite deposit;
      2. The thickness of the coal or commercial leonardite deposits relative to the volume of overburden is large; and
      3. The permittee demonstrates that the overburden and other spoil and waste materials at a particular point in the permit area or otherwise available from the entire permit area are insufficient, giving due consideration to volumetric expansion, to restore the approximate original contour.
4. Stabilize and protect all surface areas, including spoil piles affected by the surface coal mining and reclamation operation, to effectively control erosion and attendant air and water pollution.
5. Remove, segregate, and respread suitable plant growth material as required by the commission within the permit area. The commission may require the permittee to segregate suitable plant growth material in two or more soil layers. The commission shall determine the soil layer or layers to be removed based upon the quality and quantity of suitable plant growth material inventoried by the soil survey required in subdivision t of subsection 1 of section 38-14.1-14. Based on the soil survey, the commission shall also determine whether other suitable strata are necessary to meet revegetation requirements. If other strata can be shown to be suitable and necessary to meet revegetation requirements, the commission may require the permittee to determine the areal extent of other suitable strata within the proposed permit area, and to remove, segregate, protect, and respread such material. If the suitable plant growth material or other suitable strata cannot be replaced on an approved graded area within a time short enough to avoid deterioration of such material, the permittee shall stockpile and stabilize such materials by establishing a successful cover of quick-growing plants or by other means thereafter so that the suitable plant growth material or other suitable strata will be protected from wind and water erosion and will remain free from any contamination by toxic material. In the interest of achieving the maximum reclamation provided for in this chapter, the permittee may, or at the discretion of the commission shall, utilize such soil amendments as described in section 38-14.1-02.
6. For all prime farmlands as identified in paragraph 3 of subdivision a of subsection 2 of section 38-14.1-14 to be mined and reclaimed, the permittee shall, at a minimum, be required to:
   1. Segregate the A horizon of the natural soil or a combination of the A horizon materials and other available suitable plant growth materials that will create a final soil having a productive capacity equal to or greater than that which existed prior to mining; and if not utilized immediately, stockpile this material and provide needed protection from wind and water erosion or contamination;
   2. Segregate the B horizon of the natural soil, or underlying C horizons or other strata, or a combination of such horizons or other strata that are shown to be physically and chemically suitable for plant growth and that can be shown to be equally or more favorable for plant growth than the B horizon, in sufficient quantities to create in the regraded final soil a root zone of comparable depth and quality to that which existed in the natural soil. If not utilized immediately, such material must be stockpiled and provided needed protection from wind and water erosion or contamination;
   3. Replace the material described in subdivision b with proper compaction and uniform depth as determined by the commission over the regraded spoil material; and
   4. Redistribute in a uniform manner as determined by the commission the surface soil described in subdivision a.
7. Create, if authorized in the approved mining and reclamation plan and permit, as part of reclamation activities, permanent water impoundments in accordance with the requirements of the department of water resources and all of the following standards:
   1. The size of the impoundment will be adequate for its intended purposes.
   2. The impoundment dam construction will be designed to achieve necessary stability with an adequate margin of safety compatible with the requirements of applicable state law.
   3. The quality of impounded water will be suitable on a permanent basis for its intended use, and discharges from the impoundment will not exceed the quality limitations imposed by the North Dakota pollutant discharge elimination system or degrade the water quality below water quality standards established pursuant to this chapter, whichever is more stringent.
   4. The level of water will be reasonably stable.
   5. Final grading will provide adequate safety and access for maintenance and proposed water users.
   6. The water impoundments will not result in the diminution of the quality or quantity of water utilized by adjacent or surrounding landowners for agricultural, industrial, recreational, or domestic uses.
8. Minimize the disturbances to the prevailing hydrologic balance at the minesite and in associated offsite areas and to the quality and quantity of water in surface and ground water systems both during and after surface coal mining operations and during reclamation by:
   1. Avoiding toxic mine drainage by such measures as, but not limited to:
      1. Preventing water from coming in contact with, or removing water from, toxic producing deposits.
      2. Treating drainage to reduce toxic content which adversely affects downstream water upon being released to watercourses.
      3. Casing, sealing, or otherwise managing boreholes and wells to keep toxic drainage from entering ground and surface waters.
   2. Conducting surface coal mining operations so as to prevent, to the extent possible using the best technology currently available, additional contribution of suspended solids to streamflow, or runoff outside the permit area, but in no event may contributions be in excess of requirements set by applicable state law.
   3. Constructing any siltation structures pursuant to subdivision b prior to commencement of surface coal mining operations, such structures to be certified by a registered professional engineer to be constructed as designed and as approved in the reclamation plan.
   4. Cleaning out and removing temporary settling ponds or other siltation structures from drainways after disturbed areas are revegetated and stabilized and depositing the silt and debris at a site and in a manner approved by the commission.
   5. Restoring recharge capacity of the mined area to approximate premining conditions to the extent possible using the best technology currently available.
   6. Avoiding natural channel deepening or enlargement in operations requiring the discharge of water from mines.
   7. Preserving throughout the surface coal mining and reclamation process the essential hydrologic functions of alluvial valley floors.
   8. Such other actions as the commission may prescribe.
9. Make such repairs, alterations, or construction as necessary to ensure the delivery of that quality and quantity of water available prior to mining to a surface owner whose supply of water for domestic, agricultural, industrial, or other legitimate use has been disrupted or diminished in quality or quantity by the surface coal mining operation. Such repairs, alterations, or construction must be considered to be part of reclamation and must be made at no cost to the surface owner. Nothing in this chapter may be construed as affecting in any way the right of any person to enforce or protect, under applicable law, the person’s interest in water resources affected by a surface coal mining operation.
10. Remove or bury all debris and other similar material resulting from the operation and bury all mine wastes, coal, and commercial leonardite processing wastes unless the commission approves the surface disposal of such wastes. If the commission approves the surface disposal of such wastes, the permittee shall stabilize all waste piles in designated areas through construction in compacted layers, including the use of incombustible and impervious materials if necessary, to assure that the final contour of the waste pile will be compatible with natural surroundings and that the site can and will be stabilized and revegetated according to the provisions of this chapter.
11. Refrain from surface coal mining within five hundred feet [152.4 meters] of underground mines in order to prevent breakthroughs; provided, that the commission shall allow a permittee to mine near, through, or partially through an underground mine if such operations will result in improved resource recovery, abatement of water pollution, or elimination of hazards to the health and safety of the public.
12. Ensure that all debris, toxic materials, or materials constituting a fire hazard are treated or buried and compacted or otherwise disposed of in a manner designed to prevent contamination of ground or surface waters and that contingency plans are developed to prevent sustained combustion. If a fire hazard exists, the commission has the authority to require the permittee to take such actions as are necessary to abate the hazard, both inside and outside the permit area.
13. Ensure that explosives are used only in accordance with existing state law and the regulations promulgated by the commission, which must include provisions to:
    1. Provide adequate advance written notice to local governments and residents who might be affected by the use of such explosives by the publication of the planned blasting schedule in a newspaper of general circulation in the locality, by mailing a copy of the proposed blasting schedule to every resident living within one-half mile [804.67 meters] of the proposed blasting site, and by providing daily notice to residents in such areas prior to any blasting.
    2. Maintain for a period of at least three years and make available for public inspection upon request a log detailing the location of the blasts, the pattern and depth of the drill holes, the amount of explosives used per hole, and the order and length of delay in the blasts.
    3. Limit the type of explosives and detonating equipment, the size, the timing, and the frequency of blasts based upon the physical conditions of the site so as to prevent:
       1. Injury to persons.
       2. Damage to public and private property outside the permit area.
       3. Change in the course, channel, or availability of ground or surface water outside the permit area.
    4. Require that all blasting operations be conducted by trained and competent persons as certified by the commission.
    5. Provide that upon the request of a resident or owner of a manmade dwelling or structure within one mile [1.61 kilometers] of any portion of the permitted area the permittee shall conduct a preblasting survey of such structures and submit the survey to the commission and a copy to the resident or owner making the request. The area of the survey must be decided by the commission and must include such provisions as the commission may promulgate.
14. Ensure that all reclamation efforts proceed in an environmentally sound manner and as contemporaneously as practicable with the surface coal mining operations, provided that all reclamation through the initial planting on any land within the permit area must be completed by the operator no later than three years from completion of surface coal mining operations on such lands, unless otherwise prescribed by the commission.
15. Ensure that the construction, maintenance, and postmining conditions of haul roads and access roads into and across the site of operations will control or prevent erosion and siltation, pollution of water, damage to fish or wildlife or their habitat, or public or private property.
16. Refrain from the construction of haul roads and access roads up a streambed or drainage channel or in such proximity to such channel so as to seriously alter the normal flow of water.
17. Restore lands affected by the surface coal mining operation which have been designated for postmining agricultural purposes to the level of productivity equal to or greater, under equivalent management practices, than nonmined agricultural lands of similar soil types in the surrounding area. For those lands which are to be rehabilitated to native grasslands, a diverse, effective, and permanent vegetative cover must be established of the same seasonal variety native to the area to be affected and capable of self-regeneration, plant succession, and at least equal in extent of cover and productivity to the natural vegetation of the area. The level of productivity and cover attained on disturbed lands within the permit area must be demonstrated by the permittee using comparisons with similar lands in the surrounding area having equivalent historical management practices and that are undisturbed by mining, or comparable disruptive activities.
18. Assume the responsibility for successful revegetation, as required by subsection 17, for a period of ten full years after the last year of augmented seeding, fertilizing, irrigation, or other work, provided that, when the commission approves a long-term intensive agricultural postmining land use, the ten-year period of responsibility for revegetation commences at the date of initial planting. However, for previously mined areas that are affected by remining, the operator’s responsibility for successful revegetation will extend for a period of five full years after the last year of augmented seeding, fertilizing, irrigation, and other work in order to assure compliance with the applicable standards. For the purposes of this subsection, “previously mined areas” are lands that were affected by coal or commercial leonardite mining activities prior to January 1, 1970, and “augmented seeding, fertilizing, irrigation, or other work” does not include normal conservation practices recognized locally as good management for the postmining land use.
19. Place all spoil material from the initial pit or other excess spoil material resulting from surface coal mining and reclamation activities in such a manner that all of the following requirements are met:
    1. Spoil is transported and placed in a controlled manner in position for concurrent compaction and in such a way so as to assure mass stability and to prevent mass movement.
    2. The areas of disposal are within the bonded permit areas.
    3. Appropriate surface and internal drainage systems and diversion ditches are used so as to minimize spoil erosion and movement.
    4. The disposal area does not contain springs, natural watercourses, or wet weather seeps unless lateral drains are constructed from the wet areas to the main underdrains in such a manner that filtration of the water into the spoil pile will be prevented.
    5. If placed on a slope, the spoil is placed upon the most moderate slope among those upon which, in the judgment of the commission, the spoil could be placed in compliance with all the requirements of this chapter.
    6. The final configuration is compatible with the natural drainage pattern and surroundings and suitable for intended uses.
    7. Design of the spoil disposal area is certified by a registered professional engineer in conformance with professional standards.
    8. All other provisions of this chapter are met.
20. Meet such other criteria as are necessary to achieve reclamation in accordance with the purposes of this chapter, taking into consideration the physical, climatological, and other characteristics of the site.
21. To the extent possible using the best technology currently available, minimize disturbances and adverse impacts of the surface coal mining operation on fish, wildlife, and related environmental values, and achieve enhancement of such resources where practicable.

1.1. Conduct any auger mining associated with surface coal mining operations in a manner that will maximize recoverability of coal or commercial leonardite and other mineral reserves remaining after mining activities and reclamation operations are completed, and seal or fill all auger holes as necessary to ensure long-term stability of the area and minimize any adverse impact to the environment or hazard to public health or safety. The commission may prohibit auger mining if necessary to maximize the utilization, recoverability, or conservation of coal or commercial leonardite resources, to ensure long-term stability, or to protect against any adverse impact to the environment or hazard to public health or safety.

38-14.1-25. Prohibited mining practices.

1. A permittee may not use any coal or commercial leonardite mine waste piles consisting of mine wastes, tailings, coal processing wastes, or other liquid or solid wastes either temporarily or permanently as dams or embankments unless approved by the commission after consultation with the department of water resources.
2. A permittee may not locate any part of the surface coal mining and reclamation operations or deposit overburden, debris, or waste materials outside the permit area for which bond has been posted, except as provided in subsection 24 of section 38-14.1-03.
3. A permittee may not deposit overburden, debris, or waste materials in such a way that normal erosion or slides brought about by natural causes will permit the same to go beyond or outside the permit area for which bond has been posted.

38-14.1-26. Interference with commission employees.

No operator or permittee may, except as provided by law, willfully resist, prevent, impede, or interfere with the commission or any of its agents in the performance of duties under this chapter. Whoever knowingly violates this section is, upon conviction, subject to the penalty provided in subsection 4 of section 38-14.1-32.

38-14.1-27. Inspections and monitoring.

1. For the purpose of developing or assisting in the development, administration, and enforcement of this chapter and of regulations promulgated by the commission in accordance with this chapter or in the administration and enforcement of any permit under this chapter, or of determining whether any operator or permittee is in violation of any requirement of this chapter or the regulations promulgated by the commission in accordance with this chapter:
   1. The commission shall require any permittee to:
      1. Establish and maintain appropriate records.
      2. Submit monthly, semiannual, annual, and other reports, including information as the commission may require.
      3. Install, use, and maintain any necessary monitoring equipment or methods.
      4. Evaluate results in accordance with such methods, at such locations, intervals, or in such manner as the commission shall prescribe.
      5. Provide such other information relative to surface coal mining and reclamation operations as the commission deems reasonable and necessary.
   2. For those surface coal mining and reclamation operations which remove or disturb strata that serve as aquifers which significantly ensure the hydrologic balance of water use either on or off the mining site, the commission, in consultation with other appropriate state agencies, shall specify those:
      1. Monitoring sites to record the quantity and quality of surface drainage above and below the minesite as well as in the potential zone of influence.
      2. Monitoring sites to record level, amount, and samples of ground water and aquifers potentially affected by the mining and also directly below the lowermost (deepest) coal or commercial leonardite seam to be mined.
      3. Records of well logs and borehole data to be maintained.
      4. Monitoring sites to record precipitation.
   3. An annual map must be submitted by the operator to the commission for each year of the permit term and until the total bond amount has been released. The map must be in a form prescribed by the commission showing the status of surface coal mining and reclamation operations that have occurred during the year being reported, with a legend showing the number of acres [hectares] affected by such operations.
   4. The authorized representatives of the commission, without advance notice, without a warrant, and upon presentation of appropriate credentials:
      1. Shall have the right of entry to, upon, or through any surface coal mining and reclamation operations or any premises in which any records required to be maintained under this subsection are located; and
      2. May at reasonable times, and without delay, have access to and copy any records, inspect any monitoring equipment or method of operation required under this chapter.
2. The commission shall cause to be made such inspections of any surface coal mining and reclamation operation as are necessary to ensure compliance with this chapter and any regulations promulgated pursuant thereto. However, the inspections by the commission shall:
   1. Occur on an irregular basis averaging not less than one partial inspection per month and one complete inspection per calendar quarter for the surface coal mining and reclamation operation covered by each permit.
   2. Occur without prior notice to the permittee or the permittee’s agents or employees except for necessary onsite meetings with the permittee.
   3. Include the filing of inspection reports adequate to enforce the requirements of and to carry out the terms and purposes of this chapter.
   4. Occur without a warrant.
3. Each permittee shall conspicuously maintain at the entrances to surface coal mining and reclamation operations a clearly visible sign which sets forth the name, business address, and telephone number of the permittee and the permit number of the surface coal mining and reclamation operation.
4. Each inspector, upon detection of each violation of any requirement of this chapter or the regulations promulgated by the commission, shall inform the operator or permittee in writing, and shall report in writing any such violations to the commission.
5. Copies of any material records, reports, inspection materials, or information required under this section by the commission must be filed in the office of the county auditor of the county in which the surface coal mining operations occur.

The monitoring data collection and analysis required by this section must be conducted according to standards and procedures set forth by the commission in consultation with other appropriate state agencies in order to assure their reliability and validity.

38-14.1-28. Enforcement procedures.

1. Whenever, on the basis of any information available to it, including information from any person, the commission has reason to believe that any requirement of this chapter or of any regulation adopted by the commission under this chapter or any permit condition has not been complied with, the commission shall immediately conduct an inspection, without a warrant, of the surface coal mining operation at which the alleged violation is occurring unless the information available is a result of a previous inspection of such operation. If, based on such inspection, the commission determines enforcement measures are appropriate, it shall initiate one of the following procedures:
   1. If the commission or its authorized representative determines that any condition, practice, or violation exists which also creates an imminent danger to the health or safety of the public, or is causing, or can reasonably be expected to cause, significant, imminent environmental harm to land, air, or water resources, the commission or its authorized representative shall immediately order a cessation of surface coal mining and reclamation operations or the portion thereof relevant to the condition, practice, or violation. Such cessation order remains in effect until the commission or its authorized representative determines that the condition, practice, or violation has been abated, or until modified, vacated, or terminated by the commission or its authorized representative pursuant to paragraph 2.
      1. When the commission finds that the ordered cessation will not completely abate the imminent danger or the significant imminent environmental harm, the commission shall, in addition to the cessation order, impose any remedial measures on the operator deemed necessary to abate the imminent danger or the significant environmental harm.
      2. Any cessation order issued pursuant to this paragraph expires within thirty days of actual notice to the operator or permittee unless a public hearing is held within that period within such reasonable proximity of the site to allow viewings of the site during the course of the hearing.
   2. If the commission or its authorized representative determines that any operator or permittee is in violation of any requirement of this chapter or regulations thereunder or any permit condition but it is unable to make the additional finding that a condition, practice or violation exists which also creates an imminent danger to the health or safety of the public, or is causing or can reasonably be expected to cause significant, imminent environmental harm to land, air, or water resources, the commission or its authorized representative shall serve on the operator or permittee a notice of violation. The notice must fix a reasonable time, not more than ninety days, for the abatement of the violation and shall provide opportunity for an informal conference pursuant to section 38-14.1-19 and for public hearing, if requested, pursuant to the procedures of section 38-14.1-30.
      1. If the operator or permittee does not comply with the remedial measures set forth in the notice within the abatement period as originally fixed or subsequently extended for good cause shown and upon the written findings of the commission or its authorized representative, the commission or its authorized representative shall immediately order a cessation of surface coal mining and reclamation operations or that portion thereof relevant to the violation. Such cessation order remains in effect until the commission determines that the violation has been abated, or until modified, vacated, or terminated by the commission or pursuant to paragraph 2.
      2. Any cessation order issued pursuant to this paragraph expires within thirty days of actual notice to the operator or permittee unless a public hearing is held within that period within such reasonable proximity of the site to allow viewings of the site during the course of the hearing.
   3. If the commission or its authorized representative determines that a pattern of violations of any requirements of this chapter or of regulations thereunder or of any permit conditions exists or has existed and also finds that such violations are caused by the unwarranted failure of the permittee to comply with any requirements of this chapter or any permit conditions, or that such violations are willfully caused by the permittee, an order to show cause why the permit should not be suspended or revoked shall promptly issue from the commission or its authorized representative and opportunity for a hearing on such order pursuant to procedures in subsection 2 of section 38-14.1-30 must be provided. Upon the permittee’s failure to show cause why the permit should not be suspended or revoked, the commission or its authorized representative shall promptly suspend or revoke the permit.
2. Any notices and orders issued pursuant to subsection 1 must set forth with reasonable specificity the nature of the violation and any remedial action required, any period of time established for abatement, and a reasonable description of the portion of the surface coal mining and reclamation operation to which the notice or order applies. All such notices and orders must be in writing, must be signed by the commission or its authorized representative, and must be served promptly upon the operator and permittee personally or by certified mail addressed to the permanent address of the operator and permittee.

38-14.1-29. Procedures for imposing civil penalties.

1. A civil penalty may be assessed by the commission as authorized by section 38-14.1-32 only after the operator or permittee has been given an opportunity for public hearing pursuant to the procedures specified in section 38-14.1-30.
   1. If such public hearing has been held, the commission shall make findings of fact and issue a written decision pursuant to subdivision g of subsection 3 of section 38-14.1-30 as to the occurrence of the violation and the amount of the penalty which is warranted, incorporating, when appropriate, an order requiring that the penalty be paid.
   2. If the operator or permittee charged with such violation fails to use the opportunity for a public hearing, a civil penalty must be assessed by the commission if it determines that a violation did occur and issues a final order requiring that the penalty be paid.
2. Hearings under this section must be consolidated with any enforcement hearings under section 38-14.1-30.
3. Any civil penalties assessed under this chapter may be recovered by the commission in a civil action in the North Dakota district court for the county in which the violation occurred or in which the party assessed has the party’s residence or principal office in the state.

38-14.1-30. Administrative review of commission rulings — Formal hearings.

1. Within thirty days after a permit applicant is notified of a ruling by the commission pursuant to section 38-14.1-20, or after an operator or permittee is issued a notice or order pursuant to subdivision a or b of subsection 1 of section 38-14.1-28, or after the commission disapproves an application for release of all or a portion of a performance bond under section 38-14.1-17, or after the director of the state historical society renders a decision on an application for approval of a cultural resources mitigation plan under section 38-14.1-10 and subdivision u of subsection 1 of section 38-14.1-14, the applicant, operator, or permittee, or any person with an interest that is or may be adversely affected by the ruling, notice, or order or by an order modifying, vacating, or terminating a notice or order, may request and initiate formal hearing procedures before the commission. The right to the administrative review is forfeited if not requested within thirty days of the notification of any ruling or issuance of a notice of violation or order as provided in this subsection. The filing of an application for review under this subsection does not operate as a stay of any order or notice.
2. Following the issuance pursuant to subdivision c of subsection 1 of section 38-14.1-28 of an order to show cause as to why a permit should not be suspended or revoked, the commission shall hold a public hearing pursuant to procedures specified in subsection 3 on such order to show cause. After such public hearing, the commission shall issue a written decision concerning suspension or revocation of the permit pursuant to subdivision g of subsection 3.
   1. If the commission issues an order of permit suspension, it shall subsequently reinstate the permit in accordance with procedures established by commission regulations, upon a showing of compliance with the condition for reinstatement as specified in the suspension order.
   2. If the permittee fails to comply with the conditions for reinstatement as specified in an order of suspension, the commission shall, pursuant to procedures established by commission regulations, issue an order revoking the permit and forfeiting the performance bond to the state of North Dakota.
   3. If the commission revokes a permit, all surface coal mining operations must cease immediately in the permit area.
3. Administrative hearings pursuant to this section must be conducted in accordance with the provisions of chapter 28-32 and the following procedures:
   1. A hearing must be held within thirty days of a request for a formal hearing under subsection 1 or the issuance of an order to show cause under subsection 2.
   2. The commission shall cause an investigation to be made as it deems appropriate in connection with any hearing under this section. Evidence taken at a hearing under this section held in connection with a permit application ruling under section 38-14.1-20 may include, but is not limited to, site inspections of the land to be affected and other surface coal mining operations carried on by the applicant for a permit in the general vicinity of the proposed operation.
   3. Hearings held pursuant to this section are subject to judicial review in accordance with the provisions of chapter 28-32. Any requirements, procedural or otherwise, specifically imposed under this section which are in conflict with the provisions of chapter 28-32 shall supersede the provisions of chapter 28-32.
   4. All parties to any informal conference held in reference to a permit application or application for release of performance bond under section 38-14.1-19, and all persons who submitted comments or written objections to the application for release of performance bond or the permit application under sections 38-14.1-17 and 38-14.1-18 respectively, and the permittee and other interested parties in hearings to review enforcement actions taken pursuant to section 38-14.1-28 must be given written notice of the date, place, and time of the hearing at least twenty days prior to the hearing under this section. In case of an emergency, the notification period may be shortened, but in no event may notice be given less than five days prior to the hearing.
   5. In addition to any notice required by chapter 28-32, notice of hearings under this section must be published in the official newspaper of each county in which the subject matter of the hearing is located and in other daily newspapers of general circulation in the general vicinity of such counties, at least once a week for two successive weeks prior to the hearing. In case of an emergency, the publication period may be shortened, but in no event may notice be published less than five days prior to the hearing in daily newspapers of general circulation in the general locality of the subject matter involved.
   6. No person who presides at an informal conference under section 38-14.1-19 in reference to a permit application may preside at a formal administrative hearing under this section or participate in making the final administrative decision pursuant to chapter 28-32.
   7. All final orders of the commission under this section, except those issued under subsection 4, must be issued pursuant to the following procedures:
      1. Whenever a formal hearing has been held, the commission shall issue a written order pursuant to chapter 28-32, provided that the decision must be issued within thirty days after the hearing. The commission shall have no discretion to increase such time period.
      2. In the event that no one with standing to request an administrative hearing under subsection 1 requests such a hearing, the commission shall establish whether or not a permit should be granted or suspended or revoked; or, in enforcement proceedings, whether the violation has in fact occurred; or, in connection with an application for release of a bond, whether the application should be approved or denied, in whole or in part; and shall issue a final order as appropriate pursuant to rules adopted by the commission.
4. Pending completion of any investigation and hearing procedures being conducted under this section in connection with a request for review of a ruling on a permit application pursuant to section 38-14.1-20 or in connection with any notice or order issued pursuant to subdivision a or b of subsection 1 of section 38-14.1-28 and at any time prior to a decision by the commission on the request for review of a ruling on a permit application or a request for review of a notice or order, the permittee or any person with an interest which is or may be adversely affected by such notice, order, or the issuance of a permit may file with the commission a written request for temporary relief from such notice or order or permit decision together with a detailed statement giving reasons why such temporary relief should be granted. The commission shall issue an order granting or denying such relief expeditiously as provided by commission regulations. Provided, if the permittee or person with an interest which is or may be adversely affected requests relief from a cessation order, the commission’s order under this subsection must be issued within five days of receipt of such request. The commission may grant such relief, under such conditions as it may prescribe, if:
   1. A hearing on the request for temporary relief has been held in the locality of the permit area, providing all parties with an opportunity to be heard and the requirements of subdivisions b and c have been met;
   2. The permittee or person shows that there is substantial likelihood that the findings of the commission in the formal administrative proceedings being conducted pursuant to this section will be favorable to the permittee or person; and
   3. Such relief will not adversely affect the health or safety of the public or cause significant, imminent environmental harm to land, air, or water resources.
5. Nothing in this section may be construed to eliminate any additional enforcement rights or procedures which may be available under state law but are not specifically enumerated herein.

An order granting or denying temporary relief pursuant to this subsection is final and not subject to review in any subsequent administrative or judicial proceeding since any temporary relief granted is in effect only until the investigation and hearing procedures of this section are completed.

38-14.1-31. Civil action for injunctive relief.

1. In addition to other relief available, the commission may without bond or other undertaking institute a civil action for relief, including a permanent or temporary injunction, restraining order, or any other appropriate order in the North Dakota district court for the district in which the surface mining and reclamation operation is located or in which the permittee thereof has the permittee’s principal office in the state, whenever such permittee or the permittee’s agent:
   1. Fails to comply with any order or decision issued by the commission under this chapter;
   2. Interferes with or delays the commission or its authorized representative in carrying out the provisions of this chapter;
   3. Refuses to admit such authorized representative to the mine;
   4. Refuses to permit inspection of the mine by such authorized representative;
   5. Refuses to furnish any information or report requested by the commission in furtherance of this chapter;
   6. Refuses to permit access to, and copying of, such records as the commission determines necessary in carrying out the provisions of this chapter; or
   7. Refuses to permit inspection of monitoring equipment.
2. The court has jurisdiction to provide such relief as may be appropriate, including a permanent or temporary injunction or restraining order.
3. Any relief granted by the court to enforce an order or decision under subdivision a of subsection 1 continues in effect until the completion or termination of all proceedings for administrative and judicial review of such order or decision unless the district court granting relief under this section sets it aside or modifies it prior to such final determination.
4. No liability may accrue to the commission or its authorized representatives in proceeding against any operator or permittee pursuant to this section.

38-14.1-32. Penalties — Unclassified.

1. Any operator or permittee who violates this chapter, or any permit condition or regulation implementing this chapter may be assessed a civil penalty not to exceed ten thousand dollars per day of such violation except that if such violation leads to the issuance of a cessation order, a civil penalty must be assessed. Each day of continuing violation may be deemed a separate violation for purposes of penalty assessments. In determining the amount of the penalty, consideration must be given to:
   1. The operator’s or permittee’s history of previous violations at the particular surface coal mining operation;
   2. The seriousness of the violation, including any irreparable harm to the environment and any hazard to the health or safety of the public;
   3. Whether the operator or permittee was negligent; and
   4. The demonstrated good faith of the operator or permittee charged in attempting to achieve rapid compliance after notification of the violation.
2. Any operator or permittee who fails to correct a violation for which a notice or order has been issued under section 38-14.1-28 within the period permitted for the accomplishment of remedial measures must be assessed a civil penalty of not less than seven hundred fifty dollars for each day during which such failure or violation continues.
3. Any person, operator, or permittee must, upon conviction, be punished by a fine of not more than fifteen thousand dollars or by imprisonment for not more than one year, or both, who:
   1. Knowingly engages in surface coal mining operations without previously securing a permit as required by this chapter;
   2. Knowingly violates any permit condition or limitation implementing this chapter;
   3. Willfully makes any false statement, representation, or certification, or willfully fails to make any statement, representation, or certification in any application, record, report, plan, or other document filed or required to be maintained under this chapter;
   4. Willfully falsifies, tampers with, or knowingly and willfully renders inaccurate, any monitoring device or method required to be maintained under this chapter; or
   5. Fails or refuses to comply with a final order by a court pursuant to section 38-14.1-35, an order issued by the commission pursuant to section 38-14.1-28, or any order incorporated in a final decision by the commission, except an order incorporated in a decision requiring the payment of a penalty.
4. Any operator or permittee who knowingly violates section 38-14.1-26 must, upon conviction, be punished by a fine of not more than five thousand dollars or by imprisonment for not more than one year, or both.
5. Any employee of the commission who willfully violates section 38-14.1-38 must, upon conviction, be punished by a fine of not more than two thousand five hundred dollars, or by imprisonment of not more than one year, or both.
6. Whenever a corporate permittee or limited liability company permittee violates a condition of a permit or fails or refuses to comply with an order issued by the commission pursuant to section 38-14.1-28, or any order incorporated in a final decision issued by the commission, except an order incorporated in a decision requiring the payment of a penalty, any director, officer, or agent of such corporation and any governor, manager, or agent of such limited liability company who willfully and knowingly authorized, or carried out such violation, failure, or refusal is subject to the same criminal and civil penalties, fines, and imprisonment that may be imposed under subsections 1 and 3.
7. Any action for the collection of civil penalties under this section must be tried in the district court for the county in which the alleged violation occurred or in which the person or operator alleged to have committed the violation has the person’s or operator’s residence or principal office in the state.

38-14.1-33. Permit revocation — Bond forfeiture.

1. The commission may institute proceedings for the revocation of the permit and forfeiture of the performance bond of a permittee for violation by the permittee of any of the provisions of this chapter or of regulations implementing this chapter. The commission shall issue an order forfeiting the bond and revoking the permit of a permittee who fails to comply with an order of the commission suspending the permit pursuant to subsection 2 of section 38-14.1-30.
2. A permittee whose bond has been forfeited and permit revoked shall immediately cease all surface coal mining operations in this state. The permittee is not eligible to receive another permit unless the land for which the bond was forfeited has been reclaimed without cost to the state or the permittee has paid into the reclamation account a sum which, added to the value of the bond, the commission finds adequate to reclaim the land.
3. A permittee who refuses or willfully fails to comply with this chapter is ineligible for any further mining permits. After an opportunity for hearing and after a finding by the commission that the permit applicant, or operator specified in the application, controls or has controlled mining operations with a demonstrated pattern of willful violations of this chapter, or the Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 445; 30 U.S.C. 1201, et seq.], of such nature and duration and with such resulting irreparable damage to the environment as to indicate an intent not to comply with the provisions of this chapter, or the Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 445; 30 U.S.C. 1201, et seq.], no permit may be issued to said permit applicant or permittee.

38-14.1-34. Administrative review of regulations.

Any person aggrieved or adversely affected by any regulation promulgated by the commission under this chapter may petition the commission for a hearing to reconsider or amend such regulation. The commission shall grant a public hearing pursuant to procedures established in chapter 28-32.

38-14.1-35. Judicial review.

1. There is a right to judicial review pursuant to sections 28-32-42 through 28-32-49:
   1. To any applicant or any person with an interest which is or may be adversely affected who has participated in administrative proceedings under section 38-14.1-30 as an objector, and who is aggrieved by the decision of the commission.
   2. To any person with an interest which is or may be adversely affected who has participated in the administrative proceedings if the commission fails to act within the time limits specified in this chapter or in accordance with the provisions of chapter 28-32.
   3. To any permittee who is subject to an order by the commission implementing a final decision to suspend or revoke the permittee’s permit under section 38-14.1-28 or to any operator or permittee who is subject to an order by the commission implementing a final decision imposing a penalty under section 38-14.1-29 or any person having an interest which is or may be adversely affected by such order or by any modification, vacation, or termination of such order.
   4. To any person claiming to be aggrieved or adversely affected by any regulation promulgated by the commission to carry out the provisions of this chapter or by any order of the commission or by its failure to enter an order.
2. Availability of judicial review under this section may not be construed to limit the operation of the rights established in section 38-14.1-40 except as provided therein.

38-14.1-36. Assessment of costs — Attorney’s fees.

1. Whenever an order is issued as a result of any administrative proceeding under this chapter, at the request of any party, a sum equal to the aggregate amount of all costs and expenses, including attorney’s fees as determined by the commission to have been reasonably incurred by such party for or in connection with the party’s participation in such proceedings, may be assessed against any party as the commission deems proper.
2. The court, in issuing any final order pursuant to chapter 28-32 in review of commission proceedings under this chapter may assess costs, including attorney’s fees against any party whenever the court determines such award is appropriate.
3. The court, in issuing any final order in a civil action brought under section 38-14.1-40 by any person having an interest which is or may be adversely affected to compel compliance with this chapter, may award costs of litigation, including attorney’s and expert witness fees, to any party whenever the court determines such award is appropriate.
4. In civil proceedings pertaining to this chapter, the provisions of this section govern as herein provided, rather than those provided for in section 28-26-01.

38-14.1-37. Small operators.

1. The provisions of this chapter do not apply to any of the following activities:
   1. Extraction of coal or commercial leonardite by a landowner for the landowner’s own noncommercial use from land owned or leased by the landowner.
   2. Extraction of coal or commercial leonardite as an incidental part of federal, state, or local government-financed highway or other construction under regulations established by the commission.
2. If the commission finds that the probable total annual production at all locations to be mined by any permit applicant will not exceed three hundred thousand tons [272155.41 metric tons], the cost of the following activities, which must be performed by a qualified public or private entity designated by the commission, may be assumed by the commission upon the written request of the operator in connection with a permit application:
   1. The determination of probable hydrologic consequences required by subdivision o of subsection 1 of section 38-14.1-14, including the engineering analyses and designs necessary for the determination.
   2. The development of cross sections, maps, and plans required by subdivision r of subsection 1 of section 38-14.1-14.
   3. The geologic drilling and the statement of the result of test borings and core samplings required by subdivision s of subsection 1 of section 38-14.1-14.
   4. The collection of cultural resource information required by subdivision u of subsection 1 of section 38-14.1-14, any other archaeological and historical information required by the director of the state historical society, and the preparation of mitigation plans necessitated thereby.
   5. Preblast surveys required by subdivision e of subsection 13 of section 38-14.1-24.
   6. The collection of site-specific resource information and the development of protection and enhancement plans for fish and wildlife habitats and other environmental values required by the commission in accordance with this chapter.
3. The commission may provide or assume the cost of training coal or commercial leonardite operators who meet the qualifications in subsection 2 concerning the preparation of permit applications and compliance with the regulatory program.
4. An operator who has received assistance under subsection 2 or 3 shall reimburse the commission for the cost of the services rendered if the commission finds that the operator’s actual and attributed annual production of coal or commercial leonardite for all locations exceeds three hundred thousand tons [272155.41 metric tons] during the twelve months immediately following the date the operator is issued a surface coal mining and reclamation permit.
5. Proposed surface coal mining operations that will not be subject to payment of reclamation fees required by the Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 445; 30 U.S.C. 1201 et seq.] are not eligible for the assistance to small operators provided by subsections 2 and 3.

38-14.1-38. Conflict of interest.

No employee of the commission performing any function or duty under this chapter may have a direct or indirect financial interest in any underground or surface coal mining operation. Whoever willfully violates this section is, upon conviction, subject to the penalty provided in subsection 5 of section 38-14.1-32. The commission shall promulgate regulations to establish methods by which the provisions of this section will be monitored and enforced by the commission, including appropriate provisions for the filing by such employees and the review of statements and supplements thereto concerning any financial interests which may be affected by this section.

38-14.1-39. Forfeitures — Surface mining and reclamation fund — Continuing appropriation.

Performance bond forfeitures collected under this chapter must be deposited in the state treasury and credited to a special account designated as the surface mining and reclamation fund. All moneys deposited to the surface mining and reclamation fund are hereby appropriated to the commission for the purpose of reclaiming land affected by surface coal mining operations. The fund is not subject to section 54-44.1-11.

38-14.1-40. Citizen suits.

1. Any person having an interest which is or may be adversely affected may commence a civil action on the person’s own behalf to compel compliance with this chapter, or any regulation, order, or permit issued pursuant to this chapter:
   1. Against any person or any governmental instrumentality or agency who is alleged to be in violation of any regulation, order, or permit issued pursuant to this chapter; or
   2. Against the commission when there is alleged a failure of the commission to perform any act or duty under this chapter which is not discretionary with the commission.
2. Notice of the violation must be given to the commission and to any alleged violator sixty days before commencement of an action under subdivision a of subsection 1. Notice of the commencement of an action under subdivision b of subsection 1 must be given to the commission in such manner as the commission shall prescribe by regulation sixty days before commencement of such action, except that such action may be brought immediately after notification if the violation or order complained of constitutes an imminent threat to the health or safety of the plaintiff or would immediately affect a legal interest of the plaintiff.
3. No action may be commenced if the commission has commenced and is diligently prosecuting a civil action to require compliance with the provisions of this chapter, or any regulation, order, or permit issued pursuant to this chapter. In any such action, any person with an interest which is or may be adversely affected may intervene as a matter of right.
4. Any person who is injured in person or property through the violation by any operator or permittee of any rule, order, or permit issued pursuant to this chapter may bring an action for damages, including reasonable attorney’s and expert witness fees, or for temporary or permanent equitable relief. This subsection does not affect the rights established by or limits imposed under the state workforce safety and insurance laws.
5. Any action brought under this section may be brought only in the district court in which the surface coal mining operation complained of is located. The commission, if not a party, may intervene in any such action as a matter of right.
6. Nothing in this section restricts any right which any person or class of persons may have under any statute or common law to seek enforcement of any of the provisions of this chapter and the regulations thereunder, or to seek any other relief, including relief against the commission.

38-14.1-41. Chapter 28-32 to apply to this chapter — Regulations.

Chapter 28-3. applies to this chapter, except as otherwise provided in specific provisions of this chapter. The commission may promulgate regulations with respect to the administration of this chapter under chapter 28-32 except that if the commission determines that an emergency exists due to changes in federal performance standards promulgated under the Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 445; 30 U.S.C. 1201 et seq.], and any amendments thereto, the commission may adopt emergency regulations in accordance with the purposes of this chapter, which are effective immediately upon approval by the attorney general. Such emergency regulations remain in effect for a period not to exceed ninety days unless a public hearing is held pursuant to sections 28-32-10 and 28-32-11.

38-14.1-42. Cooperation with federal and state agencies.

The commission shall have the authority to cooperate with and receive technical and financial assistance from the United States, any state, or any department, agency, or officer thereof, and to file such reports and promulgate regulations as required by federal law for any purposes relating to reclamation. In the administration, inspection, and enforcement of North Dakota’s reclamation program, the commission is also authorized and encouraged to cooperate with other federal and state agencies in order to eliminate duplication of effort and unnecessary review, establish a common database for similar reviews and timely decisions, and to promulgate rules and regulations relevant to such authorization.

38-14.2-01. Declaration of findings and purpose.

The legislative assembly finds and declares that there are a substantial number of acres [hectares] within the state disturbed by surface coal mining operations and noncoal mining operations on which little or no reclamation was conducted, and the impacts from these unreclaimed lands impose social and economic costs on residents in nearby and adjoining areas as well as continuing to impair environmental quality. It is, therefore, the purpose of this chapter to promote the reclamation of mined areas left without adequate reclamation prior to the enactment of this chapter and which continue, in their unreclaimed condition, to substantially degrade the quality of the environment, prevent or damage the beneficial use of land or water resources, or endanger the health or safety of the public.

38-14.2-02. Definitions.

For the purpose of this chapter:

1. “Abandoned mine reclamation plan” means a plan for the reclamation of lands and water adversely affected by past coal mining and noncoal mining practices. The plan must generally identify all areas to be reclaimed in the state of North Dakota, the purposes for which the reclamation is proposed, the relationship of the lands to be reclaimed and the proposed reclamation to surrounding areas, and the specific criteria for ranking and identifying projects to be funded.
2. “Abandoned mine reclamation program” means a program established in accordance with this chapter for the reclamation of lands and water adversely affected by past coal mining and noncoal mining practices and includes the abandoned mine reclamation plan, annual projects under the plan, and all other activities necessary in development of the program.
3. “Commission” means the public service commission, or such department, bureau, or commission as may lawfully succeed to the powers and duties of that commission. The commission is the state regulatory authority for all purposes relating to title IV of the Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 456; 30 U.S.C. 1231 et seq.].
4. “Extreme danger” means a condition which could reasonably be expected to cause considerable physical harm to persons, property, or the environment and to which persons or improvements on real property are currently exposed.
5. “Fund” means the state abandoned mine reclamation fund to be used in carrying out a program of reclamation of abandoned mine lands pursuant to this chapter.
6. “Noncoal mining” means the mining of metalliferous and nonmetalliferous ores, clay, stone, sand, gravel, scoria, uranium, and other solid materials or substances of commercial value and which have been extracted in solid form from natural deposits on or in the earth, exclusive of coal and those minerals which occur naturally in liquid or gaseous form.
7. “Person” means an individual, partnership, firm, association, society, joint-stock company, company, cooperative, corporation, limited liability company, or other business organization.

38-14.2-03. Powers and duties of the commission.

The commission:

1. Shall develop an abandoned mine reclamation plan.
2. Shall submit such applications, abandoned mine reclamation plan, projects, and reports necessary to accomplish the purposes of this chapter, and to accomplish the purposes of title IV of Public Law 95-87 [91 Stat. 456; 30 U.S.C. 1231 et seq.].
3. Shall include in each annual request for projects the following information:
   1. A general description of each proposed project;
   2. A priority evaluation of each proposed project;
   3. A statement of the estimated benefits in such terms as number of acres [hectares] restored, miles [kilometers] of stream improved, acres [hectares] of surface lands protected from subsidence, population protected from subsidence, air pollution, and hazards of mine and coal refuse disposal area fires;
   4. An estimate of the cost for each proposed project;
   5. In the case of proposed research and demonstration projects, a description of the specific techniques to be evaluated or objective to be attained;
   6. An identification of lands or interest therein to be acquired and the estimated cost;
   7. In each year after the first in which a plan is filed under this chapter, an inventory of each project funded under the previous year’s grant, which inventory must include details of financial expenditures on such project together with a brief description of each project, including project locations, landowner’s name, acreage [hectarage], type of reclamation performed; and
   8. Other information as prescribed by the commission.
4. Shall include the following costs in each proposed project:
   1. Actual construction costs;
   2. Actual operation and maintenance costs of permanent facilities;
   3. Planning and engineering costs;
   4. Construction inspection costs; and
   5. Other necessary administrative expenses.
5. May request and accept grants of funds or services or transfer such funds or services for the implementation of the purposes of this chapter and of title IV of Public Law 95-87 [91 Stat. 456; 30 U.S.C. 1231 et seq.].
6. May enter any property without a warrant for the purpose of conducting studies to determine the existence of adverse effects of past coal mining and noncoal mining practices.
7. May enter and lease or acquire land adversely affected by past coal mining or noncoal mining practices for the purpose of reclaiming such lands pursuant to this chapter.
8. May engage in cooperative projects under this chapter with any federal or state agency.
9. May engage in any work and do all things necessary or expedient, including the promulgation of regulations for all provisions of this chapter, to implement and administer the provisions of this chapter and of title IV of Public Law 95-87 [91 Stat. 456; 30 U.S.C. 1231 et seq.], and to develop and implement an abandoned mine reclamation program.
10. May initiate, in addition to any other remedies provided for in this chapter, in any court of competent jurisdiction, an action in equity for an injunction (either temporary or permanent) to restrain any interference with the exercise of the right to enter or to conduct any work provided for in this chapter.
11. May require, by contractual agreement with the appropriate persons, the extraction of any remaining coal deposits in areas reclaimed under this chapter, in order to maximize resource recovery. The commission may promulgate such regulations as may be necessary to ensure that such extraction is performed by a qualified contractor in compliance with the applicable performance standards of section 38-14.1-24 and, if warranted, provide for compensation to the person entitled thereto.
12. May expend moneys from the fund for emergency restoration, reclamation, abatement, control, or prevention of adverse effects of coal mining practices on eligible lands, if the commission makes a finding of fact and the office of surface mining reclamation and enforcement concurs that:
    1. An emergency exists constituting a danger to the public health, safety, or general welfare; and
    2. No other person or agency will act expeditiously to restore, reclaim, abate, control, or prevent the adverse effects of coal mining practices.
13. Its agents, employees, and contractors may enter upon any land where the emergency exists and any other land to have access to the land where the emergency exists to restore, reclaim, abate, control, or prevent the adverse effects of coal mining practices and to do all things necessary or expedient to protect the public health, safety, or general welfare. Such entry is an exercise of police power and is not condemnation or trespass of property. The moneys and the benefits accruing are charged against the land and mitigate or offset any claim by any owner for any alleged damages. This provision does not create new rights of action or eliminate existing immunities.
14. Every successful bidder for an abandoned mine lands contract must be eligible based on available information concerning federal and state failure-to-abate cessation orders, unabated federal and state imminent harm cessation orders, delinquent civil penalties issued pursuant to section 518 of the Surface Mining Control and Reclamation Act of 1977 [Pub. L. 95-87; 91 Stat. 445; 30 U.S.C. 1201 et seq.], bond forfeitures where violations upon which the forfeitures were based have not been corrected, delinquent abandoned mine reclamation fees, and unabated violations of federal and state laws and rules and regulations pertaining to air or water environmental protection incurred in connection with any surface coal mining operation.

38-14.2-04. State abandoned mine reclamation fund.

There is hereby created the state abandoned mine reclamation fund.

1. Revenue to the fund must include:
   1. Moneys applied for and received by the commission pursuant to title IV of Public Law 95-87 [91 Stat. 456; 30 U.S.C. 1231 et seq.], for the purposes of this chapter.
   2. Moneys donated to the commission by persons, corporations, limited liability companies, associations, and foundations for the purposes of this chapter.
   3. Moneys collected by the commission from charges for uses of lands acquired or reclaimed with moneys from the fund, after expenditures for maintenance have been deducted.
   4. Moneys recovered by the commission through satisfaction of liens filed against privately owned lands reclaimed with moneys from the fund.
   5. Moneys recovered by the commission from the sale of lands acquired with moneys from the fund.
   6. Such other moneys as may be deposited in the fund for use in carrying out the purposes of the abandoned mine reclamation program.
2. Moneys in the fund may be used for the following purposes:
   1. Reclamation and restoration of land and water resources as defined by section 38-14.2-06 and adversely affected by past mining, including but not limited to:
      1. Reclamation and restoration of abandoned surface mined areas, abandoned coal processing areas, and abandoned coal refuse disposal areas.
      2. Reclamation of lands affected by underground mine subsidence.
      3. Planting of land adversely affected by past coal mining or noncoal mining to prevent erosion and sedimentation.
      4. Prevention, abatement, treatment, and control of water pollution created by coal mine or noncoal mine drainage including restoration of streambeds, and construction and operation of water treatment plants.
      5. Prevention, abatement, and control of burning coal refuse disposal areas and burning coal in situ.
      6. Prevention, abatement, and control of coal mine subsidence.
   2. Acquisition or lease of land as provided for in this chapter.
   3. Studies by the commission by contract with public and private organizations to provide information, advice, and technical assistance, including research and demonstration projects, conducted for the purposes of this chapter.
   4. All other necessary expenses to accomplish the purposes of this chapter, including administrative expenses and costs incurred in the development of the abandoned mine reclamation plan and the abandoned mine reclamation program.
3. There is created a special fund in the state treasury called the state abandoned mine reclamation fund set-aside trust account. Revenue to the set-aside trust account must be ten percent of the amount granted by the secretary of the interior under title IV of Public Law 95-87 as provided by Public Law 100-34. This account must be interest bearing and all interest must be credited to the set-aside trust account. No funds from this account may be expended prior to September 30, 2004. After September 30, 2004, the funds may be expended as provided in this subsection but no funds may be used to reclaim noncoal projects. The legislative assembly shall authorize expenditure by appropriation from the account as necessary to defray the administrative expenses of the program. The remaining funds in the account may only be used in accordance with section 38-14.2-07 but no funds may be used on noncoal projects. The liability of the state to fulfill the requirements of this subsection is limited to the amount of funds available in the account established in this subsection. The state has no obligations under this subsection except to the extent of federal funds deposited in the coal mine mitigation account and the interest thereon to operate the program.

38-14.2-05. Construction of public facilities.

Upon reclamation of all abandoned coal mine areas and all abandoned noncoal areas pursuant to the provisions of this chapter, if there is a need for the construction of specific public facilities in communities impacted by coal development and if impact funds which may be available are inadequate, the governor of the state of North Dakota shall certify to the existence of such conditions to the secretary of the interior and funds may be allocated and expended for such construction upon the approval of the specific public facilities by the commission.

38-14.2-06. Eligible lands and water.

Lands and water eligible for reclamation or drainage abatement expenditures under this chapter are those which were mined for coal or which were affected by such mining, wastebanks, coal processing or other coal mining processes and abandoned or left in an inadequate reclamation status prior to August 3, 1977, and for which there is no continuing reclamation responsibility under other state laws. Lands and water which were mined or affected by mining for minerals and materials other than coal are also eligible for reclamation under this chapter if such reclamation is necessary to protect the public health, safety, general welfare, and property and such noncoal abandoned mine lands were left in an inadequate reclamation status prior to August 3, 1977, and for which there is no continuing reclamation responsibility under other state laws.

38-14.2-07. Commission authorized to administer abandoned mine reclamation program — Objectives — Priorities.

The commission is hereby authorized to develop, administer, and enforce an abandoned mine reclamation program. Expenditure of funds for the projects under this program must reflect priorities in the order stated:

1. Administrative expenses and costs incurred in the development of the abandoned mine reclamation plan and the abandoned mine reclamation program.
2. The protection of public health, safety, general welfare, and property from extreme danger resulting from the adverse effects of past coal mining practices.
3. The protection of public health, safety, and general welfare from adverse effects of past coal mining practices which do not constitute an extreme danger.
4. The restoration of eligible land and water and the environment previously degraded by adverse effects of past coal mining practices, including measures for the conservation and development of soil, water (excluding channelization), woodland, fish and wildlife, recreation resources, and agricultural productivity.
5. Research and demonstration projects relating to the development of surface coal mining reclamation and water quality control program methods and techniques.
6. The protection, repair, replacement, construction, or enhancement of public facilities such as utilities, roads, recreation, and conservation facilities adversely affected by past coal mining practices.
7. The development of publicly owned land adversely affected by past coal mining practices, including land acquired as provided in this chapter, for recreation, historic, conservation, and reclamation purposes and open space benefits.
8. The protection of the public from hazards endangering life and property resulting from the adverse effects of past noncoal mining practices. However, upon request by the governor of the state of North Dakota and approval by the secretary of the interior, such work may be undertaken before the priorities related to past coal mining have been fulfilled.
9. The protection of the public from hazards to health and safety from the adverse effects of past noncoal mining practices.
10. The restoration of the environment degraded by the adverse effects of past noncoal mining.
11. The construction of public facilities in accordance with section 38-14.2-05.

38-14.2-08. Right to conduct studies.

The commission has the right to enter upon any property for the purpose of conducting studies or exploratory work to determine the existence of adverse effects of past coal mining and noncoal mining practices and to determine the feasibility of restoration, reclamation, abatement, control, or prevention of such adverse effects. Such entry must be construed as an exercise of the police power for the protection of public health, safety, and general welfare and may not be construed as an act of condemnation of property nor trespass thereon.

38-14.2-09. Affected lands — Right of entry.

If the commission makes a finding of fact that:

1. Land or water resources have been adversely affected by past coal mining or noncoal mining practices; and
2. The adverse effects are at a stage where, in the public interest, action to restore, reclaim, abate, control, or prevent should be taken; and
3. The owners of the land or water resources where entry must be made to restore, reclaim, abate, control, or prevent the adverse effects of past coal mining or noncoal mining practices are not known or readily available; or
4. The owner will not give permission for the commission, its agents, employees, or contractors to enter upon such property to restore, reclaim, abate, control, or prevent the adverse effects of past coal mining or noncoal mining practices,

then, upon giving notice by mail to the owners if known or if not known by posting notice upon the premises and advertising once in the official newspaper of each county and in other daily newspapers of general circulation in each county wherein the land lies, the commission, its agents, employees, or contractors has the right to enter upon the property adversely affected by past coal mining or noncoal mining practices and any other property to have access to such property to do all things necessary or expedient to restore, reclaim, abate, control, or prevent the adverse effects. Such entry must be construed as an exercise of the police power for the protection of public health, safety, and general welfare and may not be construed as an act of condemnation of property nor of trespass thereon. The moneys expended for such work and the benefits accruing to any such premises so entered upon are chargeable against such land to the extent allowed in section 38-14.2-14 and mitigate or offset any claim in or any action brought by any owner of any interest in such premises for any alleged damages by virtue of such entry; provided, however, that this provision is not intended to create new claims for relief or eliminate existing immunities.

38-14.2-10. Land acquisition.

The commission may acquire any land, by purchase, donation, or condemnation, pursuant to the procedures of chapter 32-15, and other laws governing eminent domain, which is adversely affected by past coal mining or noncoal mining practices if the commission determines in accordance with the rules of practice and procedure established by the commission that acquisition of such land is necessary for successful reclamation and that:

1. The acquired land, after restoration, reclamation, abatement, control, or prevention of the adverse effects of past coal mining or noncoal mining practices, will serve recreation, historic, conservation, and reclamation purposes or provide open space benefits; and
2. Permanent facilities such as a mine drainage treatment plant or a relocated stream channel will be constructed on the land for the restoration, reclamation, abatement, control, or prevention of the adverse effects of past coal mining or noncoal mining practices; or
3. Acquisition of coal refuse disposal sites and all coal refuse thereon will serve the purposes of this chapter or that public ownership is desirable to meet emergency situations and prevent recurrences of the adverse effects of past coal mining or noncoal mining practices.

38-14.2-11. Title to lands.

Title to all lands acquired pursuant to this chapter must be in the name of the state of North Dakota. The price paid for land acquired under this chapter must reflect the market value of the land as adversely affected by past coal mining or noncoal mining practices.

38-14.2-12. Transfer or sale of acquired lands.

The commission may transfer land acquired pursuant to this chapter to the appropriate state or federal agency. Where land acquired pursuant to this chapter is deemed to be suitable for industrial, commercial, residential, or recreational development, the commission may sell such land by public sale under a system of competitive bidding, at not less than fair market value, pursuant to the provisions of chapter 54-01 and other laws applicable to the sale of state-owned land and under such other regulations promulgated to ensure that such lands are put to proper use consistent with local and state land use plans, if any, as determined by the commission.

38-14.2-13. Public hearing on disposition of acquired lands.

The commission, when requested, shall hold a public hearing, with the appropriate public notice, in the county or counties in which lands acquired pursuant to this chapter are located. The hearings must be held at a time which affords local citizens and governments the maximum opportunity to participate in the decision concerning the use or disposition of the lands after restoration, reclamation, abatement, control, or prevention of the adverse effects of past coal mining or noncoal mining practices. The hearing must be conducted pursuant to chapter 28-32.

38-14.2-14. Liens for reclamation on private lands.

1. Within six months after the completion of projects to restore, abate, control, or prevent adverse effects of past coal mining or noncoal mining practices on privately owned land, the commission shall itemize the moneys so expended and may file a statement thereof in the office of the county recorder in the county in which the land is located, together with notarized appraisals by an independent appraiser of the value of the land before and after the restoration, reclamation, abatement, control, or prevention of adverse effects of past coal mining or noncoal mining practices if the moneys so expended result in a significant increase in property value. Such statement constitutes a lien upon the land. The lien may not exceed the amount determined by the appraisals to be the increase in the market value of the land as the result of the restoration, reclamation, abatement, control, or prevention of the adverse effects of past coal mining or noncoal mining practices. The lien may be waived by the commission if:
   1. The cost of filing the lien, including indirect costs, exceeds the increase in the fair market value of the land as the result of reclamation activities;
   2. The reclamation work performed on private land primarily benefits health, safety, or environmental values of the greater community or area in which the land is located; or
   3. The reclamation work performed is necessitated by an unforeseen occurrence and the work performed to restore that land will not result in a significant increase in the market value of the land as it existed immediately before the occurrence.
2. No lien may be filed against the property of any person, in accordance with this section, who neither consented to nor participated in nor exercised control over the mining operation which necessitated the reclamation performed hereunder.
3. The landowner may petition the commission for a hearing within sixty days of the filing of the lien to determine the increase in the market value of the land as the result of the restoration, reclamation, abatement, control, or prevention of the adverse effects of past coal mining or noncoal mining practices. The amount determined to be the increase in value of the premises constitutes the amount of the lien and must be recorded with the statement herein provided. The hearing must be conducted pursuant to chapter 28-32.
4. Any statement filed pursuant to this section constitutes a lien upon the land as of the date of the expenditure of the moneys and has priority as a lien second only to the lien of real estate taxes imposed upon the land.
5. The commission may bring an action to enforce the lien in the district court of the county in which the land is located. Any number of persons claiming liens against the same property may join in the action and when separate actions are commenced, the court may consolidate them. Before the lien may be enforced, written notice of intention to enforce the lien must be given by personal service upon the record owner of the land affected at least ten days before an action to enforce the lien is commenced, or by certified mail directed to the owner’s last-known address at least twenty days before the action is commenced. The land affected may not be sold for less than the fair market value of the land after the restoration, reclamation, abatement, control, or prevention of adverse effects of past coal mining or noncoal mining practices. No deficiency judgment may issue against the record owner of the land affected if the proceeds from the sale are insufficient to satisfy the total amount of the lien on the land.

38-14.2-15. Hearing and appeal.

Any person claiming to be aggrieved or adversely affected by any regulation or order of the commission or its failure to enter an order under this chapter may request a hearing by the commission. The hearing must be conducted pursuant to chapter 28-32. There is a right of appeal to the district court from any adverse ruling by the commission issued pursuant to this chapter.

38-14.3-01. Definitions.

In this chapter:

1. “Bond” means a bond required of a permittee under chapter 38-14.1.
2. “Fund” means the surface coal mining and reclamation bond fund.
3. “Permit” means a surface coal mining and reclamation operation permit approved by the public service commission under chapter 38-14.1.
4. “Permittee” means a person holding a permit.

38-14.3-02. Surface coal mining and reclamation bond fund — Appropriation.

The industrial commission may establish a surface coal mining and reclamation bond fund to be maintained at the Bank of North Dakota. All moneys collected and received under this chapter are appropriated to the commission for the purposes provided for in this chapter.

38-14.3-03. Bond coverage available to permittees.

The fund may provide bonds for the faithful performance of all surface coal mining laws, rules, and permit terms and conditions. An application for a bond may be made to the industrial commission, which shall approve or disapprove the application. The decision of the industrial commission may not be appealed. The industrial commission may establish conditions and require information and such guarantee and indemnity by the permittee as the industrial commission deems necessary for the preservation of the fund.

38-14.3-04. Investment of fund.

Investment of the fund is under the supervision of the Bank of North Dakota.

38-14.3-05. Commission may employ staff.

The industrial commission may employ staff and enter into public and private contracts as may be necessary to operate the fund. The salaries of employees and other expenditures for the operation of the fund must be paid out of the fund.

38-14.3-06. Premiums — Amount and to whom paid.

The premium for a bond under this chapter must be set by the industrial commission. Premiums must be paid in advance to the industrial commission and deposited in the fund.

38-14.3-07. Reinsurance contracts — Revenue bonds — Guarantees.

The industrial commission shall do all things necessary to preserve the fund and ensure the ability of the fund to pay claims. The industrial commission is granted all powers necessary to effectuate the purposes of this chapter, including but not limited to the power to:

1. Contract for reinsurance of any risk against which a bond is issued under this chapter. A contract for reinsurance may be entered into without public bids and must be approved by the insurance commissioner.
2. Issue evidences of indebtedness. The principal of, and interest on, evidences of indebtedness may be paid only from the fund. The evidences of indebtedness are not a debt of the state of North Dakota or of any officer or agent of the state within the meaning of any statutory or constitutional provision and shall contain a statement to that effect on their face. The evidences of indebtedness may be sold at public or private sale and must contain the terms and provisions set by the industrial commission. Any state department or public fund may invest its funds in the purchase of the evidences of indebtedness. The evidences of indebtedness are not subject to taxation by the state or by any political subdivision of the state.
3. Require, before issuing a bond, that a permittee guarantee and indemnify the fund against any loss and secure the guarantee and indemnity by the pledge or posting of real or personal property under terms and conditions set by the industrial commission. The industrial commission may not require the pledge or posting of property if the fund’s reserves are sufficient to ensure the payment of all claims against it. The liability of a permittee under a guarantee or indemnity agreement under this chapter is limited to the payment of any claims against the bond issued for the permittee.

38-14.3-08. Claims — How paid.

All claims against bonds provided for by this chapter must be paid out of the fund in an amount not exceeding the face amount of the bond.

38-14.3-09. Industrial commission may adopt rules.

The industrial commission may adopt rules necessary to carry out this chapter.

38-15-01. Policy.

It is hereby declared to be in the public interest to foster, encourage, and promote the development, production, and utilization of all natural resources of coal, commercial leonardite, oil, gas, and subsurface minerals in a manner as will prevent waste and allow a greater ultimate recovery of the natural resources, and to protect the rights of all owners so that the greatest possible economic recovery of natural resources be obtained in the state, to the end that landowners, royalty owners, producers, and the general public realize and enjoy the greatest possible good from these vital natural resources.

38-15-02. Definitions.

As used in this chapter, unless the context otherwise requires:

1. “Coal” means all kinds of coal, and includes what is known as lignite coal, unless a contrary intention plainly appears.
2. “Commercial leonardite” means a dark-colored, soft, earthy rock formed from the oxidation of lignite coal, and is produced from a mine that has as its only function for supply for purposes other than gasification or combustion to generate electricity.
3. “Commission” means the industrial commission.
4. “Conflicting interests” means those interests of producers which are in conflict, so that full production and utilization by one producer is prohibited or impeded by the interests of another producer of a separate natural resource.
5. “Gas” means all natural gas and other fluid hydrocarbons not hereinbelow defined as oil.
6. “Natural resources” means coal, oil, gas, and subsurface minerals as defined herein.
7. “Oil” means crude petroleum oil and other hydrocarbons, regardless of gravity, which are produced at the wellhead in liquid form, and the liquid hydrocarbons known as distillate or condensate recovered or extracted from gas other than gas produced in association with oil and commonly known as casinghead gas.
8. “Owner” means the person who has the right to produce natural resources either for that person or others.
9. “Person” means any natural person, corporation, limited liability company, association, partnership, receiver, trustee, executor, administrator, guardian, fiduciary, or other representative of any kind, and includes any department, agency, instrumentality, or political subdivision of the state. The masculine gender, in referring to a person, includes the feminine and the neuter genders.
10. “Producer” means the owner of a well or wells, or mine or mines, capable of producing coal, commercial leonardite, oil, gas, or subsurface minerals.
11. “Subsurface minerals” means all naturally occurring elements and their compounds, volcanic ash, precious metals, carbonates, and natural mineral salts of boron, bromine, calcium, fluorine, iodine, lithium, magnesium, phosphorus, potassium, sodium, thorium, uranium, and sulfur, and their compounds but does not include sand and gravel and rocks crushed for sand and gravel.
12. “Waste” means the inefficient utilization of reserves of oil, gas, subsurface minerals, coal, or commercial leonardite, as the case may be.

38-15-03. Jurisdiction of commission.

The commission has continuing jurisdiction and authority over all persons and property, public and private, necessary to enforce effectively the provisions of this chapter. The director of mineral resources shall act as a supervisor charged with enforcing the regulations and orders of the commission applicable to the provisions of this chapter. The commission has authority to make investigations it deems proper to determine whether facts exist which justify action by the commission. The commission has the authority:

1. To require the furnishing of a reasonable bond with good and sufficient surety, conditioned upon the full compliance with the provisions of this chapter, and the rules and regulations of the commission prescribed to govern, satisfy, and resolve conflicting interests among producers within North Dakota.
2. To resolve conflicting interests of producers of natural resources which cannot be voluntarily concluded by them in the public interest to eliminate waste, to the end that the producer, landowner, and mineral owner realize the greatest possible economic advantage.
3. To promulgate and to enforce rules, regulations, and orders to effectuate the purposes and intent of this chapter.

38-15-04. Procedure.

The administrative procedure involved in the adoption of any rules or regulations, or the issuance of any orders, by the commission under the provisions of this chapter must be in accordance with the provisions of chapter 38-08 governing the procedure in the administration of the Oil and Gas Conservation Act; provided, however, that in the event of any emergencies found to exist by the commission which in its judgment requires the making, revoking, changing, amending, modifying, altering, enlarging, renewal or extension of renewal, regulation, or order without first having a hearing, the emergency rule, regulation, or order has the same validity as if a hearing with respect to the same had been held after due notice. The emergency rule, regulation, or order permitted by this section remains in force no longer than fifteen days from its effective date, and in any event expires when the rule, regulation, or order, made after due notice and hearing with respect to the subject matter of the emergency rule, regulation, or order, becomes effective.

38-15-05. Penalty — Injunction — Provisions applicable.

The provisions of sections 38-08-16 and 38-08-17 are applicable to the provisions of this chapter and to the rules, regulations, and orders of the commission promulgated hereunder.

38-16-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

1. “Affected land” means the area of land from which overburden is removed as the result of a surface mining operation or upon which overburden or refuse is deposited as the result of a surface mining operation, or both.
2. “Committee” means the state soil conservation committee.
3. “Landowner” means the owner of land affected by a surface mining operation.
4. “Mineral” includes cement rock, clay, gravel, limestone, manganese, molybdenum, peat, potash, pumicite, salt, sand, scoria, sodium sulfate, stone, zeolite, or other minerals, but does not include coal.
5. “Overburden” means all of the earth and other materials which lie above natural deposits of minerals, and also means such earth and other materials disturbed from their natural state in a surface mining operation.
6. “Person” means any individual, firm, association, partnership, cooperative, corporation, limited liability company, or any department, agency, or instrumentality of the state or any subdivision thereof.
7. “Reclamation” means the reconditioning of the area of land affected by a surface mining operation to make the area suitable for productive use, including, but not limited to, forestry, agriculture, grazing, wildlife, recreation, residential, and industrial sites.
8. “Surface mining operation” relates to the mining of minerals by removing the overburden lying above natural deposits thereof, and mining directly from the natural deposits thereby exposed which will, within one calendar year, result in the removal of ten thousand cubic yards [7645.55 cubic meters] or more of product, including overburden, or affect one-half acre [.20 hectare] or more.

38-16-01.1. Gravel and sand surface mining operations — Reclamation — Civil action — Penalty.

Any surface mining operator conducting a gravel or sand surface mining operation on land in this state owned by another person, upon completion or abandonment of the surface mining operation, shall reclaim the affected land. Each surface mining operator shall negotiate with the landowner a written agreement providing for the reclamation of the affected land. Unless the affected land is to be used for other purposes as agreed upon between the surface mining operator and the landowner, the reclamation agreement must, at a minimum, provide for restoration by the surface mining operator of the affected land as nearly as possible to the agreed contour and usability; indicate the amount of topsoil and subsoil to be saved, segregated, and respread; and indicate the party responsible for compaction of backfill, soil testing, fertilization, revegetation, weed control, rock disposal, and replacement or establishment of conservation practices. The reclamation must be within a time period agreed upon between the parties, but within one year after the final cessation of surface mining operations. A landowner may bring a claim for relief in any appropriate district court against the surface mining operator who has failed to reclaim properly affected land pursuant to a reclamation agreement under this section. In an action under this section, a surface mining operator is liable for damage in an amount necessary to reclaim the land. Any person who violates any provision of this section is guilty of a class B misdemeanor.

38-16-02. Surface mining operation — Report to committee required.

Except as provided for in section 38-16-06, no person may conduct a surface mining operation without complying with the reporting requirements of this chapter. Any person conducting a number of operations, each of which, within one calendar year, results in the removal of less than ten thousand cubic yards [7645.55 cubic meters] of earthen material or product, including overburden, or affects less than one-half acre [.20 hectare], but which, in the aggregate, result in the removal of ten thousand cubic yards [7645.55 cubic meters] or more of earthen material or product, including overburden, within one calendar year, or affect one-half acre [.20 hectare] or more within one calendar year, is subject to the provisions of this chapter.

38-16-03. Annual report to committee — When filed — Contents.

Any person conducting a surface mining operation shall file with the committee a report on each surface mining operation conducted during the calendar year. The report must be filed on or before December thirty-first of each year in which the surface mining operation is conducted. The annual report must be on a form provided by the committee which must, in addition to any pertinent data required by the committee, include:

1. The name and address of the landowner and of the person conducting the surface mining operation, and, if any of these are corporations, limited liability companies, or other business entities, the names and addresses of their principal officers or managers and resident agent for service of process.
2. The location of the surface mining operation by section, township, range, and county.
3. The date the surface mining operation was commenced.
4. The minerals mined by the surface mining operation.
5. A description of the surface mining operation.
6. The maximum depth of the surface mining operation.
7. The number of acres [hectares] affected by the surface mining operation for the calendar year covered by the report.
8. An estimate of the number of acres [hectares] to be affected by the surface mining operation during the calendar year next succeeding the report.
9. The cubic yardage [cubic meters] of mineral mined and overburden disturbed by the surface mining operation for the calendar year covered by the report.
10. An estimate of the cubic yardage [cubic meters] of mineral to be mined and overburden to be disturbed by the surface mining operation during the calendar year next succeeding the report.
11. A map of the affected land if more than ten acres [4.05 hectares] have been disturbed by the surface mining operation, or, regardless of the amount of land to be disturbed, if the committee finds that conditions warrant it and so requests a map. The map must show the boundaries of the affected land, topographic detail, the location and names of all streams, roads, railroads, and utility lines on or immediately adjacent to the affected land, and the location of access roads built in conjunction with the surface mining operation.
12. The location of any segment of the affected land that will not be further disturbed by the surface mining operation.
13. The date of completion or abandonment of the surface mining operation, if completed or abandoned.
14. The date of beginning, extent, and current status of any reclamation activities performed during the period covered by the annual report or planned to be performed after completion or abandonment of the surface mining operation or any segment of the surface mining operation. The description of reclamation activities must indicate which parts of the affected land are intended to be reclaimed for forest, pasture, crop, horticultural, homesite, recreational, industrial, or other uses, including food, shelter, and ground cover for wildlife, and must show the same by appropriate designation on a reclamation map.

38-16-04. Powers of the committee.

The committee has the power to:

1. Exercise general supervision and administration and enforcement of this chapter.
2. Encourage and conduct training, research, experiments, and demonstrations, and to collect and disseminate information relating to surface mining operations and reclamation of lands and waters affected by surface mining operations.
3. Make, amend, and rescind, from time to time, such rules and regulations, in the manner prescribed by chapter 28-32, as may be appropriate to effectuate the purposes and provisions of this chapter.
4. Make investigations or inspections which may be deemed necessary to ensure compliance with any provisions of this chapter.
5. Cooperate with and receive technical and financial assistance from the United States, any state, or any department, agency, or officer thereof for any purposes relating to the reclamation of any affected lands.

38-16-05. Committee to transmit annual report to local soil conservation districts.

The committee shall prepare and transmit to local soil conservation districts, on or before June thirtieth of each year, a report giving information about surface mining operations and reclamation activities conducted in the soil conservation districts during the preceding calendar year.

38-16-06. Surface mining operations exempt from reporting requirements.

The reporting requirements of this chapter do not apply to a surface mining operation which is subject to a requirement by a department or agency of the state that the person conducting the surface mining operation obtain a written release from the landowner approving the condition of the affected land upon completion or abandonment of the surface mining operation. Nothing in this chapter may be construed to be applicable to a surface mining operation which is regulated under the provisions of chapter 38-14.1.

38-17-01. Short title.

This chapter must be known as the North Dakota Coal Leasing Practices Act.

38-17-02. Legislative intent.

It is the intent of the legislative assembly of the state of North Dakota to exercise the legitimate police power of the state in order to protect the economic welfare of the citizens who rely for their livelihood on agricultural production and thereby protect the agricultural economic base of the state. It is in the public interest that certain of the terms and conditions of the leases of coal in place be regulated. The provisions of this chapter apply to all leases for the mining of coal entered into after April 9, 1975.

38-17-03. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

1. “Advance royalty” means the offset contemplated which would allow payments for rent, bonuses, and damages under the terms of the lease to be deducted from the amount of the royalty due to the lessor when the mining operation actually begins.
2. “Mineral agreement” means the agreement between either the surface estate owner and the mineral developer or between the mineral estate owner and the mineral developer which gives the mineral developer the right to conduct mining operations. The mineral agreement may consist of the mineral lease and any other document or documents used to express the entire agreement between the parties.
3. “Mining operation” means any type of activity, the aim of which is to discover the presence of coal, or to remove the coal so discovered from its original position on or in the land by any means whatsoever.

38-17-04. Use of sight draft — Cancellation of lease authorized.

1. Any trust or escrow document relating to a coal lease, or any sight draft or other negotiable or non-negotiable instrument given as full or partial consideration for a coal lease, may authorize the first party to the document or instrument to reject the lease or refuse to honor the draft or other instrument at the time it is due and payable because of a bona fide failure of title.
2. Either party to a coal lease may cancel the coal lease until midnight of the fifteenth business day after the day on which the lessor executed the coal lease. Cancellation occurs and is effective when the party desiring to cancel sends written notice of the cancellation of the lease to the other party by registered mail, return receipt requested, if mailed within the specified amount of time. Notice of cancellation given by either party is effective if it indicates that party’s intention not to be bound by the lease.

38-17-05. Maximum term of years.

No coal lease executed after April 9, 1975, is valid for a primary term of more than twenty years, unless operations for mining are taking place on the leased land within the primary term, or the land is subject to a valid mining permit, and for so long thereafter as coal is regularly mined therefrom, or the land is subject to permit. This limitation does not prohibit agreements for extensions or renewals of the primary term.

38-17-06. Acknowledgment of advance royalty provision required.

All advance royalty provisions contained in coal leases executed after April 9, 1975, must be specially explained to the lessor before the lessor executes the lease. The lessor shall execute an acknowledgment indicating the lessor’s knowledge of the presence of the advance royalty provision or the advance royalty provision is void. The acknowledgment must be printed on the lease document in print which is larger than any other print on the document, and it must refer the lessor to the exact provision of the lease which permits advance royalty.

An example of the type of acknowledgment required by this section is as follows: THE LESSOR HEREBY ACKNOWLEDGES THAT THE LESSOR IS AWARE OF SECTION _________ OF THIS LEASE RELATING TO ADVANCE ROYALTIES.

38-17-07. Waiver.

The terms of a coal lease regulated by this chapter are hereby declared to be absolute and unwaivable by either party to the coal lease or to the mineral agreement, regardless of lease terms to the contrary. Any instrument which purports to waive the terms specified in this chapter is null and void and of no legal effect.

38-18-01. Short title.

This chapter must be known as the Surface Owner Protection Act.

38-18-02. Legislative findings.

1. The legislative assembly finds that it is necessary to exercise the police power of the state as described in this chapter to protect the public welfare of North Dakota which is largely dependent on agriculture and to protect the economic well-being of individuals engaged in agricultural production. This finding recognizes that the people of North Dakota desire to retain a strong agricultural economy and that North Dakota currently produces three percent of the food for the entire nation.
2. Furthermore, the legislative assembly finds that there is an abundance of minerals in North Dakota which can be used for the production of electricity, synthetic natural gas, and other forms of energy, and that energy produced from North Dakota minerals is needed by the nation and North Dakota is capable of producing up to two and one-half percent of the nation’s energy needs if the minerals found here are fully developed.
3. The legislative assembly further finds that mining development may temporarily interfere with portions of the agricultural economy.

38-18-03. Purpose and interpretation.

It is the purpose of this chapter to provide the maximum amount of constitutionally permissible protection to surface owners from the undesirable effects of development, without their consent, of minerals underlying their surface. This chapter is to be interpreted in light of the legislative intent expressed herein. The provisions of this chapter shall be interpreted to benefit surface owners, regardless of how the mineral estate was separated from the surface estate and regardless of who executed the document which gave the mineral developer the right to conduct mining operations on the land.

38-18-04. Applicability.

This chapter applies to and places requirements on the holder of the mineral estate, on the mineral developer, and on the public service commission regardless of the means used to separate the mineral estate from the surface estate.

38-18-05. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

1. “Agricultural production” means the production of any growing grass or crop attached to the surface of the land, whether or not the grass or crop is to be sold commercially, and the production of any farm animals, including farmed elk, whether or not the animals are to be sold commercially.
2. “Disturbed” means any alteration of the topsoil of the land whether the alteration is for the purpose of exploring for coal or commercial leonardite, or for the purpose of carrying out an actual mining operation.
3. “Mineral developer” means the person who acquires at least seventy-five percent of the mineral rights or a lease of at least seventy-five percent of the mineral rights for the purpose of extracting or using the mineral for nonagricultural purposes.
4. “Mineral estate” means an estate in or ownership of all or part of the minerals under a specified tract of land.
5. “Mineral lease” means any lease which purports to convey the minerals or rights relating to the minerals under a specified tract of land separate from the surface, and any other type of lease which gives or conveys rights to minerals.
6. “Mineral owner” means any person or persons who presently own the mineral estate, their successors, assigns, or predecessors in title, under a specified tract of land by means of a mineral deed, or by an exception or reservation in the deed, grant, or conveyance of the surface, or by any other means whatsoever.
7. “Minerals” means coal or commercial leonardite.
8. “Mining operation” means any type of activity, the aim of which is to discover the presence of minerals, or to remove the minerals so discovered from their original position on or in the land by any means whatsoever.
9. “Surface estate” means an estate in or ownership of the surface of a particular tract of land.
10. “Surface owner” means the person or persons who presently have valid title to the surface of the land, their successors, assigns, or predecessors in title, regardless of whether or not a portion of the land surface is occupied for a residence.

38-18-06. Written notice and consent required before permit to surface mine land may be issued.

1. Before the public service commission may issue a permit to surface mine land, the mineral developer shall give the surface owner written notice of the type of land disturbance or mining operation contemplated by the mineral developer. This notice must sufficiently disclose the plan of work and operations to enable the surface owner to evaluate the extent of the land disturbance on the surface owner’s use of the property. The notice must be accompanied by an enlarged United States geological survey topographic map showing the specific locations to be covered by the mining operation. The notice and map must be submitted to the surface owner at least thirty days before the application for a permit to surface mine is to be submitted.
2. The public service commission may not issue a permit to surface mine land unless the permit application is accompanied by statements of consent, executed by each surface owner whose land is included within the permit area, to have surface mining conducted upon the surface owner’s land. The requirement established by this section is in addition to the requirements of chapter 38-14.1.
3. A certified copy of a mineral lease executed by the surface owner in favor of the mineral developer proposing the mining project or the developer’s agent, or a certified copy of a surface lease executed by the surface owner in favor of the mineral developer proposing the mining project or the developer’s agent, if filed with the application for a permit to surface mine, may be used to fulfill the subsection 2 requirement of a statement of consent to have surface mining conducted. Any previously executed mineral lease or surface lease in favor of the mineral developer, the developer’s successors, assigns, or predecessors in title runs with the land and is binding on a subsequent mineral owner or owners or surface owner or owners, as the case may be.
4. If the mineral developer desires to have the developer’s permit amended to cover additional land, the mineral developer shall file either consent statements or surface or mineral leases executed by the surface owners of such additional land as required by this section with the application to amend the permit to cover additional land. If, in addition, all of the requirements of chapter 38-14.1 are met, the public service commission may issue the amended permit.
5. If the mineral owner or the mineral developer is unable to obtain the surface owner’s consent, the mineral owner or mineral developer may bring an action in district court to establish the relative rights of the parties and the measure of damages to the surface owner. At any time after the filing of any such action and either before or after the final decision of the district court, upon a showing to the satisfaction of the court that the surface owner will be adequately compensated for lost production, lost land value, and loss of the value of improvements due to the mining activity, the court shall issue an order which will authorize the public service commission to issue a permit to surface mine land without the consent which would otherwise be required by this section. In the event the damages awarded by the court to the surface owner exceed the amount tendered or otherwise provided for, the court shall award to the surface owner reasonable attorney’s fees in addition to any other sums determined to be due to the surface owner.

38-18-07. Surface damage and disruption payments.

1. Unless the mineral lease, surface lease, or consent statement executed by the surface owner provides for payments to the surface owner, the mineral developer shall annually pay to the surface owner a sum of money equal to the amount of damages sustained by the surface owner for loss of agricultural production caused by mining activity, provided that it can be shown that the land disturbed or to be disturbed has regularly been used for agricultural production. The amount of damages may be determined by any formula mutually agreeable between the surface owner and the mineral developer. The payments contemplated by this section only cover land actually mined, disturbed, or to be mined during the year or years during which agricultural production was actually interrupted and which land has not been restored to the level of agricultural productivity required by the plan submitted pursuant to chapter 38-14.1. The payments to be made hereunder must be made before December thirty-first of that calendar year in which the loss occurred.
2. Unless waived by the owner of a farm building, if the coal or commercial leonardite removal area of a surface mining operation comes within five hundred feet [152.4 meters] of any farm building, the mineral developer shall pay to the owner of the farm building either the fair market value of the farm building or the entire cost of removing the farm building to a location where the coal or commercial leonardite removal area of the mining operation will not come within five hundred feet [152.4 meters] of such building or buildings. The payments contemplated hereunder are in addition to any payments required by the terms of any mineral lease, unless the surface owner is a party to the lease and the lease provides for damages as contemplated in this subsection in an amount not less than the amount which would be recoverable under this section.
3. The rights granted to the surface owner by this section are hereby declared to be absolute and unwaivable, except as provided in subsection 2. Any instrument which purports to waive rights granted by this section is null and void and of no legal effect.

38-18-08. Financial obligation to reclaim.

1. It is hereby declared to be the financial obligation of the mineral developer to pay the entire cost of the surface reclamation necessitated by that developer’s mining operation. This obligation is in no way limited by the amount of the bond required of an “operator” by chapter 38-14.1.
2. If a mineral developer fails to begin reclamation of the land disturbed by a mining operation within one year after the completion of the mining operation in accordance with the plan submitted to the public service commission pursuant to chapter 38-14.1 and regulations promulgated thereunder, the surface owner may notify the public service commission, which commission shall take all of the necessary action lawfully authorized to obtain complete compliance with the reclamation plan.
3. An action at law may be maintained to recover sums due to the surface owner under this section and under section 38-18-07. The surface owner must be awarded reasonable attorney’s fees for the maintenance of the action in addition to any other sums determined to be due to the surface owner.

38-18.1-01. Mineral interest defined.

In this chapter, unless context or subject matter otherwise requires, “mineral interest” includes any interest in oil, gas, coal, clay, gravel, uranium, and all other minerals of any kind and nature, whether created by grant, assignment, reservation, or otherwise owned by a person other than the owner of the surface estate.

38-18.1-02. Statement of claims — Recording — Reversion.

Any mineral interest is, if unused for a period of twenty years immediately preceding the first publication of the notice required by section 38-18.1-06, deemed to be abandoned, unless a statement of claim is recorded in accordance with section 38-18.1-04. Title to the abandoned mineral interest vests in the owner or owners of the surface estate in the land in or under which the mineral interest is located on the date of abandonment. The owner of the surface estate in the land in or under which the mineral interest is located on the date of abandonment may record a statement of succession in interest indicating that the owner has succeeded to ownership of the minerals under this chapter.

38-18.1-03. When mineral interest deemed to be used.

1. A mineral interest is deemed to be used when:
   1. There are any minerals produced under that interest.
   2. Operations are being conducted thereon for injection, withdrawal, storage, or disposal of water, gas, or other fluid substances.
   3. In the case of solid minerals, there is production from a common vein or seam by the owners of such mineral interest.
   4. The mineral interest on any tract is subject to a lease, mortgage, assignment, or conveyance of the mineral interest recorded in the office of the recorder in the county in which the mineral interest is located.
   5. The mineral interest on any tract is subject to an order or an agreement to pool or unitize, recorded in the office of the recorder in the county in which the mineral interest is located.
   6. A proper statement of claim is recorded as provided by section 38-18.1-04.
2. The payment of royalties, bonus payments, or any other payment to a named or unnamed interest-bearing account, trust account, escrow account, or any similar type of account on behalf of a person who cannot be located does not satisfy the requirements of this section and the mineral interest is not deemed to be used for purposes of this section. Interest on such account must be credited to the account and may not be used for any other purpose. A named or unnamed interest-bearing account, trust account, escrow account, or any similar type of account that has been in existence for three years is deemed to be abandoned property and must be treated as abandoned property under chapter 47-30.2. A lease given by a trustee remains valid.

38-18.1-04. Statement of claim — Recording — Time.

The statement of claim provided for in section 38-18.1-02 must:

1. Be recorded by the owner of the mineral interest or the owner’s representative prior to the end of the twenty-year period set forth in section 38-18.1-02. A joint tenant, but not a tenant in common, may record a claim on behalf of oneself and other joint tenants.
2. Contain the name and address of the owner of the mineral interest, and a legal description of the land on, or under which, the mineral interest is located as well as the type of mineral interest involved.
3. Be recorded in the office of the recorder in the county in which the mineral interest is located.

The mineral interest is deemed to be in use at the date of recording, if the recording is made within the time provided by this section. A statement of claim filed after July 31, 2009, by a person other than the owner of record of the mineral interest is not effective to preserve a mineral interest unless accompanied by a reference to the name of the record owner under whom the owner of the mineral interest claims.

38-18.1-05. Failure to record the statement of claim.

Failure to record the statement of claim within the time period provided in section 38-18.1-04 will not cause a mineral interest to be extinguished if:

1. The owner of record of the mineral interest satisfies either one of the following requirements within sixty days after first publication of the notice provided for in section 38-18.1-06:
   1. Files with the county recorder a statement of claim as required in section 38-18.1-04; or
   2. Files with the county recorder documentation that at least one of the activities under subsection 1 of section 38-18.1-03 took place during the twenty-year period immediately preceding the first publication of notice.
2. A person other than the owner of record of the mineral interest files with the county recorder within sixty days after first publication of the notice provided for in section 38-18.1-06 an affidavit under oath or a declaration under oath which includes an explanation of the factual and legal basis for the person’s assertion of title to the mineral interest. This explanation must be accompanied by documentation supporting the assertion or an explanation why documentation is unavailable.

38-18.1-06. Notice of lapse of mineral interest — Method.

1. The owner or owners of the surface estate in the land in or under which the mineral interest is located intending to succeed to the ownership of a mineral interest upon its lapse shall give notice of the lapse of the mineral interest by publication.
2. The publication provided for in subsection 1 must be made once each week for three weeks in the official county newspaper of the county in which the mineral interest is located; however, if the address of the mineral interest owner is shown of record or can be determined upon reasonable inquiry as defined in subsection 6, notice must also be made by mailing a copy of the notice to the owner of the mineral interest within ten days after the last publication is made.
3. The notice must state:
   1. The name of the record owner of the mineral interest;
   2. A description of the land on which the mineral interest involved is located; and
   3. The name of the owner or owners of the surface estate in the land in or under which the mineral interest is located giving the notice.
4. A copy of the notice and an affidavit of service of the notice must be recorded in the office of the recorder of the county in which the mineral interest is located and constitutes prima facie evidence in any legal proceedings that such notice has been given.
5. The owner or owners of the surface estate in the land in or under which the mineral interest is located who succeeds to the ownership of a mineral interest upon its lapse under this chapter is entitled to record a statement of succession in interest indicating that that owner or owners of the surface estate in the land in or under which the mineral interest is located has succeeded to the ownership of the mineral interest.
6. To constitute a reasonable inquiry as provided in subsection 2, the owner or owners of the surface estate or the owner’s authorized agent must conduct a search of:
   1. The county recorder’s records for the existence of any uses as defined in section 38-18.1-03 by the owner of the mineral interest;
   2. The clerk of court’s records for the existence of any judgments, liens, or probate records which identify the owner of the mineral interest;
   3. The social security death index for the last-known residence of the owner of the mineral interest, if deceased; and
   4. One or more public internet databases to locate or identify the owner of the mineral interest or any known heirs of the owner. The owner or owners of the surface estate are not required to conduct internet searches on private fee internet databases.

38-18.1-06.1. Perfecting title in surface owner.

1. Upon completion of the procedure provided in section 38-18.1-06, the owner or owners of the surface estate may maintain an action in district court in the county in which the minerals are located and obtain a judgment in quiet title in the owner or owners of the surface estate. This action must be brought in the same manner and is subject to the same procedure as an action to quiet title pursuant to chapter 32-17.
2. In an action brought under this section, the owner or owners of the surface estate shall submit evidence to the district court establishing that all procedures required by this chapter were properly completed and that a reasonable inquiry as defined by subsection 6 of section 38-18.1-06 was conducted. If the district court finds that the surface owner has complied with all procedures of the chapter and has conducted a reasonable inquiry, the district court shall issue its findings of fact, conclusions of law, and enter judgment perfecting title to the mineral interest in the owner or owners of the surface estate.
3. A judgment obtained by the owner or owners of the surface estate in compliance with this section is deemed conclusive except for fraud, misrepresentation, or other misconduct.
4. A mineral lessee that obtains a lease from the owner of the surface estate, which owner has obtained a judgment to minerals pursuant to this section, is deemed a bona fide purchaser and its lease remains effective in the event the judgment is subsequently vacated for any reason. Further, the lessee is not liable to any third party for lease bonus, royalties, or any other proceeds paid to the surface owner under the lease before the judgment being vacated.
5. Absent fraud or misrepresentation, the owner or owners of the surface estate which obtain a judgment under this section and lease minerals to a lessee are entitled to retain all lease bonus, royalties, or any other proceeds paid to the surface owner under the lease before the judgment being vacated.

38-18.1-07. Waiver prohibited.

The provisions of this chapter may not be waived at any time prior to the expiration of the twenty-year period provided in section 38-18.1-02.

38-18.1-08. Applicability.

This chapter does not apply to any mineral interest owned by any governmental body or agency thereof and this chapter is both prospective and retrospective in its application.

38-19-01. Declaration of policy.

It is hereby declared to be in the public interest to encourage, and promote the proper use of geothermal resources in a manner which will prevent waste; to authorize and provide for the operation of geothermal resource extraction facilities in such manner as will achieve the optimum utilization of the geothermal resource and protect the correlative rights of all owners; to prevent contamination and pollution of surface and ground water sources; and to avoid creation of secondary hazards of a geologic nature.

38-19-02. Definitions.

As used in this chapter:

1. “Commission” means the industrial commission of North Dakota.
2. “Geothermal energy” means the internal energy of the earth, available to man as heat from rocks or liquids.
3. “Geothermal energy extraction facility” means and includes any drilled, bored, or excavated device or installation to provide for the extraction of geothermal energy.
4. “Geothermal resource” means the recoverable stored heat of the earth.
5. “Producer” means the owner of a geothermal energy extraction facility or facilities, and the owner’s agents or employees.
6. “Product” means anything produced, whether usable or unusable, by means of a geothermal energy extraction facility.
7. “Waste” means and includes the locating, spacing, drilling, excavating, or operating of any geothermal energy extraction facility in a manner which causes or tends to cause reduction in the quantity or quality of geothermal energy ultimately recoverable from a geothermal resource, or which causes or tends to cause unnecessary or excessive use, or degradation, of land surface.

38-19-03. Jurisdiction of the commission.

The commission has jurisdiction and authority and is charged with the responsibility to enforce the provisions of this chapter. This chapter does not apply to any activity regulated under chapters 38-08, 38-12, 38-12.1, 38-14.1, and 61-28. The jurisdiction granted to the commission by this chapter is not exclusive and does not affect the jurisdiction of other governmental entities. The commission acting through the director of mineral resources has the authority:

1. To require:
   1. Identification of ownership of all facilities, installations, and equipment used in the extraction of geothermal energy.
   2. The making and filing of all logs and reports on facility location, drilling, boring, excavating, and construction and the filing, free of charge, of samples, core chips, and complete cores, when requested, in the office of the state geologist.
   3. The drilling, boring, casing, excavating, plugging, and construction of facilities in a manner to prevent contamination and pollution of surface and ground water sources and unnecessary environmental degradation.
   4. The furnishing of a reasonable bond with good and sufficient surety, conditioned upon the full compliance with this chapter and the rules and orders of the commission relating to the extraction of geothermal energy. The person required to furnish the bond may elect to deposit a collateral bond, self-bond, cash, or any alternative form of security approved by the commission, or combination thereof, by which a permittee assures faithful performance of all requirements of this chapter and the rules and orders of the industrial commission.
   5. Metering or measuring all products extracted from or by means of a facility regulated by this chapter.
   6. That every person who operates a geothermal energy extraction facility in this state shall keep and maintain complete and accurate records of the quantities and nature of products extracted from or by means of any facility, and the ultimate disposition of such products, which records must be available to the commission or its agents at all times, and that every such person file with the commission such reports as it may prescribe.
   7. That upon termination of the operation of any facility or activity regulated by this chapter, the operator of the facility shall restore the surface as nearly as possible to its original condition and productivity.
2. To regulate:
   1. The drilling, boring, excavating, and construction of all geothermal energy extraction facilities.
   2. Operations to assure the optimum performance of all facilities regulated under this chapter.
3. To limit and prescribe the nature, quantity, and source of geothermal energy to be extracted from any facility regulated by this chapter.
4. To adopt rules and issue orders to effectuate the purposes of this chapter.

38-19-04. Permit and report required.

It is unlawful to commence any operations for the drilling, boring, excavating, or construction of a geothermal energy extraction facility without first securing a permit from the director of mineral resources, under such rules as may be adopted by the commission and after paying to the commission a fee for each such facility in an amount to be prescribed by the commission by rule. The fee set must be related to the cost of regulation and inspection under this chapter.

A report is required upon completion of any geothermal energy extraction facility. The report must be prepared by the geothermal energy extraction facility installer on a form provided by the state geologist and must be furnished to the state geologist within thirty days after the completion of the facility. The report must contain relevant information the state geologist requires relating to the environmental safety of the facility, including the facility owner and location, a log of formations penetrated or total depth, system specifications and design, and fluids used in the facility.

All construction of geothermal energy extraction facilities must comply with rules adopted under this chapter.

38-19-05. Commission may employ examiners.

The commission may use hearing examiners under such rules as the commission may adopt.

38-19-06. Action to restrain violation or threatened violation.

Whenever it appears that any person is violating or threatening to violate any provision of this chapter, or any rule or order of the commission, the commission may bring action against that person, in the district court of the county where the violation occurs or is threatened, to restrain that person from continuing the violation or from carrying out the threat of violation. In any such action, the court has jurisdiction to issue, without the filing of a bond or other undertaking by the commission, such prohibitory and mandatory injunctions as are necessary, including temporary restraining orders, preliminary injunctions, temporary, preliminary, or final orders restraining the person from continuing the violation or from carrying out the threat of violation.

38-19-07. Penalties.

1. Any person who violates any provision of this chapter, or any rule or order of the commission adopted or issued under this chapter, is subject to a civil penalty of not more than twelve thousand five hundred dollars for each act of violation and for each day the violation continues.
2. It is a class C felony for any person, for the purpose of evading this chapter, or any rule or order of the commission, to make or cause to be made any false entry or statement in a report required by this chapter or by any rule or order adopted or issued or promulgated by the commission, or to make or cause to be made any false entry in any record, account, or memorandum required by this chapter, or by any rule or order of the commission, or to omit, or cause to be omitted, from any such record, account, or memorandum, full, true, and correct entries as required by this chapter or by any rule or order of the commission, or to remove from this state or destroy, mutilate, alter, or falsify any record, account, or memorandum.
3. The civil penalties provided in subsection 1 are recoverable by suit filed by the attorney general in the name and on behalf of the commission, in the district court of the county in which the defendant resides, or in which any defendant resides, if there is more than one defendant, or in the district court of any county in which the violation occurred. The payment of the penalty does not operate to relieve a person on whom the penalty is imposed from liability to any other person for damages arising out of such violation.

38-19-08. Administrative procedure and judicial review.

Any proceedings under this chapter for the adoption or modification of rules or orders, including emergency orders relating to extraction of geothermal energy and determining compliance with rules of the commission, must be conducted in accordance with sections 38-08-11, 38-08-12, 38-08-13, and 38-08-14; and chapter 28-32 governs administrative practice when consistent with the provisions of this chapter and the above-referenced sections.

38-19-09. Disposition of unusable products.

Products for which there is no beneficial use and which the commission determines to be hazardous must be disposed of in accordance with the provisions of chapter 38-23 and other state laws and regulations regarding the management of hazardous waste.

38-20-01. Interstate mining compact.

The interstate mining compact is hereby enacted into law and entered into with all other jurisdictions legally joining therein in the form substantially as follows:

38-20-02. Filing bylaws and amendments.

In accordance with subsection 9 of article V of the compact, the interstate mining compact commission shall file copies of its bylaws and any amendments thereto with the governor and public service commission.

38-21-01. Geophysical, geothermal, subsurface minerals, and coal exploration fund.

There is created a geophysical, geothermal, subsurface minerals, and coal exploration fund. The following must be deposited into the fund:

1. Fees collected under sections 38-08.1-04, 38-12-03, 38-12.1-05, and 38-19-04.
2. Money received from the forfeiture of bonds or other security required by section 38-08.1-03.1, 38-12-02, 38-12.1-04, or 38-19-03.
3. Money received by the industrial commission from any federal or state agency, or any other source, to satisfy the purposes for which the fund is established.
4. Money received for penalties imposed under section 38-08.1-07, 38-12-05, 38-12.1-08, or 38-19-07.
5. Money recovered from any person to recoup costs and expenses incurred by the industrial commission to satisfy any duty imposed by chapter 38-08.1, 38-12, 38-12.1, or 38-19.

38-21-02. Fund uses.

Money in the fund may be used to pay costs and expenses incurred by the industrial commission to satisfy unfulfilled obligations imposed on persons regulated under chapters 38-08.1, 38-12, 38-12.1, and 38-19. To cure such obligations, the commission may enter contracts consistent with the requirements of section 38-08-04.4.

38-21-03. Continuing appropriation — Cap.

All money collected under section 38-21-01 must be deposited in the fund established by that section. The fund must be maintained as a special fund and all money transferred into the fund is appropriated and must be used and disbursed solely for the purposes described in section 38-21-02. If, however, the fund reaches five hundred thousand dollars, any additional money collected under section 38-21-01 must be deposited in the general fund, provided there are no outstanding obligations to be paid by the fund.

38-22-01. Policy.

It is in the public interest to promote the geologic storage of carbon dioxide. Doing so will benefit the state and the global environment by reducing greenhouse gas emissions. Doing so will help ensure the viability of the state’s coal and power industries, to the economic benefit of North Dakota and its citizens. Further, geologic storage of carbon dioxide, a potentially valuable commodity, may allow for its ready availability if needed for commercial, industrial, or other uses, including enhanced recovery of oil, gas, and other minerals. Geologic storage, however, to be practical and effective requires cooperative use of surface and subsurface property interests and the collaboration of property owners. Obtaining consent from all owners may not be feasible, requiring procedures that promote, in a manner fair to all interests, cooperative management, thereby ensuring the maximum use of natural resources.

38-22-02. Definitions.

As used in this chapter, unless the context requires otherwise:

1. “Carbon dioxide” means carbon dioxide produced by anthropogenic sources which is of such purity and quality that it will not compromise the safety of geologic storage and will not compromise those properties of a storage reservoir which allow the reservoir to effectively enclose and contain a stored gas.
2. “Commission” means the industrial commission.
3. “Geologic storage” means the permanent or short-term underground storage of carbon dioxide in a storage reservoir.
4. “Permit” means a permit issued by the commission allowing a person to operate a storage facility.
5. “Pore space” means a cavity or void, whether natural or artificially created, in a subsurface sedimentary stratum.
6. “Reservoir” means a subsurface sedimentary stratum, formation, aquifer, cavity, or void, whether natural or artificially created, including oil and gas reservoirs, saline formations, and coal seams suitable for or capable of being made suitable for injecting and storing carbon dioxide.
7. “Storage facility” means the reservoir, underground equipment, and surface facilities and equipment used or proposed to be used in a geologic storage operation. It does not include pipelines used to transport carbon dioxide to the storage facility.
8. “Storage operator” means a person holding or applying for a permit.
9. “Storage reservoir” means a reservoir proposed, authorized, or used for storing carbon dioxide.

38-22-03. Commission authority.

The commission has authority:

1. Over all persons and property necessary to administer and enforce this chapter and its objectives.
2. To regulate activities relating to a storage facility, including construction, operation, and closure.
3. To enter, at a reasonable time and manner, a storage facility to inspect equipment and facilities; to observe, monitor, and investigate operations; and to inspect records required to be maintained at the facility.
4. To require that storage operators provide assurance, including bonds, that money is available to fulfill the storage operator’s duties.
5. To exercise continuing jurisdiction over storage operators and storage facilities, including the authority, after notice and hearing, to amend provisions in a permit and to revoke a permit.
6. To dissolve or change the boundaries of any commission-established oil or gas field or unit that is within or near a storage reservoir’s boundaries.
7. To grant, for good cause, exceptions to this chapter’s requirements and implementing rules.

38-22-04. Permit required — Permit transfer.

Geologic storage is allowed if permitted by the commission. A permit may be transferred if the commission consents.

38-22-05. Permit applications, fees, costs, and priorities — Carbon dioxide storage facility administrative fund.

1. A person applying for a permit shall:
   1. Comply with application requirements set by the commission.
   2. Pay a fee in an amount set by the commission. The amount of the fee must be set by rule and must be based on the commission’s anticipated cost of processing the application. The fee must be deposited in the carbon dioxide storage facility administrative fund.
   3. Pay to the commission the costs the commission incurs in publishing notices for hearings and holding hearings on permit applications.
2. In processing permit applications the commission shall give priority to storage operators who intend to store carbon dioxide produced in North Dakota.

38-22-06. Permit hearing — Hearing notice.

1. The commission shall hold a public hearing before issuing a permit.
2. Notice of the hearing must be published for two consecutive weeks in the official newspaper of the county or counties where the storage reservoir is proposed to be located and in any other newspaper the commission requires. Publication deadlines must comply with commission requirements.
3. Notice of the hearing must be given to each mineral lessee, mineral owner, and pore space owner within the storage reservoir and within one-half mile of the storage reservoir’s boundaries.
4. Notice of the hearing must be given to each surface owner of land overlying the storage reservoir and within one-half mile of the reservoir’s boundaries.
5. Notice of the hearing must be given to any additional persons that the commission requires.
6. Service of hearing notices required by this section must conform to personal service provisions in rule 4 of the North Dakota Rules of Civil Procedure.
7. Hearing notices required by this section must comply with deadlines set by the commission.
8. Hearing notices required by this section must contain the information the commission requires.

38-22-07. Permit consultation.

Before issuing a permit, the commission shall consult the department of environmental quality.

38-22-08. Permit requirements.

Before issuing a permit, the commission shall find:

1. That the storage operator has complied with all requirements set by the commission.
2. That the storage facility is suitable and feasible for carbon dioxide injection and storage.
3. That the carbon dioxide to be stored is of a quality that allows it to be safely and efficiently stored in the storage reservoir.
4. That the storage operator has made a good-faith effort to get the consent of all persons who own the storage reservoir’s pore space.
5. That the storage operator has obtained the consent of persons who own at least sixty percent of the storage reservoir’s pore space.
6. Whether the storage facility contains commercially valuable minerals and, if it does, a permit may be issued only if the commission is satisfied that the interests of the mineral owners or mineral lessees will not be adversely affected or have been addressed in an arrangement entered into by the mineral owners or mineral lessees and the storage operator.
7. That the proposed storage facility will not adversely affect surface waters or formations containing fresh water.
8. That carbon dioxide will not escape from the storage reservoir.
9. That substances that compromise the objectives of this chapter or the integrity of a storage reservoir will not enter a storage reservoir.
10. That the storage facility will not endanger human health nor unduly endanger the environment.
11. That the storage facility is in the public interest.
12. That the horizontal and vertical boundaries of the storage reservoir are defined. These boundaries must include buffer areas to ensure that the storage facility is operated safely and as contemplated.
13. That the storage operator will establish monitoring facilities and protocols to assess the location and migration of carbon dioxide injected for storage and to ensure compliance with all permit, statutory, and administrative requirements.
14. That all nonconsenting pore space owners are or will be equitably compensated.

38-22-09. Permit provisions.

The commission may include in a permit or order all things necessary to carry out this chapter’s objectives and to protect and adjust the respective rights and obligations of persons affected by geologic storage.

38-22-10. Amalgamating property interests.

If a storage operator does not obtain the consent of all persons who own the storage reservoir’s pore space, the commission may require that the pore space owned by nonconsenting owners be included in a storage facility and subject to geologic storage.

38-22-11. Certificate.

When the commission issues a permit it shall also issue a certificate stating that the permit has been issued, describing the area covered, and containing other information the commission deems appropriate. The commission shall file a copy of the certificate with the county recorder in the county or counties where the storage facility is located.

38-22-12. Environmental protection — Reservoir integrity.

1. The commission shall take action to ensure that a storage facility does not cause pollution or create a nuisance. For the purposes of this provision and in applying other laws, carbon dioxide stored, and which remains in storage under a commission permit, is not a pollutant nor does it constitute a nuisance.
2. The commission’s authority in subsection 1 does not limit the jurisdiction held by the department of environmental quality. Nothing else in this chapter limits the jurisdiction held by the department of environmental quality.
3. The commission shall take action to ensure that substances that compromise the objectives of this chapter or the integrity of a storage reservoir do not enter a storage reservoir.
4. The commission shall take action to ensure that carbon dioxide does not escape from a storage facility.

38-22-13. Preservation of rights.

Nothing in this chapter nor the issuing of a permit:

1. Prejudices the rights of property owners within a storage facility to exercise rights that have not been committed to a storage facility.
2. Prevents a mineral owner or mineral lessee from drilling through or near a storage reservoir to explore for and develop minerals, provided the drilling, production, and related activities comply with commission requirements that preserve the storage facility’s integrity and protect this chapter’s objectives.

38-22-14. Fees — Carbon dioxide storage facility administrative fund — Continuing appropriation.

1. Storage operators shall pay the commission a fee on each ton of carbon dioxide injected for storage. The fee must be in the amount set by commission rule. The amount must be based on the contribution of the storage facility and the source of the carbon dioxide to the energy and agriculture production economy of North Dakota and the commission’s anticipated expenses that it will incur in regulating storage facilities during their construction, operational, and preclosure phases.
2. The fee must be deposited in the carbon dioxide storage facility administrative fund. The fund must be maintained as a special fund and all money in the fund is appropriated and may be used only for defraying the commission’s expenses in processing permit applications; regulating storage facilities during their construction, operational, and preclosure phases; and making storage amount determinations under section 38-22-23. The commission, however, through a cooperative agreement with another state agency, may use the fund to compensate the cooperating agency for expenses the cooperating agency incurs in carrying out regulatory responsibilities that agency may have over a storage facility. Interest earned by the fund must be deposited in the fund.

38-22-15. Fees — Carbon dioxide storage facility trust fund — Continuing appropriation.

1. Storage operators shall pay the commission a fee on each ton of carbon dioxide injected for storage. The fee must be in the amount set by commission rule. The amount must be based on the contribution of the storage facility and the source of the carbon dioxide to the energy and agriculture production economy of North Dakota and the commission’s anticipated expenses associated with the long-term monitoring and management of a closed storage facility.
2. The fee must be deposited in the carbon dioxide storage facility trust fund. The fund must be maintained as a special fund and all money in the fund is appropriated and may be used only for defraying expenses the commission incurs in long-term monitoring and management of a closed storage facility. The commission, however, through a cooperative agreement with another state agency, may use the fund to compensate the cooperating agency for expenses the cooperating agency incurs in carrying out regulatory responsibilities that agency may have over a storage facility. Interest earned by the fund must be deposited in the fund.
3. The industrial commission shall file with the director of the legislative council a report discussing whether the amount in the carbon dioxide storage facility trust fund and fees being paid into it are sufficient to satisfy the fund’s objectives. The first report is due in December of 2014 and subsequent reports are due every four years thereafter.

38-22-16. Title to carbon dioxide.

The storage operator has title to the carbon dioxide injected into and stored in a storage reservoir and holds title until the commission issues a certificate of project completion. While the storage operator holds title, the operator is liable for any damage the carbon dioxide may cause, including damage caused by carbon dioxide that escapes from the storage facility.

38-22-17. Certificate of project completion — Release — Transfer of title and custody.

1. After carbon dioxide injections into a reservoir end and upon application by the storage operator, the commission shall consider issuing a certificate of project completion.
2. The certificate may only be issued after public notice and hearing. The commission shall establish notice requirements for this hearing.
3. The certificate may only be issued after the commission has consulted with the department of environmental quality.
4. The certificate may not be issued until at least ten years after carbon dioxide injections end.
5. The certificate may only be issued if the storage operator:
   1. Is in full compliance with all laws governing the storage facility.
   2. Shows that it has addressed all pending claims regarding the storage facility’s operation.
   3. Shows that the storage reservoir is reasonably expected to retain the carbon dioxide stored in it.
   4. Shows that the carbon dioxide in the storage reservoir has become stable. Stored carbon dioxide is stable if it is essentially stationary or, if it is migrating or may migrate, that any migration will be unlikely to cross the storage reservoir boundary.
   5. Shows that all wells, equipment, and facilities to be used in the postclosure period are in good condition and retain mechanical integrity.
   6. Shows that it has plugged wells, removed equipment and facilities, and completed reclamation work as required by the commission.
6. Once a certificate is issued:
   1. Title to the storage facility and to the stored carbon dioxide transfers, without payment of any compensation, to the state.
   2. Title acquired by the state includes all rights and interests in, and all responsibilities associated with, the stored carbon dioxide.
   3. The storage operator and all persons who generated any injected carbon dioxide are released from all regulatory requirements associated with the storage facility.
   4. Any bonds posted by the storage operator must be released.
   5. Monitoring and managing the storage facility is the state’s responsibility to be overseen by the commission until such time as the federal government assumes responsibility for the long-term monitoring and management of storage facilities.

38-22-18. Penalties.

1. A person who violates a provision of this chapter or a commission rule or order under this chapter is subject to a civil penalty imposed by the commission or a court not to exceed twelve thousand five hundred dollars for each offense, and each day’s violation is a separate offense. Paying the penalty does not make legal an illegal act nor relieve a person on whom the penalty is imposed from correcting the violation or from liability for damages caused by the violation.
2. In determining the amount of the penalty, the commission shall consider:
   1. The nature of the violation, including its circumstances and gravity, and the hazard or potential hazard to the public’s or a private person’s health, safety, and economic welfare.
   2. The economic or environmental harm caused by the violation.
   3. The economic value or other advantage gained by the person committing the violation.
   4. The history of previous violations.
   5. The amount necessary to deter future violations.
   6. Efforts to correct the violation.
   7. Other matters justice requires.

38-22-19. Enhanced recovery projects.

1. This chapter does not apply to applications filed with the commission proposing to use carbon dioxide for an enhanced oil or gas recovery project, rather such applications will be processed under chapter 38-08.
2. The commission may allow an enhanced oil or gas recovery project to be converted to a storage facility. In considering whether to approve a conversion, and upon conversion, the provisions of this chapter and its implementing rules apply, but if during the conversion process unique circumstances arise, the commission, to better ensure that the chapter’s objectives are fulfilled, may waive such provisions and may impose additional ones.

38-22-20. Cooperative agreements and contracts.

1. The commission may enter into agreements with other governments, government entities, and state agencies for the purpose of carrying out this chapter’s objectives.
2. The commission may enter into contracts with private persons to assist it in carrying out this chapter’s objectives. Unless the circumstances require otherwise, the commission shall, in entering such contracts, follow the process set out in section 38-08-04.4. If an emergency exists the commission may enter contracts without public notice and without competitive bidding.

38-22-21. Trusts, monopolies, restraint of trade.

Cooperative operation of a storage facility permitted by the commission does not violate North Dakota statutes relating to trusts, monopolies, or restraint of trade.

38-22-22. Participation of public interests.

The entity or official controlling state interests or the interests of political subdivisions is authorized to consent to and participate in a geologic storage project.

38-22-23. Determining storage amounts — Carbon credits — Fee.

1. The commission, under procedures and criteria it may adopt, shall determine the amount of injected carbon dioxide stored in a reservoir that has been or is being used for an enhanced oil or gas recovery project. The commission may also make such a determination for carbon dioxide stored under this chapter.
2. The purpose for determining storage amounts is to facilitate using the stored carbon dioxide for such matters as carbon credits, allowances, trading, emissions allocations, and offsets, and for other similar purposes.
3. The commission may charge a reasonable fee to the person requesting a storage determination. The fee must be set by rule.
4. Fees the commission receives for storage determinations must be deposited into the carbon dioxide storage facility administrative fund.

38-23-01. General prohibition.

The placement, storage, exploration, testing, or disposal of high-level radioactive waste within the exterior boundaries of North Dakota is prohibited. If this provision is superseded by federal law, the remaining provisions of this chapter continue to apply. This section does not limit the authority of the legislative assembly or the commission to issue a notice of disapproval under this chapter.

38-23-02. Definitions.

As used in this chapter:

1. “Commission” means the industrial commission.
2. “High-level radioactive waste” means:
   1. Highly radioactive material resulting from the reprocessing of spent nuclear fuel, and other highly radioactive material, containing fission products in sufficient concentrations to require permanent isolation, including liquid waste produced directly in reprocessing and any solid material derived from the liquid waste; or
   2. Highly radioactive material that the commission, consistent with existing law and rules, determines requires permanent isolation.
3. “High-level radioactive waste disposal” means the emplacement in a repository of high-level radioactive waste with no foreseeable intent of recovery.
4. “High-level radioactive waste facility” means a premises, building, structure, fixture, or improvements used or operated for the storage or disposal of high-level radioactive waste.
5. “High-level radioactive waste storage” means the retention of high-level radioactive waste with the intent to recover the waste for subsequent use, processing, or disposal.

38-23-03. Jurisdiction of the commission and duties.

1. The commission has jurisdiction and authority over any person or property, public or private, necessary to enforce this chapter. The commission may investigate and determine whether facts exist justifying action by the commission. The state geologist shall act as a supervisor charged with the duty of enforcing the regulations and orders of the commission applicable to this chapter.
2. The commission acting through the state geologist may:
   1. Serve as the point of contact for the federal department of energy or any other federal agency on any matter related to the long-term or temporary storage or permanent disposal of high-level radioactive waste.
   2. Issue a notice of disapproval regarding a proposed high-level radioactive waste facility in accordance with federal law when the legislative assembly is not in session. Before issuing a notice of disapproval, the commission shall consult with the high-level radioactive waste advisory council and the local government entities with jurisdiction over the area where the proposed high-level radioactive waste facility is to be located.
3. Only the legislative assembly may issue a notice of disapproval during a legislative session.
4. The commission, acting through the state geologist, may:
   1. Take any action necessary to assert the state’s rights relating to the exploration of a suitable location for a high-level radioactive waste facility within the state, including providing comments to a federal agency or initiating litigation.
   2. Enter agreements with the federal government regarding high-level radioactive waste regulation and facility siting and accept available funds for deposit into the high-level radioactive waste fund.
   3. Adopt and enforce rules and orders to effectuate the purpose and intent of this chapter.
   4. Require:
      1. Identification of ownership of all high-level radioactive waste facilities and equipment used for high-level radioactive waste storage or disposal.
      2. The delivery to the state geologist of basic exploration data collected, within thirty days of field collection of such data, free of charge. Data includes:
         1. Sample cuts, core chips, or whole cores;
         2. Sample logs, radioactivity logs, resistivity logs, or other types of electrical or mechanical logs;
         3. Elevation and location information on data collection points; and
         4. Other pertinent information required by the state geologist.
      3. The filing of monthly reports in the manner prescribed by the commission and any other reports deemed necessary by the commission.
      4. The conducting of all exploration, storage, and disposal operations in a manner to prevent pollution of freshwater supplies and to provide for the protection of the environment, public safety, and economic interests.
      5. The reclamation of all land disturbed by operations regulated by this chapter to a condition consistent with prior land use and productive capacity. A permanent marker is to be erected and maintained over the disposal site.
      6. The furnishing of a reasonable bond with good and sufficient surety, conditioned upon the full compliance with this chapter, and the rules and orders of the commission. The person required to furnish the bond may elect to deposit under such terms as the commission may prescribe a collateral bond, cash, or any alternative form of security approved by the commission, or combination thereof, by which an operator assures faithful performance of all requirements of this chapter and the rules and orders of the commission.
      7. The payment of fees for services performed by the commission, including costs associated with the investigation, review, and processing of the application; monitoring and inspection of the exploration site; monitoring and inspection of the facility; and environmental and monetary impact of the facility. The commission shall set the amount of the fee based on the anticipated actual cost of services rendered and impact to the state and local area. The commission shall set the annual operating fee for a facility permit to be dependent on the size and scope of the facility, but the fee may not be less than one million dollars. Unless otherwise provided by statute, fees collected by the commission must be deposited in the high-level radioactive waste fund, according to procedures established by the state treasurer.
   5. Regulate:
      1. The drilling, boring, excavating, and abandonment of all exploration holes drilled for the purpose of obtaining information regarding high-level radioactive waste storage or disposal.
      2. The drilling, boring, excavating, construction, and operation of all high-level radioactive waste facilities.
   6. Inspect all exploration, development, and high-level radioactive waste facility sites. For purposes of this subsection, the commission may access all exploration, development, or operational records of inspection and may require the operator’s assistance if necessary.

38-23-04. Permit required.

1. A person may not commence any actions for testing, exploring, excavating, drilling, boring, or operating a high-level radioactive waste facility without obtaining a permit from the commission.
2. A notice of opportunity for a position paper from the commissioners of the county must be attached to the permit application. A county position paper must be made public at the time the permit application is submitted.
3. A permit may be issued only after notice and hearing and payment of a fee. Notice must be provided in accordance with Rule 3 of the North Dakota Rules of Civil Procedure.
4. An applicant for a permit shall provide notice to a surface owner and any resident of a permanently occupied dwelling located within two miles [3.22 kilometers] of the proposed location, the county commissioners and mayor of any municipality within thirty miles [48.28 kilometers], and publish a notice in the official county newspaper and any county newspaper within thirty miles [48.28 kilometers] of the proposed location.
5. The commission shall give written notice of an application for exploration or facility permit to the county in which exploration is sought or a facility is proposed at least sixty days before the hearing. The commission shall adopt rules establishing deadlines for the issuance of permits.
6. A permit application for a high-level radioactive waste facility must include:
   1. A description of the facility to be permitted.
   2. A detailed description of the material to be stored or disposed.
   3. A detailed description of the mechanical construction and operating procedures of the facility.
   4. A justification for the need for the facility to be permitted, including economic impact.
   5. A detailed discussion and description of the subsurface geology and hydrology of the area to be affected by the construction and operation of the facility to be permitted.
   6. A detailed discussion and description of a monitoring system to be used to ascertain the integrity of the facility and to ensure compliance with this chapter.
   7. A detailed description and discussion of a reclamation program for the restoration of the surface as nearly as possible to its original condition and productivity upon expiration of the permit or termination of any activities regulated by this chapter.
   8. Any other information required by the commission.
7. Following a hearing, the commission may deny an application if the commission determines the testing, exploration, excavating, drilling, or operation poses a threat to human health or the environment or because of concerns related to economic impacts. A person denied a permit may appeal the denial in accordance with chapter 28-32.
8. The commission may include conditions in a permit which the commission deems necessary to ensure protection of human health and the environment or to address economic impacts.
9. A permitholder shall furnish and maintain a reasonable bond with good and sufficient surety, conditioned upon the full compliance with the permit, this chapter, and rules adopted by the commission.
10. The commission shall establish the term of a permit, but the term of a permit may not exceed five years. An application for a permit renewal must be made at least one hundred twenty days before the expiration of the valid permit and is subject to all the procedures and requirements of this section.

38-23-05. Procedure.

The administrative procedure involved in adopting rules or the issuance of orders by the commission under this chapter must be in accordance with chapter 38-08. If the commission determines an emergency exists which requires the making, revoking, changing, amending, modifying, altering, enlarging, renewal, or extension of a rule or order without first having a hearing, the emergency rule or order has the same validity as a hearing held after due notice. The emergency rule or order may remain in force up to fifteen days from its effective date, and expires when a rule or order made after due notice and hearing becomes effective.

38-23-06. Penalty — Injunction — Applicable provisions.

Sections 38-08-16 and 38-08-17 are applicable to the provisions of this chapter and to the rules and orders of the commission adopted or issued under this chapter.

38-23-07. High-level radioactive waste fund — Continuing appropriation.

There is established a high-level radioactive waste fund into which funds received under an agreement entered under this chapter, permit fees, and civil penalties must be deposited. The commission shall administer the fund and may use the fund to fulfill any of the commission’s powers and duties under this chapter. This fund must be maintained as a special fund and all moneys transferred into the fund are hereby appropriated and must be used and disbursed solely for the purposes of this chapter.

38-23-08. High-level radioactive waste advisory council — Members, powers, and duties.

1. The high-level radioactive waste advisory council is established to advise the commission in carrying out its duties. The council consists of the director of the department of water resources, state health officer, director of the department of transportation, director of the game and fish department, the commerce commissioner, and director of the department of environmental quality, who serve as ex officio members. The state geologist shall serve as the executive secretary for the council. Additional members on the council are:
   1. A representative of county government, appointed by the governor;
   2. A representative of city government, appointed by the governor;
   3. A representative of the agricultural community, appointed by the governor;
   4. Two senators, appointed by the majority leader of the senate of the legislative assembly; and
   5. Two representatives, appointed by the majority leader of the house of representatives of the legislative assembly.
2. Each appointed member of the council shall serve a four-year term. The governor may fill a vacancy in the membership of the council and remove an appointed member of the council for cause. The council members shall select a chairman from among the council members.
3. An appointed council member must be reimbursed by the commission for necessary travel and other expenses incurred in the performance of official duties.
4. The council shall hold at least one meeting per year and any other meetings deemed necessary by the chairman or a majority of the council.
5. The council shall:
   1. Review site suitability and issue a report for a proposed high-level radioactive waste facility to the legislative assembly or commission.
   2. Review and make recommendations to the commission regarding rules and standards relating to high-level radioactive waste and the duties of the commission.
   3. Consider any other matter related to this chapter the council deems appropriate, and may make any recommendation to the commission concerning the administration of this chapter.
   4. Report its findings biennially to the commission and to the legislative management.

38-23-09. County zoning authority.

A county zoning regulation may not prohibit a high-level radioactive waste disposal exploratory drilling permit or a high-level radioactive waste facility permitted by the commission, but may regulate the size, scope, and location.

38-24-01. Definitions.

As used in this chapter:

1. “Commission” means the industrial commission.
2. “Nonhydrocarbons” include compressed air, nitrogen, and other gases and liquids not otherwise regulated by title 38.
3. “Underground storage and retrieval facility” means a drilled, bored, or excavated device or installation providing for the subsurface emplacement and recovery of nonhydrocarbons.

38-24-02. Jurisdiction of the commission and duties.

The commission has jurisdiction and authority over any person or property, public or private, necessary to enforce this chapter. The commission acting through the office of the state geologist may:

1. Require:
   1. Identification of ownership of all facilities and equipment used for the underground storage and retrieval of nonhydrocarbons.
   2. The making and filing of all logs and reports on facility location, drilling, boring, excavating, and construction and the filing of samples, core chips, and complete cores, when requested, free of charge, in the office of the state geologist.
   3. The drilling, boring, excavating, and construction of facilities in a manner preventing contamination and pollution of surface and ground water sources and the environment.
   4. The furnishing of a reasonable bond with good and sufficient surety, conditioned upon the full compliance with this chapter, and the rules and orders of the commission.
   5. Metering or other measuring of all nonhydrocarbons injected, emplaced, stored, or retrieved from a facility regulated by this chapter.
   6. A person operating a facility for the underground storage and retrieval of nonhydrocarbons in this state to keep and maintain complete and accurate records of the quantities and nature of material stored and retrieved, which records must be available to the commission or its agents at all times, and may require every such person to file prescribed reports with the commission.
   7. Upon termination of the operation of a facility or activity regulated by this chapter, the operator of the facility to restore the surface as nearly as possible to its original condition and productivity.
2. Regulate:
   1. The testing, exploration, drilling, boring, excavating, and construction of underground storage and retrieval.
   2. Operations to assure the optimum performance of a facility regulated by this chapter.
3. Prescribe the nature, quantity, and source of nonhydrocarbons to be stored in or retrieved from a facility regulated by this chapter.
4. Adopt and enforce rules and orders to effectuate the purposes of this chapter.

38-24-03. Permit required.

A person may not commence operations for the testing, exploration, excavating, drilling, boring, or construction of an underground storage and retrieval facility or the conversion of an existing facility for use in an activity regulated by this chapter, without obtaining a permit from the commission. A permit may be issued only after notice and hearing, and payment of a fee in an amount to be prescribed by the commission. A permit application must include:

1. A description of the activity to be permitted.
2. A detailed description of the nature of the nonhydrocarbons to be stored and retrieved.
3. A detailed description of the mechanical construction and operating procedures of the facility.
4. A justification for the need for the facility.
5. A detailed description of the subsurface geology and hydrology of the area to be affected by the construction and operation of the facility.
6. A detailed description of the monitoring system assuring the integrity of the facility and compliance with this chapter.
7. A detailed description of the reclamation and the restoration of the surface as nearly as possible to its original condition and productivity upon expiration of the permit or termination of any activity regulated by this chapter.
8. Any other information required by the commission.

38-24-04. Denial of permit — Review.

1. Following a hearing, the commission may deny an application if the commission determines the facility or activity poses a threat to ground or surface waters or the environment. A person denied a permit may appeal the denial in accordance with chapter 28-32.
2. All fees collected pursuant to this chapter, must be deposited in the general fund in the state treasury.
3. A permit required by this chapter is in addition to all other permits required by law.

38-24-05. Action to restrain violation or threatened violation.

The commission may bring action against a person violating or threatening to violate a provision of this chapter, or a rule, regulation, or order of the commission. The action must commence in the district court of the county where the violation occurred or is threatened. Without the filing of a bond or other undertaking by the commission, the court may issue an injunction, including a temporary restraining order, a preliminary injunction, or a temporary, preliminary, or final order restraining the person from continuing the violation or from carrying out the threat of violation.

38-24-06. Penalties.

1. A person that violates this chapter, or a rule, regulation, or order of the commission adopted under this chapter is subject to a civil penalty of not more than twelve thousand five hundred dollars for each violation and for each day the violation occurred.
2. It is a class C felony for a person, for the purpose of evading this chapter, or a rule, regulation, or order of the commission to:
   1. Make or cause a false entry or statement in a report required by this chapter or by a rule, regulation, or order issued or adopted by the commission;
   2. Make or cause a false entry in a record, account, or memorandum required by this chapter, or by any rule, regulation, or order of the commission;
   3. Omit, or cause to be omitted, from a record, account, or memorandum, full, true, and correct entries as required by this chapter or by any rule, regulation, or order of the commission; or
   4. Remove from this state or destroy, mutilate, alter, or falsify a record, account, or memorandum.
3. The civil penalties provided in subsection 1 are recoverable by civil action filed by the attorney general on behalf of the commission. The civil action must commence in the district court of the county in which:
   1. The defendant resides;
   2. Any defendant resides, if there is more than one defendant; or
   3. The violation occurred.
4. The payment of penalties does not relieve a person on whom the penalty is imposed from liability to any other person for damages arising out of the violation.

38-24-07. Administrative procedure and judicial review.

A proceeding under this chapter for the issuance or modification of rules, including emergency orders relating to underground storage and retrieval and determining compliance with rules of the commission, must be conducted in accordance with chapter 28-32. If the commission determines an emergency requiring immediate action exists, the commission may issue an emergency order without notice or hearing, which is effective upon adoption. An emergency order may not remain in force for more than fifteen days. A person aggrieved by action of the commission, or by its rules or orders, may appeal to the district court of the county in which the person resides, or in Burleigh County, in accordance with chapter 28-32.

38-25-01. Definitions.

As used in this chapter:

1. “Commission” mean the industrial commission.
2. “Gas” includes all natural gas, including hydrogen, and all other fluid hydrocarbons not defined as oil.
3. “Geological storage” means the underground storage of oil or gas in a storage reservoir or salt cavern.
4. “Oil” includes crude petroleum oil and other hydrocarbons regardless of gravity which are produced at the wellhead in liquid form and the liquid hydrocarbons known as distillate or condensate recovered or extracted from gas, other than gas produced in association with oil and commonly known as casinghead gas.
5. “Permit” means a permit issued by the commission allowing a person to operate an underground storage facility.
6. “Pore space” has the same meaning as in section 47-31-02.
7. “Prevent waste” means the locating, spacing, drilling, equipping, operating, or producing of any oil or gas storage well or facility in a manner that increases the quantity of oil or gas stored, or which decreases unnecessary loss or destruction of oil or gas.
8. “Reservoir” means a subsurface sedimentary stratum, formation, aquifer, or void, whether natural or artificially created, including oil and gas reservoirs and saline formations suitable for or capable of being made suitable for injecting, storing, and withdrawing oil or gas. The term does not include salt caverns.
9. “Salt cavern” means a natural occurring cavity contained within a salt formation or a cavity created in a salt formation by solution mining, suitable for injecting, storing, and withdrawing oil or gas.
10. “Solution mining” means the process of injecting fluid into a well to dissolve rock salt or other readily soluble rock to create a salt cavern for underground storage of oil or gas.
11. “Storage facility” means the reservoir, salt cavern, underground equipment, and surface facilities and equipment used or proposed to be used in an underground storage operation. The term does not include a pipeline used to transport oil or gas to the storage facility.
12. “Storage operator” means a person holding or applying for a permit.
13. “Waste” means the inefficient storing of oil or gas.

38-25-02. Commission authority.

The commission has authority:

1. Over all persons and property necessary to administer and enforce this chapter when necessary to prevent waste, to protect correlative rights of the mineral and surface estate, or to effect greater ultimate storage and recovery of oil and gas.
2. To regulate activities relating to an underground storage facility, including construction, solution mining to create salt caverns, operation, and closure.
3. To enter an underground storage facility at a reasonable time and manner to inspect equipment and facilities, to observe, monitor, and investigate operations, and to inspect records required to be maintained at the facility.
4. To require storage operators provide financial assurance, including bonds, to ensure money is available to fulfill the storage operator’s duties.
5. To exercise continuing jurisdiction over storage operators and storage facilities, including the authority to amend or revoke a permit after notice and hearing.
6. After notice and hearing, to dissolve or change the boundaries of any commission established oil or gas field or unit within or near a storage reservoir’s or salt cavern’s boundaries.
7. After notice and hearing, to adopt reasonable rules and issue reasonable orders to implement the policies of this chapter.
8. After notice and hearing, to grant exceptions to this chapter’s requirements and implementing rules if required to comply with applicable federal law.

38-25-03. Permit required — Permit transfer.

Geologic storage is allowed if permitted by the commission. A permit may be transferred if the commission consents.

38-25-04. Permit hearing — Hearing notice.

1. The commission shall hold a public hearing before issuing any storage permit.
2. Notice of the hearing must be published for two consecutive weeks in the official newspaper of the county or counties where the storage reservoir or salt cavern is proposed to be located and in any other newspaper the commission requires. Publication deadlines must comply with commission requirements.
3. Written notice of hearing must be mailed to each surface owner of record of land overlying the storage reservoir or salt cavern and within one-half mile [0.80 kilometer] of the reservoir’s or salt cavern’s boundaries. The notice of hearing must be mailed to an owner’s last known address.
4. If the proposed storage facility contemplates storage of oil or gas in an oil and gas reservoir, notice of the hearing also must be mailed to each mineral lessee, mineral owner of record, and pore space owner of record within the storage reservoir and within one-half mile [0.80 kilometer] of the storage reservoir’s boundaries.
5. If the proposed storage facility contemplates storage of oil or gas in a salt cavern, notice of the hearing must be mailed to each salt mineral lessee, salt mineral owner of record, and pore space owner of record within the salt cavern outer boundaries and within one-half mile [0.80 kilometer] of the outer boundaries of the salt cavern, or as otherwise may be required by the commission.
6. If the storage facility contemplates storage of oil or gas in a saline formation or aquifer, notice of hearing must be mailed to each pore space owner of record within the storage reservoir and within one-half mile [0.80 kilometer] of the storage reservoir’s boundaries.
7. Hearing notices required by this section must comply with the deadlines set by the commission and must contain the information the commission requires.

38-25-05. Permit requirements — Storage in oil and gas reservoir.

Before issuing a permit for storage in an oil and gas reservoir, the commission shall find:

1. The storage operator has or will obtain the consent by lease, purchase, or other agreement from all surface owners where surface disturbance activities are necessary and surface facilities will be located.
2. The storage operator has complied with all requirements set by the commission.
3. The storage facility is suitable and feasible for the injection, storage, and withdrawal of oil or gas.
4. The storage operator has made a good-faith effort to get the consent of all persons that own the storage reservoir’s pore space.
5. The storage operator has made a good-faith effort to obtain the consent of all persons that own oil and gas minerals and oil and gas leases.
6. The storage operator has obtained the consent of persons that own at least fifty-five percent of the storage reservoir’s pore space unless the percentage required to unitize the oil and gas unit is otherwise provided for by order of the commission before August 1, 2021, in which case the percentage in the order required to pool the mineral interests prevails as to the percentage of pore space owners from whom the storage operator must obtain consent.
7. The storage operator has obtained the consent of persons that own at least fifty-five percent of the storage reservoir’s oil and gas minerals and oil and gas leases unless the percentage required to unitize the oil and gas unit is otherwise provided for by order of the commission before August 1, 2021, in which case the percentage in the order prevails.
8. Whether the storage reservoir contains any commercially valuable oil, gas, or other minerals and, if it does, a permit may be issued only if the commission is satisfied the interests of the mineral owners or mineral lessees will not be affected adversely or have been addressed in an arrangement entered by the mineral owners or mineral lessees and the storage operator.
9. The proposed storage facility will not affect adversely surface waters or formations containing fresh water.
10. The injected oil or gas will not escape from the storage reservoir.
11. The storage facility will not endanger health or unduly endanger the environment.
12. The storage facility is in the public interest.
13. The vertical boundaries of the storage reservoir are defined to include any necessary or reasonable buffer zones for the purpose of ensuring the safe operations of the storage facility and to protect the storage facility against pollution, invasion, and escape or migration of oil or gas therefrom.
14. The horizontal extent of the injected gas within the storage reservoir, as estimated by reasonable means and confirmed through appropriate monitoring methods, are defined to include any necessary or reasonable buffer zones for the purpose of ensuring the safe operations of the storage facility and to protect the storage facility against pollution, invasion, and escape or migration of oil or gas therefrom.
15. The storage operator will establish monitoring facilities and protocols to assess the location and migration of oil and gas, if any, injected for storage and to ensure compliance with all permit, statutory, and administrative requirements.
16. The method of underground storage is reasonably necessary to effectively carry on the joint effort, will prevent waste, protect correlative rights of the mineral and surface estate, and, with reasonable probability, will result in the increased storage and recovery of more oil and gas.
17. The time, conditions, and method by which the storage facility must be dissolved and the facility’s affairs wound up. A storage facility may be dissolved ten years after the storage facility permit is issued upon a petition to the commission by the pore space owners and mineral owners that are credited with at least the percentage of interest of the pore space required to ratify the storage facility amalgamation agreement, and a subsequent hearing and order by the commission.
18. All nonconsenting owners are or will be compensated equitably.

38-25-06. Permit requirements — Storage in saline reservoir or aquifer.

Before issuing a permit for storage in a saline reservoir or aquifer, the commission shall find:

1. The storage operator has or will obtain the consent by lease, purchase, or other agreement from all surface owners where surface disturbance activities are necessary and surface facilities will be located.
2. The storage operator has complied with all requirements set by the commission.
3. The storage facility is suitable and feasible for the injection, storage, and withdrawal of oil or gas.
4. The storage operator has made a good-faith effort to obtain the consent of all persons that own the storage reservoir’s pore space.
5. The storage operator has obtained the consent of persons that own at least sixty percent of the storage reservoir’s pore space.
6. The proposed storage facility will not affect adversely surface waters or formations containing fresh water.
7. The injected oil or gas will not escape from the storage reservoir.
8. The storage facility will not endanger health or unduly endanger the environment.
9. The storage facility is in the public interest.
10. The vertical boundaries of the storage reservoir are defined to include any necessary or reasonable buffer zones for the purpose of ensuring the safe operations of the storage facility and to protect the storage facility against pollution, invasion, and escape or migration of oil or gas therefrom.
11. The horizontal extent of the injected gas within the storage reservoir, as estimated by reasonable means and confirmed through appropriate monitoring methods, are defined to include any necessary or reasonable buffer zones for the purpose of ensuring the safe operations of the storage facility and to protect the storage facility against pollution, invasion, and escape or migration of oil or gas therefrom.
12. The storage operator will establish monitoring facilities and protocols to assess the location and migration of oil and gas, if any, injected for storage and to ensure compliance with all permit, statutory, and administrative requirements.
13. The method of underground storage is reasonably necessary to effectively carry on the joint effort, will prevent waste, protect correlative rights of the mineral and surface estate, and, with reasonable probability, will result in the increased storage and recovery of more oil and gas.
14. The time, conditions, and method by which the storage facility must be dissolved and the facility’s affairs wound up. A storage facility may be dissolved ten years after the storage facility permit is issued upon a petition to the commission by the pore space owners and mineral owners that are credited with at least the percentage of interest of the pore space required to ratify the storage facility amalgamation agreement, and a subsequent hearing and order by the commission.
15. All nonconsenting pore space owners are or will be compensated equitably.

38-25-07. Permit requirements — Storage in salt cavern.

Before issuing a permit for storage in a salt cavern, the commission shall find:

1. The storage operator has or will obtain the consent by lease, purchase, or other agreement from all surface owners where surface disturbance activities are necessary and surface facilities will be located.
2. The storage operator has complied with all requirements set by the commission, including all necessary permits to conduct solution mining, if applicable.
3. The storage facility is suitable and feasible for the injection, storage, and withdrawal of oil or gas.
4. The storage operator has made a good-faith effort to obtain the consent of all persons that own the salt cavern’s pore space.
5. The storage operator has made a good-faith effort to obtain the consent of all persons that own the salt cavern’s salt minerals and salt leases.
6. The storage operator has obtained the consent of persons that own at least sixty percent of the salt cavern’s pore space.
7. The storage operator has obtained the consent of persons that own at least fifty-five percent of the salt cavern’s salt minerals and salt leases.
8. The proposed storage facility will not affect adversely surface waters or formations containing fresh water.
9. The injected oil or gas will not escape from the salt cavern.
10. The storage facility will not endanger health or unduly endanger the environment.
11. The storage facility is in the public interest.
12. The horizontal and vertical boundaries of the salt cavern are defined to include a buffer zone from the outer walls of the cavern for the purpose of ensuring the safe operation of the storage facility and to protect the storage facility against pollution, invasion, and escape or migration of gas therefrom.
13. The storage operator will establish monitoring facilities and protocols to assess the location and migration of oil and gas, if any, injected for storage and to ensure compliance with all permit, statutory, and administrative requirements.
14. The method of underground storage is reasonably necessary to effectively carry on the joint effort, will prevent waste, protect correlative rights of the mineral and surface estate, and, with reasonable probability, will result in the increased storage and recovery of more oil and gas.
15. The time, conditions, and method by which the storage facility must be dissolved and the facility’s affairs wound up. A storage facility may be dissolved ten years after the storage facility permit is issued upon a petition to the commission by the pore space owners and mineral owners that are credited with at least the percentage of interest of the pore space required to ratify the storage facility amalgamation agreement, and a subsequent hearing and order by the commission.
16. That all nonconsenting owners are or will be equitably compensated.

38-25-08. Amalgamating property interests.

If a storage operator does not obtain the consent of all persons owning a pore space and of mineral interest owners when required by this chapter, the commission may require the interest owned by the nonconsenting owners be included in an approved storage facility and subject to geologic storage if the minimum percentage of consent is obtained as specified in this chapter. Any pore space owner who does not have responsibility over the construction, management, supervision, or control of the storage facility operations is not liable for money damages for personal or other property damages proximately caused by the operations.

38-25-09. Ownership of oil and gas.

All oil or gas previously reduced to possession and subsequently injected into underground storage facilities must be deemed the property of the storage operator subject to the obligation to pay royalties as set forth in section 38-25-10.

38-25-10. Injection of produced gas — When royalties owed.

1. Unless otherwise expressly agreed by the storage operator, mineral owners, and lease owners, royalties on gas produced but not sold and which is injected into a storage facility instead of flaring or for lack of market, are not due on the produced and stored gas until gas volumes actually are withdrawn from the storage facility, sold, and proceeds received from the sale.
2. Prior to gas being withdrawn and sold from a storage facility under this section, the storage operator, after notice and hearing, shall obtain approval from the commission evidencing a reasonable and equitable method of allocation of the stored gas sale proceeds to the rightful mineral, royalty, and leasehold owners of the gas injected into storage. The commission may adopt such rules and orders as necessary to implement the purposes of this section.

38-25-11. Application.

This chapter does not apply to applications filed with the commission which propose to use produced gas for an enhanced oil or gas recovery project. Those applications must be processed under chapter 38-08.