(1)(a) The State Department of Geology and Mineral Industries may not issue a permit for a prospect well until the applicant has provided a bond or alternative form of financial security as specified in rules adopted by the governing board of the State Department of Geology and Mineral Industries.

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(b) The amount of the bond or alternative form of financial security may not be less than $10,000 for each prospect well or not less than $50,000 for all prospect wells to be drilled.

(2) The bond or alternative form of financial security must be conditioned upon compliance with the requirements of this chapter and rules adopted and orders issued pursuant to this chapter and must secure the state against all losses, charges and expenses, including court costs and attorney fees, incurred by the state in obtaining such compliance.

(3) With the consent of the department, any bond or acceptable alternative form of financial security submitted pursuant to this section may be terminated or canceled. However, the department may not consent to the termination or cancellation of any bond or security until each prospect well covered by such bond or security has been properly and safely plugged and decommissioned pursuant to the plan required by the permit or until another bond or security for each well has been submitted and approved by the department. [1975 c.552 § 4c; 1977 c.87 § 1; 1979 c.163 § 2; 1995 c.146 § 1; 2009 c.794 § 9]