CHAPTER 140
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CHAPTER 140
( HB 4 )
AN ACT relating to merchant electric generating facilities and making an appropriation therefor.
Be it enacted by the General Assembly of the Commonwealth of Kentucky:
Section 1. KRS 278.702 is amended to read as follows:
(1) There is hereby established the Kentucky State Board on Electric Generation and Transmission Siting. The
board shall be composed of seven (7) members as follows:
(a) The three (3) members of the Kentucky Public Service Commission;
(b) The secretary of the Energy and Environment Cabinet or the secretary's designee;
(c) The secretary of the Cabinet for Economic Development or the secretary's designee;
(d) 1. If the facility subject to board approval is proposed to be located in one (1) county, two (2) ad
hoc public members to be appointed by the Governor from a county where a facility subject to
board approval is proposed to be located:
a. One (1) of the ad hoc public members shall be the chairman of the planning commission
with jurisdiction over an area in which a facility subject to board approval is proposed to
be located. If the proposed location is not within a jurisdiction with a planning
commission, then the Governor shall appoint either the county judge/executive of a
county that contains the proposed location of the facility or the mayor of a city, if the
facility is proposed to be within a city; and
b. One (1) of the ad hoc public members shall be appointed by the Governor and shall be a
resident of the county in which the facility is proposed to be located.
2. If the facility subject to board approval is proposed to be located in more than one (1) county,
two (2) ad hoc public members to be chosen as follows:
a. One (1) ad hoc public member shall be the county judge/executive of a county in which
the facility is proposed to be located, to be chosen by majority vote of the county
judge/executives of the counties in which the facility is proposed to be located; and
b. One (1) ad hoc public member shall be a resident of a county in which the facility is
proposed to be located, and shall be appointed by the Governor.
If a member has not been chosen by majority vote, as provided in subdivision a. of this
subparagraph, by thirty (30) days after the filing of the application, the Governor shall directly
appoint the member.
3. Ad hoc public members appointed to the board shall have no direct financial interest in the
facility proposed to be constructed.
(2) The term of service for the ad hoc members of the board shall continue until the merchant electric generating
facility[board issues a final determination in the proceeding] for which they were appointed has been
constructed and begins generating electricity for sale or the construction certificate expires. The remaining
members of the board shall be permanent members.
(3) The board shall be attached to the Public Service Commission for administrative purposes. The commission
staff shall serve as permanent administrative staff for the board. The members of the board identified in
subsection (1)(a) to (d) of this section shall promulgate administrative regulations in accordance with KRS
Chapter 13A to implement KRS 278.700 to 278.716.
(4) No member of the board shall receive any salary or fee for service on the board or shall have any financial
interest in any facility the application for which comes before the board, but each member shall be reimbursed
for actual travel and expenses directly related to service on the board.
(5) The chairman of the Public Service Commission shall be the chairman of the board. The chairman shall
designate one (1) member of the board as vice chairman. A majority of the members of the board shall ACTS OF THE GENERAL ASSEMBLY 2
constitute a quorum for the transaction of business. No vacancy on the board shall impair the right of the
remaining members to exercise all of the powers of the board. The board shall convene upon the call of the
chairman.
Section 2. KRS 278.704 is amended to read as follows:
(1) No person shall commence to construct a merchant electric generating facility until that person has applied for
and obtained a construction certificate for the facility from the board. The construction certificate shall be
valid for a period of three (3)[two (2)] years after the issuance date of the last permit required to be obtained
from the Energy and Environment Cabinet after which the certificate shall be void. The certificate shall be
conditioned upon the applicant obtaining necessary air, water, and waste permits. If an applicant has not
obtained all necessary permits and has not commenced to construct prior to the expiration date of the
certificate, the applicant shall be required to obtain a new valid certificate from the board.
(2) Except as provided in subsections (3), (4), and (5) of this section, no construction certificate shall be issued to
construct a merchant electric generating facility unless the exhaust stack of the proposed facility and any wind
turbine is at least one thousand (1,000) feet from the property boundary of any adjoining property owner and
all proposed structures or facilities used for generation of electricity are two thousand (2,000) feet from any
residential neighborhood, school, hospital, or nursing home facility. For purposes of applications for site
compatibility certificates pursuant to KRS 278.216, only the exhaust stack of the proposed facility to be
actually used for coal or gas-fired generation or, beginning with applications for site compatibility certificates
filed on or after January 1, 2015, the proposed structure or facility to be actually used for solar or wind
generation shall be required to be at least one thousand (1,000) feet from the property boundary of any
adjoining property owner and two thousand (2,000) feet from any residential neighborhood, school, hospital,
or nursing home facility.
(3) If the merchant electric generating facility is proposed to be located in a county or a municipality with
planning and zoning, then decommissioning and setback requirements from a property boundary, residential
neighborhood, school, hospital, or nursing home facility may be established by the planning and zoning
commission. Any decommissioning requirement or setback established by a planning and zoning commission
for a facility in an area over which it has jurisdiction shall:
(a) Have primacy over the decommissioning requirements in subsection (2)(m) of Section 3 of this Act
and the setback requirement in subsections (2) and (5) of this section; and
(b) Not be subject to modification or waiver by the board through a request for deviation by the applicant,
as provided in subsection (4) of this section or otherwise.
(4) The board may grant a deviation from the requirements of subsection (2) of this section on a finding that the
proposed facility is designed to and, as located, would meet the goals of KRS 224.10-280, 278.010, 278.212,
278.214, 278.216, 278.218, and 278.700 to 278.716 at a distance closer than those provided in subsection (2)
of this section.
(5) If the merchant electric generating facility is proposed to be located on a site of a former coal processing plant
in the Commonwealth where the electric generating facility will utilize on-site waste coal as a fuel source, then
the one thousand (1,000) foot property boundary requirement in subsection (2) of this section shall not be
applicable; however, the applicant shall be required to meet any other setback requirements contained in
subsection (2) of this section.
(6) If requested, a merchant electric generating entity considering construction of a facility for the generation of
electricity or a person acting on behalf of such an entity shall hold a public meeting in any county where
acquisition of real estate or any interest in real estate is being considered for the facility. A request for such a
meeting may be made by the commission, or by any city or county governmental entity, including a board of
commissioners, planning and zoning, fiscal court, mayor, or county judge/executive. The meeting shall be held
not more than thirty (30) days from the date of the request.
(7) The purpose of the meeting under subsection (6) of this section is to fully inform landowners and other
interested parties of the full extent of the project being considered, including the project time line. One (1) or
more representatives of the entity with full knowledge of all aspects of the project shall be present and shall
answer questions from the public.
(8) Notice of the time, subject, and location of the meeting under subsection (6) of this section shall be posted in
both a local newspaper, if any, and a newspaper of general circulation in the county. Notice shall also be
placed on the websites[Web sites] of the unregulated entity, and any local governmental unit. Owners of real CHAPTER 140
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estate known to be included in the project and any person whose property adjoins at any point any property to
be included in the project shall be notified personally by mail. All notices must be mailed or posted at least
two (2) weeks prior to the meeting.
(9) The merchant electric generating entity or a person acting on behalf of a merchant electric generating entity
shall, on or before the date of the public meeting held under subsection (6) of this section, provide notice of all
research, testing, or any other activities being planned or considered to:
(a) The Energy and Environment Cabinet;
(b) The Public Service Commission;
(c) The Transportation Cabinet;
(d) The Attorney General; and
(e) The Office of the Governor.
(10) [A person that, on or before April 10, 2014, has started acquiring interests in real estate for a project as
described in subsection (6) of this section shall hold a meeting that complies with this section within thirty (30)
days of April 10, 2014.
(11)] Subsections (6) to (9)[(10)] of this section shall not apply to any facility or project that has already received a
certificate of construction from the board.
Section 3. KRS 278.706 is amended to read as follows:
(1) Any person seeking to obtain a construction certificate from the board to construct a merchant electric
generating facility shall file an application at the office of the Public Service Commission.
(2) A completed application shall include the following:
(a) The name, address, and telephone number of the person proposing to construct and own the merchant
electric generating facility;
(b) A full description of the proposed site, including a map showing the distance of the proposed site from
residential neighborhoods, the nearest residential structures, schools, and public and private parks that
are located within a two (2) mile radius of the proposed facility;
(c) Evidence of public notice that shall include the location of the proposed site and a general description of
the project, state that the proposed construction is subject to approval by the board, and provide the
telephone number and address of the Public Service Commission. Public notice shall be given within
thirty (30) days immediately preceding the application filing to:
1. Landowners whose property borders the proposed site; and
2. The general public in a newspaper of general circulation in the county or municipality in which
the facility is proposed to be located;
(d) A statement certifying that the proposed plant will be in compliance with all local ordinances and
regulations concerning noise control and with any local planning and zoning ordinances. The statement
shall also disclose setback requirements established by the planning and zoning commission as provided
under KRS 278.704(3);
(e) If the facility is not proposed to be located on a site of a former coal processing plant and the facility
will use on-site waste coal as a fuel source or in an area where a planning and zoning commission has
established a setback requirement pursuant to KRS 278.704(3), a statement that the exhaust stack of the
proposed facility and any wind turbine is at least one thousand (1,000) feet from the property boundary
of any adjoining property owner and all proposed structures or facilities used for generation of
electricity are two thousand (2,000) feet from any residential neighborhood, school, hospital, or nursing
home facility, unless facilities capable of generating ten megawatts (10MW) or more currently exist on
the site. If the facility is proposed to be located on a site of a former coal processing plant and the
facility will use on-site waste coal as a fuel source, a statement that the proposed site is compatible with
the setback requirements provided under KRS 278.704(5). If the facility is proposed to be located in a
jurisdiction that has established setback requirements pursuant to KRS 278.704(3), a statement that the
proposed site is in compliance with those established setback requirements; ACTS OF THE GENERAL ASSEMBLY 4
(f) A complete report of the applicant's public involvement program activities undertaken prior to the filing
of the application, including:
1. The scheduling and conducting of a public meeting in the county or counties in which the
proposed facility will be constructed at least ninety (90) days prior to the filing of an application,
for the purpose of informing the public of the project being considered and receiving comment
on it;
2. Evidence that notice of the time, subject, and location of the meeting was published in the
newspaper of general circulation in the county, and that individual notice was mailed to all
owners of property adjoining the proposed project at least two (2) weeks prior to the meeting;
and
3. Any use of media coverage, direct mailing, fliers, newsletters, additional public meetings,
establishment of a community advisory group, and any other efforts to obtain local involvement
in the siting process;
(g) A summary of the efforts made by the applicant to locate the proposed facility on a site where existing
electric generating facilities are located;
(h) Proof of service of a copy of the application upon the chief executive officer of each county and
municipal corporation in which the proposed facility is to be located, and upon the chief officer of each
public agency charged with the duty of planning land use in the jurisdiction in which the facility is
proposed to be located;
(i) An analysis of the proposed facility's projected effect on the electricity transmission system in
Kentucky;
(j) An analysis of the proposed facility's economic impact on the affected region and the state;
(k) A detailed listing of all violations by it, or any person with an ownership interest, of federal or state
environmental laws, rules, or administrative regulations, whether judicial or administrative, where
violations have resulted in criminal convictions or civil or administrative fines exceeding five thousand
dollars ($5,000). The status of any pending action, whether judicial or administrative, shall also be
submitted;[ and]
(l) A site assessment report as specified in KRS 278.708. The applicant may submit and the board may
accept documentation of compliance with the National Environmental Policy Act (NEPA) rather than a
site assessment report; and
(m) A decommissioning plan that shall describe how the merchant electric generating facility will be
decommissioned and dismantled following the end of its useful life. The decommissioning plan shall,
at a minimum, include plans to:
1. Unless otherwise requested by the landowner, remove all above-ground facilities;
2. Unless otherwise requested by the landowner, remove any underground components and
foundations of above-ground facilities. Facilities removed under this subparagraph shall be
removed to a depth of three (3) feet below the surface grade of the land in or on which the
component was installed, unless the landowner and the applicant otherwise agree to a
different depth;
3. Return the land to a substantially similar state as it was prior to the commencement of
construction;
4. Unless otherwise requested by the landowner, leave any interconnection or other facilities in
place for future use at the completion of the decommissioning process;
5. Secure a bond or other similar security for the project to assure financial performance of the
decommissioning obligation, provided that:
a. The amount of the proposed bond or similar security shall be determined by an
independent, licensed engineer who is experienced in the decommissioning of solar
electric generating facilities and has no financial interest in either the merchant electric
generating facility or any parcel of land upon which the merchant electric generating
facility is located. The proposed amount of the bond or similar security shall be either: CHAPTER 140
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i. The net present value of the total estimated cost of completing the
decommissioning plan, less the current net salvage value of the merchant electric
generating facility's components; or
ii. The bond amount required by a county or municipal government that has
established a decommissioning bond requirement or similar security obligation
in the county or municipality where the merchant electric generating facility will
be located. If the facility will be located in more than one (1) county or
municipality that has established a decommissioning bond or similar security
obligation, then the higher amount shall be required for the facility;
b. The bond or other similar security names:
i. For property that is leased by the applicant, each landowner from whom the
applicant leases land and the Energy and Environment Cabinet as the primary
co-beneficiaries; or
ii. For property that is owned by the applicant, the Energy and Environment
Cabinet as the primary beneficiary;
c. If the merchant electric generating facility is to be located in a county or municipality
that has not established a decommissioning bond or other similar security obligation,
the bond or other similar security shall name the county or municipality as a secondary
beneficiary with the county's or municipality's consent;
d. The bond or other similar security shall be provided by an insurance company or surety
that shall at all times maintain at least an "Excellent" rating as measured by the AM
Best rating agency or an investment grade credit rating by any national credit rating
agency and, if available, shall be noncancelable by the provider or the customer until
completion of the decommissioning plan or until a replacement bond is secured; and
e. The bond or other similar security shall provide that at least thirty (30) days prior to its
cancellation or lapse, the surety shall notify the applicant, its successor or assign, each
landowner, the Energy and Environment Cabinet, and the county or city in which the
facility is located of the impending cancellation or lapse. The notice shall specify the
reason for the cancellation or lapse and provide any of the parties, either jointly or
separately, the opportunity to cure the cancellation or lapse prior to it becoming
effective. The applicant, its successor, or its assign, shall be responsible for all costs
incurred by all parties to cure the cancellation or lapse of the bond. Each landowner, or
the Energy and Environment Cabinet with the prior approval of each landowner, may
make a demand on the bond and initiate and complete the decommissioning plan.
6. Communicate with each affected landowner at the end of the merchant electric generating
facility's useful life so that any requests of the landowner that are in addition to the minimum
requirements set forth in this paragraph and in addition to any other requirements specified in
the lease with the landowner may, in the sole discretion of the applicant or its successor or
assign, be accommodated; and
7. Incorporate the requirements of paragraph (m)1. to 6. of this subsection into the applicant's
leases with landowners.
(3) Application fees for a construction certificate shall be set by the board and deposited into a trust and agency
account to the credit of the commission.
(4) Replacement of a merchant electric generating facility with a like facility, or the repair, modification,
retrofitting, enhancement, or reconfiguration of a merchant electric generating facility shall not, for the
purposes of this section and KRS 224.10-280, 278.704, 278.708, 278.710, and 278.712, constitute construction
of a merchant electric generating facility.
(5) The board shall promulgate administrative regulations prescribing fees to pay expenses associated with its
review of applications filed with it pursuant to KRS 278.700 to 278.716. All application fees collected by the
board shall be deposited in a trust and agency account to the credit of the Public Service Commission. If a
majority of the members of the board find that an applicant's initial fees are insufficient to pay the board's
expenses associated with the application, including the board's expenses associated with legal review thereof, ACTS OF THE GENERAL ASSEMBLY 6
the board shall assess a supplemental application fee to cover the additional expenses. An applicant's failure to
pay a fee assessed pursuant to this subsection shall be grounds for denial of the application.
Section 4. KRS 278.708 is amended to read as follows:
(1) Any person proposing to construct a merchant electric generating facility shall file a site assessment report
with the board as required under KRS 278.706(2)(l).
(2) A site assessment report shall be prepared by the applicant or its designee.
(3) A completed site assessment report shall include:
(a) A description of the proposed facility that shall include a proposed site development plan that describes:
1. Surrounding land uses for residential, commercial, agricultural, and recreational purposes;
2. The legal boundaries of the proposed site;
3. Proposed access control to the site;
4. The location of facility buildings, transmission lines, and other structures;
5. Location and use of access ways, internal roads, and railways;
6. Existing or proposed utilities to service the facility;
7. Compliance with applicable setback requirements as provided under KRS 278.704(2), (3), (4), or
(5); and
8. Evaluation of the noise levels expected to be produced by the facility;
(b) An evaluation of the compatibility of the facility with scenic surroundings;
(c) The potential changes in property values and land use resulting from the siting, construction, and
operation of the proposed facility for property owners adjacent to the facility;
(d) Evaluation of anticipated peak and average noise levels associated with the facility's construction and
operation at the property boundary; and
(e) The impact of the facility's operation on road and rail traffic to and within the facility, including
anticipated levels of fugitive dust created by the traffic and any anticipated degradation of roads and
lands in the vicinity of the facility.
(4) The site assessment report shall also suggest any mitigating measures to be implemented by the applicant to
minimize or avoid adverse effects identified in the site assessment report.
(5) The board shall have the authority to hire a consultant to review the site assessment report and provide
recommendations concerning the adequacy of the report and proposed mitigation measures. The board may
direct the consultant to prepare a separate site assessment report. Any expenses or fees incurred by the board's
hiring of a consultant shall be borne by the applicant.
(6) The applicant shall be given the opportunity to present evidence to the board regarding any mitigation
measures. As a condition of approval for an application to obtain a construction certificate, the board may
require the implementation of any mitigation measures that the board deems appropriate. Ongoing compliance
with any mitigation measures that were conditions of construction certificate application approval shall be
enforced by the Energy and Environment Cabinet pursuant to subsection (9) of Section 5 of this Act.
Section 5. KRS 278.710 is amended to read as follows:
(1) Within one hundred twenty (120) days of receipt of an administratively complete application, or within one
hundred eighty (180) days of receipt of an administratively complete application if a hearing is requested, the
board shall, by majority vote, grant or deny a construction certificate, either in whole or in part, based upon the
following criteria:
(a) Impact of the facility on scenic surroundings, property values, the pattern and type of development of
adjacent property, and surrounding roads;
(b) Anticipated noise levels expected as a result of construction and operation of the proposed facility;
(c) The economic impact of the facility upon the affected region and the state; CHAPTER 140
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(d) Whether the facility is proposed for a site upon which existing generating facilities, capable of
generating ten megawatts (10MW) or more of electricity, are currently located;
(e) Whether the proposed facility will meet all local planning and zoning requirements that existed on the
date the application was filed;
(f) Whether the additional load imposed upon the electricity transmission system by use of the merchant
electric generating facility will adversely affect the reliability of service for retail customers of electric
utilities regulated by the Public Service Commission;
(g) Except where the facility is subject to a statewide setback established by a planning and zoning
commission as provided in KRS 278.704(3) and except for a facility proposed to be located on a site of
a former coal processing plant and the facility will use on-site waste coal as a fuel source, whether the
exhaust stack of the proposed merchant electric generating facility and any wind turbine is at least one
thousand (1,000) feet from the property boundary of any adjoining property owner and all proposed
structures or facilities used for generation of electricity are two thousand (2,000) feet from any
residential neighborhood, school, hospital, or nursing home facility, unless a different setback has been
requested and approved under KRS 278.704(4). If a planning and zoning commission has established
setback requirements that differ from those under KRS 278.704(2), the applicant shall provide evidence
of compliance. If the facility is proposed to be located on site of a former coal processing plant and the
facility will use on-site waste coal as a fuel source, the applicant shall provide evidence of compliance
with the setback requirements provided in KRS 278.704(5);
(h) The efficacy of any proposed measures to mitigate adverse impacts that are identified pursuant to
paragraph (a), (b), (e), or (f) of this subsection from the construction or operation of the proposed
facility;[ and]
(i) Whether the applicant has a good environmental compliance history; and
(j) Whether the decommissioning plan is complete and complies with the requirements of subsection
(2)(m) of Section 3 of this Act and any other local requirements that may apply.
(2) When considering an application for a construction certificate for a merchant electric generating facility, the
board may consider the policy of the General Assembly to encourage the use of coal as a principal fuel for
electricity generation as set forth in KRS 152.210, provided that any facility, regardless of fuel choice, shall
comply fully with KRS 224.10-280, 278.212, 278.216, and 278.700 to 278.716.
(3) A person that has received a construction certificate for a merchant electric generating facility shall:
(a) File with the Energy and Environment Cabinet the copy of the bond or other similar security that,
pursuant to subsection (2)(m)5. of Section 3 of this Act, is required by a county or a municipal
government or as part of a decommissioning plan, no later than the date upon which the
construction of the merchant generating facility commences, and refile an updated copy at least once
every five (5) years thereafter;
(b) Not transfer rights and obligation under the certificate without having first applied for and received a
board determination that:
1.[(a)] The acquirer has a good environmental compliance history; and
2.[(b)] The acquirer has the financial, technical, and managerial capacity to meet the obligations
imposed by the terms of the approval or has the ability to contract to meet these obligations;
(c) File with the Energy and Environment Cabinet a notice of the date that construction is complete and
the merchant electric generating facility begins producing electricity for sale; and
(d) Following the date the merchant electric generating facility begins producing electricity for sale, file
a notice of any transaction involving the transfer or sale of ownership, control, or the right to control
the merchant electric generating facility, with lessors of property where the merchant electric
generating facility is located, the Energy and Environment Cabinet, the county judge/executive of a
county and, if applicable, the mayor of a municipality in which the merchant electric generating
facility is located, within ten (10) days of completing the transaction. The notice shall include the
name, street address, telephone number, and e-mail address of the person acquiring ownership,
control, or the right to control the merchant electric generating facility. ACTS OF THE GENERAL ASSEMBLY 8
(4) A person that has acquired ownership, control, or the right to control a merchant electric generating facility
from the applicant or its successor or assign shall file with the Energy and Environment Cabinet within ten
(10) days of completing the acquisition:
(a) A written consent to assume the obligations set forth in the decommissioning plan as of the date the
acquisition occurred; and
(b) A notice of adoption of an existing bond or other similar security previously filed pursuant to
subsection (3)(a) of this section or a replacement bond or other similar security that complies with
subsection (2)(m)5. of Section 3 of this Act. An existing bond or other similar security shall be
adopted, or a replacement bond or other similar security shall be in place, as of the date the
acquisition occurs so that there is no lapse in coverage of the decommissioning bond or other similar
security. A person making a filing pursuant to this subsection shall file an updated bond or other
similar security that complies with subsection (2)(m)5. of Section 3 of this Act at least once every five
(5) years.
(5) Any person who transfers or sells ownership, control, or the right to control a merchant electric generating
facility shall remain liable for all existing decommissioning obligations and bond requirements until the
person who acquires ownership, control, or the right to control the merchant electric generating facility
files with the Energy and Environment Cabinet the documents required by subsection (4) of this section and
they are accepted as complete by the secretary.
(6) Any application approval condition that requires the approval of the transfer of control of a merchant
electric generating facility after construction is complete shall be void and unenforceable, but any transfer
of control of a merchant electric generating facility shall be subject to compliance with the requirements of
subsections (3)(d), (4), and (5) of this section.
(7) Notwithstanding any provision of law to the contrary, including any order issued by the board prior to the
effective date of this Act, after the board has approved an application for a construction certificate for a
merchant electric generating facility under this section, the approved applicant has posted the bond or
similar security required under subsection (2)(m)5. of Section 3 of this Act, and the facility is constructed
and begins generating electricity for sale, the board's authority to enforce any conditions of the
construction certificate, including bonding and decommissioning requirements, shall end and the secretary
of the Energy and Environment Cabinet shall monitor and enforce the construction certificate holder's
compliance with the requirements of KRS 278.700 to 278.716 and the conditions of its construction
certificate application approval.
(8) In addition to all compliance monitoring and enforcement performed by the secretary of the Energy and
Environment Cabinet, and notwithstanding any provision of law to the contrary, the secretary shall also
review the decommissioning plan required by subsection (2)(m) of Section 3 of this Act or by local
ordinance, license, or permit and the bond or similar security amount required by subsection (2)(m)5. of
Section 3 of this Act or by local ordinance, license, or permit as needed, including any time a transfer
determination is made under subsection (5) of this section, but in any event at least once every five (5)
years. Upon review, the secretary of the Energy and Environment Cabinet shall require the
decommissioning plan to be updated and the bond amount to be changed to match any significant change
in circumstances or change to the estimated cost of effectuating the decommissioning plan or to the salvage
value of the facility or its components.
(9) After the facility for which an application for a construction certificate has been approved is constructed
and begins generating electricity for sale, the secretary of the Energy and Environment Cabinet shall
ensure ongoing compliance with the mitigation measures that were conditions of the application approval
under subsection (6) of Section 4 of this Act and any enforcement by the board of the mitigation measures
shall cease.
(10) During the period that the merchant electric generating facility is operational, if solar panels are replaced
and discarded, the facility owner-operator shall remove discarded solar panels from the site within ninety
(90) days of completion of the work. Upon request of the facility owner-operator, the secretary of the
Energy and Environment Cabinet may extend the time period under this subsection for removing discarded
solar panels.
Section 6. KRS 278.718 is amended to read as follows:
The provisions of KRS 278.700, 278.704, 278.706, 278.708, and 278.710 shall[ be in addition to, and shall] not
supplant, any other state or federal law, including the powers available to local governments under the provisions of CHAPTER 140
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home rule under KRS 67.080, 67.083, 67.850, 67.922, 67A.060, 67C.101, and 82.082. An ordinance, permit, or
license issued by a local government shall have primacy over the provisions and requirements of KRS 278.700 and
Sections 2, 3, and 4 of this Act, and any conflict between an order of the board and a local ordinance, permit, or
license shall be resolved in favor of the local government's ordinance, permit, or license.
Section 7. KRS 224.10-100 is amended to read as follows:
In addition to any other powers and duties vested in it by law, the cabinet shall have the authority, power, and duty to:
(1) Exercise general supervision of the administration and enforcement of this chapter, and all rules, regulations,
and orders promulgated thereunder;
(2) Prepare and develop a comprehensive plan or plans related to the environment of the Commonwealth;
(3) Encourage industrial, commercial, residential, and community development which provides the best usage of
land areas, maximizes environmental benefits, and minimizes the effects of less desirable environmental
conditions;
(4) Develop and conduct a comprehensive program for the management of water, land, and air resources to assure
their protection and balance utilization consistent with the environmental policy of the Commonwealth;
(5) Provide for the prevention, abatement, and control of all water, land, and air pollution, including but not
limited to that related to particulates, pesticides, gases, dust, vapors, noise, radiation, odor, nutrients, heated
liquid, or other contaminants;
(6) Provide for the control and regulation of surface coal mining and reclamation in a manner to accomplish the
purposes of KRS Chapter 350;
(7) Secure necessary scientific, technical, administrative, and operational services, including laboratory facilities,
by contract or otherwise;
(8) Collect and disseminate information and conduct educational and training programs relating to the protection
of the environment;
(9) Appear and participate in proceedings before any federal regulatory agency involving or affecting the purposes
of the cabinet;
(10) Enter and inspect any property or premises for the purpose of investigating either actual or suspected sources
of pollution or contamination or for the purpose of ascertaining compliance or noncompliance with this
chapter, or any regulation which may be promulgated thereunder;
(11) Conduct investigations and hold hearings and compel the attendance of witnesses and the production of
accounts, books, and records by the issuance of subpoenas;
(12) Accept, receive, and administer grants or other funds or gifts from public and private agencies including the
federal government for the purpose of carrying out any of the functions of the cabinet. The funds received by
the cabinet shall be deposited in the State Treasury to the account of the cabinet;
(13) Request and receive the assistance of any state or municipal educational institution, experiment station,
laboratory, or other agency when it is deemed necessary or beneficial by the cabinet in the performance of its
duties;
(14) Advise, consult, and cooperate with other agencies of the Commonwealth, other states, the federal
government, and interstate and interlocal agencies, and affected persons, groups, and industries;
(15) Formulate guides for measuring presently unidentified environmental values and relationships so they can be
given appropriate consideration along with social, economic, and technical considerations in decision making;
(16) Monitor the environment to afford more effective and efficient control practices, to identify changes and
conditions in ecological systems, and to warn of emergency conditions;
(17) Adopt, modify, or repeal with the recommendation of the commission any standard, regulation, or plan;
(18) Issue, after hearing, orders abating activities in violation of this chapter, or the provisions of this chapter, or the
regulations promulgated pursuant thereto and requiring the adoption of the remedial measures the cabinet
deems necessary; ACTS OF THE GENERAL ASSEMBLY 10
(19) Issue, continue in effect, revoke, modify, suspend, or deny under such conditions as the cabinet may prescribe
and require that applications be accompanied by plans, specifications, and other information the cabinet deems
necessary for the following permits:
(a) Permits to discharge into any waters of the Commonwealth, and for the installation, alteration,
expansion, or operation of any sewage system; however, the cabinet may refuse to issue the permits to
any person, or any partnership, corporation, etc., of which the person owns more than ten percent (10%)
interest, who has improperly constructed, operated, or maintained a sewage system willfully, through
negligence, or because of lack of proper knowledge or qualifications until the time that person
demonstrates proper qualifications to the cabinet and provides the cabinet with a performance bond;
(b) Permits for the installation, alteration, or use of any machine, equipment, device, or other article that
may cause or contribute to air pollution or is intended primarily to prevent or control the emission of air
pollution; or
(c) Permits for the establishment or construction and the operation or maintenance of waste disposal sites
and facilities;
(20) May establish, by regulation, a fee or schedule of fees for the cost of processing applications for permits
authorized by this chapter, and for the cost of processing applications for exemptions or partial exemptions
which may include but not be limited to the administrative costs of a hearing held as a result of the exemption
application, except that applicants for existing or proposed publicly owned facilities shall be exempt from any
charge, other than emissions fees assessed pursuant to KRS 224.20-050, and that certain nonprofit
organizations shall be charged lower fees to process water discharge permits under KRS 224.16-050(5);
(21) May require for persons discharging into the waters or onto the land of the Commonwealth, by regulation,
order, or permit, technological levels of treatment and effluent limitations;
(22) Require, by regulation, that any person engaged in any operation regulated pursuant to this chapter install,
maintain, and use at such locations and intervals as the cabinet may prescribe any equipment, device, or test
and the methodologies and procedures for the use of the equipment, device, or test to monitor the nature and
amount of any substance emitted or discharged into the ambient air or waters or land of the Commonwealth
and to provide any information concerning the monitoring to the cabinet in accordance with the provisions of
subsection (23) of this section;
(23) Require by regulation that any person engaged in any operation regulated pursuant to this chapter file with the
cabinet reports containing information as to location, size, height, rate of emission or discharge, and
composition of any substance discharged or emitted into the ambient air or into the waters or onto the land of
the Commonwealth, and such other information the cabinet may require;
(24) Promulgate regulations, guidelines, and standards for waste planning and management activities, approve
waste management facilities, develop and publish a comprehensive statewide plan for nonhazardous waste
management which shall contain but not be limited to the provisions set forth in KRS 224.43-345, and develop
and publish a comprehensive statewide plan for hazardous waste management which shall contain but not be
limited to the following:
(a) A description of current hazardous waste management practices and costs, including treatment and
disposal, within the Commonwealth;
(b) An inventory and description of all existing facilities where hazardous waste is being generated, treated,
recycled, stored, or disposed of, including an inventory of the deficiencies of present facilities in
meeting current hazardous waste management needs and a statement of the ability of present hazardous
waste management facilities to comply with state and federal laws relating to hazardous waste;
(c) A description of the sources of hazardous waste affecting the Commonwealth including the types and
quantities of hazardous waste currently being generated and a projection of such activities as can be
expected to continue for not less than twenty (20) years into the future; and
(d) An identification and continuing evaluation of those locations within the Commonwealth which are
naturally or may be engineered to be suitable for the establishment of hazardous waste management
facilities, and an identification of those general characteristics, values, and attributes which would
render a particular location unsuitable, consistent with the policy of minimizing land disposal and
encouraging the treatment and recycling of the wastes. CHAPTER 140
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The statewide waste management plans shall be developed consistent with state and federal laws relating to
waste;
(25) Perform other acts necessary to carry out the duties and responsibilities described in this section;
(26) Preserve existing clean air resources while ensuring economic growth by issuing regulations, which shall be no
more stringent than federal requirements, setting maximum allowable increases from stationary sources over
baseline concentrations of air contaminants to prevent significant deterioration in areas meeting the state and
national ambient air quality standards;
(27) Promulgate regulations concerning the bonding provisions of subsection (19)(a) of this section, setting forth
bonding requirements, including but not limited to requirements for the amount, duration, release, and
forfeiture of the bonds. All funds from the forfeiture of bonds required pursuant to this section shall be placed
in the State Treasury and credited to a special trust and agency account which shall not lapse. The account
shall be known as the "sewage treatment system rehabilitation fund" and all moneys placed in the fund shall be
used for the elimination of nuisances and hazards created by sewage systems which were improperly built,
operated, or maintained, and insofar as practicable be used to correct the problems at the same site for which
the bond or other sureties were originally provided;
(28) Promulgate administrative regulations not inconsistent with the provisions of law administered by the cabinet;[
and]
(29) Through the secretary or designee of the secretary, enter into, execute, and enforce reciprocal agreements with
responsible officers of other states relating to compliance with the requirements of KRS Chapters 350, 351,
and 352 and the administrative regulations promulgated under those chapters;
(30) Monitor and enforce the compliance of a merchant electric generating entity to which a construction
certificate has been issued pursuant to Section 5 of this Act with respect to its obligations under subsections
(3), (4), (5), (7), (8), (9) and (10) of Section 5 of this Act; and
(31) Draw upon a decommissioning bond or similar security for which it is named as a beneficiary and
decommission and dismantle a merchant electric generating facility in accordance with its approved
decommissioning plan.
Section 8. KRS 224.99-010 is amended to read as follows:
(1) Any person who violates KRS 224.10-110(2) or (3), 224.70-110, 224.73-120, 224.20-050, 224.20-110,
224.46-580, 224.1-400, or who fails to perform any duties imposed by these sections, or who violates any
determination, permit, administrative regulation, or order of the cabinet promulgated pursuant thereto shall be
liable for a civil penalty not to exceed the sum of twenty-five thousand dollars ($25,000) for each day during
which such violation continues, and in addition, may be concurrently enjoined from any violations as
hereinafter provided in this section and KRS 224.99-020.
(2) Any person who violates KRS 224.10-110(4) or (5), or KRS 224.40-100, 224.40-305, or any provision of this
chapter relating to noise, or who fails to perform any determination, permit, administrative regulation, or order
of the cabinet promulgated pursuant thereto shall be liable for a civil penalty not to exceed the sum of five
thousand dollars ($5,000) for said violation and an additional civil penalty not to exceed five thousand dollars
($5,000) for each day during which such violation continues, and in addition, may be concurrently enjoined
from any violations as hereinafter provided in this section and KRS 224.99-020.
(3) (a) Any person who shall knowingly violate any of the provisions of this chapter relating to noise or any
determination or order of the cabinet promulgated pursuant to those sections which have become final
shall be guilty of a Class A misdemeanor. Each day upon which the violation occurs shall constitute a
separate violation.
(b) For offenses by motor vehicles, a person shall be guilty of a violation.
(4) Any person who knowingly violates KRS 224.70-110, 224.73-120, 224.40-100, 224.20-110, 224.20-050,
224.40-305, or 224.10-110(2) or (3), or any determination, permit, administrative regulation, or order of the
cabinet promulgated pursuant to those sections which have become final, or who knowingly provides false
information in any document filed or required to be maintained under this chapter, or who knowingly renders
inaccurate any monitoring device or method, or who tampers with a water supply, water purification plant, or
water distribution system so as to knowingly endanger human life, shall be guilty of a Class D felony, and
upon conviction thereof, shall be punished by a fine not to exceed twenty-five thousand dollars ($25,000), or ACTS OF THE GENERAL ASSEMBLY 12
by imprisonment for a term of not less than one (1) year and not more than five (5) years, or by both fine and
imprisonment, for each separate violation. Each day upon which a violation occurs shall constitute a separate
violation.
(5) If any person engages in generation, treatment, storage, transportation, or disposal of hazardous waste in
violation of the hazardous waste management provisions of this chapter or contrary to a permit, order, or rule
issued or promulgated under this chapter, or fails to provide information or to meet reporting requirements
required by terms and conditions of a permit or administrative regulations promulgated pursuant to this
chapter, the secretary may issue an order requiring compliance within a specified time period or may
commence a civil action in a court of appropriate jurisdiction. The violator shall be liable for a civil penalty
not to exceed the sum of twenty-five thousand dollars ($25,000) for each day during which the violation
continues, and in addition, may be enjoined from any violations in a court of appropriate jurisdiction.
(6) Any person who knowingly is engaged in generation, treatment, storage, transportation, or disposal of
hazardous waste in violation of this chapter or contrary to a permit, order, or administrative regulation issued
or promulgated under this chapter, or knowingly makes a false statement, representation, or certification in an
application for or form pertaining to a permit or in a notice or report required by the terms and conditions of an
issued permit, shall be guilty of a Class D felony, and upon conviction thereof, shall be punished by a fine not
to exceed twenty-five thousand dollars ($25,000) for each day of violation, or by imprisonment for a term of
not less than one (1) year and not more than five (5) years, or by both fine and imprisonment, for each separate
violation. Each day upon which a violation occurs shall constitute a separate violation.
(7) Nothing contained in subsections (4) or (5) of this section shall abridge the right of any person to recover
actual compensatory damages resulting from any violation.
(8) Any person who violates any provision of this chapter to which no express penalty provision applies, except as
provided in KRS 211.995, or who fails to perform any duties imposed by those sections, or who violates any
determination or order of the cabinet promulgated pursuant thereto shall be liable for a civil penalty not to
exceed the sum of one thousand dollars ($1,000) for said violation and an additional civil penalty not to exceed
one thousand dollars ($1,000) for each day during which the violation continues, and in addition, may be
concurrently enjoined from any violations as hereinafter provided in this section and KRS 224.99-020.
(9) The Franklin Circuit Court shall hold concurrent jurisdiction and venue of all civil, criminal, and injunctive
actions instituted by the cabinet or by the Attorney General on its behalf for the enforcement of the provisions
of this chapter or the orders and administrative regulations of the cabinet promulgated pursuant thereto, except
for any actions arising from or related to subsections (3), (4), or (5) of Section 5 of this Act or subsection
(16) of this section, which shall be brought in the Circuit Court in any county in which the merchant
electric generating facility is located.
(10) Any person who deposits leaves, clippings, prunings, garden refuse, or household waste materials in any litter
receptacle, except with permission of the owner of the receptacle, or who places litter into a receptacle in such
a manner that the litter may be carried away or deposited by the elements upon any property or water not
owned by him or her is guilty of a Class B misdemeanor. Penalties imposed under this subsection shall be,
when collected, transferred to the county treasurer where the offense occurred and placed into a fund for solid
waste cleanup. This subsection shall not be construed to divert any other fines assessed and collected by the
cabinet or funds available to the cabinet for the purpose of remediation of open dumps.
(11) In addition to or in lieu of the penalties set forth in this section or in KRS Chapters 532 and 534, any person
found guilty of a second or subsequent offense related to littering may be ordered by the court to pick up litter
for not less than four (4) hours.
(12) Any person who violates KRS 224.20-300, 224.20-310, any other provision of this chapter, or any
determination, permit, administrative regulation, or order of the cabinet relating to the Asbestos Hazard
Emergency Response Act of 1986 (AHERA), Public Law 99-519, as amended, shall be liable to the
Commonwealth of Kentucky for a civil penalty in an amount not to exceed twenty-five thousand dollars
($25,000) for each violation. Each day a violation continues shall, for purposes of this subsection, constitute a
separate violation of provisions of this chapter relating to AHERA.
(13) A violation of KRS 224.50-413 shall be subject to a fifty dollar ($50) fine for each day the violation continues.
(14) Any person who removes a methamphetamine contamination notice posted under KRS 224.1-410(9) contrary
to the administrative regulations governing methamphetamine contamination notice removal shall be guilty of
a Class A misdemeanor. CHAPTER 140
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(15) Any person who leases, rents, or sells a property that has been determined to be contaminated property under
KRS 224.1-410(4) to a lessee, renter, or buyer without giving written notice that the property is a contaminated
property pursuant to KRS 224.1-410(10) shall be guilty of a Class D felony.
(16) Any person who violates subsection (3), (4), or (5) of Section 5 of this Act may be subject to civil penalties
not to exceed two thousand five hundred dollars ($2,500) per day. In determining the civil penalty to be
imposed under this subsection, the cabinet shall consider all relevant circumstances including but not
limited to the extent of harm or potential harm caused by the violation, the nature and duration of the
violation, the number of past violations, and any corrective action taken by the merchant electric generating
facility owner. If a merchant electric generating facility fails to pay any civil penalty for noncompliance
under this subsection for a period of three hundred sixty-five (365) days after a final determination of the
assessment of the civil penalty, or fails to post a bond or replacement bond in compliance with subsections
(3), (4), or (5) of Section 5 of this Act within ninety (90) days of a final determination that the bond or
replacement bond is required, the cabinet may order suspension of its operations until it is brought back
into compliance and all civil penalties have been paid or the bond or replacement bond is posted. If after a
final determination that the cabinet's order suspending operations of the facility is valid, and the merchant
electric generating facility fails to bring the facility back into compliance by paying all outstanding civil
penalties or posting the bond or replacement bond within ninety (90) days of that final determination, the
cabinet may order the decommissioning of the facility to commence.
SECTION 9. A NEW SECTION OF SUBCHAPTER 10 OF KRS CHAPTER 224 IS CREATED TO
READ AS FOLLOWS:
(1) If the owner of a merchant electric generating facility fails to complete the decommissioning plan within
eighteen (18) months of the date that the facility ceases to produce electricity for sale and the secretary has
not extended the deadline, the cabinet shall draw upon the decommissioning bond and implement the
decommissioning plan.
(2) Within ninety (90) days of the effective date of this Act, the cabinet shall promulgate administrative
regulations pursuant to KRS Chapter 13A to establish the monitoring and enforcement requirements for
the obligations set forth in subsections (3), (4), (5), (7), (8), (9) and (10) of Section 5 of this Act and
subsections (30) and (31) of Section 7 of this Act. The cabinet shall establish a fee structure covering the
entire useful life of a merchant electric generating facility to be charged to each facility for which the
cabinet has monitoring and enforcement responsibilities. The fees collected shall be deposited in the
restricted fund established in subsection (3) of this section.
(3) (a) There is hereby established in the State Treasury a restricted fund to be known as the merchant
electric generating facility monitoring and enforcement fund, which shall be administered by the
cabinet and shall consist of the fees collected under subsection (2) of this section and any moneys
collected pursuant to enforcement actions taken by the cabinet in the course of performing its
monitoring and enforcement responsibilities for merchant electric generating facilities.
(b) Amounts deposited in the fund shall only be used to defray the costs of the cabinet's monitoring and
enforcement responsibilities for merchant electric generating facilities and for no other purpose.
(c) Notwithstanding KRS 45.229, fund amounts not expended at the close of the fiscal year shall not
lapse, but shall be carried forward into the next fiscal year.
(d) Any interest earnings of the fund shall become part of the fund and shall not lapse.
(e) Moneys deposited in the fund are hereby appropriated for the purposes set forth in this subsection
and shall not be appropriated or transferred by the General Assembly for any other purposes.
(4) In carrying out its decommissioning plan and bond adequacy review under subsection (8) of Section 5 of
this Act, the cabinet shall have the authority to hire a consulting independent licensed engineer to review
the secured decommissioning bond or similar security instrument and decommissioning plan and provide
recommendations concerning the adequacy of the security instrument to cover actual costs. The cabinet
may direct the independent licensed engineer to prepare an assessment report. Any expenses or fees
incurred by the cabinet’s hiring of the independent licensed engineer shall be paid by the owner-operator of
the merchant electric generating facility.
Veto Overridden March 30, 2023.
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