The diversion of the funds, used by the legislative and executive branches for general fund purposes, violated the state's obligation to secure federal approval before making changes to the approved bonding program, and "seriously jeopardizes" the ability of that pooled fund to pay reclamation obligations if the mining operations default. The funds were unlawfully transferred in June 2003 and March 2004. On May 13, 2004 the federal Office of Surface Mining disapproved the transfers but took no immediate action to require restoration of the funds.
On June 28, the Kentucky Resources Council served a formal "notice of intent to sue" the Kentucky Department for Natural Resources and Environment and Public Protection Cabinet for failure to comply with federal coal mining laws. The Governor's prompt action resolves the threatened suit and is appreciated by KRC.
To read the Cabinet's press release announcing the restoration of the funds, go to http://kentucky.gov/Newsroom/NAT_RES_ENV_PROT_CAB/7-12bondpool.htm