November 25, 1980

Mr. Rodger Pearson, Secretary 
Department of Agriculture 
Anderson Building 
Pierre, South Dakota 57501

Official Opinion No. 80-71

Landowner Assuming Responsibility of Mineral Well Converted to Water Well

Dear Mr. Pearson:

You have requested an official opinion from this office in regard to the following factual situation:

FACTS: 

An agreement was made between an exploration company and a landowner wherein the landowner agreed to assume the responsibility of developing or plugging an exploration well.

Based on the above facts, you have asked the following questions:

QUESTIONS: 

1.  Does this agreement absolve the company of its responsibility for the mineral well? 

2.  If the answer to No. 1 is yes, then is a bond required of the landowner until such time as the mineral well is developed?

IN RE QUESTION NO. 1:

Before addressing your question of whether the agreement absolves the company of its responsibility for the mineral well, notice should be made of the fact that state law specifically provides for such an absolution.  SDCL 45-6A- 6.14 states as follows: 

If any mineral well drilled are to be ultimately used or are to be converted to water wells, it shall be the responsibility of the user to comply with the provisions of chapter 46-6.

SDCL Chapter 46-6 deals with the appropriation of ground water, and requires that a permit to appropriate ground water be obtained if the water will be put to use for other than domestic purposes.

Thus, SDCL 45-6A-6.14 statutorily allows a mineral well to be converted to a water well, with the responsibility for the development of the well transferring to the well user (landowner/lessee).  The purchase agreement referred to in your question does little more than give effect to this statute, by specifically transferring title and responsibility for the mineral well from the well driller to the landowner or lessee who will use the well for water. As this transfer of responsibility is specifically contemplated in SDCL 45- 6A-6.14, the purchase agreement is indeed valid, and the exploration company is absolved of its responsibility for the mineral well.

IN RE QUESTION NO. 2:

You have asked whether, under SDCL Chapter 45-6A, a bond may be required from the landowner until the mineral well is developed into a water well.  The bonding provision regarding mineral exploration, and mineral wells drilled  pursuant to exploration, is contained in SDCL 45-6A-6.2.  Only an operator, one who is conducting the exploration program, is required to submit a bond. Therefore no bond can be required under the general bonding provisions of SDCL Chapter 45-6A.

In addition, SDCL 45-6A-6.14 does not specifically give the state authority to require a bond from the water well user. Therefore, no bond may be required from the landowner.  Notice should be made, however, of the fact that the landowner/lessee (water well user) is required to comply with the State's statutes and regulations governing ground water (SDCL Chapter 46-6).

Respectfully submitted,

Mark V. Meierhenry
Attorney General