I. GENERAL 

The Commonwealth of Kentucky, Energy and Environment Cabinet, Department for Natural Resources, 

Division of Oil and Gas ("Commonwealth") and the United States Environmental Protection Agency 

Region 4 ("EPA") have entered into this Memorandum of Agreement ("Agreement") to establish 

policies, responsibilities, and procedures pursuant to 40 C.F.R. Part 145, and Section 1425 of the Safe 

Drinking Water Act ("SDWA" or the "Act"), for the Commonwealth of Kentucky Underground 

Injection Control Program for Class II Wells ("State UIC Program"), as authorized by Part C of the 

SDWA (P. L. 93-523 as amended by P. L. 95-190 and 96-502), 42 U.S.C. 300h et. seq. 

This Agreement is entered into by the Commonwealth, and signed by Steve Hohmann, Commissioner, 

Department for Natural Resources ("Commissioner") with the EPA, and signed by the Regional 

Administrator for Region 4. This Agreement shall become effective when approved by the 

Administrator. 

II. POLICIES AND AGREEMENTS 

A. Lead Agency Responsibilities 

The lead agency of the Kentucky 1425 UIC Program, designated by the Governor of the Commonwealth 

of Kentucky, is the Kentucky Department of Natural Resources, Division of Oil and Gas ("DOG"). As 

the lead agency, DOG receives the annual grant and coordinates the State UIC Program, including 

communications, with the EPA. These responsibilities shall include, but not be limited to, the 

submission of grant applications, reporting and monitoring results, and annual report requirements. 

DOG is responsible for and has the authority over all Class II injection wells in the state. Under that 

authority, DOG is responsible for administering the State UIC Program including, but not limited to, 

reports, permits, compliance monitoring, and enforcement. The EPA will regulate all other classes of 

wells in the Commonwealth. 

B. Review and Modifications 

This Agreement shall be reviewed annually as part of the annual program grant and State/EPA 

Agreement ("SEA") process. The annual program grant and the SEA shall be consistent with this 

Agreement and may not override this Agreement. 

This Agreement may be modified upon the initiative of the Commonwealth or the EPA. Modifications 

must be in writing signed by the Commissioner and the Regional Administrator. Modifications become 

effective when signed by the Regional Administrator. Modifications may be made by revision prior to 

the effective date of this Agreement or subsequently by addenda attached to this Agreement. 

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D. Responsibilities of the Parties 

Each of the Parties have responsibilities to assure that the goals of the SDW A and the UIC requirements 

are met. The Parties agree to maintain a high level of cooperation and coordination between the 

Commonwealth and the EPA staffs in a partnership to assure successful and effective administration of 

the State UIC Program. In this partnership, the Regional Administrator will provide to the 

Commissioner on a continuing basis technical and policy assistance on program matters. 

The Regional Administrator is responsible for keeping the Commissioner apprised of the meaning and 

content of Federal guidelines, technical standards, regulations, policy decisions, directives, and any 

other factors which affect the State UIC Program. 

The strategies and priorities for issuance of permits, compliance monitoring and enforcement of permits, 

and implementation of technical requirements shall be established in the program description, the annual 

State/EPA Agreement, or in subsequent working agreements. If requested by either Party, meetings will 

be scheduled at reasonable intervals between The Commonwealth and the EPA to review specific 

operating procedures, resolve problems, or discuss mutual concerns involving the administration of the 

State UIC Program. 

E. Sharing of Information 

The Commissioner shall timely inform the EPA of any: proposed, pending or enacted modifications to 

its laws, regulations, or guidelines; and any judicial decisions or administrative actions which might 

affect the State UIC Program and The Commonwealth's authority to administer the program. The 

Commissioner shall promptly inform the EPA of any resource allocation changes (e.g. personnel, 

budget, equipment, etc.) which might affect the Commonwealth's ability to administer this program. 

Any information obtained or used by the Commonwealth under the State UIC Program shall be 

available to the EPA upon request without restriction. If such request would require the expenditure of 

voluminous resources for purposes of copying documents or otherwise providing the information 

requested, DOG may request that the EPA visit the DOG office to review the requested documents or 

obtain the requested information. 

If the information has been submitted to the Commonwealth under a claim of confidentiality the 

Commonwealth must submit that claim to the EPA when providing the EPA such information. Any 

information obtained from the Commonwealth and subject to a claim of confidentiality will be treated in 

1 For purposes of this Agreement, "policy" shall constitute officially transmitted, written EPA guidance, interpretation, or 

other policy related to the implementation of the UIC Program. 

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F. Duty to Revise Program 

Within 270 days of any revisions or additions to any regulation promulgated at 40 C.P.R. Parts 124, 144, 

145, or 146 issued under Section 1421 of the SDW A, revising or adding any requirement respecting 

State UIC programs, the Commonwealth shall submit notice to the EPA demonstrating that the State 

UIC Program meets the revised or added requirement. 

If the Administrator revises or amends any requirement of a regulation under Section 1421 of the 

SDWA, the Commonwealth may demonstrate that the Commonwealth's program meets the 

requirements of Section 1421 (b) of the SDW A and represents an effective program under Section 

1425(b) of the SDW A. The Commonwealth may make this alternative showing under Section 1425, but 

still must do this within 270 days after such revision or amendment. 

G. Definition and Exemptions of USDW 

The Commonwealth agrees to define an underground source of drinking water ("USDW") in a manner 

consistent with 40 C.P.R. §§144.1(g), 144.3, and 146.3 of the Federal UIC regulations. The 

Commonwealth further agrees to exempt USDWs only in conformance with 40 C.P.R. §§ 146.4 and 

146.7 of the Federal UIC regulations. The EPA Region 4 granted eight aquifer exemptions in the 

Commonwealth associated with Class II injection permits. These exemptions will remain in effect upon 

transfer of the program. A detailed description of the exemptions will be provided to the Commonwealth 

as provided in Section II.B. of this document. 

H. Duration of Agreement 

This Agreement will remain in effect until such time as the primary enforcement responsibility of the 

Commonwealth is withdrawn by the EPA according to the provisions of 40 C.P.R. § 145.34. 

I. General Provisions 

Nothing in this Agreement is intended to affect any UIC or program requirement, including any 

standards or prohibitions established by state or local law as long as the state or local requirements are 

not less stringent than any requirements set forth in the Federal UIC regulations or any other 

requirements or prohibitions established under the SDW A or applicable regulations. 

Nothing in this agreement shall be construed to limit the authority of the EPA to take action pursuant to 

Sections 1421, 1422, 1423, 1424, 1425, 1431 or other Sections of the SDW A. 

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applicable Federal and State requirements. 

B. Transfer of Responsibility from the EPA to the Commonwealth 

The Regional Administrator shall transfer from the EPA to the Commonwealth any pending permit 

applications, and any other information relevant to program operation not already in the possession of 

the Commissioner when the Commonwealth assumes primacy for the program. The EPA will provide to DOG a list of all injection wells in its inventory within three months of program delegation. At the time 

primacy is granted by the EPA, the Commonwealth shall assume full authority and responsibility for the 

issuance, modification, enforcement of and compliance with all issued or pending Class II permits in 

accordance with the provisions of the approved program. The EPA shall continue to administer 

enforcement actions in progress on all wells, permitted or otherwise, as of the date of this Agreement 

until final resolution. 

C. Compliance Schedules and Reports 

The Commissioner agrees to establish compliance schedules in permits where appropriate and to require 

periodic reporting on compliance with compliance schedules and other permit conditions. 

IV. COMPLIANCE MONITORING 

A. General 

The Commonwealth shall operate a timely and effective compliance monitoring system to track 

compliance with permit conditions and program requirements. For purposes of this Agreement, the 

terms "compliance monitoring" or "compliance evaluation" shall refer to all efforts associated with 

determining compliance with the State UIC Program requirements. 

B. Compliance Schedule 

The Commonwealth agrees to maintain procedures to receive, evaluate, retain, and investigate all 

notices and reports that are required by permit compliance schedules and State UIC Program 

regulations. These procedures shall also include the necessary elements to investigate the failure of 

persons required to submit such notices and reports. The Commonwealth shall initiate appropriate 

compliance actions when required information is not received or when the reports are not submitted. 

C. Review of Compliance Reports 

The Commonwealth shall conduct a timely and substantive review of all such reports to determine 

compliance status. The Commonwealth shall operate. a system to determine if: 1) the reports required by 

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methods of surveillance shall be utilized to identify persons who have not complied with permit 

conditions or other program requirements. Any compilations, indices, or inventory obtained for such 

facilities or activities will be made available to the Regional Administrator upon request. 

The Commissioner shall conduct periodic inspections of the facilities and activities subject to regulatory 

requirements. These compliance monitoring inspections shall be performed to assess compliance with 

all UIC permit conditions or State UIC Program requirements and include selecting and evaluating a 

facility's monitoring and reporting program. These inspections shall be conducted to determine the 

compliance or noncompliance with the issued permits, verify the accuracy of the information submitted 

by permittees in reporting forms and monitoring data, and to verify the adequacy of sampling, 

monitoring, and other methods to provide the information. 

The Commonwealth agrees to witness each year at a minimum, 25% of the mechanical integrity tests 

conducted by permittees. 

E. Information from the Public 

The Commissioner shall establish a mechanism for the public to submit information on violations and to 

have procedures for receiving, investigating, and ensuring proper consideration of the information. 

F. Authority to Enter 

The Director of DOG (and other State officials) engaged in compliance monitoring and evaluation shall 

have the authority to enter any site or premise subject to regulation or to review and copy the records of 

relevant program operations where such records are kept. 

G. Admissibility 

Any investigatory inspections shall be conducted and samples and other information collected in a 

manner to provide evidence admissible in an enforcement proceeding or in court. 

V. ENFORCEMENT 

A. General 

The Commonwealth is responsible for taking timely and appropriate enforcement action against persons in violation of State UIC Program requirements, compliance schedules, technical requirements, and 

other permit conditions. 

Failure by the Commonwealth to initiate appropriate enforcement action against a substantive violation 

may be the basis for the EPA's determination that the Commonwealth has failed to take timely 

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Program requirement. Additionally, DOG shall have the mechanism to assess or sue to recover in court 

civil penalties and criminal remedies as established in 40 C.P.R.§ 145.13. 

C. Public Participation 

The Commonwealth shall provide for public participation in the Commonwealth's enforcement process 

by providing either: 1) the authority which allows intervention as of right by any citizen having an 

interest which is or may be adversely affected in any civil or administrative action to obtain remedies as 

specified in the paragraph above; or 2) assurance that DOG will: i) investigate and provide written 

responses to all citizen complaints; ii) not oppose intervention by any citizen when permissive 

intervention may be authorized by statutes, rule, or regulation; and iii) publish notice of any proposed 

settlement of a State enforcement action in order to provide at least 30 days for public comment on any 

proposed settlement of a Commonwealth enforcement action. 

Nothing in this Agreement shall affect the EPA's authority or responsibility to take enforcement actions 

under Section 1423 of the SDW A. 

D. EPA Enforcement 

When the Commonwealth has a fully-approved program, the EPA will not take enforcement actions 

without providing prior notice to the Commonwealth and otherwise complying with Section 1423 of the 

SDW A. The EPA retains primary enforcement responsibility whenever the State program is disapproved 

in whole or part. A State which has a partially approved program has the authority to enforce against any 

violation of the approved portion of its program. A State whose program has been approved under 

Section 1425 has primary enforcement responsibility for that part of the program. 

E. Assessment of Fines 

The Commonwealth shall agree to assess civil penalties in an amount appropriate to the violation as 

required in 40 C.P.R. § 145.13(c). 

VI. EPA OVERSIGHT 

A. General 

The EPA shall oversee the Commonwealth's administration of the State UIC Program on a continuing 

basis to assure that such administration is consistent with this MOA, the State UIC grant application, and 

all applicable requirements embodied in current regulations, policies, and Federal law. 

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forms and include an annual narrative report as specified in the annual SEA workplan. The reports are 

also to be made available to the public for inspection and copying. 

D. Annual Program Report 

The Commonwealth shall submit an annual program report to the Regional Administrator in accordance 

with § 144.8(b )(2). This report shall be for the fiscal year ending on September 30, and make available to 

the public no more than 60 days later. 

D. Immediate Reporting on Noncompliance 

The Commissioner shall immediately notify the Regional Administrator of any major imminent hazard 

to public health resulting from the endangerment of an USDW of the Commonwealth by well injection. 

E. Review of Permits 

Arrangements between the Regional Administrator and the Commissioner may be made within the 

context of the MOA for the EPA to review and comment on a sampling of draft or issued permits. 

The sampling of permits agreed upon between the Commonwealth and Region should be based on a 

definite number of well permits or a percentage of well permit applications which are submitted. 

F. Inspection and Surveillance by the EPA 

The Regional Administrator may select Class II injection well facilities and activities within the State 

for the EPA inspection. 

The following priorities should be considered in selecting facilities for inspection and review as a 

function of the EPA's responsibility: 

(1) Class II wells permitted on an area basis; 

(2) Class II salt water disposal wells; and 

(3) Class II wells authorized by rule. 

The EPA may conduct such inspections jointly with the Commonwealth. The Director of DOG shall 

give the Regional Administrator adequate notice to participate in any compliance evaluation inspection 

scheduled by the Commonwealth. 

The Regional Administrator may also choose to conduct inspections independently of the 

Commonwealth's schedule. In such cases, the EPA shall normally notify the Commonwealth at least 

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Commonwealth's quarterly reports, annual noncompliance reports, program reports, and other requested 

information, to determine the State UIC Program's consistency with its program submission, the 

SDW A, and applicable regulations, guidance, and policies. The review will include a review of financial 

expenditures, progress towards program implementation, changes in the program description, and efforts 

taken toward progress on program elements. 

The EPA shall submit a summary of the evaluation findings to the Commonwealth outlining any 

deficiencies in program performance and making recommendations for the Commonwealth's operations. 

The report also might provide guidance for the development of any upcoming grant application. The 

Commonwealth shall have thirty (30) days from the date of receipt of the summary to concur with or 

comment on the findings and recommendations. 

VI. SIGNATURES 

Commonwealth of Kentucky 

Energy and Environment Cabinet 

Department for Natural Resources 

Commissioner Ste ~ 

Date: J /tz_ f .) 

U.S. Environmental Protection Agency 

Region 4 

Heather 

Regional 

~ 

McTeer 

Administrator 

Toney ~ 

Date: ;ok>/ ltJ/ 5' I I 

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