UNDERGROUNDINJECTIONCONTROLPROGRAMMEMORANDUMOFAGREEMENTBETWEENTHECOMMONWEALTHOFKENTUCKYandTHEUNITEDSTATESENVIRONMENTALPROTECTIONAGENCYREGION4I.GENERALTheCommonwealthofKentucky,EnergyandEnvironmentCabinet,DepartmentforNaturalResources,DivisionofOilandGas("Commonwealth")andtheUnitedStatesEnvironmentalProtectionAgencyRegion4("EPA")haveenteredintothisMemorandumofAgreement("Agreement")toestablishpolicies,responsibilities,andprocedurespursuantto40C.F.R.Part145,andSection1425oftheSafeDrinkingWaterAct("SDWA"orthe"Act"),fortheCommonwealthofKentuckyUndergroundInjectionControlProgramforClassIIWells("StateUICProgram"),asauthorizedbyPartCoftheSDWA(P.L.93-523asamendedbyP.L.95-190and96-502),42U.S.C.300het.seq.ThisAgreementisenteredintobytheCommonwealth,andsignedbySteveHohmann,Commissioner,DepartmentforNaturalResources("Commissioner")withtheEPA,andsignedbytheRegionalAdministratorforRegion4.ThisAgreementshallbecomeeffectivewhenapprovedbytheAdministrator.II.POLICIESANDAGREEMENTSA.LeadAgencyResponsibilitiesTheleadagencyoftheKentucky1425UICProgram,designatedbytheGovernoroftheCommonwealthofKentucky,istheKentuckyDepartmentofNaturalResources,DivisionofOilandGas("DOG").Astheleadagency,DOGreceivestheannualgrantandcoordinatestheStateUICProgram,includingcommunications,withtheEPA.Theseresponsibilitiesshallinclude,butnotbelimitedto,thesubmissionofgrantapplications,reportingandmonitoringresults,andannualreportrequirements.DOGisresponsibleforandhastheauthorityoverallClassIIinjectionwellsinthestate.Underthatauthority,DOGisresponsibleforadministeringtheStateUICProgramincluding,butnotlimitedto,reports,permits,compliancemonitoring,andenforcement.TheEPAwillregulateallotherclassesofwellsintheCommonwealth.B.ReviewandModificationsThisAgreementshallbereviewedannuallyaspartoftheannualprogramgrantandState/EPAAgreement("SEA")process.TheannualprogramgrantandtheSEAshallbeconsistentwiththisAgreementandmaynotoverridethisAgreement.ThisAgreementmaybemodifiedupontheinitiativeoftheCommonwealthortheEPA.ModificationsmustbeinwritingsignedbytheCommissionerandtheRegionalAdministrator.ModificationsbecomeeffectivewhensignedbytheRegionalAdministrator.ModificationsmaybemadebyrevisionpriortotheeffectivedateofthisAgreementorsubsequentlybyaddendaattachedtothisAgreement.1of8C.ConformancewithLawsandRegulationsTheCommissionershalladministertheStateUICProgramconsistentwith:theCommonwealth'ssubmissionforprogramapproval;thisMOA;theSDWA;currentFederallawsregulationsandpolicy1;promulgatedminimumrequirements;prioritiesestablishedaspartoftheannuallyapprovedStateUICgrant;andanyseparateworkingagreementsenteredintobetweentheCommonwealthandtheEPAasnecessaryforthefulladministrationoftheStateUICProgram.D.ResponsibilitiesofthePartiesEachofthePartieshaveresponsibilitiestoassurethatthegoalsoftheSDWAandtheUICrequirementsaremet.ThePartiesagreetomaintainahighlevelofcooperationandcoordinationbetweentheCommonwealthandtheEPAstaffsinapartnershiptoassuresuccessfulandeffectiveadministrationoftheStateUICProgram.Inthispartnership,theRegionalAdministratorwillprovidetotheCommissioneronacontinuingbasistechnicalandpolicyassistanceonprogrammatters.TheRegionalAdministratorisresponsibleforkeepingtheCommissionerapprisedofthemeaningandcontentofFederalguidelines,technicalstandards,regulations,policydecisions,directives,and anyotherfactorswhichaffecttheStateUICProgram.Thestrategiesandprioritiesforissuanceofpermits,compliancemonitoringandenforcementofpermits,andimplementationoftechnicalrequirementsshallbeestablishedintheprogramdescription,theannualState/EPAAgreement,orinsubsequentworkingagreements.IfrequestedbyeitherParty,meetingswillbescheduledatreasonableintervalsbetweenTheCommonwealthandtheEPAtoreviewspecificoperatingprocedures,resolveproblems,ordiscussmutualconcernsinvolvingtheadministrationoftheStateUICProgram.E.SharingofInformationTheCommissionershalltimelyinformtheEPAofany:proposed,pendingorenactedmodificationstoitslaws,regulations,orguidelines;and anyjudicialdecisionsoradministrativeactionswhichmightaffecttheStateUICProgramandTheCommonwealth'sauthoritytoadministertheprogram.TheCommissionershallpromptlyinformtheEPAofanyresourceallocationchanges(e.g.personnel,budget,equipment,etc.)whichmightaffecttheCommonwealth'sabilitytoadministerthisprogram.AnyinformationobtainedorusedbytheCommonwealthundertheStateUICProgramshallbeavailabletotheEPAuponrequestwithoutrestriction.Ifsuchrequestwouldrequiretheexpenditureofvoluminousresourcesforpurposesofcopyingdocumentsorotherwiseprovidingtheinformationrequested,DOGmayrequestthattheEPAvisittheDOGofficetoreviewtherequesteddocumentsorobtaintherequestedinformation.IftheinformationhasbeensubmittedtotheCommonwealthunderaclaimofconfidentialitytheCommonwealthmustsubmitthatclaimtotheEPAwhenprovidingtheEPAsuchinformation.AnyinformationobtainedfromtheCommonwealthandsubjecttoaclaimofconfidentialitywillbetreatedin1ForpurposesofthisAgreement,"policy"shallconstituteofficiallytransmitted,writtenEPAguidance,interpretation,orotherpolicyrelatedtotheimplementationoftheUICProgram.2of8

# accordance

with

40 C.F.R.

Part

2. If 

# the EPA obtains information

from

the Commonwealth

that

is not claimed

to be confidential,

the EPA may make
that information available

to the public without further notice. The EPA shall furnish

to States

the information

in its files
not submitted

under

a claim

of confidentiality which

the State needs

to implement

its approved

State UIC Program.

The EPA shall furnish

to the State information submitted

to the EPA under

a claim

of confidentiality

which

the State needs

to implement its approved

State UIC Program subject

to conditions

in 40 C.P.R.

Part

2. 

# 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. 3 of8III.PERMITTINGA.GeneralTheCommonwealth,throughauthoritydelegatedtoDOG,isresponsibleforexpeditiouslydrafting,circulating,issuing,modifying,reissuing,andterminatingUICpermitsandshalldosoinaccordancewith40C.F.R.§145.11.TheDirectorofDOGshallreviewandissuepermitsbasedonthepermitconditionsof40C.F.R.Part144.51144.52and145.11.PermitsshallbeissuedwhichcomplywithapplicableFederalandStaterequirements.B.TransferofResponsibilityfromtheEPAtotheCommonwealthTheRegionalAdministratorshalltransferfromtheEPAtotheCommonwealthanypendingpermitapplications,andanyotherinformationrelevanttoprogramoperationnotalreadyinthepossessionoftheCommissionerwhentheCommonwealthassumesprimacyfortheprogram.TheEPAwillprovidetoDOGalistofallinjectionwellsinitsinventorywithinthreemonthsofprogramdelegation.AtthetimeprimacyisgrantedbytheEPA,theCommonwealthshallassumefullauthorityandresponsibilityfortheissuance,modification,enforcementofandcompliancewithallissuedorpendingClassIIpermitsinaccordancewiththeprovisionsoftheapprovedprogram.TheEPAshallcontinuetoadministerenforcementactionsinprogressonallwells,permittedorotherwise,asofthedateofthisAgreementuntilfinalresolution.C.ComplianceSchedules andReportsTheCommissioneragreestoestablishcomplianceschedulesinpermitswhereappropriateandtorequireperiodicreportingoncompliancewithcomplianceschedulesandotherpermitconditions.IV.COMPLIANCEMONITORINGA.GeneralTheCommonwealthshalloperateatimelyandeffectivecompliancemonitoringsystemtotrackcompliancewithpermitconditionsandprogramrequirements.ForpurposesofthisAgreement,theterms"compliancemonitoring"or"complianceevaluation"shallrefertoalleffortsassociatedwithdeterminingcompliancewiththeStateUICProgramrequirements.B.ComplianceScheduleTheCommonwealthagreestomaintainprocedurestoreceive,evaluate,retain,andinvestigateallnoticesandreportsthatarerequiredbypermitcomplianceschedulesandStateUICProgramregulations.Theseproceduresshallalsoincludethenecessaryelementstoinvestigatethefailureofpersonsrequiredtosubmitsuchnoticesandreports.TheCommonwealthshallinitiateappropriatecomplianceactionswhenrequiredinformationisnotreceivedorwhenthereportsarenotsubmitted.C.ReviewofComplianceReportsTheCommonwealthshallconductatimelyandsubstantivereviewofallsuchreportstodeterminecompliancestatus.TheCommonwealthshalloperate.asystemtodetermineif:1)thereportsrequiredby4of8permitsandStateUICProgramregulationsaresubmitted;2)thesubmittedreportsarecompleteandaccurate;and3)thepermitconditionsandStateUICProgramrequirementsaremet.ThereportsandnoticesshallbeevaluatedforcompliancestatusinaccordancewiththeCommonwealth'scomplianceprogramandtheStateUICProgramrequirements.D.InspectionandSurveillanceTheCommissioneragreestohaveinspectionandsurveillanceprocedurestodeterminecomplianceornoncompliancewiththeapplicablerequirementsoftheStateUICProgram.Investigationsorothermethodsofsurveillanceshallbeutilizedtoidentifypersonswhohavenotcompliedwithpermitconditionsorotherprogramrequirements.Anycompilations,indices,orinventoryobtainedforsuchfacilitiesoractivitieswillbemadeavailabletotheRegionalAdministratoruponrequest.TheCommissionershallconductperiodicinspectionsofthefacilitiesandactivitiessubjecttoregulatoryrequirements.ThesecompliancemonitoringinspectionsshallbeperformedtoassesscompliancewithallUICpermitconditionsorStateUICProgramrequirementsandincludeselectingandevaluatingafacility'smonitoringandreportingprogram.Theseinspectionsshallbeconductedtodeterminethecomplianceornoncompliancewiththeissuedpermits,verifytheaccuracyoftheinformationsubmittedbypermitteesinreportingformsandmonitoringdata,andtoverifytheadequacyofsampling,monitoring,andothermethodstoprovidetheinformation.TheCommonwealthagreestowitnesseachyearataminimum,25%ofthemechanicalintegritytestsconductedbypermittees.E.InformationfromthePublicTheCommissionershallestablishamechanismforthepublictosubmitinformationonviolationsandtohaveproceduresforreceiving,investigating,andensuringproperconsiderationoftheinformation.F.AuthoritytoEnterTheDirectorofDOG(andotherStateofficials)engagedincompliancemonitoringandevaluationshallhavetheauthoritytoenteranysiteorpremisesubjecttoregulationortoreviewandcopytherecordsofrelevantprogramoperationswheresuchrecordsarekept.G.AdmissibilityAnyinvestigatoryinspectionsshallbeconductedandsamplesandotherinformationcollectedinamannertoprovideevidenceadmissibleinanenforcementproceedingorincourt.V.ENFORCEMENTA.GeneralTheCommonwealthisresponsiblefortakingtimelyandappropriateenforcementactionagainstpersonsinviolationofStateUICProgramrequirements,complianceschedules,technicalrequirements,andotherpermitconditions.FailurebytheCommonwealthtoinitiateappropriateenforcementactionagainstasubstantiveviolationmaybethebasis fortheEPA'sdeterminationthattheCommonwealthhasfailedtotaketimely5of8

# enforcement

action. When

the Commonwealth

fails

to take

a timely action,

the EPA may take Federal enforcement

action under Section

1423

of the SDW

A. 

# B. Enforcement Mechanisms The Commonwealth

shall have

the mechanisms

to restrain immediately

and effectively

any person engaging

in any unauthorized

activity

or operation

which

is endangering

or causing damage

to public health

or the environment

as applicable

to the State UIC Program.

DOG shall also have

the means

to sue in courts

of competent jurisdiction

to prohibit

any threatened

or continuing violation

of any State UIC 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. 6 of8

# In addition

to the specific oversight activities

listed

in this section,

the EPA may from time

to time request pertinent information

related

to the oversight

of the Class

II UIC program

and the Commonwealth

shall submit

and provide access

to files necessary

for evaluating

the Commonwealth's administration

of the State UIC Program. 

# B. Program Reports The Commonwealth

shall submit program reports

to the Regional Administrator

in accordance

with 40 C.P.R. Section
144.8.
The reports

are

to be submitted quarterly

using

the specified

7520 reporting 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 7 of8

# seven

(7) days before

any inspection

which

the EPA determines

to be necessary. However,

if an emergency

exists,

or for some other reason

it is impossible

to give advance notification,

the Regional Administrator

may waive advance notification

to inspect

a facility.



# In accordance

with Section 1445(b

)(2)

of the SDW

A, the Commonwealth

shall

not inform

the person whose property

is to be entered

of the proposed inspection. 

# G. Annual Performance Evaluation The EPA shall conduct,

at least annually, performance evaluations

of the State UIC Program
using;

the 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 

# Ste **~** Commissioner Date:



# J 

# /t
z_ f .)

U.S. Environmental
Protection Agency Region

4 

# ~ Heather McTeer Toney 

# ~ Regional Administrator Date: 

# ;ok>/

ltJ/ 

# 5' I

I 

# 8 of8