KRS 353.5901: Operations and reclamation plan -- Contents, distribution, and

agreement or mediation -- Mediation report -- Review under KRS 353.700.

(1) A well operator shall submit to the department an operations and reclamation plan

at the time of filing an application for permit to drill, deepen, or reopen a well. The

plan shall be filed on forms provided by the department and shall include:

(a) A narrative description of those best management practices intended to be

employed to prevent pollution, erosio n, and sedimentation from the well site

and all disturbed areas, including roads. The description shall be updated

when the best management practices utilized on site differ from those

described in the plan;

(b) A narrative description of the location of a ll areas to be disturbed, including

the location of roads, gathering lines, the well site, tanks and other storage

facilities, and any other information that may be required by the department.

Accompanying this narrative description shall be a plat depicti ng the location

on the land of all of these disturbances or facilities; and

(c) Any additional information that the department may require.

(2) The plan shall include at a minimum a narrative describing the following categories:

(a) Site plans;

(b) Construction practices to be used;

(c) Reclamation methods to be used after well completion;

(d) Maintenance of the reclaimed site; and

(e) Site closure describing plugging, abandonment, and reclamation procedures.

(3) The department shall review and approve the operations and reclamation plan prior

to permit issuance in cases where there has not been a severance of the ownership of

the oil and gas from the ownership of the surface to be disturbed.

(4) In all cases where there has been a complete severance of the ownership of the oil

and gas from the ownership of the surface and the surface owners of all disturbed

areas have not signed agreements with the well operator agreeing to the operations

and reclamation plan, at the time of filing the application the well o perator shall

cause to be delivered to the surface owners of all disturbed areas who have not

agreed to the operations and reclamation plan, by certified mail, return receipt

requested:

(a) A copy of the operations and reclamation plan required by paragrap h (a) of

subsection (1) of this section, and the narrative description of land

disturbances and plat required by paragraph (b) of subsection (1) of this

section; and

(b) A notice to read as follows: "If you do not agree with the proposed use of your

land b y the well operator, the well operator may request mediation of your

dispute by the Energy and Environment Cabinet's Office of Administrative

Hearings. If mediation is requested, and you decide to participate, each party

to the mediation will be charged on e hundred dollars ($100) to help cover the

cost of mediation. You will be notified of the time and place for mediation, if

the well operator chooses mediation, and of your right to participate."

The certified mail receipt, w hen returned, shall be filed by the well operator with

the department and made part of the permit application.

(5) If the well operator has been unable to reach agreement with the surface owners of

all areas to be disturbed in all cases where there has bee n a complete severance of

the ownership of the oil and gas from the ownership of the surface to be disturbed,

the permit required by this chapter shall not be issued until the dispute has been

referred to mediation to be conducted by the Energy and Environ ment Cabinet's

Office of Administrative Hearings, and mediation has been concluded either by

agreement between the parties or by a report of the mediator, in accordance with

subsection (6) of this section.

(6) The well operator may request mediation any ti me after filing the permit

application, and all parties participating in the mediation shall pay a nonrefundable

fee of one hundred dollars ($100) to the Kentucky State Treasurer, which shall be

for the sole use of the department and shall be in addition t o any money

appropriated by the General Assembly for the use of the department. The

department may waive the mediation fee for surface owners who submit verifiable

proof of financial inability to pay. The department shall notify the well operator and

all surface owners of areas to be disturbed by drilling who have not agreed to the

operation and reclamation plan of the date and time mediation shall be conducted by

certified mail, return receipt requested. The department shall conduct mediation at

the site proposed to be disturbed within fifteen (15) days from the date requested, if

practicable. At the mediation, the mediator will attempt to facilitate an agreement

between the well operator and the surface owner. If an agreement is not forthcoming

after media tion, the mediator shall, within five (5) days after mediation, issue a

report to the director recommending that the director:

(a) Accept the plan as submitted by the well operator; or

(b) Accept the plan with modifications set forth by the mediator.

(7) If an agreement between the well operator and the surface owners of all disturbed

areas is not forthcoming after mediation, the mediator shall consider the following

factors as to the reasonable use of the surface by the well operator in issuing a report

to the director:

(a) The location of roads, gathering lines, and tank batteries;

(b) The timing of the operation, considering seasonal uses of the land by the

surface owner and the need of the well operator to drill expeditiously;

(c) The impact on the other uses of the land by the surface owner, including the

location of timber, houses, barns, ponds, crops, and other improvements;

(d) Whether the plan includes a plan for timely, effective reclamation of all

disturbed areas; and

(e) Any other information deemed appropriate by the mediator.

(8) The director shall make a final agency determination within five (5) days of the

receipt of the mediation report accepting the plan as submitted by the well operator,

accepting the plan with modifications set forth by th e mediator, or approving a plan

containing elements of both the original and the modified plan.

(9) Any order or final determination of the department under this section shall be

subject to review in accordance with KRS 353.700 and any administrative

regulations promulgated thereunder.