DAR File No. 28880

Environmental Quality, Environmental Response and Remediation

R311-206

Underground Storage Tanks: Financial Assurance Mechanisms

NOTICE OF PROPOSED RULE

DAR File No.: 28880
Filed: 07/13/2006, 03:27
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The proposed amendments implement changes made to the Utah Underground Storage Tank (UST) Act by the 2006 Utah legislature (H.B. 271). The legislative changes require that UST owners and operators who use the Environmental Assurance Program and the Petroleum Storage Tank (PST) Trust Fund for UST financial assurance use the Program for all USTs that the owner or operator owns or operates. The changes to the Act also allow an owner or operator whose tanks are not participating in the Program to participate without performing a site check (soil and/or groundwater samples) if the Executive Secretary (UST) determines, with reasonable cause, that samples are unnecessary to establish that no petroleum has been released. (DAR NOTE: H.B. 271 (2006) is found at Chapter 107, Laws of Utah 2006, and will be effective 01/01/2007.)

Summary of the rule or change:

The proposed changes define the criteria the Executive Secretary will use to determine if there is reasonable cause to believe that no petroleum has been released, and consequently to allow an owner/operator to put nonparticipating USTs under Fund coverage without performing a site check. Other changes simplify the rule regarding issuing of certificates of compliance, and remove a reference to a form that is no longer used. In Section R311-206-2, the financial responsibility declaration is now part of the certificate of compliance application form, so the reference to the financial responsibility declaration form is removed. In Section R311-206-3, combined two subsections that specify requirements for issuing certificates of compliance for tanks using the PST Fund and those not using the Fund into one subsection for both classes of tanks. In Section R311-206-9, the statement regarding subsequent participation in the Environmental Assurance Program after a period of nonparticipation is deleted and the concept is moved to a new section (Section R311-206-10) and expanded. In Section R311-206-10, the change specifies the requirements for participating in the Program after a period of nonparticipation, and the criteria by which the Executive Secretary may determine that reasonable cause exists to allow an UST on the Fund without a site check. The Executive Secretary may determine that reasonable cause exists if the last two compliance inspections show that the tanks meet the U.S. Environmental Protection Agency's Significant Operational Compliance (SOC) criteria, and if all compliance and leak detection data required for the time period since the last compliance inspection document continued SOC. The SOC criteria are incorporated by reference. Effective 01/01/2008, the Executive Secretary may use the "reasonable cause" criteria only if the tank is less than ten years old or the period of Fund nonparticipation is less than six months.

State statutory or constitutional authorization for this rule:

Sections 19-6-105 and 19-6-428

EPA Release Prevention Compliance Measures Matrix, dated 09/30/2003; and the EPA Release Detection Compliance Measures Matrix, dated 09/30/2003

Anticipated cost or savings to:

the state budget:

None anticipated--The proposed changes only implement legislative changes to the Utah UST Act. The rules themselves would not result in any cost or savings to State budget.

local governments:

None anticipated--A local government that owns an UST not currently on the Fund could realize savings as in "Other persons" below if the government decided to put the UST under Fund coverage, but all local governments in Utah that own USTs currently have their USTs covered by the Fund.

other persons:

Savings of up to $315,000 (approximate) to UST owner/operators, for site checks that would not be required for tanks that qualify using the "reasonable cause" language and join the Fund. Actual savings would depend on owner/operator decisions to place nonparticipating tanks under fund coverage, and the number of tanks that can qualify under the "reasonable cause" criteria.

Compliance costs for affected persons:

No costs are anticipated--The rule changes specify criteria under which the site check would not be needed to put nonparticipating tanks under Fund coverage, thus resulting in possible savings to affected persons.

Comments by the department head on the fiscal impact the rule may have on businesses:

The proposed changes spell out the criteria the Executive Secretary (UST) may use to implement the change in the UST Act that allows an UST owner or operator to place a tank on the State PST Fund without doing a site check if the tank currently uses a financial responsibility method other than the Fund. The owner would save the cost of a site assessment for each facility that meets the criteria. UST owners who join the Fund could realize savings on cleanup costs for leaks that occur after they join the Fund. Dianne R. Nielson, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Direct questions regarding this rule to:

Gary Astin at the above address, by phone at 801-536-4103, by FAX at 801-359-8853, or by Internet E-mail at gastin@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

08/31/2006

Interested persons may attend a public hearing regarding this rule:

8/22/2006 at 2:00 PM, Department of Environmental Quality, 168 N 1950 W, Room 101, Salt Lake City, UT

This rule may become effective on:

09/15/2006

Authorized by:

Dianne R. Nielson, Executive Director

RULE TEXT

R311. Environmental Quality, Environmental Response and Remediation.

R311-206. Underground Storage Tanks: Financial Assurance Mechanisms.

R311-206-2. Declaration of Financial Assurance Mechanism.

(a) To demonstrate financial assurance, as required by 40 CFR 280, subpart H, owners or operators of petroleum storage tanks shall:

(1) meet all requirements for participation in the Environmental Assurance Program, or

(2) demonstrate financial assurance by an allowable method specified in 40 CFR 280, subpart H.

(b) [As specified in Subsections 19-6-428(1) and (2), o]Owners or operators shall [submit a completed Financial Responsibility Declaration to ]declare whether they will participate in the Environmental Assurance Program under Section 19-6-410.5, or show financial assurance by another method.

(c) For the purposes of Subsection 19-6-412(6), all tanks at a facility shall be covered by the same financial assurance mechanism, and shall be considered to be in one area, unless the Executive Secretary determines there is sufficient information so that releases from different tanks at the facility could be accurately differentiated.

R311-206-3. Requirements for Issuance of Certificates of Compliance.

(a) The Executive Secretary shall issue a certificate of compliance to an owner or operator [participating in the Environmental Assurance Program ]for individual petroleum storage tanks at a facility if:

(1) the owner or operator has a certificate of registration;[

(2) the petroleum storage tank fee has been paid;]

([3]2) the tank is substantially in compliance with all state and federal statutes, rules and regulations;

([4]3) the UST test, conducted within 6 months before the tank was registered or within 60 days after the date the tank was registered, indicates that each individual UST is not leaking;

([5]4) the owner or operator has submitted a letter to the Executive Secretary stating that based on customary business inventory practices standards there has been no release from the tank; and

([6]5) the owner or operator has submitted a completed application according to a form provided and approved by the Executive Secretary[.], and has declared the financial assurance mechanism that will be used; and

(6) the owner or operator has met all requirements for the financial assurance mechanism chosen, including payment of all applicable fees.[

(b) The Executive Secretary shall issue a certificate of compliance to an owner or operator who elects to demonstrate financial assurance by a method other than the Environmental Assurance Program for individual petroleum storage tanks at a facility if:

(1) the owner or operator has a certificate of registration;

(2) the processing fee assessed by Subsection 19-6-408(2) has been paid;

(3) the tank is substantially in compliance with all state and federal statutes, rules and regulations;

(4) the UST test, conducted within 6 months before the tank was registered or within 60 days after the date the tank was registered, indicates that each individual UST is not leaking;

(5) the owner or operator has submitted a letter to the Executive Secretary stating that based on customary business inventory practices standards there has been no release from the tank; and

(6) the owner or operator has met the requirements of 40 CFR 280, subpart H and has demonstrated acceptable financial assurance. The Certificate of Compliance shall not be issued until the financial assurance documents submitted for review have been approved.]

R311-206-9. Removing Participating Tanks from the Environmental Assurance Program.

(a) At any time after May 1,1997, owners and operators of petroleum storage tanks who have voluntarily elected to participate in the Environmental Assurance Program may cease participation in the program and be exempted from the requirements described in Section R311-206-4 by:

(1) permanently closing tanks as outlined in 40 CFR 280, subpart G, Rule R311-204, and Rule R311-205, or

(2) meeting the following requirements:

(i) demonstrating compliance with Section R311-206-5, and

(ii) notifying the Executive Secretary at least 60 days before the date of cessation in the program, and specifying the date of cessation.

(b) The fund will not give pro-rata refunds.

(c) For tanks being removed voluntarily from the program, the date of cessation in the program shall be the date on which coverage under the program ends. Subsequent claims for payments from the fund must be made in accordance with Section 19-6-424 and Section R311-207-2.

[ (d) Owners and operators who voluntarily remove participating tanks from the program shall comply with the requirements of 19-6-428(3) before any subsequent participation in the program.

]

R311-206-10. Participation in the Environmental Assurance Program After a Period of Voluntary Non-participation.

(a) Owners and operators who choose not to participate in the Environmental Assurance Program shall, before any subsequent participation in the program, meet the following requirements:

(1) notify the Executive Secretary of the intent to participate in the program;

(2) comply with the requirements of Subsection 19-6-428(3), and

(3) meet the requirements of Subsection R311-206-3(a) to qualify for a new certificate of compliance.

(b) Effective January 1, 2007, and until December 31, 2007, the Executive Secretary may determine that there is reasonable cause to believe that no petroleum has been released if the owner or operator, for each UST to participate in the program, meets the following requirements at the time the owner or operator applies for participation:

(1) The last two compliance inspections verify significant operational compliance, and verify that no release has occurred. Significant operational compliance status shall be determined using the EPA Release Prevention Compliance Measures Matrix and Release Detection Compliance Measures Matrix, both dated September 30, 2003 and incorporated herein by reference. The matrices contain leak prevention and leak detection criteria to be used by inspectors in determining compliance status of underground storage tanks.

(2) The owner or operator documents compliance with all release prevention and release detection requirements that are required for the time period since the last compliance inspection, and the records submitted do not give reason to suspect a release has occurred. The owner or operator shall submit:

(i) tank and piping leak detection records, or a tank and line tightness test performed within the last six months;

(ii) the most recent simulated leak test for all automatic line leak detectors;

(iii) cathodic protection tests, if applicable, and

(iv) internal lining inspections, if applicable.

(c) Effective January 1, 2008, the Executive Secretary may determine that reasonable cause exists if:

(1) the owner or operator meets the requirements of Subsections (b)(1) and (b)(2) above, and

(2) the period of non-participation in the Program is less than six months, or the UST is less than ten years old.

KEY: hazardous substances, petroleum, underground storage tanks

Date of Enactment or Last Substantive Amendment: [September 9, 2004]2006

Notice of Continuation: March 6, 2002

Authorizing, and Implemented or Interpreted Law: 19-6-105, 19-6-428

ADDITIONAL INFORMATION

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For questions regarding the content or application of this rule, please contact Gary Astin at the above address, by phone at 801-536-4103, by FAX at 801-359-8853, or by Internet E-mail at gastin@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.