This chapter describes the use of state-required mechanisms to demonstrate UST FR as follows: A. BACKGROUND . . . 148
A.1 Process for Approving State Mechanisms . . . 148 B. OWNER OR OPERATOR RESPONSIBILITIES WHEN USING STATE-REQUIRED
MECHANISMS . . . 149 B.1 Satisfying State Requirements . . . 149 C. EPA REGIONAL ADMINISTRATOR RESPONSIBILITIES AND OVERSIGHT . . . 150 C.1 Evaluating Equivalency of State-Required Mechanism . . . 150 C.2 Issuing Notifications About Acceptability of State-Required Mechanisms . . . 151 C.3 Responding to Notices That the Owner or Operator Has Failed to
Secure Alternate Assurance or Has Been Named a Debtor in
Bankruptcy . . . 151 C.4 Reviewing Financial Responsibility Submissions . . . 151 D. IMPLEMENTING AGENCY RESPONSIBILITIES AND OVERSIGHT . . . 152 D.1 Implementing Agency Responsibilities and Oversight . . . 152
A. BACKGROUND
As of July 1, 1999, many states have federally-approved UST programs, including programs for UST FR. In these states, compliance with state requirements automatically satisfies federal FR requirements. For USTs located in a state that does not have an approved program, and where the state requires owners or operators to demonstrate UST FR, an owner or operator must comply with both federal and state rules. However, an owner or operator may use a "state-required" mechanism to satisfy the federal UST FR
requirements if the EPA Regional Administrator determines that the state mechanism is at least equivalent to the federal financial mechanisms. Therefore, in states with approved programs, additional "state-required" mechanisms do not need to be approved by EPA (as described in this chapter), they simply need to meet the broad requirements in the state program approval regulations (§281.37(c)).
Although termed a "state-required" mechanism, typically a state offers a number of options for complying with UST FR requirements, most, if not all, being identical or similar to the federal options described in this Manual. One exception to this norm is mandatory participation in a state fund as the sole method of demonstrating compliance with all or part of UST FR; state funds are discussed in Chapter 9. Other optional state mechanisms that are not included in the federal options are discussed in Chapter 16.
A.1 Process for Approving State Mechanisms
The state, an owner or operator, or any other interested party may submit to the Regional
Administrator a written petition requesting that one or more of the state-required mechanisms be considered acceptable for meeting federal UST FR requirements. The submission must include copies of the appropriate state statutory and regulatory requirements and must show the amount of funds for corrective action and/or for third party compensation assured by the mechanism(s). The Regional Administrator may require the petitioner to submit additional information necessary to make this determination. A petition may be submitted on behalf of all of the state's underground storage tank owners and operators. The Regional Administrator must evaluate the equivalency of state-required mechanisms in terms of the certainty and amount of funds assured and the types of costs covered.
NOTE: An owner or operator submitting a petition to the EPA Regional
Administrator should notify and/or copy the state regulatory agency also.
B. OWNER OR OPERATOR RESPONSIBILITIES WHEN USING STATE-REQUIRED MECHANISMS
The following checklist summarizes owner or operator responsibilities:
CHECKLIST OF OWNER OR OPERATOR RESPONSIBILITIES WHEN USING STATE-REQUIRED MECHANISMS
G Satisfying State Requirements (see Section B.1)
B.1 Satisfying State Requirements
Typically, state requirements for UST FR are similar if not identical to the federal program described in this Manual. Regardless, owners or operators must follow specific state requirements for the state- required mechanism including:
C Establishing proper scope and amount of UST FR, C Maintaining it,
C Keeping appropriate records, and
C Submitting necessary reports and evidence of FR.
Owners or operators should not assume that approved state-required mechanisms are identical to the federal mechanisms described in this Manual.
C. EPA REGIONAL ADMINISTRATOR RESPONSIBILITIES AND OVERSIGHT
The following checklist summarizes the EPA's responsibilities and potential oversight activities:
CHECKLIST OF EPA REGIONAL ADMINISTRATOR RESPONSIBILITIES AND OVERSIGHT FOR STATE-REQUIRED MECHANISMS
G G G G
Evaluating Equivalency of State-Required Mechanism (see Section C.1)
Issuing Notifications About Acceptability of State-Required Mechanisms (see Section C.2)
Responding to Notices That the Owner or Operator Has Failed to Secure Alternate Assurance or Has Been Named a Debtor in Bankruptcy (see Section C.3)
Reviewing Financial Responsibility Submissions (see Section C.4)
C.1 Evaluating Equivalency of State-Required Mechanism
In a state that does not have state program approval, the Regional Administrator must evaluate the equivalency of a state-required mechanism principally in terms of:
C Certainty of the availability of funds for taking corrective action and/or for compensating third parties
C The amount of funds that will be made available, and C The types of costs covered.
The Regional Administrator may also consider other factors such as timeliness and cost of access to funds. In addition, the Regional Administrator may want to consider the following criteria that mechanisms must meet to be no less stringent than the federal requirements in states that have state program approval (see 40 CFR 281.37). The mechanism must:
C Be valid and enforceable;
C Be issued by a provider that is qualified or licensed in the state; C Not permit cancellation without allowing the state to draw funds;
C Ensure that funds will only and directly be used for corrective action and third-party liability costs; and
Require that the provider notify the owner or operator of any circumstances that would impair or suspend coverage.
The Regional Administrator may consider these criteria in performing a §280.100 evaluation.
November 30, 1999 CHAPTER 8: STATE-REQUIRED MECHANISMS Page 150 C
C.2 Issuing Notifications About Acceptability of State-Required Mechanisms
The Regional Administrator should notify the petitioner about the mechanism's acceptability in lieu of financial mechanisms specified in federal regulations. If mechanisms are not found acceptable, the Regional Administrator may want to document the reasons for the decision so that the owner or operator or state can consider possible remedies. (Pending this determination, owners and operators using such mechanisms are deemed to be in compliance with federal FR requirements for underground storage tanks located in the state for the amounts and types of costs covered by such mechanisms.)
C.3 Responding to Notices That the Owner or Operator Has Failed to Secure Alternate Assurance or Has Been Named a Debtor in Bankruptcy
EPA Regional Administrators who receive notices that owners or operators have failed to obtain financial assurance or have been named as debtors in bankruptcy proceedings, should coordinate responses with the state agency(ies) responsible for oversight of state UST FR. Responses to such notices will likely resemble the responses described elsewhere in this Manual, depending on the mechanism.
C.4 Reviewing Financial Responsibility Submissions
If EPA Regional Administrators receive FR submissions, they should coordinate actions with state agencies responsible for oversight of state UST FR. Reviews of such submissions will likely resemble the reviews described elsewhere in this Manual, depending on the mechanism.
D. IMPLEMENTING AGENCY RESPONSIBILITIES AND OVERSIGHT
The following checklist summarizes the state's responsibilities:
CHECKLIST OF IMPLEMENTING AGENCY RESPONSIBILITIES AND OVERSIGHT FOR STATE-REQUIRED MECHANISMS
G Implementing Agency Responsibilities and Oversight (see Section D.1)
D.1 Implementing Agency Responsibilities and Oversight
Typically, implementing agency responsibilities and oversight for state-required mechanisms are similar if not identical to responsibilities and oversight for the federal mechanisms described in this Manual, such as the following:
C Respond to notices
C Review wording and coverage of evidence of FR
C Check eligibility and qualifications of owners and operators and providers of financial assurance C Issue notifications and request information
C Direct payments
Implementing agencies should not assume that approved state-required mechanisms are identical to the federal mechanisms described in this Manual.