224.60-130 Petroleum storage tank environmental assurance fund -- Duties of
Division of Waste Management.
(1)
The Energy and Environment Cabinet, Department for Environmental Protection,
Division of Waste Management, shall:
(a) Establish by administrative regulation the policy, guidelines, and procedures
to administer the financial responsibility and petroleum storage tank accounts
of the petroleum storage tank environmental assurance fund. In adopting
administrative regulations to carry out this section, the division may
distinguish between types, classes, and ages of petroleum storage tanks. The
division may establish a range of amounts to be paid from the fund, or may
base payments on methods such as pay for performance, task order, or firm
fixed pricing, which are designed to provide incentives for contractors to more
tightly control corrective action costs, and shall establish criteria to be met by
persons who contract to perform corrective action to be eligible for
reimbursement from the fund. The criteria may include the certification of
individuals, partnerships, and companies. Criteria shall be established to
certify laboratories that contract to perform analytical testing related to the
underground storage tank program. Owners and operators shall have all
required analytical testing performed by a certified laboratory to be eligible for
fund participation. Persons who contract with petroleum storage tank owners
or operators shall not be paid more than the amount authorized by the division
for reimbursement from the fund for the performance of corrective action. At
a minimum, the division shall promulgate administrative regulations that will
insure an unobligated balance in the fund adequate to meet financial assurance
requirements and corrective action requirements of KRS 224.60-135(2) and
(4). If the unobligated balance in the fund is not adequate to meet the
requirements of this paragraph, the division shall obligate funds necessary to
meet these requirements;
(b) Establish by administrative regulation the criteria to be met to be eligible to
participate in the financial responsibility and petroleum storage tank accounts
and to receive reimbursement from these accounts. The division may establish
eligibility criteria for the petroleum storage tank account based upon the
financial ability of the petroleum storage tank owner or operator. Owners or
operators seeking coverage under the petroleum storage tank account shall file
for eligibility and for financial assistance with the division. To ensure cost
effectiveness, the division shall promulgate administrative regulations
specifying the circumstances under which prior approval of corrective action
costs shall be required for those costs to be eligible for reimbursement from
the fund. In promulgating administrative regulations to carry out this section,
the division may distinguish between types, classes, and ages of petroleum
storage tanks and the degree of compliance of the facility with any
administrative regulations of the cabinet promulgated pursuant to KRS
224.60-105 or applicable federal regulations;
(c)
(d)
(e)
(f)
(g)
(h)
Establish a financial responsibility account within the fund which may be used
by petroleum storage tank owners and operators to demonstrate financial
responsibility as required by administrative regulations of the cabinet or the
federal regulations applicable to petroleum storage tanks, consistent with the
intent of the General Assembly as set forth in KRS 224.60-120(5). The
account shall receive four-tenths of one cent (<!-- CONTENT FOR THE PAGE -->.004) from the one and fourtenths cent (<!-- CONTENT FOR THE PAGE -->.014) paid on each gallon of gasoline and special fuels received
in this state pursuant to KRS 224.60-145. To be eligible to use this account to
demonstrate compliance with financial responsibility requirements of the
cabinet or federal regulations, or to receive reimbursement from this account
for taking corrective action and for compensating third parties for bodily
injury and property damage, the petroleum storage tank owner or operator
shall meet the eligibility requirements established by administrative regulation
promulgated by the division;
Establish a small operator assistance account within the fund which may be
used by the division to make or participate in the making of loans, to purchase
or participate in the purchase of the loans, which purchase may be from
eligible lenders, or to insure loans made by eligible lenders;
Establish a petroleum storage tank account within the fund to be used to pay
the costs of corrective action due to a release from a petroleum storage tank
not eligible for reimbursement from the financial responsibility account.
Reimbursements of corrective action projects performed under the petroleum
storage tank account shall be carried out on or before July 15, 2016. Any
corrective action costs incurred after this date shall not be eligible for
reimbursement under the petroleum storage tank account. The account shall
receive one cent (<!-- CONTENT FOR THE PAGE -->.01) from the one and four-tenths cent (<!-- CONTENT FOR THE PAGE -->.014) paid on
each gallon of gasoline and special fuels received in this state pursuant to
KRS 224.60-145. This account shall not be used to compensate third parties
for bodily injury and property damage. Within three (3) months after July 15,
2004, the division shall develop a plan to address the payment of claims and
completion of corrective action at facilities eligible for reimbursement from
this account. The division shall establish a ranking system to be used for the
distribution of amounts from this account for the purpose of corrective action.
In promulgating administrative regulations to carry out this section, the
division shall consider the financial ability of the petroleum storage tank
owner or operator to perform corrective action and the extent of damage
caused by a release into the environment from a petroleum storage tank;
Hear complaints brought before the division regarding the payment of claims
from the fund in accordance with KRS 224.10-410 to 224.10-470;
Establish and maintain necessary offices within this state, appoint employees
and agents as necessary, and prescribe their duties and compensation;
Employ, in accordance with the procedures found in KRS 45A.690 to
45A.725 for awarding personal service contracts, a qualified actuary to
perform actuarial studies, as directed by the division, for determining an
appropriate reserve in the financial responsibility account and the petroleum
storage tank account sufficient to satisfy the obligations in each account for all
eligible facilities and to satisfy future liabilities and expenses necessary to
operate each account. The division shall, by administrative regulation, set the
entry level for participation in the fund;
(i) Authorize expenditures from the fund to carry out the purpose of KRS 224.60105 to 224.60-160, including reasonable costs of administering the fund, the
procurement of legal services, and the procurement of analytical testing
services when necessary to confirm the accuracy of analytical testing results
obtained by a petroleum storage tank owner or operator. The expenditures
shall be paid from the appropriate account;
(j) Establish a small operators' tank removal account within the fund to reimburse
the reasonable cost of tank system removal for small owners and operators.
The account shall not be used when an owner or operator is removing the tank
with the intention of replacing or upgrading the tank. In promulgating
administrative regulations to carry out this paragraph, the division may
distinguish among owners and operators based on income and types and
classes of tanks. The division shall not place a limit on the number of tanks
that an owner or operator has in order to be eligible to participate in the
program and receive reimbursement under this paragraph;
(k) Establish by administrative regulation the policy, guidelines, and procedures
to perform financial audits of any petroleum storage tank owner or operator
receiving reimbursement from the fund or any entity contracting or
subcontracting to provide corrective action services for facilities eligible for
fund reimbursement. Financial audits shall be limited to those files, records,
computer records, receipts, and other documents related to corrective action
performed at a facility where the costs of corrective action have been
reimbursed by the fund. Files, records, computer records, receipts, and other
documents related to corrective action reimbursed by the fund shall be subject
to a financial audit for a period of three (3) years after the date of final
reimbursement from the fund. Results of the audits shall be protected from
disclosure as allowed by KRS 61.878(1)(c). Financial auditing services may
be contracted for or personnel may be employed as needed to implement the
requirements of this paragraph;
(l) Be authorized to enter and inspect any facility intending to seek
reimbursement for the cost of corrective action to determine the
reasonableness and necessity of the cost of corrective action. The division may
collect soil or water samples or require storage tank owners or operators to
split samples with the division for analytical testing. Refusal to allow entry
and inspection of a facility or refusal to allow the division to collect or split
samples shall make the facility ineligible for fund participation;
(m) Have inspectors on site at all tank system removals. Failure to comply with
this provision shall make the facility ineligible for fund participation. A
petroleum storage tank owner or operator may request through certified mail
(2)
(3)
(4)
that the division schedule an inspector to be present at an upcoming tank
removal. If the request is made at least two (2) weeks before the time for the
removal and an inspector fails to be present at the time scheduled, the tank
removal may proceed without making the facility ineligible for fund
participation unless the owner is notified by the division no later than ten (10)
days prior to the proposed date that an inspector is not available on the
proposed date, in which event a representative of the division shall contact the
operator and schedule a new date. If no inspector is present at the rescheduled
date, the removal may then proceed without penalty; and
(n) Establish that the deadline for submission of final reimbursement requests
under the petroleum storage tank account is two (2) years after receipt of a no
further action letter.
The division may advise the cabinet on the promulgation of administrative
regulations concerning petroleum storage tanks.
The division may sue and be sued in its own name.
The division may transfer funds from the petroleum storage tank account to the
small operator tank removal account as needed to satisfy the obligations, future
liabilities, and expenses necessary to operate that account. The division may transfer
funds to the financial responsibility account as needed to maintain within that
account sufficient funds to demonstrate financial responsibility and to ensure
payment of claims as provided in subsection (1)(c) of this section.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 378, effective July 15, 2010; ch. 47,
sec. 2, effective July 15, 2010; and ch. 59, sec. 1, effective July 15, 2010. -Amended 2007 Ky. Acts ch. 78, sec. 2, effective March 23, 2007. -- Amended 2005
Ky. Acts ch. 123, sec. 26, effective June 20, 2005. -- Amended 2004 Ky. Acts ch. 26,
sec. 1, effective July 13, 2004. -- Amended 2002 Ky. Acts ch. 361, sec. 2, effective
July 15, 2002. -- Amended 1998 Ky. Acts ch. 284, sec. 3, effective July 15, 1998;
and ch. 498, sec. 4, effective July 15, 1998. -- Amended 1996 Ky. Acts ch. 295,
sec. 2, effective July 15, 1996; and ch. 318, sec. 137, effective July 15, 1996. -Amended 1992 Ky. Acts ch. 450, sec. 3, effective April 13, 1992. -- Created 1990
Ky. Acts ch. 370, sec. 6, effective April 9, 1990.
2010-2012 Budget Reference. See State/Executive Branch Budget, 2010 (1st Extra.
Sess.) Ky. Acts ch. 1, Pt. V, C, 3 at 145.
Formerly codified as KRS 224.819.
Legislative Research Commission Note (7/15/2010). This section was amended by
2010 Ky. Acts chs. 24, 47, and 59, which do not appear to be in conflict and have
been codified together.
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