224.60-140 Petroleum storage tank environmental assurance fund -- Claims for
reimbursement.
(1)
(2)
There is hereby created the petroleum storage tank environmental assurance fund.
The fund shall consist of a financial responsibility account and a petroleum storage
tank account. Each account shall be maintained as a separate and distinct interestbearing account. Interest credited to an account shall be retained in that account. All
of the following amounts shall be deposited in the fund:
(a) Four-tenths of one cent (.004) from the one and four-tenths cent (.014)
paid on each gallon of gasoline and special fuels received in this state
pursuant to KRS 224.60-145 to the financial responsibility account;
(b) One cent (.01) from the one and four-tenths cent (.014) paid on each
gallon of gasoline and special fuels received in this state pursuant to KRS
224.60-145 to the petroleum storage tank account;
(c) Money appropriated by the General Assembly for deposit in each account;
(d) Any money recovered by the fund pursuant to this section shall be deposited
in the appropriate account; and
(e) Any money collected in the form of penalties levied pursuant to KRS 224.60155 shall be deposited to the appropriate account.
Money in the fund, financial responsibility account, and the petroleum storage tank
account shall be used by the division for the following purposes:
(a) To reimburse petroleum storage tank owners or operators for the costs,
expenses, and other obligations incurred for corrective action required by the
cabinet to be undertaken as the result of a release into the environment from a
petroleum storage tank. Reimbursement shall be limited to only those costs,
expenses, and other obligations incurred to comply with corrective action
requirements established in law or administrative regulation by the cabinet.
Additional costs related to compliance with a local program operating under
KRS 224.60-105(4) shall be neither reimbursable by the fund nor imposed on
the owner or operator. Reimbursement shall not include the costs related to
the removal, or actions incidental to the removal, of a tank system except as
authorized under KRS 224.60-130(1)(j);
(b) For payment of or reimbursement for third-party claims for bodily injury and
property damage, related to a facility eligible for participation in the financial
responsibility account, which are asserted against a petroleum storage tank
owner or operator as a result of a release into the environment from a
petroleum storage tank;
(c) To pay the reasonable, prorated costs incurred by the division in administering
each account; and
(d) The cost to operate the small operators' assistance account pursuant to KRS
224.60-130(1)(d), the small operators' tank removal account pursuant to KRS
224.60-130(1)(j), to perform or contract for the performance of financial
audits conducted under KRS 224.60-130(1)(k), and to employ sufficient
(3)
(4)
(5)
(6)
(7)
(8)
(9)
inspectors to carry out the provisions of KRS 224.60-130 and to set forth their
duties. These costs shall be prorated to each account.
The use of the fund shall not exceed one million dollars (,000,000) per
occurrence for corrective action and one million dollars (,000,000) per
occurrence for compensating third parties for bodily injury and property damage.
Money in the fund may be used by the cabinet for costs incurred by the cabinet for
corrective action taken pursuant to KRS 224.60-135(2) and (4).
The fund shall be used to guarantee payment of reasonable costs and expenses to a
contractor performing corrective action under contract with a petroleum storage
tank owner or operator subject to entry level amounts payable by the petroleum
storage tank owner or operator. Money in the fund shall be obligated to secure the
guarantee.
A petroleum storage tank owner or operator may apply to the division for
reimbursement from the fund of costs to perform corrective action, except that the
petroleum storage tank owner or operator shall be responsible for and shall not be
reimbursed for an amount equal to the entry level into the fund as set pursuant to
administrative regulation of the division.
The division or its designated agent shall issue all decisions made on claims filed
pursuant to this section in writing, with notification to all appropriate parties, within
ninety (90) days after submission of the claim, unless all parties to the claim agree
in writing to an extension of time. The division shall by phone or facsimile
transmission immediately notify the claim applicant and its consultant, if applicable,
when the claim is determined to be deficient. The notification shall provide
sufficient information to allow the applicant and its consultant, if applicable, to
begin to correct the deficiency. The division shall then notify the applicant and its
consultant, if applicable, by certified mail of the deficiency. The notice shall
indicate how many days remain in the ninety (90) day review period from the time
of mailing. The review period shall be tolled pending submittal of information
responding to the deficiency, but not to exceed thirty (30) days. When the division
receives information that corrects the deficiency, or at the end of the thirty (30) day
period, the division shall complete the review of the claim within the time
remaining in the ninety (90) day review period. Nothing in this section shall be
construed as preventing the fund from making partial reimbursement as appropriate.
Except as provided in subsection (9), any costs incurred and payable from the fund
for corrective action taken pursuant to KRS 224.60-135(2) shall be recovered by the
division from the petroleum storage tank owner or operator which released the
petroleum or petroleum products into the environment.
The liability of a petroleum storage tank owner or operator subject to a cost
recovery under this section shall not exceed an amount equal to the entry level into
the fund, the division's cost incurred in the cost recovery, and any penalties applied
in accordance with KRS 224.60-155. This amount shall include any expenditures
made by the petroleum storage tank owner or operator for the release into the
environment from the petroleum storage tank that is the subject of the cost of
recovery.
(10) The amount of costs determined pursuant to subsections (8) and (19) of this section
shall be recoverable in a civil action. This subsection does not deprive a party of any
defense the party may have.
(11) Money recovered by the division pursuant to this section shall be deposited in the
appropriate account.
(12) Upon motion and sufficient showing by any party, the court shall join to the action
any person who may be liable for costs or expenditures recoverable pursuant to this
section.
(13) (a) Any party found liable for any costs or expenditures recoverable under this
section who establishes that only a portion of those costs or expenditures are
attributable to their actions, shall pay only for that portion.
(b) If the trier of fact finds the evidence insufficient to establish each party's
portion of costs or expenditures pursuant to subsection (12) of this section, the
court shall apportion those costs or expenditures, to the extent practicable
according to equitable principles among the defendants.
(c) The appropriate account shall pay any portion of the judgment in excess of the
aggregate amount of costs or expenditures apportioned under paragraphs (a)
and (b) of this subsection.
(14) (a) No indemnification, hold harmless, conveyance, or similar agreement shall be
effective to transfer any liability for costs recoverable under this section. This
subsection shall not bar any agreement to insure, hold harmless, or indemnify
a party to the agreement for any costs under KRS 224.60-105 to 224.60-160.
(b) The entry of judgment against any party to the action shall not bar any future
action by the fund against any other person who is later discovered to be
potentially liable for costs paid from the fund.
(c) Payment of any claim by the fund pursuant to KRS 224.60-105 to 224.60-160
shall be subject to the state acquiring by subrogation the rights of the claimant
to recover those costs of corrective action for which it has compensated the
claimant from the person responsible or liable for the release.
(15) This section shall not be construed as authorizing recovery for costs of corrective
action resulting from any release authorized or permitted pursuant to state or federal
law.
(16) The cabinet shall attempt, to the maximum extent practicable, to secure or obtain
funds that may be available for corrective actions under federal laws. However,
nothing in this subsection shall prevent the cabinet from expending any funds
available under KRS 224.60-105 to 224.60-160 if such federal funds are determined
to be unavailable.
(17) The fund shall not be used for corrective action, reimbursement, or third-party
liability resulting from releases from petroleum storage tanks used exclusively for
storage of fuel used in the operation of a commercial ship or vessel oil tanks used
exclusively for storage of fuel used for the purposes of powering locomotives.
(18) (a) Any person filing a claim for reimbursement from the division shall, prior to
filing the claim for reimbursement, ensure full payment of the claims of all
(b)
(c)
(d)
vendors and subcontractors who have performed work or supplied materials
related to corrective action at an underground storage tank facility, where
labor or materials supplied by a vendor or subcontractor form a basis for at
least part of the claim for reimbursement.
A vendor or subcontractor may waive, in writing, his right to receive full
payment before the person files the claim for reimbursement. Any vendor or
subcontractor who waives, in writing, his right to full payment shall also
waive, in writing, his right to take legal recourse against the division and the
underground storage tank facility owner or operator for nonpayment from a
prime contractor for work performed or materials supplied to the prime
contractor during corrective action at an underground storage tank facility.
Any vendor or subcontractor who waives, in writing, his right to full payment
prior to the filing of the claim for reimbursement shall acknowledge in the
written waiver that his, his heirs', successors', and assigns' sole recourse for
the nonpayment of work performed or materials supplied to a prime contractor
during corrective action at an underground storage tank facility is to proceed
against the prime contractor for whom he performed the work or supplied
materials. Any vendor or subcontractor who waives, in writing, his right to
full payment prior to the filing of the claim for reimbursement shall release
and discharge any liens filed as a result of work performed or materials
provided at the underground storage tank facility. Subcontractor and vendor
waivers must be made on standard forms furnished by the division. Their
signatures must be notarized.
Unless the provisions of paragraph (b) of this subsection apply, any person
filing a claim for reimbursement from the division shall certify, by affidavit,
on standard forms furnished by the division, that all vendors and
subcontractors who have performed work or supplied materials related to
corrective action at an underground storage tank facility, where labor and
materials supplied by a vendor or subcontractor form a basis for at least part
of the claim for reimbursement, have been paid in full as of the date of
submission of the claim for reimbursement. A single affidavit may be made
for each claim for reimbursement, provided, however, that the representations
made in the affidavit shall be applied to each vendor or subcontractor
individually, and, where false, shall be treated, as to each vendor or
subcontractor, as a separate violation for the purpose of applying any criminal
statute.
Any person with responsibility for administering the division who believes, or
has information, that an affidavit submitted pursuant to this subsection
contains false or misleading information, or any person with responsibility for
administering the division who believes or has information that an application
for financial assistance or a claim for reimbursement contains false or
misleading information, shall provide that information to the
Commonwealth's attorney whose jurisdiction includes the county where the
majority of the subject underground storage tank facility is located. That
person may additionally provide the information to any other interested
prosecutor with jurisdiction to prosecute crimes pertaining to an application
for financial assistance or the claim for reimbursement.
(19) Any person who knowingly makes a false statement, representation, or certification
in an application for reimbursement from the fund, or in any supporting
documentation attached thereto, shall be responsible for and shall not be reimbursed
for any amounts incurred based upon the false statement, representation, or
certification. Any costs incurred and paid from the fund which are based on a false
statement, representation, or certification in an application for reimbursement from
the fund, or in any supporting documentation attached thereto, shall be recovered by
the fund administrators from the person who asserted the false statement,
representation, or certification.
Effective: June 20, 2005
History: Amended 2005 Ky. Acts ch. 123, sec. 27, effective June 20, 2005. -- Amended
2002 Ky. Acts ch. 361, sec. 4, effective July 15, 2002. -- Amended 2000 Ky. Acts
ch. 409, sec. 1, effective July 14, 2000. -- Amended 1998 Ky. Acts ch. 284, sec. 6,
effective July 15, 1998; and ch. 498, sec. 5, effective July 15, 1998. -- Amended
1996 Ky. Acts ch. 295, sec. 3, effective July 15, 1996. -- Amended 1992 Ky. Acts
ch. 450, sec. 4, effective April 13, 1992. -- Created 1990 Ky. Acts ch. 370, sec. 8,
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 224.821.
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