Underground Storage Tank Petroleum Product Cleanup Fund Overview
The Massachusetts Underground Storage Tank Program (Program) was established as the Massachusetts Underground Storage Tank Petroleum Product Cleanup Fund (Fund) in 1991 by Massachusetts General Law Chapter 21J. The purpose of M.G.L. c.21J is to prevent the need for environmental cleanup actions and to expedite environmental cleanup actions by providing partial reimbursement to owners or operators of UST systems for costs, expenses and other obligations incurred as a result of releases of petroleum products from their UST systems. The Program also allows for reimbursement for claims of bodily injury, property damage, and damage to natural resources that are assessed against an owner or operator of a UST system.
Dispensing facilities are eligible to receive reimbursement for work performed after April 1, 1991; marinas are eligible for work performed after June 30, 1992. Reimbursement is subject to a deductible and correlates with the number of UST systems owned by the Claimant. Chapter 21J provides for the Fund to be financed by annual tank registration fees and a per gallon fee imposed on the delivery of petroleum products to USTs. Currently, these fees are set at $250.00 and 2½ cents, respectively.
Additionally, the Program allows UST owners to demonstrate Financial Responsibility (FR) as required by the U.S. Environmental Protection Agency (EPA) [40 CFR Part 280, Subpart H] and the Massachusetts Board of Fire Prevention Regulations [527 CMR 9.07(N)]. As defined by the EPA, FR means that owner/operators must be able to pay for the costs of damage to natural resources, personal injury, or property damage as a result of a leak from their UST system. Financial assurance may be demonstrated by any combination of the following:
- Private insurance
- Self insurance
- Surety bond
- Letter of credit
- State assurance fund.
The 21J Fund was approved on January 13, 1992 by the EPA as a state assurance fund. Pursuant to M.G.L. c. 21J § 8, the Underground Storage Tank Petroleum Cleanup Fund Administrative Review Board (the "Board") was established to oversee the Fund. The Board's primary tasks are to administer the Fund, rule on eligibility and payment of reimbursement claims, and develop and oversee the regulations and fee structure.
Under 503 CMR 2.00, the Board established criteria by which an owner or operator of a UST system can seek reimbursement. These criteria include ensuring that the UST system was in full compliance with all applicable laws at the time of the release; that the facility was operating after April 2, 1991; that reimbursement is sought on behalf of an eligible Claimant; that the owner or operator has paid all fees; and that the release is deemed an Eligible Release.
Certificate of Compliance
The first step a tank owner or operator must take is to file an Application for Certificate of Compliance (COC). The tank owner or operator must complete a separate Application for Certificate of Compliance for each dispensing facility and file it with the DOR UST Program Compliance Unit. The application requires such information as the Massachusetts Department of Environmental Protection (MassDEP) facility identification tracking number (if applicable), the location of tank(s), and the ownership of tank(s).
All new applications for COCs must be accompanied with a Board Acceptable Site Assessment (BASA) that demonstrates that the dispensing facility does not have Petroleum Product contaminant levels or conditions that require notification to the MassDEP or require further response actions. COCs are issued with a 5-year expiration date. To renew a COC, an owner/operator must file an Renewal Application for Certificate of Compliance (COC) prior to the expiration of the current COC in order to be eligible for the program after that date.
Application for Eligibility
Once the Certificate of Compliance has been approved and if an owner or operator wishes to seek reimbursement under the Fund, the next step an owner or operator must take is to file an Application for Eligibility. To do so, however, one must be an eligible Claimant. An eligible Claimant is one who:
a. Pays for response actions in excess of deductible amounts and unreimbursed by any other source; or
b. Pays a final judgment resulting from civil court action by third parties for bodily injury, property damage and damage to natural resources; or
c. Otherwise incurs costs, expenses or obligations as a result of an eligible release.
Currently, an Application of Eligibility must be submitted:
a. within 180 days of reporting a release to MassDEP;
b. within 365 days of closure, removal, or abandonment of the UST system;
When submitting an Application for Eligibility, the following information is also required: a current dated photograph of the facility; and copies of the following: Certificate of Compliance; FP-290; Notice of Responsibility, insurance questionnaire; and any required line and leak detector tests results from prior to the release date. An Application of Eligibility will not be considered complete unless this information is included.
Additionally, if the applicant receives reimbursement from another source, which is the subject of a claim approved or to be approved by the Board, the applicant must immediately notify the UST Program. An Insurance/Subrogation worksheet is available to assist in calculating the net reimbursable amount of the claim.
Applying for Reimbursement
An Eligible Release is one that has occurred at a site that is in "Full Compliance", where the owner has paid all applicable delivery and annual tank fees, has notified MassDEP of the release, and MassDEP has issued a Release Tracking Number (RTN).
Once the Application for Eligibility is approved, an Application for Reimbursement ("claim") may be filed. Typically, claims are filed by the UST System owner. However, a claimant may also be any person or entity authorized by the owner to conduct response actions at the site for the Eligible Release. The owner or operator must provide claimant, facility, and consultant information as well as a claim summary, grand total of reimbursements claimed, certification, and the following documentation:
a. owner authorization to file a claim, if applicable;
b. documentation of costs incurred;
c. explanation of why costs are incurred;
d. listing of costs, expenses, and obligations; and
e. competitive bidding information.
The Application for Reimbursement must be submitted within 365 days of making payment. The owner or operator should maintain proof of filing by sending the application by certified or registered mail and maintaining a receipt. The owner or operator is also required to:
- provide accurate and complete oral and written information;
- provide claims records to the 21J Board or third-party administrator upon written request;
- consent to all audits of payments and necessary inspections to verity the accuracy of submissions;
- keep all records relating to a claim for at least four years from when the claim was reimbursed or otherwise disposed of.
The Application for Reimbursement must be certified by:
- an officer of the corporation or an individual designated by power of attorney; or
- general partner, sole proprietor, or trustee; or
- principal/individual designed by power of attorney for other entity.
All applications and forms may be reproduced or computer generated, provided the form language is not modified. Listing of costs, expenses, and obligations may be presented on a computer spreadsheet, provided the format is the same as that of the application. The regulations specify items that are likely to be covered by the Fund and those which are not. Generally, the costs must be reasonable and appropriate and not reimbursed by another source of payment.
Examples of allowable costs are:
- removal, treatment, transport, reuse, recycling and/or disposal of materials contaminated with Petroleum Products;
- rental, lease, or purchase of remediation equipment ($5,000 or greater);
- sampling and analysis of released petroleum product, air, groundwater, and soil.
Examples of costs not directly related and not covered are:
- retrofitting, relining, or replacing UST systems;
- costs incurred prior to notification to MassDEP of the release and obtaining a MassDEP RTN;
- loss of revenue because of a shutdown due to a release.
Additionally, the regulations establish a Reimbursement Fee Schedule , which is to be used as a guide for all work performed. The Board will not pay in excess of the rates published. When a Claimant performs work that is not covered in the reimbursement fee schedule, the Claimant will be required to solicit bids for that work. The regulations implementing the 21J Program establish reimbursement maximums for costs incurred as a result of an occurrence. The current maximums are as follows:
a. $1.5 million for an owner or operator of a Dispensing Facility from which Petroleum Product is sold or transferred to other dispensing facilities or to the public or the owner or operator of a dispensing facility that handles an average of more than 10,000 gallons of petroleum product per month based on annual throughput for the calendar year previous to filing an application for eligibility; or
b. $500,000 for an owner or operator that does not sell to the public and dispenses less than 10,000 gallons of petroleum product per month; or
c. $500,000 for an owner or operator of a former dispensing facility.
The regulations also allow for reimbursement for bodily injury and property damage to third parties. The owner or operator shall send the Board a copy of any Final Judgment and shall file an Application for Third Party Claims Arising from a Civil Court Action within 180 days of the entry of the Final Judgment. To be eligible, a Final Judgment must be against an eligible Claimant, arising from an eligible release, in excess of the deductible limit and unreimbursed by any other source of payment.
If the Final Judgment against an eligible Claimant results from a full adversarial trial, the Board will regard the existence of the Final Judgment as establishing that the bodily injury, property damage, or damage to natural resources was proximately caused by an eligible release. If the Final Judgment against an eligible Claimant results from less than a full adversarial trial, then the Board may require further information or verification regarding the relationship of the bodily injury, property damage, or damage to natural resources to an eligible release, and may make an independent determination whether such injury or damages was proximately caused by an eligible release.
Final Judgments based on the following specific types of damages are eligible for reimbursement:
a. temporary and/or permanent relocation costs;
b. temporary and/or permanent provision for alternative sources of water supply;
c. cost-effective method of assessment, clean-up and/or disposal of contaminated soils and debris necessary and consistent with 310 CMR 40.0000;
d. response action necessary to mitigate the effects of property damage;
e. medical expenses;
f. loss of wages or business income; and/or
g. damages to natural resources not to exceed $500,000, provided that there was a full adversarial trial.
Final Judgments based on the following specific types of damages are not eligible for reimbursement:
a. pain and suffering;
b. loss of consortium;
c. fear of future harm or disease;
d. punitive damages, civil penalties, or criminal fines;
e. emotional distress; and/or
f. diminution of property value.
All claims will be considered complete upon receipt, review, and presentation to the Board for the purposes of voting approval. Within 45 days of the Board's decision or, if later, within 45 days of presentation to the Board of any supplemental information requested by the Board, the Board will notify the Claimant in writing of the Board's determination as to the claim for reimbursement. Parties aggrieved by a decision of the Board with respect to a claim may, within 60 days of the decision, either file a Request for Reconsideration with the Board or file a civil court action pursuant to MGL c.249 s.4. If a reconsideration is requested, and following the Board's determination on the reconsideration, the Parties are still aggrieved by the Board's decision with respect to a claim, the Parties may, within 60 days of the reconsideration decision, either file a request for Conference hearing with a Three-Member Panel of the Board or file a civil court action pursuant to MGL c.249 s.4.
Underground Storage Tank Petroleum Cleanup Fund Administrative Review Board
The Board is comprised of the following nine members:
- the Commissioner of the Department of Revenue, or his designee, who shall serve as chairperson;
- the Commissioner of the Department of Environmental Protection, or his designee;
- the State Fire Marshal, or his designee; and
- six members appointed by the Governor who are knowledgeable in the remediation and prevention of problems resulting from the operation of USTs and UST systems, and are representatives of the following industry groups:
- the Massachusetts Petroleum Council,
- the Independent Oil Marketers Association of New England,
- the New England Service Station and Automotive Repair Association,
- an institution or organization engaged in the business of insurance,
- a financial institution or organization, and
- a statewide environmental public interest organization.
The current Board members are as follows:
- David S. Davenport, Department of Revenue designee, Chair
- Kendall Marra, Department of Environmental Protection designee
- David Beaudin, State Fire Marshal designee
- Thomas J. Porter, Jr., New England Service Station and Automotive Repairman Association Representative
- Stephen Dodge, Massachusetts Petroleum Council Representative
- Edward A. Rachins, Independent Oilman's Association Representative
- Parker Wellington, Insurance Industry Representative
- Marc Guerin, Finance Industry Representative
- Paul McNeil, Environmental Public Interest Group Representative
For more information about applying for a Board position, please refer to the Commonwealth's Boards and Commissions website.