Environmental/Oct 26, 2015

DEQ Releases Information on How to Access the UST Cleanup Fund as a Financial Assurance Mechanism

As Michigan’s Department of Environmental Quality (DEQ) continues to develop procedures for implementing and accessing the Underground Storage Tank (UST) Cleanup Fund (Fund) created by the passage of SB 791 in December 2014, it just released the instructions for how UST owners/operators (O/O) can demonstrate financial responsibility by using the Fund. A brief summary of these procedures is provided below. Keep in mind, however, that until the UST O/O receives a notice of approval from the Michigan Underground Storage Tank Authority (MUSTA), the currently utilized financial responsibility mechanism must be maintained. The procedure outlined by DEQ is as follows:

  1. Submit a Claim Deductible Buy-Down Application and applicable fees to MUSTA. Remember that an O/O is only eligible to buy down the $50,000 deductible (to $15,000) if the O/O owns seven or fewer refined petroleum USTs. The application can be accessed at http://www.mi.gov/documents/deq/deq-musta-Buy-Down_Form_503487_7.docx.
  2. Submit proof of financial responsibility for the applicable deductible (i.e., $50,000 or $15,000 – see #1 above) to MUSTA. Financial mechanisms available to UST O/O for the deductible amount are as follows:
    1. Financial test of self-insurance
    2. Guarantee
    3. Insurance/risk retention group coverage
    4. Surety bond
    5. Letter of credit
    6. Trust fund
    7. Standby trust fund
    8. Other methods (if local government is the O/O).
  3. Submit a Request for Determination of Eligibility to MUSTA. The request form can be accessed at http://www.mi.gov/documents/deq/deq-musta-Req-Determination-Submittal-Form_503489_7.docx.
  4. When MUSTA approves the Request for Determination, the O/O will receive a letter from MUSTA which describes how to maintain claim eligibility, as well as the amount of coverage provided by the Fund. This letter should be kept on file by the O/O.

Requests for Determinations and Deductible Buy-Downs can be prepared and submitted to MUSTA now. DEQ anticipates having all materials needed to accept claims, invoices, and Requests for Indemnification available to the O/O by December 1, 2015, and will begin accepting claims, invoices and Requests for Indemnification by January 1, 2016. We will continue to provide updates as additional procedures and forms are released.

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