Environmental/Jun 14, 2016

EPA Approves MI Underground Storage Tank (UST) Cleanup Fund as a Financial Responsibility Mechanism

On May 27, 2016, Region 5 of the Environmental Protection Agency (EPA) approved Michigan’s Underground Storage Tank Cleanup Fund (the Fund) as an acceptable partial coverage financial responsibility mechanism for owners and operators (O/O) of USTs within the State of Michigan. After payment of a deductible ($50,000, unless the O/O owns fewer than 8 USTs and pays $500/UST to buy down the deductible to $15,000) the Fund covers corrective action and compensation of third parties for bodily injury and property damage caused by accidental releases from covered USTs. To review a copy of EPA’s approval letter, click here: http://www.michigan.gov/documents/deq/deq-musta-letter-Michigan_State_Fund_Approval_525950_7.pdf. Within 60 days of Michigan receiving EPA approval, EPA requires that Michigan provide each O/O covered by the Fund with a letter or certificate describing the nature of the coverage.

O/O who opt to utilize the Fund as a financial responsibility mechanism must first complete and submit a Documentation of Financial Responsibility Submittal Form, along with proof of financial responsibility for the deductible amount to the Michigan Underground Storage Tank Authority (MUSTA). Financial responsibility mechanisms that may be used for the deductible amount include (note that each of these mechanisms must be in compliance with specific MUSTA/EPA requirements):

  • Financial test of self-insurance
  • Guarantee
  • Insurance/risk retention group coverage
  • Surety bond
  • Letter of Credit
  • Trust fund
  • Standby trust fund

A Request for Determination of Eligibility must also be submitted to MUSTA. Once MUSTA has approved the Request for Determination, MUSTA will send the O/O a letter of approval which describes the conditions for maintaining claim eligibility and the amount of coverage provided. The O/O should maintain a copy of this letter (and all financial responsibility mechanisms) in its files.

For questions or further information on financial responsibility mechanisms for UST O/O, contact us at lynn@ggtmlaw.com. For additional information on GGTM’s assistance to UST O/O, click here: https://ggtmlaw.com/areas-of-practice/environmental-law/underground-storage-tanks-ust/.

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