1. New UST Cleanup Fund for Michigan
Presented to: Michigan Bankers Association, January 2015
Grand Rapids, MI Cincinnati, OH
2. Regulatory Requirements
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• 36 states have whole or partial funds
• Michigan Natural Resources and Environmental
Protection Act (NREPA)
– Consolidated various Michigan statutes
– Divided in “Parts”
• Part 211 “Underground Storage Tank Regulations”
– Regulates Underground Storage Tanks
– Includes Financial Responsibility (FR) requirements
• Part 213 “Leaking Underground Storage Tank” (LUST)
– Regulates releases from USTs
– Provides means to cleanup and “close” LUSTs
3. History of MUSTFA
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• Former Cleanup Fund
• Accepted claims 1989 through June 1995
• MUSTFA had financial problems throughout
• Continued to collect 7/8₵/gal
• Key issues with MUSTFA finances (OMB Study 1996)
– No licensing or certification of contractors & consultants
– Little guidance/limits for cleanup, especially initially
– Very conservative cleanup standards
• RBCA came in after MUSTFA
– Avg cost of cleanup: $125,000
4. Reimbursement under MUSTFA
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• ≈ 30% of early claims were
rejected with $0 reimbursed
• For MUSTFA-approved claims
– Reimbursement well less than 100%,
often at 50% or less
– Reimbursement delays commonly
over 180 days
• Fund shut down twice, w/ final in
1995
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5. Enter Son of MUSTFA
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• UST Cleanup Fund (Fund)
• Signed by Governor on December 30, 2014
• Coverage as of Governor signature
• Accepting claims: likely as of 10/1/15
• Administered by an Authority (think Mac Bridge)
• Authority details
– 7 seats , DEQ plus 6 Michigan residents
– Stipulates 4 seats for industry reps
6. Fund Details
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• UST owner or operator (O/O) receive money for a release discovered and
reported after the bill's effective date.
• Deductible
– Standard deductible amount of $50,000/claim
– O/O of fewer than eight (8) USTs can obtain a lower deductible of $15,000/claim w/
an annual fee of $500 per tank.
– (Note: each compartment of a multi-compartment tank is considered a tank for fee
purposes).
• Approved claims to be paid within 45 days after the proper determinations.
• The Bill provides that the Authority and the State will not be liable for work
invoices or indemnification requests if revenue is insufficient.
• Allows O/O w. denied claim to request review by the Authority's board of
directors
• Provides appeal of claim denial to Circuit Court
• Cap on administrative cost to maximum of 7% of Fund's projected revenue
• Provides funding to Michigan Department of Environmental Quality (MDEQ) for
the cleanup of orphan sites
• Penalties for fraud, including creative payment of deductible
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7. Fund Details: cont’d
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Fund will be accepting claims ≈10/1/15
Impact of coverage on prior release(s)
Schedule of Costs (semi-PUSTCRB (Ohio))
Ohio: top down Agency-driven program (work-plans
must be approved)
Very different geology and limited groundwater
Protected groundwater identified in statute
Prosecution against consultants/contractors not uncommon
Michigan: little agency involvement, no licensing
Controls on consultant: rejection of claim, leaves to O/O
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8. Closures Process
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• Only two checkpoints w/ DEQ
• Can expend significant funds before
any checkpoint
• Closure ≠ Clean Site (or even low
risk)
Example of “Closed” site with LNAPL
migrating to adjacent property
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9. For the rest of the presentation…llow
Up
Contact Marty Janowiak (mjanowiak@bldi.com) at 616-459-3737.
Also refer to www.michiganenvironmentalblog.com
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Copyright, BLDI, Inc. 2015, all rights reserved.