1. IPECA’s Annual UST Seminar Management & Compliance Assistance Legal Overview –FR & Implications on Compliance October 7, 2015 - Indianapolis David R. Gillay, Esq. Partner, Environmental Department

2. Federal UST FR Overview RCRA Amendments in 1986 directed PA to develop financial responsibility (FR) requirements for UST o/o Fed. Regulations: 40 CFR 280, Subpart H June 2015: Updated UST Regulations— No substantive changes to FR Indiana: EPA granted state program approval in June of 2006

3. Indiana UST FR Rules Statutory Authority: – Indiana Code (IC) 13-23-1-2(c)(6) and 13-23-4 Rule: – Indiana Administrative Code: Title 329, Article 9, Rule 8 (329 IAC 9-8) Applicability: – Owners and Operators of petroleum UST systems (unless UST system specifically excluded or deferred, NOTE: Federal rule changes no longer defer airport hydrant fuel distribution systems or UST systems with field constructed tanks) Coverage – Per occurrence – Aggregate Release from the requirements – UST is properly closed per 329 IAC 9-6; or – If corrective action required, once corrective action has been completed and the tank has been properly closed per 329 IAC 9-6.

4. IN UST FR Mechanisms o/o may use any one (1) or a combination of FR mechanisms listed in 329 IAC 9-8. The bulk of the UST FR rule language provides prescriptive language for how each of the following mechanisms should be worded to be adequate for compliance with the rule. Mechanisms: – 9-8-6: Financial test of self-insurance – 9-8-7: Guarantee – 9-8-8: Insurance and risk retention group coverage – 9-8-9: Surety bond

5. IN UST FR Mechanisms Mechanisms (con’t): – 9-8-10: Letter of credit – 9-8-11: Excess Liability Trust Fund (also requires UST owner or operator demonstrate ability to pay applicable statutory deductible) – 9-8-12: Trust fund – 9-8-13: Standby trust fund – 9-8-14 through 9-8-17: Additional mechanisms for local governments

6. FR Mechanism - ELTF ELTF was approved by U.S. EPA Region 5 as an acceptable FR mechanism for Indiana UST owners or operators in 1995. May be used in conjunction with other FR mechanisms Eligibility is determined by the ELTF rule at 328 IAC 1. IDEM will not make a determination on eligibility until an Initial Site Characterization (ISC) has been completed and submitted.

7. FR Mechanism – ELTF (con’t) UST o/o must demonstrate ability to pay applicable deductible prescribed by statute (IC 13-23-8-3). UST o/o is also required to maintain evidence of state fund coverage (329 IAC 9-8-21(b)(8) Record keeping)—a certificate of financial assurance (COFA) issued by IDEM per 328 IAC 1-7-1 and 40 CFR 280.101(d).

8. FR Reporting by O/O UST owner or operator shall submit to IDEM documentation of evidence of FR when any of the following occur: – Within thirty (30) days after the owner or operator identifies a release from a UST required to be reported under 329 IAC 9-4-4 or 329 IAC 9-5-2. – If the owner or operator fails to obtain alternate coverage within 30 days after they receive notice of: bankruptcy of a provider of financial assurance, suspension or revocation of the authority of a provider of financial assurance to issue a financial assurance mechanism, failure of a guarantor to meet the requirements of a financial test, other incapacity of a provider of financial assurance. Required to certify compliance with the FR rule on the UST notification form per 329 IAC 9-2-2. IDEM may require an owner or operator to submit evidence of financial assurance or other information relevant to compliance with 329 IAC 9-8.

9. UST FR Record keeping What you need for a compliance inspection: UST owner or operator must maintain evidence of all financial assurance mechanisms used to demonstrate FR until released from the requirements. Records may be maintained at UST site, or if maintained off site, made available upon request of IDEM.

10. UST FR Record keeping (con’t) Must maintain: – A copy of the financial assurance mechanism worded as specified in the rule (329 IAC 9-8). – An updated copy of a certification of financial responsibility (COFR) worded as required by 329 IAC 9-8-21(c). NOTE: A COFR must be updated whenever the financial assurance mechanism used to demonstrate FR changes. Additional ELTF requirement: Copy of coverage supplied by or required by Indiana under 40 CFR 280.101(d)—The COFA per 328 IAC 1-7-1.

11. Most Common NOVs Failure to have Financial Responsibility Failure to Provide Proof of FR Failure to Maintain Proper RD for Piping Failure to Provide RD for USTs O/O has not designated and certified any UST System Operators Failure to Maintain records

12. Solutions & Lessons Learned Avoid the costs of failing to maintain necessary UST records such as enforcement referrals, potential delivery prohibition orders, and non-enforcement commissioner orders to comply. Failing to have necessary paperwork will result in compliance issues.

13. Solutions & Lessons Learned Incomplete and inaccurate documentation/records may affect ELTF access and reimbursement. IDEM has requested that all o/o update their Notification Form to the most current state form…this includes updating FR information. If an o/o is going to be using the ELTF, should be documented on that form and o/o should get COFA from IDEM.

14. Solutions & Lessons Learned If you receive a violation letter or NOV, you can limit potential enforcement action or receive a reduction in the civil penalty for a timely response. Flat-fee compliance review under IN Audit Privilege UST Compliance/Inspection Hotline [monthly or flat-fee] Enforcement counsel - packaging/strategy of enforcement/response to VL/NOV

15. Questions or Comments Amy Smith, Esq. Co-Chair, Petroleum Practice [After October 19] David R. Gillay, Esq. Chair, Petroleum Practice (317) 231-7474 (o) (317) 946-9267 (m) david.gillay@btlaw.com