ABSTRACT
Introduction................................................................................................. 209 10.2 EPA Guidance For Approving State Funds............................................... 210
10.2.1 Funding Source............................................................................. 211 10.2.2 Amount of Fund............................................................................ 212 10.2.3 Coverage Provided........................................................................ 212 10.2.4 Eligibility for Use of the Fund..................................................... 214
10.3 Potential Problems with State Financial Assurance Funds....................... 214 10.3.1 Levels of State Funding and Fund Financing.............................. 215 10.3.2 Eligibility Requirements............................................................... 216
10.3.2.1 The Use of State-Required Financial Test to Demonstrate Financial Responsibility Deductibles Under a State Fund....................................................... 217
10.3.3 Claims Management...................................................................... 218 10.3.4 State Loan Programs for Tank Upgrading................................... 218 10.3.5 Summary of Questions About State Financial
Assurance Funds........................................................................... 219 10.3.5.1 General Fund Characteristics....................................... 220 10.3.5.2 Third-Party Coverage................................................... 220 10.3.5.3 Scope of Coverage and Eligibility Requirements....... 220 10.3.5.4 State Loan Programs for UST Upgrading................... 221 10.3.5.5 First Dollar Coverage and Deductibles........................ 221 10.3.5.6 Wrap-Around Coverage............................................... 222
10.4 Current Status of State Financial Assurance Funds.................................. 222 10.4.1 Description of Selected State Funds............................................. 223
10.4.1.1 The Michigan Underground Storage Tank Financial Assurance Fund (MUSTFA)........................................ 224
10.4.1.2 The Louisiana Underground Motor Fuel Storage Tank Trust.................................................................... 225
10.4.1.3 The Georgia Underground Storage Tank Trust Fund .. 226 10.4.1.4 The Idaho Petroleum Clean Water Trust Fund........... 228
10.5 Conclusion.................................................................................................. 229 References............................................................................................................. 243
State funds are the financial responsibility mechanism on which most underground storage tanks (UST) owners/operators must depend to comply with EPA’s financial responsibility regulations. As indicated in the previous chapters, insurance still is not widely available and the other financial respon sibility mechanisms allowed by EPA generally require UST owners/operators to have generated required levels of financial responsibility themselves. Not surprisingly, the vast majority of firms in the regulated community do not generate sufficient profits to put aside between $1 million and $2 million for a financial responsibility mechanism dedicated only to UST corrective action and third party compensation. Thus, most UST owners/operators currently are looking for public assistance, in the form of a state financial responsibility fund, to provide these funds.
