Under federal law, owners and operators of certain underground storage tanks (USTs) must demonstrate their ability to pay for cleanup and third party damages in the event of contamination. This federal law, as interpreted by the U.S. Environmental Agency (EPA), sets the assurance amount at $1 million per occurrence for owners with less than 100 USTs and $2 million per occurrence for owners with more than 100 USTs.
The Virginia Petroleum Storage Tank Fund (Fund) was created, in part, to assist Virginia's owners and operators in meeting the federal assurance requirements. The Fund may be used by owners and operators to meet the majority of the assurance requirement, with owners and operators being responsible for demonstrating financial responsibility for a small portion of the federally mandated per occurrence requirement.
All FR documents submitted to DEQ must be the original and in the exact form and language as required by 9 VAC 25-590-10 et seq. Appendices.
This documentation is the proof that the owner/operator can pay their share of corrective action and third party liability claim costs if a release occurs. It must be updated annually and retained by the UST owner (either at the facility, or at corporate headquarters. However, if corporate headquarters is not in Virginia, FR must be kept at the facility. Demonstration requirements
Highlights:
Financial Responsibility (FR) requirements vary depending upon the type of tank (see Table 1, below). In the event of a release, owners and operators of petroleum tanks in Virginia must meet a FR requirement for each occurrence as their share of the cost of corrective action/cleanup or third party action costs (in the case of regulated USTs). Once the FR obligation has been met, the Fund will begin to reimburse for reasonable, necessary and otherwise eligible corrective action and third party liability (if aplicable) costs.
Table 1 : Financial Responsibility Access and Demonstration Requirements by UST Tank Type
| Regulated UST |
tanks and/or piping more than
10% underground |
See Table 2 |
See Table 2 |
| Exempt UST 1 |
non-commercial (farm,
residential) less than 1,100 gallon
|
$500 (No third party) |
n/a |
| Exempt UST 2 |
heating oil USTs |
$500 No third party) |
n/a |
| Regulated AST Facility |
greater than 25,000 gallon
storage capacity |
AST Access Table
(No third party)
|
n/a at this time |
| Unregulated AST Facility |
less than 25,000 gallon
storage capacity
|
AST Access Table
(No third party)
|
n/a |
|
Small Heating Oil AST
|
5,000 gallon or less heating oil AST
|
$500 No third party) |
n/a |
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Financial Responsibility Requirement for UST Owners/Operators
1) The amount of FR is determined on a sliding scale by calculating the total annual gallons pumped through all of the regulated USTs owned and operated in Virginia. Annual gallonage for used oil USTs must be included (this is calculated by the number of gallons pumped out of each tank annually). At this time, only UST owners or operators are required to demonstrate FR.
2) The amount of FR determined on the sliding scale is the amount that must be paid by an UST owner/operator before reimbursement from the Fund is allowed (see Table 2, below). This is also the amount of FR the UST owner/operator must demonstrate to operate these USTs legally in Virginia.
3) To demonstrate FR, the UST owner/operator must have proof of at least one of the following financial documents (in the form specified in the Appendices to 9 VAC 25-590-10 et seq.): Financial test of self-insurance trust agreement insurance, surety bond guarantee, or letter of credit
4) The UST owner/operator must use the exact language provided in the Appendices to 9 VAC 25-590-10 et seq.
5) This documentation is the proof that the owner/operator can pay their share of corrective action and third party liability claim costs if a release occurs. It must be updated annually and retained by the UST owner (either at the facility, or at the corporate headquarters. However, if the corporate headquarters is not in Virginia, FR documentation must be kept at the facility).
6) DEQ must receive the original copy of the FR documentation within 30 days of reporting a release.
If you have questions regarding your responsibilities under 9 VAC 25-590-10 et seq., please contact Josiah Bennett at (804) 698-4205. Copies of the Regulation may be found on the DEQ website.
Table 2: UST Financial Responsibility Requirement Sliding Scale
|
600,000 or less
|
$5,000
|
$15,000
|
$20,000
|
|
600,001-1.2 M
|
$10,000
|
$30,000
|
$40,000
|
|
1,200,001-1.8 M
|
$20,000
|
$60,000
|
$80,000
|
|
1,800,001-2.4 M
|
$30,000
|
$120,000
|
$150,000
|
|
Above 2.4 M
|
$50,000
|
$150,000
|
$200,000
|
How to Demonstrate
The State regulation 9 VAC 25-590-10 et seq addresses the financial responsibility requirements. The Office of Financial Assurance provides forms for owners to use to demonstrate. However, if you would like to download the Financial Responsibility Demonstration Mechanism for USTs , click on the link or go to the Files & Forms webpage.
Please contact Josiah Bennett (804-698-4205) if you have any questions concerning your financial responsibility requirement or demonstrating financial responsibility.
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