401 KAR 42:090. Financial responsibility.

      RELATES TO: KRS 224.10, 224.60, 40 C.F.R. Part 280 Subpart H, Part 281, 42 U.S.C. 6991c

      STATUTORY AUTHORITY: KRS 224.10-100, 224.60-105, 224.60-120, 40 C.F.R. Part 280 Subpart H, Part 281, 42 U.S.C. 6991c

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 224.10-100 requires the Environmental and Protection Cabinet to develop and conduct programs that provide for the prevention, abatement, and control of contaminants that may threaten the environment. KRS 224.60-105 requires the cabinet to regulate underground storage tank (UST) systems by requiring registration, minimum construction and performance standards, leak detection, recordkeeping, release reporting, corrective action, closure, financial responsibility, and other standards to protect public health and the environment. KRS 224.60-105(3) requires the cabinet to establish a regulatory program that implements federal requirements for UST systems. 401 KAR Chapter 42 identifies requirements for UST systems. This administrative regulation establishes requirements for demonstrating financial responsibility for corrective action and for compensation of third parties for bodily injury and property damage caused by sudden and nonsudden accidental UST system releases arising from the operation of UST systems containing petroleum.

      Section 1. Application of Federal Regulations. The requirements for demonstrating financial responsibility for corrective action and for compensation of third parties for bodily injury and property damage caused by sudden and nonsudden accidental UST system releases arising from the operation of UST systems containing petroleum are governed by 40 C.F.R. Part 280 Subpart H, KRS 224.60-105, 224.60-120, and this administrative regulation.

      Section 2. State Fund Mechanism for Financial Responsibility. (1) The Petroleum Storage Tank Environmental Assurance Fund may be utilized as a mechanism to demonstrate financial responsibility in accordance with 40 C.F.R. 280.101 if the following requirements are satisfied:

      (a) A person owns or operates a petroleum storage tank or tanks;

      (b) The owner or operator certifies financial responsibility for the petroleum storage tank(s) in accordance with KRS 224.60-120; and

      (c) The owner or operator registers the petroleum storage tank with the cabinet in accordance with 401 KAR 42:020.

      (2) An owner or operator shall be deemed by the cabinet to have satisfied the requirements of subsection (1) to utilize the Petroleum Storage Tank Environmental Assurance Fund to meet the financial responsibility requirements of 40 C.F.R. 280.101 if:

      (a) A Certificate of Registration and Reimbursement Eligibility has been issued to the owner or operator of a petroleum storage tank in accordance with 401 KAR 42:020; and

      (b) The cabinet has determined that the owner or operator qualifies for participation in the Financial Responsibility Account, or the Petroleum Storage Tank Account through compliance with 401 KAR 42:030 and 42:040.

      (3) Federal and state-owned facilities shall not be eligible to utilize the state fund mechanism.

Section 3. Certification of Financial Responsibility. An owner or operator shall certify, through signature on the UST Facility Registration Form DEP 7112, (January 2006), required in 401 KAR 42:020, that financial responsibility has been established and maintained in accordance with Section 1 of this administrative regulation. (17 Ky.R. 1646; eff. 12-19-90; Am. 22 Ky.R. 335; eff. 11-14-95; 32 Ky.R. 2127; 33 Ky.R. 743; eff. 9-13-2006.)