[30 Pa.B. 6593]
[Continued from previous Web Page] § 977.17. Security for payment of gallon fee.
(a) The value of the security posted by a distributor shall be calculated by multiplying the gallon fee as set forth in § 977.12 (b)(ii) (relating to owner and operator fees) by the number of gallons of regulated substance (except heating oil and diesel fuel products) distributed over the 3-month period in the past calendar year in which the distributor distributed the greatest volume of regulated substance.
(b) The Fund will accept only payment bonds issued by surety companies licensed to do business in this Commonwealth.
(c) Negotiable securities of the United States or the Commonwealth may be used in lieu of a surety bond if the face value of the security is not less than the amount of the security required. The securities shall be held by the State Treasurer.
(d) Bank letters of credit submitted as collateral shall be subject to the following conditions:
(1) The letter of credit shall be a standby or guarantee letter of credit issued by a Federally insured or equivalently protected bank or banking institution authorized to do business in this Commonwealth.
(2) The letter of credit shall be irrevocable and shall be so designated. The letter of credit shall name the Fund as the beneficiary and shall be payable to the Fund. The Fund may accept a letter of credit for which a limited time period is stated if the following conditions are met and are stated in the letter:
(i) The letter of credit is automatically renewable for additional time periods unless the bank gives at least 90 days prior written notice to both the Fund and the owner or operator, of its intent to terminate the letter of credit at the end of the current time period.
(ii) The Fund may draw upon the letter of credit before the end of its time period, if the distributor is required to post security under § 977.16 (relating to posting and collecting security) and has failed to replace the letter of credit with other acceptable means of compliance in accordance with section 215 of the Oil and Gas Act (58 P. S. §§ 601.215) within 30 days of the bank's notice to terminate the letter of credit.
(iii) A distributor will notify the Fund within 30 days of the bank's notice to terminate the letter of credit.
(3) The letter of credit shall be governed by the Uniform Custom and Priorities for Accounting Credits, International Chamber of Commerce, Publication Number 400 (1983 edition), and the laws of the Commonwealth, including 13 Pa.C.S. § 5101 (relating to letters of credit).
(4) The Fund will not accept a letter of credit from a bank, which has failed or refused to pay, in full, on a letter of credit previously submitted as collateral to the Fund.
(5) The Fund will not accept a letter of credit that contains rights of set-off, or liens in favor of the issuing bank.
(e) If the Fund collects an amount under the letter of credit in excess of the fees due, following failure of the distributor to replace the letter of credit after demand by the Fund, the Fund will hold the excess proceeds as cash collateral. The distributor may obtain the excess after the distributor has submitted, and the Fund has approved, a bond or other form of security posted in compliance with this section.
§ 977.18. Capacity fee payment procedure.
(a) The Fund may charge the capacity fee to an owner or operator.
(b) The capacity fee shall be calculated as set forth in § 977.12(d) (relating to owner and operator fees).
(c) An owner or operator shall pay, on or before the due date indicated on the statement, the full amount of the capacity fee or a monthly payment of 1/12 of the total capacity fee due.
§ 977.19. Certified company fees.
(a) Maximum fee. The Board may charge and modify fees, not to exceed the maximum fees established in this section, based on an annual actuarial review. The Fund shall publish the annual fee in the Pennsylvania Bulletin at least 30 days prior to the effective date of the scheduled fee change.
(b) Certified company fee. Certified companies may be required to pay to the Fund a certified company fee not to exceed a maximum fee of $2,000 per year.
(c) Certification fee. Certified companies which perform tank-handling activities on a UST as described in this subsection, may be required to pay to the Fund an annual certification fee for each of the certifications held for each of the certified installers, based on the certification information maintained by the DEP:
(1) Installation and modification certification (UMX) fee not to exceed a maximum fee of $100.
(2) Removal certification (UMR) fee not to exceed a maximum fee of $50.
(3) Tightness Tester certification (UTT) fee not to exceed a maximum fee of $25.
(4) Storage tank liner certification fee (TL) not to exceed a maximum fee of $100.
(d) Activity fee. A per tank activity fee may be assessed on all activities on a UST or a HOT. The tank installer must complete an activity fee form for each activity. These forms and the activity fees shall be submitted to the Fund 30 days prior to the commencement of the activity. The fees are as follows:
(1) Installation Activity Fee not to exceed a maximum fee of $100.
(2) Major Modification Activity Fee not to exceed a maximum fee of $100.
(3) Removal Activity Fee not to exceed a maximum fee of $100.
§ 977.20. Certified company fee, certification fee and activity fee payment procedures.
(a) Certified company fee and certification fee payment procedures.
(1) This section applies to a certified company that performs installations, major modifications, or removals of a UST or a HOT.
(2) A certified company shall pay the certified company fee and the certification fee to the Fund on or before the due date on the statement.
(3) The assessed fees shall be calculated as set forth in § 977.19 (relating to certified company fees).
(4) A certified company shall pay, by the due date indicated on the statement, the full amount of the fee or a monthly payment of 1/12 of the total certified company fee and certification fee.
(b) Activity fee payment procedures.
(1) This section applies to a certified company that performs installations, major modifications, and removals of a UST or a HOT.
(2) The certified company shall submit any required installation, modification and removal fees on a form provided by the Fund for each facility where the certified company is performing an activity.
(3) The certified company shall submit the form and activity fee at least 30 days prior to the inception of the tank-handling activity.
(4) The activity fee shall be calculated as set forth in § 977.19(d) (relating to certified company fees).
§ 977.21. Penalty for late payment of fees.
Failure or refusal of a participant to pay the fee or a part of the fee by the date established by the Board for the payment of fees may result in a penalty of 5% of the amount due which shall accrue on the first day of delinquency. Thereafter, on the last day of each month during which a part of a fee or a prior accrued penalty remains unpaid, an additional 5% of the then unpaid balance shall accrue in accordance with section 705(e) of the act (35 P. S. § 6021.705(e)).
§ 977.22. Fee dispute procedure.
(a) General disputes. The participant or a distributor that disputes the amount of an assessed fee may obtain review by filing a complaint with the Fund's Executive Director following the procedure established in § 977.61 (relating to dispute procedures).
(b) Change in tank ownership. If a change in the ownership of a UST occurs and the prior owner failed to pay assessed fees, the current owner may file an affidavit supplied by the Fund to establish date of ownership. The Fund may waive unpaid assessed fees up to and including the date of purchase of a UST. Coverage for releases occurring on or after the date of ownership may be considered for Fund coverage, based on the eligibility requirements as found in § 977.31 (relating to eligibility requirements).
§ 977.23. Recordkeeping responsibilities.
(a) An owner or operator shall maintain for 3 years documents necessary to verify the payment of the gallon, capacity, and tank fees. At a minimum, these records shall include:
(1) Distributor delivery invoices.
(2) Financial records documenting payment of fees.
(3) Regulated substance inventory documents.
(4) Copies of the statement for a gallon, capacity, or tank fee.
(b) A distributor shall maintain for a minimum of 3 years documents necessary to verify the number of gallons of regulated substances delivered into a UST. Records shall be maintained by customer account and shall include at a minimum:
(1) Distributor delivery invoices.
(2) Financial records, by customer account, documenting payment of the gallon fee.
(3) Financial records pertaining to remittance of the gallon fee by distributor.
(4) Regulated substance inventory records.
(5) Copies of the Fund's gallon fee statement.
(c) A certified company shall maintain for 3 years documents necessary to verify the company certification and the number of installer certifications held by the employes of the company for the installation, major modification, and removal of a UST or a HOT. This documentation shall include, at a minimum:
(1) Copies of DEP company certification and tank installer certificates.
(2) Financial records documenting payment of fees to the Fund.
(d) A certified company shall maintain documents necessary to verify the number of installations, modifications, and removal activities performed on a UST or a HOT. This documentation shall include, at a minimum:
(1) Copies of the tank activity report form originally submitted to DEP.
(2) Financial records documenting payment of fees to the Fund.
(e) Documents identified in this section shall be made available to the Fund upon request.
§ 977.24. Audit of records.
The Fund may require audits of the participant or a distributor to protect the rights and responsibilities of the Fund.
Subchapter C. COVERAGE AND CLAIMS PROCEDURES Sec.
977.31. Eligibility requirements. 977.32. Participant cooperation. 977.33. Fund coverage and exclusions. 977.34. Claims reporting. 977.35. Third-party suit. 977.36. Corrective action payments. 977.37. Priority of payment. 977.38. Primary coverage. 977.39. Claim dispute procedures. 977.40. Subrogation for corrective action cost. § 977.31. Eligibility requirements.
(a) To be eligible for Fund coverage, the participant shall meet the following eligibility requirements as set forth in section 706 of the act (35 P. S. §§ 6021.706):
(1) The participant is potentially liable for the corrective action costs, bodily injury or property damage.
(2) The current fee required under section 705 of the act (35 P. S. § 6021.705) has been paid.
(3) A UST or HOT has been registered in accordance with the requirements of section 503 of the act (35 P. S. § 6021.503).
(4) The participant has obtained the appropriate permit or certification, if required under sections 108, 501 and 504 of the act (35 P. S. §§ 6021.108, 6021.501 and 6021.504).
(5) The release that is the subject of the claim occurred after the date established by the Board for payment of the fee required by section 705(d) of the act (35 P. S. § 6021.705(d)). This date is established as February 1, 1994.
(6) The participant cooperates, as defined in § 977.32 (relating to participant cooperation), with the Fund in its eligibility determination process, claims investigation, the defense of any suit, the pursuit of a subrogation action and other matters as requested.
(7) The participant has met the notification requirements of § 977.34 (relating to claims reporting).
(8) If the claimant is a certified company, the company conducted a tank-handling activity on a UST or a HOT from which the release occurred.
§ 977.32. Participant cooperation.
(a) At a minimum, the participant shall cooperate by:
(1) Providing all information requested by the Fund including tank system design documents, inventory records, tank tightness test results, contracts, and other information pertinent to a claim within 30 days of the request of the Fund, or additional time as set by the Fund.
(2) Permitting the Fund or its agent to inspect, sample, and monitor on a continuing basis the property or operation of the participant.
(3) Providing access to interview employes, agents, representatives, or independent contractors of the participant; and to review any documents within the possession, custody or control of the participant concerning the claim.
(4) Submitting, and requiring employes, consultants, and other interested parties subject to its control to submit, to an examination under oath upon the request of the Fund.
(5) Obtaining competitive proposals for work to be performed when requested by the Fund.
(b) The participant shall cooperate in all respects with the Fund, its investigators, attorneys, and agents during the investigation and resolution of a claim, including the defense of a suit, as provided in § 977.35 (relating to third-party suit) and any subrogation action as provided in § 977.40 (relating to subrogation for corrective action cost).
(c) Lack of cooperation by the participant with the Fund or its investigators, attorneys, or agents may result in denial of the claim or cessation of further payments on a claim.
§ 977.33. Fund coverage and exclusions.
(a) Fund coverage.
(1) Corrective action. The Fund shall indemnify an eligible owner or operator for up to the available coverage limit, for reasonable and necessary corrective action costs.
(2) Bodily injury or property damage. The Fund shall indemnify the eligible participant, up to the available coverage limit, for bodily injury and property damage.
(i) The Fund may defend any suit against the eligible participant. The cost of this defense does not reduce Fund coverage limits.
(ii) Punitive or exemplary damages awarded against the participant as a result of a suit are excluded from Fund coverage.
(3) Deductible. Payment of a claim for corrective action costs shall be subject to a deductible in an amount not less than $5,000 per tank per occurrence for each UST or HOT that contributed to the release. If an eligible claim for bodily injury or property damage results from the release, an additional deductible per tank per occurrence in an amount not less than $5,000 applies to all claims in addition to the deductible for corrective action. A certified tank installer is subject to one deductible per tank per occurrence. The Fund in its discretion may pay the entire claim and seek reimbursement of the applicable deductible from the participant. The Fund shall publish the deductibles in the Pennsylvania Bulletin annually.
(4) Limits of liability. Payment of corrective action costs and bodily injury and property damage claims are subject to the following limits of liability:
(i) Payments for reasonable and necessary corrective action costs, and bodily injury or property damage may not exceed a total of $1 million per tank per occurrence and may not exceed the annual aggregate limit.
(ii) Payments may not exceed:
(A) An annual aggregate of $ million for each owner and operator of 100 or less UST or an owner or operator of 100 or less HOT.
(B) An annual aggregate of $2 million for each owner or operator of 101 or more UST or an owner or operator of 101 or more HOT.
(iii) For the purpose of determining coverage limits, any release, whether sudden, accidental, intermittent or continuous will be considered one occurrence.
(iv) The Fund will only reimburse an owner or operator for reasonable and necessary corrective action costs.
(v) Damages paid to a third party for bodily injury or property damage may not exceed the amount of damages awarded by a court of competent jurisdiction or the amount agreed to by the Fund in settlement of the claim or suit resulting from a release. Under no circumstances will the Fund pay any amount in excess of the Fund's limit of liability as found in paragraph (4).
(b) Exclusions. Fund coverage does not apply to the following:
(1) Any release caused in whole or in part by the intentional act of the participant.
(2) Any damages which the participant is legally obligated to pay solely by reason of the assumption of liability in a contract or agreement unless the participant has paid all current and past-due fees to the Fund as required by section 705(e) of the act (35 P. S. § 6021.705(e)), and the release was not discovered or known by the participant or by any previous participant, prior to the payment of any past due fees.
(3) Any portion of a release which occurred before February 1, 1994.
(4) Any claim made against a certified company before the date of election of coverage.
(5) Any claim made against the participant for a release discovered before any required fees are paid.
(6) Default judgments.
§ 977.34. Claims reporting.
The participant shall notify the Fund within 60 days after the confirmation of a release under §§ 245.304 and 245.305 (relating to investigation of suspected releases; and reporting releases).
§ 977.35. Third-party suit.
(a) Suit. In addition to the requirements of § 977.32 (relating to participant cooperation), the participant shall assist the Fund in its defense of a suit. The participant shall forward to the Fund all materials including:
(1) Technical reports, laboratory data, field notes, or any other documents gathered by or on behalf of the participant to abate a release or to implement corrective action.
(2) Documentation of release detection methods, such as tank and line tightness tests or inventory records to verify that a release has taken place.
(3) Correspondence between the participant and any other persons relating to the release or claim that is the subject of the suit
(4) Demands, summons, notices, or other processes or papers filed with, in or by a court of law, administrative agency, or an investigative body relating to the release or claim.
(5) The expert reports, investigations and data collected by experts retained by the participant relating to the release or claim.
(6) Other information developed or discovered by the participant concerning the release or claim.
(b) Legal defense undertaken by the Fund. The Fund may settle or defend any claim for bodily injury or property damage. The Fund may assign legal counsel to defend any suit brought against the participant by a third party. The Fund will not reimburse legal fees for any firm not assigned by the Fund.
(c) Defense and exhaustion of limits. The Fund is not required to pay defense costs after the limit of liability is exhausted.
§ 977.36. Corrective action payments.
(a) The Fund shall make payments for reasonable and necessary corrective action costs to an owner or operator, unless a signed Authorization to Pay Form provided by the Fund has been submitted designating another person to receive Fund payments.
(b) Time and expense charges for remediation invoices shall be submitted to the Fund for all work performed. For invoices to be paid by the Fund, the invoices must be fully documented to include:
(1) Time sheets for personnel and equipment.
(2) Statements of work performed.
(3) Receipts or other documentation for expendable supplies and subcontractor supplies.
(4) A list of tests performed with costs and results for any laboratory analyses.
(5) The owner, operator or remediation contractor shall supply rate schedules, fees for service schedules, and contracts with consultants.
(6) All subcontractor invoices.
(c) An owner or operator may request that the Fund employ an alternative remediation payment option to include pay for performance type contracts.
§ 977.37. Priority of payment.
The Fund may prioritize reimbursements. The prioritization may take into account corrective action costs and the impact of the release on human health.
§ 977.38. Primary coverage.
(a) Primary coverage. The Fund provides primary coverage for corrective action costs and eligible claims for personal injury and property damage due to a release from a UST or a HOT.
(b) Combined limits. When the Fund determines a certified company is responsible for the release that is the subject of the claim, the coverage of a certified company will be exhausted before the coverage of an owner or operator of a UST or a HOT is applied.
§ 977.39. Claim dispute procedures.
The participant, or a distributor, that disputes a determination of the Fund may obtain a review of the determination by filing an appeal with the Executive Director of the Fund by following the procedures established in § 977.61 (relating to dispute procedures).
§ 977.40. Subrogation for corrective action cost.
(a) The Fund, after any payment, shall be subrogated to all of the rights of recovery of an owner or operator against any person for the costs of remediation.
(b) If an owner or operator does not comply with the requirements of § 977.32 (relating to participant cooperation), the Fund may deny any further payments on a claim.
Subchapter D. HEATING OIL TANK OPTIONAL PROGRAM Sec.
977.51. Election requirements. 977.52. Coverage period. 977.53. Cancellation of coverage. 977.54. Dispute procedures. § 977.51. Election requirements.
To elect coverage from the Fund, a HOT owner or operator shall:
(1) Complete and submit an application form available from the Fund.
(2) Provide the Fund with a copy of a tank tightness test utilizing an EPA approved testing system, indicating a satisfactory result. The test must have been completed within the 30-day period preceding the application date.
(3) Submit a fee determined by the Fund not to exceed a maximum of $100. The fee will be credited to the applicant's account if the application is approved or returned if the application is rejected.
(4) Pay any fee established in § 977.11 (relating to Fund fees).
§ 977.52. Coverage period.
If the Fund determines that the requirements set forth in § 977.31 (relating to eligibility requirements) have been satisfied, coverage by the Fund will be effective from the date the application is received. A HOT owner or operator will have continuous coverage provided all fees are paid within 30 days of the due date indicated on the statement provided by the Fund.
§ 977.53. Cancellation of coverage.
(a) A HOT owner or operator may cancel coverage by providing advance written notice to the Fund. Coverage will be terminated on the date notice is received by the Fund or on a later date as requested by the HOT owner or operator. Fee refunds shall be made on a pro-rata basis.
(b) The failure of a HOT owner or operator to remit fees within 30 days of the due date indicated on the statement will cause coverage to be canceled as of the due date. A fee is deemed paid on the date the payment is received by the Fund. Coverage may be reinstated as provided in section 705(e) of the act (35 P. S. § 6021.705(e)).
§ 977.54. Dispute procedures.
A HOT owner or operator who disputes a decision of the Fund may obtain review by filing a complaint with the Fund's Executive Director following the procedures set forth in § 977.61 (relating to dispute procedures).
Subchapter E. DISPUTE PROCEDURES Sec.
977.61. Dispute procedures. § 977.61. Dispute procedures.
(a) An appeal of a decision of the Fund shall be made in writing to the Executive Director of the Fund. The appeal must be received within 35 days of the mailing date of the Fund's decision. An appeal shall contain:
(1) The name and address of the appellant.
(2) A statement of the facts forming the basis of the complaint.
(3) Supporting material.
(b) An appeal of the Executive Director's decision shall be made in writing to the Board. The appeal must be received by the Board within 15 days of the mailing date of the decision. The appeal process shall be conducted in accordance with 1 Pa. Code Part II (relating to the General Rules of Administrative Practice and Procedure).
(c) An adjudication of the Board may be appealed in accordance with 2 Pa.C.S. § 702 (relating to appeals).
(d) To remain eligible for Fund coverage, disputed fees shall be paid in full during the pendency of an appeal.
(1) If a participant or a distributor prevails in the appeal, fees paid in excess of the amount determined to be due plus interest shall be refunded. Interest shall be computed at the rate determined by the Secretary of Revenue for interest payments for overdue taxes under section 806 of the Fiscal Code (72 P. S. § 806).
(2) Penalties authorized by the act or by § 977.21 (relating to penalty for late payment of fees) will be retroactive to the first day of delinquency.
[Pa.B. Doc. No. 00-2213. Filed for public inspection December 22, 2000, 9:00 a.m.]
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