Eligibility, Applying and Reimbursement

This page addresses reimbursement questions from the Underground Storage Tank Branch (USTB) funding source, the Petroleum Storage Tank Environmental Assurance Fund (PSTEAF), maintained by the Claims and Payment Section.

How do I apply for pollution liability insurance from the USTB?
How much does it cost to obtain pollution liability insurance from the USTB?
What are the eligibility requirements for the Financial Responsibility Account (FRA) or the Petroleum Storage Tank Account (PSTA)?
How do I apply for reimbursement from the FRA or the PSTA?
Are all my costs reimbursable?
How do I apply for the Small Owner Tank Removal Account (SOTRA) from the USTB?
What are the eligibility requirements for SOTRA?

How do I apply for pollution liability insurance from USTB?

To become eligible to participate in the Financial Responsibility Account (FRA) or the Petroleum Storage Tank Account (PSTA), the owner or operator of a facility who has regulated petroleum underground storage tank (UST) systems that contain motor fuel must complete a UST Facility Registration Form (DEP 7112/07/07) indicating “Other” on the form, and state applying for PSTEAF coverage.

Owners and operators meeting the criteria for FRA coverage will receive a Certificate of Registration and Reimbursement Eligibility (CORRE) for each facility meeting the eligibility requirements. To maintain eligibility, the owner or operator must comply with eligibility requirements.

Those not meeting eligibility requirements for coverage under the FRA will be placed into the PSTA. The owner or operator will be notified in writing of the account placement as well as any deficiencies noted in the review and what can be done to correct the deficiencies.

For more information about eligibility for the FRA and PSTA accounts, contact Michele Westerfield at 502-564-5981 or 800-928-7782.

How much does it cost to obtain pollution liability insurance?

There is no cost or fee required for coverage. However, there are deductibles (entry levels) that may apply if you have a release that requires cleanup. These deductibles are based upon the total number of tanks you own or operate: 1-5 tanks have a $500 deductible; 6-10 tanks have a $2,500 deductible and 11 or more tanks have a $12,500 deductible. In some cases, the deductible will be waived for facilities requiring corrective action that had their tank removal reimbursed under the Small Owner Tank Removal Account (SOTRA) and for those facilities where a site check was requested after Sept. 13, 2006, and lab analysis do not support the need for corrective action.

For more information about the deductibles (entry levels) for the FRA and PSTA accounts, contact Louanna Tracy or Dennis Giles at 502-564-5981 or 800-928-7782.

What are the eligibility requirements for the FRA or the PSTA Accounts?

The eligibility requirements for participation in the Financial Responsibility Account (FRA), pursuant to 401 KAR 42:250 Section 4 (1), include the following:

Register the tanks with the cabinet in accordance with 401 KAR 42:020 prior to the release requiring corrective action;
Have release detection as required by 401 KAR 42:040. A facility permanently or temporarily closed in compliance with 401 KAR 42:070 shall have maintained compliance with release detection requirements prior to the permanent or temporary closure of the system;
Not have a release for which corrective action is required at the time of certification;
Have corrosion protection as required by 401 KAR 42:030;
Have paid all annual fees required pursuant to KRS 224.60-150;
Have tank(s) in operation on or after the compliance dates set forth in 401 KAR 42:090 and be mandated by 401 KAR 42:090 to demonstrate financial responsibility as specified under 401 KAR 42:090;
Have demonstrated to the cabinet financial responsibility in the amount of the entry level established in 401 KAR 42:250 Section 5 and;
Have overfill and spill prevention as required by 401 KAR 42:030 for those facilities in operation after Dec. 22, 1998.

The eligibility requirements for participation in the Petroleum Storage Tank Account (PSTA), pursuant to 401 KAR 42:250 Section 4 (2), include the following:

Registered the tanks with the cabinet in accordance with 401 KAR 42:020;
Have paid all annual fees as required by KRS 224.60-150;
Submit a completed UST facility Registration Form to the cabinet to certify eligibility for the PSTA;
Have filed a Notice of Intent form with the cabinet to permanently close the underground storage tank(s) at the facility (if applicable) to comply with the requirement of 401 KAR 42:070 and;
Reported a release to the cabinet as required by KRS 224.01-400 and KRS 224.01-405.

For questions about FRA and PSTA eligibility requirements, contact Louanna Tracy or Dennis Giles at 502-564-5981 or 800-928-7782.

How do I apply for reimbursement from the FRA or the PSTA?

The four steps in applying for coverage, applying for reimbursement, approval of funding for corrective action activities (as directed by the cabinet) and the reimbursement of those related costs are addressed below:

Step 1 – The owner and/or operator of a regulated petroleum UST system submits a completed UST Facility Registration Form to the UST Branch’s Administrative Section. If the owner/operator is determined eligible to receive pollution liability insurance, he/she is issued a CORRE indicating the account placement. Once an owner/operator is placed into either the FRA or PSTA, the owner/operator is eligible to submit an Application for Assistance.

Step 2 – Application for Assistance. Either the owner or the operator (not both entities) whose UST system has had a release into the environment (as determined by laboratory analytical) or at the written direction from the cabinet for the performance of a site check after Sept. 13, 2006, and is seeking reimbursement for those costs can submit a completed Application for Assistance form to the UST Branch’s Claims and Payment Section for review. Read the application to determine other information needed to be considered a complete application. Correction of deficiencies may be required for some applications.

Step 3 – Approval of Monies. The UST Branch will issue directives for work to be completed which will either have a pre-established fixed cost amount associated with the directive or will require the submittal of a cost estimate on the appropriate reimbursement worksheet (as listed in the directive letter). The pre-established fixed cost will be itemized on the appropriate worksheet and attached to the written directives and will serve as an obligation and guarantee of payment. For those directives issued without a pre-established fixed cost, once the required cost estimate is submitted on the appropriate reimbursement worksheet and reviewed in accordance with 401 KAR 42:250, the applicant and the certified contractor will receive a letter identifying the amount approved and will serve as an obligation and guarantee of payment. Once the approval of monies has been received by either method the work directed may begin.

Step 4 – Reimbursement. The applicant shall submit the appropriate reimbursement worksheet and documentation, along with the required report. If the directive issued included a pre-established fixed cost with an attached worksheet, the worksheet shall be returned with the signature page completed and will serve as a claim request. For directives that are issued without a pre-established fixed cost, pre-approval of those costs shall first be obtained. The claims associated with the non-fixed cost directives require the Claim Request Form, Invoice Listing Form, Payment Verification Affidavit, Payment Waiver Form, the required worksheet and the required backup documentation in accordance with the instructions associated with the specific worksheet. Once the required report is submitted and deemed technically complete (and all required documentation has been submitted), the cabinet will process the payment. Once the reimbursements are approved by the cabinet, the applicant should receive a check from the Finance and Administration Cabinet within 10 to 14 days.

Are all my costs reimbursable?

For pre-established fixed cost directives associated with site investigative work, the amount listed on the worksheet is the amount that will be reimbursed once the worksheet is submitted and the report is deemed technically complete. For those directives issued without a pre-established fixed cost directive that received cost pre-approval, the amount that will be reimbursed is the based on the work performed and the required backup documentation in accordance with the instruction sheet for that specific worksheet. Regulations stipulate maximum levels of reimbursement for personnel and certain work tasks. Contractors certified for reimbursement of corrective action work should be familiar with expenses reimbursable by the UST Branch. If your contractor charges for items that are not reimbursable or charges more than the cost regulations allow, you will be responsible for paying those costs.

Some of the Corrective Action Costs Eligible for Reimbursement include:

Site checks and/or testing at a facility to determine tightness of tanks and lines in response to a suspected release upon written direction of the cabinet;
Performance of corrective action as defined in KRS 224.60-115(4) due to a release of motor fuel from a regulated petroleum storage tank system pursuant to the written direction of the cabinet;
Necessary laboratory services to analyze samples taken at a facility as part of the site check, site investigation, corrective action, or maintenance of the corrective action system at the written direction of the cabinet;
Restoration or replacement of a well, spring or cistern used by humans for personal, commercial or agricultural purposes at the written direction of the cabinet;
Removal, treatment, and disposal of contaminated liquids and soils resulting from corrective action;
The cost of material purchased to perform corrective action as defined in KRS 224.60-115(4);
The cost of implementation of corrective action technology such as soil venting, bioremediation, or groundwater treatment system, as identified in a corrective action agreement approved by the cabinet for the facility;
The cost of replacing blacktop or concrete (if removal was necessary to perform the corrective action);
An attorney fee integral to the performance of corrective action beyond the Point of Compliance of a facility, such as preparation of a property access agreement as required by the cabinet;
Other costs as identified in a corrective action agreement approved by the cabinet for the facility; and
A purchase of capital equipment, for the purpose of implementing a corrective action agreement, in excess of $1,000 if the lease or rental for the equipment will exceed the purchase price in accordance with 401 KAR 42:250 Section 11.

How do I apply for SOTRA?

Pursuant to 401 KAR 42:330, any applicant seeking reimbursement from the Small Owner Tank Removal Account (SOTRA) must be approved by the cabinet prior to the removal of a regulated petroleum UST system. A completed SOTRA Application for Assistance form must be filed a minimum of 45 days prior to the anticipated date of tank removal and must be approved by the cabinet in writing prior to the removal in order to be eligible for reimbursement. There are no deductibles associated with the SOTRA program.

For more information concerning applying to the SOTRA, please contact Dennis Giles or Louanna Tracy at 502-564-5981 or 800-928-7782.

What are the eligibility requirements for SOTRA?

The Small Owner Tank Removal Account (SOTRA) was established to assist "small owners."

Eligible "small owners" meet the following criteria in accordance with 401 KAR 42:330 Section 2:

The petroleum storage tank owner demonstrates full or partial interest in ten (10) or fewer tanks;
Shall have an average total income for the last five (5) years of $100,000 or less;
The tanks are located on a facility that is or was involved in the retail sale or wholesale distribution of motor fuel;
The tanks are registered with the Division of Waste Management, pursuant to KRS 224.60-105 and 401 KAR 42:020;
The retail sale or wholesale distribution of motor fuel at the facility from a UST system or systems permanently cease upon permanent closure of the tanks;
All known tanks at the facility are being removed or closed in place;
The owner has owned the tanks for more than one (1) year prior to the date of the application for reimbursement from the account;
A written notice shall be submitted to the applicable regional office at least fourteen (14) calendar days prior to commencement of the permanent closure of the petroleum storage tank to maintain eligibility for reimbursement;
Federal and state-owned facilities are not eligible for reimbursement from the Small Owners Tank Removal Account

For questions concerning the SOTRA eligibility requirements, contact Dennis Giles at 502-564-5981 or 800-928-7782.