Financial Responsibility and Installer Certification Grant Guidelines for States; Solid Waste Disposal Act, Subtitle I, as Amended by Title XV, Subtitle B of the Energy Policy Act of 2005, 4004-4007 [E7-1341]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 72, Number 18 (Monday, January 29, 2007)]
[Notices]
[Pages 4004-4007]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-1341]



[[Page 4004]]

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ENVIRONMENTAL PROTECTION AGENCY

[FRL-8274-2]


Financial Responsibility and Installer Certification Grant 
Guidelines for States; Solid Waste Disposal Act, Subtitle I, as Amended 
by Title XV, Subtitle B of the Energy Policy Act of 2005

AGENCY: Environmental Protection Agency.

ACTION: Notice of availability.

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SUMMARY: By this notice, the Environmental Protection Agency (EPA), 
Office of Underground Storage Tanks (OUST) is advising the public that 
on January 22, 2007 EPA issued the financial responsibility and 
installer certification grant guidelines and subsequently made the 
guidelines available on EPA's Web site. In this notice, EPA is 
publishing the financial responsibility and installer certification 
grant guidelines in their entirety. EPA developed the financial 
responsibility and installer certification grant guidelines as required 
by Section 9003(i)(2) of Subtitle I of the Solid Waste Disposal Act, as 
amended by Section 1530 of the Energy Policy Act of 2005.

DATES: On January 22, 2007, EPA issued and subsequently posted the 
financial responsibility and installer certification grant guidelines 
on EPA's Web site. EPA is notifying the public via this notice that the 
financial responsibility and installer certification grant guidelines 
are available as of January 29, 2007.

ADDRESSES: EPA posted the financial responsibility and installer 
certification grant guidelines on our Web site at: https://www.epa.gov/
oust/fedlaws/epact_05.htm#Final. You may also obtain paper copies from 
the National Service Center for Environmental Publications (NSCEP), 
EPA's publications distribution warehouse. You may request copies from 
NSCEP by calling 1-800-490-9198; writing to U.S. EPA/NSCEP, Box 42419, 
Cincinnati, OH 45242-0419; or faxing your request to NSCEP at 301-604-
3408. Ask for: Grant Guidelines To States For Implementing The 
Financial Responsibility And Installer Certification Provision Of The 
Energy Policy Act Of 2005 (EPA-510-R-07-002, January 2007).

FOR FURTHER INFORMATION CONTACT: Maricruz MaGowan, EPA's Office of 
Underground Storage Tanks, at magowan.maricruz@epa.gov or 703-603-7175.

SUPPLEMENTARY INFORMATION: On August 8, 2005, President Bush signed the 
Energy Policy Act of 2005. Title XV, Subtitle B of this act, titled the 
Underground Storage Tank Compliance Act of 2005, contains amendments to 
Subtitle I of the Solid Waste Disposal Act. This is the first federal 
legislative change for the underground storage tank (UST) program since 
its inception over 20 years ago. The UST provisions of the law 
significantly affect federal and state UST programs, require major 
changes to the programs, and are aimed at further reducing UST releases 
to our environment. Among other things, the UST provisions of the 
Energy Policy Act require that states receiving funding under Subtitle 
I comply with certain requirements contained in the law. OUST worked, 
and is continuing to work, with its partners to develop grant 
guidelines that EPA regional tank programs will incorporate into 
states' grant agreements. The guidelines will provide states that 
receive UST funds with specific requirements, based on the UST 
provisions of the Energy Policy Act, for their state UST programs.
    Section 9003(i) of Subtitle I of the Solid Waste Disposal Act, as 
amended by Section 1530 of the Energy Policy Act, requires EPA to 
require states that receive Subtitle I funding to impose measures to 
protect groundwater from contamination by USTs through use of either 
evidence of financial responsibility and installer certification or 
secondary containment. As a result of that requirement, EPA worked with 
states, tribes, other Federal agencies, tank owners and operators, UST 
equipment industry, and other stakeholders to develop draft financial 
responsibility and installer certification grant guidelines. In May 
2006, EPA released a draft of the financial responsibility and 
installer certification grant guidelines. EPA considered comments and, 
subsequently on January 22, 2007, issued the financial responsibility 
and installer certification grant guidelines. EPA will incorporate 
these guidelines into grant agreements between EPA and states. States 
receiving funds from EPA for their UST programs must comply with the 
UST provisions of the Energy Policy Act and will be subject to action 
by EPA under 40 CFR 31.43 if they fail to comply with the guidelines. 
(Please note that EPA issued the secondary containment grant guidelines 
in November 2006 and published a notice of availability in the November 
22, 2006 Federal Register [Volume 71, Number 225]. See EPA's Web site: 
https://www.epa.gov/oust/fedlaws/final_sc.htm to view the secondary 
containment grant guidelines.)
    Statutory and Executive Order Reviews: Under Executive Order 12866 
(58 FR 51735, October 4, 1993), this action is not a ``significant 
regulatory action'' and is therefore not subject to OMB review. Because 
this grant action is not subject to notice and comment requirements 
under the Administrative Procedure Act or any other statute, it is not 
subject to the Regulatory Flexibility Act (5 U.S.C. Section 601 et 
seq..) or Sections 202 and 205 of the Unfunded Mandates Reform Act of 
1999 (UMRA) (Pub. L. 104-4). In addition, this action does not 
significantly or uniquely affect small governments. Although this 
action does create new binding legal requirements, such requirements do 
not substantially and directly affect tribes under Executive Order 
13175 (63 FR 67249, November 9, 2000). Although this grant action does 
not have significant federalism implications under Executive Order 
13132 (64 FR 43255, August 10, 1999), EPA consulted with states in the 
development of these grant guidelines. This action is not subject to 
Executive Order 13211, ``Actions Concerning Regulations that 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 
28355, May 22, 2001), because it is not a significant regulatory action 
under Executive Order 12866. This action does not involve technical 
standards; thus, the requirements of Section 12(d) of the National 
Technology Transfer and Advancement Act of 1995 (15 U.S.C. Section 272 
note) do not apply. This action does not impose an information 
collection burden under the provisions of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.). The Congressional Review Act, 5 
U.S.C. 801 et seq., generally provides that before certain actions may 
take effect, the agency promulgating the action must submit a report, 
which includes a copy of the action, to each House of the Congress and 
to the Comptroller General of the United States. Since this final 
action will contain legally binding requirements, it is subject to the 
Congressional Review Act, and EPA will submit a report to Congress 
containing this final action prior to the publication of this action in 
the Federal Register.

Grant Guidelines to States for Implementing the Financial 
Responsibility and Installer Certification Provision of the Energy 
Policy Act of 2005

    U.S. Environmental Protection Agency; Office of Underground Storage 
Tanks; January 2007.


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Contents

Overview of Financial Responsibility and Installer Certification 
Guidelines

Why Is EPA Issuing These Guidelines?
What Is in These Guidelines?
When Do These Guidelines Take Effect?

Requirements for Financial Responsibility and Installer Certification

What Tanks Do These Guidelines Apply To?
How Does a State Implement These Guidelines?
What Requirements Must a State Program Include To Meet the Financial 
Responsibility and Installer Certification Provision?
How Is the Liability of Owners and Operators Affected?
What Enforcement Authority Must States Have for Financial 
Responsibility and Installer Certification?
How Will States Demonstrate Compliance With These Guidelines?
How Will EPA Enforce States' Compliance With the Requirements in 
These Guidelines?

For More Information About the Financial Responsibility and Installer 
Certification Grant Guidelines

Background About the Energy Policy Act of 2005

Overview of Financial Responsibility and Installer Certification 
Guidelines

Why Is EPA Issuing These Guidelines?

    The U.S. Environmental Protection Agency (EPA), in consultation 
with states and industry, has developed these grant guidelines to 
implement the financial responsibility and installer certification 
provision in Section 9003(i) of the Solid Waste Disposal Act (SWDA), 
enacted by the Underground Storage Tank Compliance Act, which is part 
of the Energy Policy Act of 2005 signed by President Bush on August 8, 
2005.
    Section 1530 of the Energy Policy Act amends Section 9003 in 
Subtitle I of the Solid Waste Disposal Act to add requirements for 
additional measures to protect groundwater from contamination. State 
underground storage tank (UST) programs that receive funding under 
Subtitle I must meet, at a minimum, one of the following:
    1. Evidence Of Financial Responsibility And Certification--A person 
that manufactures an underground tank or piping for an underground 
storage tank system or installs an underground storage tank system must 
maintain evidence of financial responsibility under Section 9003(d) of 
Subtitle I in order to provide for the costs of corrective actions 
directly related to releases caused by improper manufacture or 
installation unless the person can demonstrate themselves to be already 
covered as an owner or operator of an underground storage tank under 
Section 9003, Subtitle I. In addition, underground storage tank 
installers must: be certified or licensed; have the installation 
certified or approved; install the underground storage tank system 
compliant with a code of practice and in accordance with the 
manufacturer's instructions; or use another method determined to be no 
less protective of human health and the environment.
    2. Tank And Piping Secondary Containment--Each new or replaced 
underground tank, or piping connected to any such new or replaced tank, 
that is within 1,000 feet of any existing community water system or any 
existing potable drinking water well must be secondarily contained and 
monitored for leaks. In the case of a replacement of an existing 
underground tank or existing piping connected to the underground tank, 
the secondary containment and monitoring shall apply only to the 
specific underground tank or piping being replaced, not to other 
underground tanks and connected pipes comprising such system. In 
addition, each new motor fuel dispenser system installed within 1,000 
feet of any existing community water system or any existing potable 
drinking water well must have under-dispenser containment. These 
requirements do not apply to repairs meant to restore an underground 
tank, pipe, or dispenser to operating condition. (These requirements 
are described in the secondary containment guidelines, EPA 510-R-06-
001, published on November 15, 2006, https://www.epa.gov/oust/fedlaws/
final_sc.htm.)

What Is In These Guidelines?

    These guidelines describe the minimum requirements for financial 
responsibility and installer certification that a state's underground 
storage tank program must contain in order for a state to comply with 
statutory requirements for Subtitle I funding. These guidelines include 
definitions, requirements, criteria, and options for states choosing to 
implement the financial responsibility and installer certification 
provision.

When Do These Guidelines Take Effect?

    States receiving Subtitle I funding must implement either the 
financial responsibility and installer certification requirements 
described in these guidelines or the secondary containment requirements 
(EPA 510-R-06-001, published on November 15, 2006, https://www.epa.gov/
oust/fedlaws/final_sc.htm) by February 8, 2007.

Requirements For Financial Responsibility and Installer Certification

What Tanks Do These Guidelines Apply To?

    These guidelines apply to underground storage tank systems 
regulated under Subtitle I, except those excluded by regulation at 40 
CFR Part 280.10(b) and those deferred by regulation at 40 CFR 
280.10(c).

How Does A State Implement These Guidelines?

    A state implements these guidelines by:
     Requiring financial responsibility for all manufacturers 
of underground storage tanks or piping for an underground storage tank 
system that is installed in the state,
     Requiring financial responsibility and installer 
certification for all installers of underground storage tank systems in 
the state, and
     Developing processes and procedures for financial 
responsibility and installer certification provisions that, at a 
minimum, meet the requirements in these guidelines.
    The state must meet these guidelines by February 8, 2007. States 
may choose to be more stringent than these minimum requirements.

What Requirements Must A State Program Include To Meet The Financial 
Responsibility And Installer Certification Provision?

    State requirements must, at a minimum, include the following 
provisions:
A. Persons Affected
    State financial responsibility and installer certification 
requirements must clearly define who will be covered by them. At a 
minimum, the following persons must be covered:
     A person that manufactures an underground storage tank or 
piping for an underground storage tank system that is installed in the 
state (manufacturer).\1\
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    \1\ This requirement does not apply to manufacturing of 
underground ancillary equipment or containment systems.
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     A person that installs part or all of an underground 
storage tank system in the state (installer).
    The term ``underground storage tank system'' has the same 
definition as contained in 40 CFR 280.12.
    Manufacturers or installers that demonstrate to the state that they 
already maintain financial responsibility as the owner or operator of 
an underground storage tank do not need to maintain financial

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responsibility as a manufacturer or installer for that same underground 
storage tank.
    In states where a single installer of an underground storage tank 
system is identified by the state (e.g., for purposes of obtaining a 
permit), that person is the one required to maintain financial 
responsibility for that installation and meet the certification 
requirements described in these guidelines. Where there is not a single 
installer on record, states must define those who must maintain 
evidence of financial responsibility and meet the certification 
requirements described in these guidelines.
B. Amount and Scope of Coverage
    States must require a minimum of:
     $1 million per occurrence and $2 million annual aggregate 
for manufacturers to cover the costs of corrective action of a release 
from a regulated underground storage tank or piping, as appropriate, 
caused by improper manufacturing, and
     $1 million per occurrence and $2 million annual aggregate 
for installers to cover the costs of corrective action of a release 
from a regulated underground storage tank system due to improper 
installation.
    These limits do not include legal defense costs.
C. Length of Coverage
    States must require that:
     Manufacturers of tanks and piping maintain financial 
responsibility coverage for 30 years after installation, or until the 
underground storage tank system is permanently closed, in accordance 
with 40 CFR 280.71, whichever of these events comes first.
     Installers of underground storage tank systems maintain 
financial responsibility for ten years after installation, or until the 
underground storage tank system is permanently closed, in accordance 
with 40 CFR 280.71, or whichever of these events comes first.
    States may allow manufacturers and installers to obtain financial 
responsibility mechanisms with annual or other limited policy periods, 
as long as the manufacturer/installer maintains uninterrupted coverage 
for the full period required by these guidelines (30 years or ten 
years, as appropriate). These types of mechanisms are currently 
available. For example, insurance is currently available in various 
forms, including occurrence-based with annual policy periods or claims-
made with annual policy periods coupled with appropriate retroactive 
and extended reporting periods.
D. Allowable Mechanisms
    States may allow manufacturers and installers to use a variety of 
financial mechanisms as long as these mechanisms meet all of the 
following four criteria:
    1. The mechanism must be valid and enforceable;
    2. The mechanism must be issued by a provider that is licensed, 
registered, and/or otherwise qualified to provide such coverage in the 
state;
    3. The mechanism must pay for the costs of corrective action, up to 
the coverage limits described above, resulting from a release from a 
regulated underground storage tank or tank system caused by improper 
manufacture or installation, as appropriate; and
    4. The mechanism must require that the provider notify the insured 
and the state of cancellation or non-renewal of the mechanism, within a 
time frame determined to be reasonable by each state.
    These mechanisms may include the ones currently used by tank owners 
and operators to meet their financial responsibility requirements under 
40 part 280.94 to 280.103.
    However, not all of these current mechanisms may be appropriate for 
use in all instances to meet the new manufacturer and installer 
financial responsibility requirement, and some may have to be modified 
to meet this new requirement and be consistent with State regulations.
    In developing their requirements, states are encouraged to 
consider, as a model, provisions in 40 CFR part 280, Subpart H, that 
reasonably prevent gaps in coverage, such as in cases of cancellation 
or non-renewal by the financial responsibility provider, bankruptcy of 
the installer/manufacturer, or incapacity or liquidation of the 
financial responsibility provider.
    If a State chooses to use a State assurance fund to provide 
financial responsibility for manufacturers and/or installers, the state 
must develop a separate fund, independent from its existing state 
assurance fund (i.e., State fund used to provide financial 
responsibility for underground storage tank owners and operators). This 
requirement for a separate fund is to ensure the financial integrity of 
existing State assurance funds.
    If a State allows a mechanism that includes a deductible, the state 
must either require first dollar coverage or that manufacturers and 
installers maintain separate financial responsibility coverage for the 
deductible amount.
E. Notification and Recordkeeping
    State requirements must contain a provision or provisions requiring 
a system of notification and record keeping to and/or by the 
manufacturer, installer, owner, operator, and/or the State program. 
These provisions must reasonably address, at a minimum, the following 
questions:
     To whom and when must the evidence of financial 
responsibility be provided?
     How and where must manufacturers and installers maintain 
evidence of financial responsibility?
     If an underground storage tank system is permanently 
closed, in accordance with 40 CFR 280.71, who needs to notify the 
manufacturer/installer?
     If the manufacturer or installer files for bankruptcy or 
ceases operation for any other reason, whom should they notify and 
when?
     Any other question(s) that the state may deem appropriate.
F. Installer Certification
    The state must require that a person that installs an underground 
storage tank system meet one of the following:
     Be certified or licensed by the tank and piping 
manufacturer;
     Be certified or licensed by the EPA Administrator or a 
State, as appropriate;
     Have their underground storage tank system installation 
certified by a registered professional engineer with education and 
experience in underground storage tank system installation;
     Have their installation of the underground storage tank 
inspected and approved by the Administrator or the State, as 
appropriate;
     Be compliant with a code of practice developed by a 
nationally-recognized association or independent testing laboratory and 
in accordance with the manufacturer's instructions; or
     Be compliant with another method that is determined by the 
Administrator or a state, as appropriate, to be no less protective of 
human health and the environment.

    Note: These requirements are similar to the requirements already 
found under 40 CFR 280.20(d), 280.20(e), and 280.33(a). Most, if not 
all, state underground storage tank regulations already cover these 
requirements for new installations and repairs. However, States must 
also require that persons who replace or add equipment after the 
initial installation of the underground storage tank system meet the 
installer certification requirements.


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How is the Liability of Owners and Operators Affected?

    These provisions do not affect or alter the liability of any owner 
or operator of an underground storage tank system. Owners and operators 
must still comply with all applicable technical regulations. For 
example, they must comply with the requirements to report releases, 
perform necessary corrective action, and maintain financial 
responsibility to pay for corrective action and for compensation of 
third parties for bodily injury and property damage.

What Enforcement Authority Must States Have for Financial 
Responsibility and Installer Certification?

    At a minimum, States must have comparable enforcement authorities 
for violations of their financial responsibility and installer 
certification requirements as they have for violations of current 
underground storage tank requirements.

How Will States Demonstrate Compliance With These Guidelines?

    After February 8, 2007, the effective date of the financial 
responsibility and installer certification requirements, and before 
receiving future grant funding, States must provide one of the 
following to EPA:
     For a State that has met the requirements for financial 
responsibility and installer certification, the State must submit a 
certification indicating that the State meets the requirements in the 
guidelines.
     For a State that has not yet met the requirements for 
financial responsibility and installer certification, the State must 
provide a document that describes the State's efforts to meet the 
requirements. This document must include:

--A description of the State's activities to date to meet the 
requirements in the guidelines;
--A description of the State's planned activities to meet the 
requirements; and
--The date by which the State expects to meet the requirements.
    EPA may verify State certification of compliance through site 
visits, record reviews, or audits, as authorized by 40 CFR part 31.

How Will EPA Enforce States' Compliance With The Requirements In These 
Guidelines?

    As a matter of law, each State that receives funding under Subtitle 
I, which would include a Leaking Underground Storage Tank (LUST) 
Cooperative Agreement, must comply with certain underground storage 
tank requirements of Subtitle I. EPA anticipates State and Tribal 
Assistance Grants (STAG) funds will be available for inspection and 
other underground storage tank compliance activities. EPA will also 
condition STAG grants with compliance with these guidelines. Absent a 
compelling reason to the contrary, EPA expects to address noncompliance 
with these STAG grant conditions by utilizing EPA's grant enforcement 
authorities under 40 CFR part 31.43, as necessary and appropriate.

For More Information About The Financial Responsibility And Installer 
Certification Grant Guidelines

    Visit the EPA Office of Underground Storage Tanks Web site at 
https://www.epa.gov/oust or call 703-603-9900.

Background About The Energy Policy Act Of 2005

    On August 8, 2005, President Bush signed the Energy Policy Act of 
2005. Title XV, Subtitle B of this act (entitled the Underground 
Storage Tank Compliance Act) contains amendments to Subtitle I of the 
Solid Waste Disposal Act--the original legislation that created the 
underground storage tank (UST) program. These amendments significantly 
affect Federal and State underground storage tank programs, will 
require major changes to the programs, and are aimed at reducing 
underground storage tank releases to our environment.
    The amendments focus on preventing releases. Among other things, 
they expand eligible uses of the Leaking Underground Storage Tank 
(LUST) Trust Fund and include provisions regarding inspections, 
operator training, delivery prohibition, secondary containment and 
financial responsibility, and cleanup of releases that contain 
oxygenated fuel additives.
    Some of these provisions require implementation by August 2006; 
others will require implementation in subsequent years. To implement 
the new law, EPA and States will work closely with tribes, other 
Federal agencies, tank owners and operators, and other stakeholders to 
bring about the mandated changes affecting underground storage tank 
facilities.
    To see the full text of this new legislation and for more 
information about EPA's work to implement the underground storage tank 
provisions of the law, see: https://www.epa.gov/oust/fedlaws/nrg05_
01.htm.

    Dated: January 22, 2007.
Susan Parker Bodine,
Assistant Administrator, Office of Solid Waste and Emergency Response.
 [FR Doc. E7-1341 Filed 1-26-07; 8:45 am]
BILLING CODE 6560-50-P