Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
363.900 - 363.908,
42 U.S.C.
7545(o)(1)(D),
16 C.F.R.
306.12,
40 C.F.R.
80.27
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
363.902 requires the commissioner of the
department to implement and administer an inspection and testing program for
motor fuels. This administrative regulation establishes procedures to implement
and administer a motor fuels inspection and testing program.
Section 1. Definitions.
(1) "Administrative Stop-Sale Order" means a
motor fuel product is ordered removed from sale to the consumer due to a
violation not related to motor fuel quality standards and
specifications.
(2) "Alternative
fuel" means methanol, denatured ethanol, and other alcohols; mixtures
containing eighty-five (85) percent or more by volume of methanol, denatured
ethanol, and other alcohols with gasoline or other fuels; natural gas;
liquefied petroleum gas; hydrogen; coal derived liquid fuels; fuels, other than
alcohol, derived from biological materials.
(3) "Anti-Knock Index" or "AKI" means the
arithmetic average of the Research Octane Number (RON) and Motor Octane Number
(MON): AKI = (RON+MON)/2; this value is called by a variety of names, in
addition to anti-knock index, including: Octane rating, Posted octane, (R+M)/2
octane.
(4) "Automotive Fuel
Rating" means the automotive fuel rating required under the amended Automotive
Fuel Ratings, Certification and Posting Rule, 16 C.F.R. Part 306 . The
automotive fuel rating for alternative non-liquid automotive fuels is expressed
in 16 C.F.R. Part 309.
(5)
"Aviation gasoline" means a type of gasoline suitable for use as a fuel in an
aviation spark-ignition internal combustion engine.
(6) "Aviation turbine fuel" means a refined
middle distillate suitable for use as a fuel in an aviation gas turbine
internal combustion engine.
(7)
"Biodiesel" means a fuel comprised of, at least ninety-nine (99) percent by
volume, mono-alkyl esters of long chain fatty acids derived from vegetable oils
or animal fats, designated B- 100 or B-99.
(8) "Biodiesel blend" means hydrocarbon-based
diesel fuel blended with between six (6) and twenty (20) percent by volume
biodiesel and can contain fuel additives.
(9) "Biomass-based diesel" means a diesel
fuel substitute produced or co-produced from non-petroleum renewable resources
that meets the registration requirements for fuels and fuel additives
established by the Environmental Protection Agency under
42 U.S.C.
7545
§ (o) (1) (D), and includes fuel
derived from animal wastes, including poultry fats and poultry wastes, and
other waste materials, or from municipal solid waste and sludges and oils
derived from wastewater and the treatment of wastewater.
(10) "Distributor" means any carrier or
supplier that transports or stores, or causes the transportation or storage, of
motor fuel without taking title to or otherwise having ownership of the motor
fuel and without altering either the quality or quantity.
(11) "Ethanol flex fuel blends", commonly
known as "Flex Fuel", means gasoline-ethanol mixtures of more than fifty-one
(51) percent but not greater than eighty-three (83) percent ethanol by volume,
restricted for use as fuel in vehicles equipped with flexible-fuel spark
ignition engines.
(12) "EPA" means
the United States Environmental Protection Agency.
(13) "Gasoline-oxygenate blend" means a fuel
consisting primarily of gasoline blended with more than one (1) percent by
volume oxygenate, with more than three tenths (0.3) of a percent by volume
methanol; this includes gasoline-ethanol blends containing between one (1) and
fifteen (15) percent ethanol by volume.
(14) "Internal combustion engine" means a
device used to generate power by converting chemical energy bound in a fuel via
spark-ignition or compression-ignition engine combustion into mechanical work
to power a vehicle or other device.
(15) "License" means retail motor fuel
license.
(16) "License holder"
means the person, owner, or retailer or their delegated representative, that is
financially responsible for the cost of fees, fines, corrective actions, and
remediation of motor fuel quality, to ensure compliance with the Motor Fuel
Inspection and Testing Program pursuant to KRS 363.900-908.
(17) "Manifolded" means a piping connection
between two (2) or more tanks that allows fuel to freely flow from one tank to
another thus drawing product from multiple tanks.
(18) "Mid-level ethanol flex fuel blends"
means gasoline-ethanol mixtures containing between sixteen (16) and fifty (50)
percent ethanol by volume, restricted for use in flexible-fuel vehicles with
automotive spark-ignition engines.
(19) "Motor Fuel Quality Stop-Sale Order"
means a motor fuel product is ordered removed from sale to the consumer for
failure to conform to minimum specifications for the particular type, class,
and grade.
(20) "Oxygenate" means
an oxygen-containing organic compound, such as an alcohol, like ethanol, that
can be used as a fuel or fuel supplement.
(21) "Person" means an individual,
partnership, corporation, company, firm, association, or other business
entity.
(22) "Premium diesel" means
diesel fuel identified on retail dispensers with an additional term
incorporated directly in a product or grade name that differentiates the fuel
and implies the fuel provides properties that meet or exceed the minimum
requirements of the NIST Handbook 130 Uniform Engine Fuels and Automotive
Lubricants Regulation, §2.2.1 for Premium Diesel Fuel.
(23) "Product transfer documentation" means a
bill of lading, invoice, loading, delivery, or meter ticket, bill of sale, or
any combination of product delivery documentation meeting the requirements
established in this administrative regulation, that shall accompany a shipment
of motor fuel.
(24) "Racing
gasoline" means a specialty fuel typically used in non-road racing vehicles
that is generally of lower volatility and has a narrower boiling range and a
higher octane rating than gasoline or gasoline-oxygenate blends made for use in
conventional passenger vehicles.
(25) "Reid Vapor Pressure" or "RVP" means a
measure of the volatility of gasoline and gasoline-oxygenate blends. It is the
property of a liquid fuel that distinguishes its evaporation
characteristics.
(26) "Storage
tank" means a tank located either above or below ground used to hold motor fuel
intended for retail sale.
(27)
"V/L" means vapor to liquid ratio.
Section 2. Licensing and Renewal.
(1)
(a) A
person shall not offer for sale retail motor fuel to consumers without first
obtaining a license from the department.
(b) Operating a retail facility without a
retail motor fuel license shall result in the placement of an Administrative
Stop-Sale Order pursuant to a Level 6 Civil Penalty on all motor fuel offered
for sale.
(2) Each
retail facility motor fuel license shall be effective from the date of issuance
until January 31 of the following calendar year.
(3) After January 31, 2023, the department
shall provide the ability to apply for or renew retail motor fuel licenses
online.
(a) Paper applications and payments
shall no longer be accepted after January 31, 2023.
(b) Paper applications and payments submitted
after January 31, 2023 shall not be processed.
(4) A valid retail motor fuel license shall
be conspicuously displayed at the retail facility.
(5) A retail motor fuel license shall be
non-transferable.
(6) A retail
motor fuel license shall not be issued without an application having been first
submitted.
(a) An application shall be
complete upon submission to the department. An incomplete application shall not
be processed.
(b) Payment shall be
by money order or cashier's check, made payable to Kentucky State Treasurer and
mailed to the Kentucky Department of Agriculture, Division of Regulation and
Inspection, 107 Corporate Drive, Frankfort, Kentucky 40601; or debit or credit
through the department's online portal.
(c) An application without payment shall not
be processed.
(d) Payments received
without a completed application shall not be processed.
(e) The license holder shall affirm or modify
the availability of each motor fuel offered for sale with each license
application or renewal, including any motor fuel subject to a Declaration of
Non-Sale, as established in Section 9(10) of this administrative
regulation.
(f) The license holder
shall confirm that all retail dispensing devices used for retail sales shall
comply with
302
KAR 81:010.
(7) Unpaid fines assessed under the Motor
Fuel Quality Testing and Inspection Program shall be grounds for the denial of
license issuance.
(8) A license
holder shall not offer for sale a new motor fuel, or a motor fuel not
established in this administrative regulation or 302 KAR 79:012, without first
notifying the department in writing.
(9) A license holder shall notify the
department in writing within ten (10) consecutive days of any of the following
events:
(a) The Retail Facility
closes;
(b) The License Holder
information changes;
(c) A license
holder intends to permanently modify motor fuel products offered for sale or
storage tank allocation; or
(d) A
retail facility has a storage tank that has been entered into temporary
closure, in accordance with any law or regulation.
Section 3. Labeling.
(1) The label showing the minimum automotive
fuel rating shall meet the same specifications required in 16 C.F.R. Part 306
or 16 C.F.R. Part 309 .
(2)
(a) Retail dispensing devices shall display
the octane rating certified on the product transfer documentation to the
license holder of gasoline and gasoline-oxygenate blends being offered for sale
to consumers.
(b) At least one (1)
label on the face of the dispenser shall identify the octane rating.
(c) If two (2) or more gasolines or
gasoline-oxygenate blends with different octane ratings are sold from a single
dispenser, then a separate label for each octane rating shall be placed on the
face of the dispenser.
(3) Labels shall be placed conspicuously on
the dispenser and be in full view of consumers. Labels shall be placed as near
as reasonably practical to the price.
(4) During remediation the posted automotive
fuel rating may differ from that certified on the product transfer
documentation; otherwise, the posted automotive fuel rating shall meet or
exceed the certification on the product transfer documentation.
(5)
(a) In
addition to this regulation, for gasoline containing less than one (1) percent
by volume oxygenate a label shall be posted that contains words such as "neat,"
"conventional," "recreational," "alcohol free," "contains no ethanol," or other
language approved by the department.
(b) The label shall not contain the
following: "100 %" or "pure gasoline."
(6) Gasoline and gasoline-oxygenate blends
shall be labeled in accordance with 302 KAR 79:012, Section 1(5)(a) through
(c).
(7) Gasoline-ethanol blends
containing greater than ten (10) percent, up to and including fifteen (15)
percent, shall be labeled in accordance with the EPA dispenser labeling
requirements in
40 C.F.R.
1090.1510.
(8) No later than January 31, 2023, the
selector identifying Ethanol Flex Fuels containing at least fifty-one (51)
percent and no greater than eighty-three (83) percent ethanol by volume shall
be labeled as either:
(a) "Ethanol Flex
Fuel";
(b) "E-85";
(c) The numerical value representing the
percentage by volume ethanol in the fuel, rounded to the nearest multiple of
ten (10), followed by the percentage sign followed by the term
"Etha-nol";
(d) The phrase,
"Contains 51% - 83% Ethanol"; or
(e) Containing the requirements of
16 C.F.R.
306.12(4).
1. In addition to the requirements of
paragraphs (a) through (d) of this subsection, an additional label, meeting the
requirements of
16 C.F.R.
306.12(4), shall be in a
prominent place, as close to the selector as practical.
2. The label shall be positioned to clearly
identify which control the consumer will use to select the Ethanol Flex
Fuel.
3. Illustrations of Ethanol
Flex Fuel labels. Labels shall meet the specifications in this section and
shall look like these examples, except the black print shall be on the
appropriately colored orange background and theknock-out print within the black
band shall be orange.
(9) Aviation gasoline shall be identified by
the grade terms contained in the latest version of ASTM D6227, Standard
Specification for Unleaded Aviation Gasoline Containing a Non-hydrocarbon
Component, ASTM D7547, Standard Specification for Hydrocarbon Unleaded Aviation
Gasoline, and ASTM D910, Standard Specification for Leaded Aviation Gasolines
for the particular type and grade.
(10) Aviation turbine fuels shall be
identified as grades Jet A, Jet A-1, or Jet B.
(11) A racing gasoline label shall display an
AKI that meets or exceeds the certification on the product transfer
documentation.
(12) Diesel fuel
other than No. 2-D shall be identified on the dispenser by grade.
Section 4. Retail Product Storage
Identification.
(1) To facilitate retail motor
fuel product storage identification, each product storage tank or vessel shall
consist of a lid or access point, rim or fixed component, and collar or
permanent label.
(a) Each lid or access point
and rim or fixed component for any motor fuel product storage tank or vessel at
the retail level shall be permanently, plainly, and vividly marked to identify
the product contained inside by means of a description and color as designated
in the published API Recommended Practice 1637; Equipment Color-Symbols System,
Figures 1-3 and with a collar or permanent label.
(b) In addition to a collar or permanent
label, the lid or access point, and rim or fixed component shall be identified
by one of the following methods:
1. Paint the
lid or access point and rim or fixed component, then place a collar or
permanent label near or around the access point that states the name or
description of the product such as "Regular E10"; or
2. Paint the lid or access point and rim or
fixed component, then fit a collar permanent label inside the lid or access
point.
(2) If
a retail motor fuel product is not covered in the publication API Recommended
Practice 1637; Figures 1-3 Equipment Color Symbols System, the product shall be
permanently, plainly, and vividly marked to identify the product contained
inside.
(3) To identity motor fuel
products stored at the retail facility, a license holder shall place, in a
conspicuous location, a legible chart identifying any of the following, if
applicable:
(a) The location of each storage
tank in use;
(b) The type and grade
of motor fuel in each storage tank;
(c) Which, if any, storage tanks are
manifolded;
(d) Any dispenser
displaying a single product or grade on multiple buttons;
(e) The dispenser supplied by each storage
tank; and
(f) Any product subject
to a Declaration of Non-Sale.
Section 5. Product Transfer Documentation.
(1) The requirements of this section shall be
in addition to, and not in substitution of, other requirements established in
any federal statute or regulation.
(2) Products regulated by this administrative
regulation shall be accompanied by transfer documentation that detail
components of the motor fuel.
(3) A
legible paper copy, or digital representation, of the product transfer
documentation shall be made available to the department prior to the conclusion
of the inspection or upon request.
(4) With the exception of Section 7(2)(b) of
this administrative regulation, each license holder selling motor fuel shall
retain product transfer documentation for each grade at the location where the
motor fuel is transferred for at least the last five (5) deliveries.
(5) The license holder shall make available
to the department upon request product transfer documentation that shall state
for each type and grade of motor fuel, the:
(a) Type of motor fuel being
transferred;
(b) Automotive fuel
rating of the motor fuel being transferred;
(c) Name and address of the
transferor;
(d) Name and address of
the transferee;
(e) Volume of motor
fuel being transferred; and
(f)
Date of the transfer.
(6) Product transfer documentation shall
include:
(a) For gasoline, the statement "The
RVP does not exceed {fill in appropriate value} psi";
(b) For gasoline containing no oxygenate, the
statement, "Contains no oxygenate";
(c) For gasoline blended with ethanol in
concentration of at least one (1) percent by volume in the motor fuel:
1. For gasoline blended with less than nine
(9) percent by volume ethanol, the following statement: "Contains up to X %
ethanol. The RVP does not exceed {fill in appropriate value} psi." The term X
refers to the maximum volume percent of ethanol present in the
gasoline;
2. For gasoline blended
with between nine (9) and ten (10) percent, by volume ethanol, the following
statement: "Contains between 9% and 10% ethanol"; and
3. For gasoline blended with greater than ten
(10) percent, by volume, and not more than fifteen (15) percent, by volume
ethanol the following statement: "Contains between 10% and 15% ethanol";
and
(d) For gasoline
blended with an oxygenate other than ethanol, a statement declaring the name
and percentage by volume of any oxygenate or combination of oxygenates
present.
(7) Product
transfer documentation pertaining to mid-level ethanol flex fuel and ethanol
flex fuel blends, shall be represented by the numerical value representing the
percentage by volume ethanol in the fuel, followed by the percentage sign
followed by the term "Ethanol. Use Only in Flex Fuel Vehicles/May Harm Other
Engines".
(a) For Mid-Level Ethanol Flex fuel
blends containing more than sixteen (16) percent and no greater than fifty (50)
percent ethanol by volume, the numerical value representing the percentage by
volume ethanol in the fuel, shall be rounded to the nearest multiple of ten
(10), followed by the percentage sign followed by the term "Ethanol".
(b) For ethanol flex fuel blends containing
more than, at least, fifty-one (51) percent and no greater than eighty-three
(83) percent by volume of ethanol, the numerical value representing the
percentage by volume ethanol in the fuel, shall be rounded to the nearest
multiple of ten (10), followed by the percentage sign followed by the term
"Ethanol", or the phrase, "Contains 51% - 83% Ethanol".
(8) Diesel fuel blended with more than five
(5) percent by volume biomass-based diesel or biodiesel shall include, a
disclosure of the biomass-based diesel or biodiesel component, expressed as the
percentage by volume in the product transfer documentation. Diesel fuel shall
also include a statement declaring the grade as either "No.1-D" or "No.
2-D".
(9) Product transfer
documentation pertaining to premium diesel shall be so identified.
(10) Biodiesel blend stock shall be
identified by the letter "B" followed by the numerical value representing the
percentage by volume of biodiesel either "B-99" or "B-100", followed by the
term "Biodiesel Blend Stock".
(11)
100% Biomass-Based diesel shall be identified by the phrase, "Contains 100%
Biomass-Based diesel".
(12)
Alternative fuel, with one (1) principal component, shall be identified by
indicating the commonly-used name of the fuel along with a disclosure of the
amount, expressed as a minimum percentage by volume; such as "M-85, Minimum 85%
Methanol".
(13) Alternative fuel,
with two (2) principle components, shall be identified by indicating the
commonly-used name of the fuel along with a disclosure of the two (2) principle
components, expressed as a minimum percentage by volume; such as "LPG, Minimum
90% Propane, 2% Butane".
Section
6. Unattended Stations. The license holder of a retail motor fuel
dispensing site that is unstaffed shall comply with all motor fuel quality
requirements established in this administrative regulation.
Section 7. Inspection of Premises.
(1) The department's inspector shall present
agency identification to the license holder prior to obtaining
samples.
(2)
(a) The department shall have access to all
distributor and retail facility records relating to the distribution or sale of
retail motor fuel.
(b) If a license
holder sells retail motor fuel at more than one (1) location, the product
transfer documentation may be retained at a central location if the product
transfer documentation is made available to the inspector prior to the
conclusion of the inspection.
(3) At each retail facility, having more than
one (1) dispenser per product, the license holder shall identify and affix all
dispensers with an alphabetical or numerical designation.
(4) Each retail location shall have on file a
chart or other means of determining each products volume in gallons. This
information shall be supplied prior to conclusion of the inspection or upon
request.
(5) The department shall
have access to all motor fuel intended for retail sale for the purpose of
examination, inspection, taking of samples, and investigations. A license
holder shall not hinder or obstruct the department in the reasonable
performance of its duties.
(a) If access is
denied by the license holder, an Administrative Stop-Sale Order may be issued
on the product identified by the department to be inspected until access is
granted, even if the product has been removed from sale.
(b) A license holder shall be exempt from
this section by providing proof that no motor fuel is in the tank at the time
of the inspection.
(6) A
receipt, either printed by a device or written in clear hand script shall be
provided to the department's inspector. Failure to meet the requirements of
paragraphs (a) through (f) of this subsection shall result in the issuance of a
Level 1 Civil Penalty. Receipts shall include:
(a) Retail facility address;
(b) Date of the transaction;
(c) Price per gallon of the motor fuel
dispensed;
(d) Total volume of
motor fuel dispensed;
(e) Identity
of the product by name, symbol, or abbreviation; and
(f) Dispenser designation by either an
alphabetical or numerical description.
(7) If the design, construction, or location
of any storage tank is such as to require special equipment, accessories, or
access for use or motor fuel return, the equipment, accessories, or access
shall be supplied by the license holder.
Section 8. Sampling of Motor Fuel.
(1) Samples of motor fuel collected for
testing shall be pumped, pulled, drawn, or otherwise procured in accordance
with the most recent standard practice for the particular type, class, and
grade of the motor fuel, using a standard or method detailed in one (1) of the
following:
(a) ASTM D4057-19, Standard
Practice for Manual Sampling of Petroleum and Petroleum Products;
(b) ASTM D5842-19, Standard Practice for
Sampling and Handling of Fuels for Volatility Measurement; or
(c) ASTM D4306-20, Standard Practice for
Aviation Fuel Sample Containers for Test Affected by Trace
Contamination.
(2) Only
gasoline, gasoline-oxygenate blends, and diesel fuel shall be subject to random
sampling.
(3) Samples of not more
than one (1) gallon per grade, per source, per inspection shall be collected
from any distributor or retail facility without cost to the state. If the same
type and grade of motor fuel from multiple storage tanks, which are not
manifolded, is offered for sale at a retail facility a sample of each type and
grade shall be obtained.
(4) If a
motor fuel quality Notice of Violation has been issued because of a complaint
or random or department-initiated inspection, the department shall pay the cost
of the laboratory analysis associated with an initial inspection and the first
and second follow-up inspections, if required.
(a) The license holder shall be responsible
for payment of a percentage of the cost of each subsequent laboratory analysis
needed to verify compliance with
KRS
363.900 - 363.908 and this administrative
regulation. This includes a specification test that was not applicable at the
time of the initial inspection but is applicable at the time of the subsequent
inspection.
1. The license holder shall be
required to pay fifty (50) percent of the cost of the laboratory analysis for
the third follow-up inspection.
2.
The license holder shall be required to pay one-hundred (100) percent of the
cost of the laboratory analysis for the fourth and any subsequent follow-up
inspections.
3. Laboratory analysis
costs shall be paid by the license holder to the department prior to the
follow-up inspection.
4. Payment of
costs shall be in the form of a money order or cashier's check, made payable to
Kentucky State Treasurer and mailed to the Kentucky Department of Agriculture,
Division of Regulation and Inspection, 107 Corporate Drive, Frankfort, Kentucky
40601; or debit or credit through the department's online portal.
(b) If the department determines
that a test, not performed in a previous laboratory analysis, is necessary the
department shall pay the cost of the additional testing.
Section 9. Enforcement.
(1) Any license holder found by the
department to be in violation of
KRS
363.900 - 363.908, this administrative
regulation, or 302 KAR 79:012, shall receive a Notice of Violation by personal
service or certified mail detailing the facts constituting the citation of the
violation and the assessment of a fine, if applicable.
(a) Each Notice of Violation shall state the
amount of the fine. Fine amounts shall be determined in accordance with Motor
Fuel Quality Testing and Inspection Program Civil Penalty Guidelines, Form
KDA-OCEP-MF-01.
1. If a finding of the
department results in the issuance of a Level 2, 3, 4, or 5 Civil Penalty, the
assessed fine or order shall be afforded a case review upon written
request.
2. If a finding of the
department results in the issuance of any Level 1 Civil Penalty, it shall be
prima facie evidence of the fact or facts found therein, and the fine amount
shall constitute a Final Agency Action and shall not be subject to a case
review.
(b) A follow-up
inspection shall be conducted for every motor fuel quality violation resulting
in a Level 2 Penalty and above.
(2)
(a)
Operating without a retail motor fuel license shall be a violation of
KRS
363.904(1), which shall
result in the placement of an Administrative Stop-Sale Order pursuant to a
Level 6 Civil Penalty on all motor fuel offered for sale. The issuance of a
citation for a violation of the statute shall be prima facie evidence of the
fact or facts found therein. The Administrative Stop-Sale Order on all motor
fuel offered for sale at the retail facility shall constitute a Final Agency
Action and shall not be subject to a case review.
(b) A Level 6 Civil Penalty may be remediated
by filing an application to obtain or renew a license.
(3) Remediation options may include removing
and replacing or upgrading the motor fuel in storage to conform to minimum
specifications for the particular type, class, and grade; or otherwise
addressing the cause of the violation.
(4) If a Notice of Violation or a Follow-up
Failure has been issued, the license holder, within ten (10) consecutive day's
receipt of the Notice:
(a)
1. Shall provide remediation documentation to
the department describing the corrective action taken to resolve the violation;
or
2. If the license holder has not
provided the department with documentation in writing by the expiration of the
ten (10) consecutive days, the product that was the subject of the violation
shall be subject to an Administrative Stop-Sale Order and subject to a Level 5
Civil Penalty by the department; or
(b) May request a case review, as provided in
Section 9(1)(a)1. of this administrative regulation.
(5) The department shall obtain a follow-up
sample from the retail facility for analysis within a period not to exceed
three (3) business days, from receipt of remediation documentation as required
in Section 9(4)(a) of this administrative regulation. If the remediation action
taken results in the downgrading of the posted automotive fuel rating, which is
evidenced by photo documentation that complies with Section 3(1) of this
administrative regulation, a follow-up sample shall not be required.
(6) An Administrative Stop-Sale Order or a
Motor Fuel Quality Stop-Sale Order may be included with a Notice of Violation
or Follow-up Failure Notification.
(a) If a
Motor Fuel Quality Stop-Sale Order is issued, the product identified in the
Notice of Violation shall be removed from sale to the consumer.
(b) A product shall remain under a Motor Fuel
Quality Stop-Sale Order until subsequent sampling and analysis by the
department verifies its compliance.
(c) The department shall notify the license
holder of its decision to remove Motor Fuel Quality Stop-Sale Order within a
period not to exceed three (3) business days upon receipt of analysis
indicating conformance with the minimum specification for the particular type,
class, and grade of the motor fuel.
(7) Motor fuel not in compliance with this
administrative regulation shall be subject to a Motor Fuel Quality Stop-Sale
Order. The license holder shall be notified of the Motor Fuel Quality Stop-Sale
Order.
(a) The Motor Fuel Quality Stop-Sale
Order shall be in writing and contain an explanation of the
violation.
(b) The department shall
notify the licensee of analytical test results not later than the first
business date following the department's receipt of results from the testing
laboratory.
(c) If the department
has made a determination that a violation has been resolved, the Motor Fuel
Quality Stop-Sale Order shall be removed.
(d) A Motor Fuel Quality Stop-Sale Order
shall apply to the product for which sample analysis inicates a
violation.
(e) The Motor Fuel
Quality Stop-Sale Order shall extend to motor fuels blended from any product
placed under a Motor Fuel Quality Stop-Sale Order.
(8) Irrespective of ownership, any Motor Fuel
Quality Stop-Sale Order shall remain in effect until remediation documentation,
detailing the corrective action taken, has been received, in writing, from the
license holder. A product shall continue to remain under a Motor Fuel Quality
Stop-Sale Order until subsequent sampling and analysis by the department
verifies compliance with
KRS
363.900 - 363.908 and this administrative
regulation. If needed, the department may obtain a follow-up sample from the
retail facility for analysis. This requirement shall remain in effect if there
is a change in licensure or ownership.
(9) The fine shall be paid within thirty (30)
consecutive day's receipt of the Notice of Violation unless a case review is
requested pursuant to Section 9(1)(a)1. of this administrative regulation.
Failure to pay a fine within thirty (30) consecutive day's receipt of the
violation shall be subject to an Administrative Stop-Sale Order being issued by
the department.
(10) Declaration of
Non-Sale. If the license holder is unable to achieve, or elects not to achieve,
motor fuel quality compliance, the license holder may remove a non-compliant
motor fuel from sale to the consumer by obtaining a Declaration of Non-Sale. A
Declaration of Non-Sale shall have the effect of a Motor Fuel Quality Stop-Sale
Order on any retail motor fuel product to which it applies.
(a) A retail facility shall have a maximum of
two (2) motor fuels subject to a declaration of nonsale at a time.
(b) If the fine associated with a motor fuel
quality violation has been paid and the license holder is unable to achieve, or
elects not to achieve, motor fuel quality compliance, the license holder may
provide a notarized Declaration of Non-Sale to the department, on Form
KDA-OCEP-MF-04, stating that the retail facility shall no longer offer for sale
a specific type and grade of motor fuel.
1. A
separate Declaration of Non-Sale shall be submitted for each type and grade of
motor fuel.
2. Each Declaration of
Non-Sale shall be complete upon submission.
3. An incomplete Declaration of Non-Sale
shall not be accepted or certified.
4. The certified Declaration of Non-Sale
shall be conspicuously displayed at the retail facility.
(c) If the fine associated with a motor fuel
quality violation has not been paid and the license holder made a timely
request for a case review and is unable to achieve, or elects not to achieve,
motor fuel quality compliance, the license holder may be granted a Temporary
Declaration of Non-Sale, contingent upon payment of the fine that is the
subject of the case review.
1. A Temporary
Declaration of Non-Sale is subject to the requirements established in Section
9(10)(b)1. through 4. of this administrative regulation.
2. The case review shall be conducted in
accordance with Section 10 of this administrative regulation.
3. After the license holder pays the fine
stated in a Notice of Final Agency Action, the license holder may provide a
notarized Declaration of Non-Sale to the department, on Form KDA-OCEP-MF-04,
stating that the retail facility shall no longer offer for sale a specific type
and grade of motor fuel.
4. If the
license holder fails to pay a fine stated in a Notice of Final Agency Action
within fifteen (15) consecutive days after the receipt of the Notice, the
Temporary Declaration of Non-Sale shall be revoked and the product shall be
placed under an Administrative Stop-Sale Order.
(d) Remediation. A Declaration of Non-Sale
may be remediated by removing and replacing the affected motor fuel in storage
and providing detailed documentation to the department of the corrective action
taken.
1. The license holder under which the
Declaration of Non-Sale was certified shall be responsible for payment of a
percentage of the cost of each laboratory analysis needed to verify compliance
with
KRS
363.900 through
363.908
and this administrative regulation.
a. The
license holder shall pay fifty (50) percent of the cost of the laboratory
analysis for the first inspection of remediation.
b. The license holder shall pay 100 percent
of the cost of the laboratory analysis for the second and any subsequent
inspections of remediation.
c.
Remediation documentation and laboratory analysis costs shall be received by
the department prior to the follow-up inspection.
d. Payment of costs shall be in the form of a
money order or cashier's check, made payable to Kentucky State Treasurer and
mailed to the Kentucky Department of Agriculture, Division of Regulation and
Inspection, 107 Corporate Drive, Frankfort, Kentucky 40601; or debit or credit
through the department's online portal.
e. If the department determines that a test,
not performed in a previous laboratory analysis, is necessary the department
shall pay the cost of the additional testing.
2. If there has been a change in ownership
and the license holder elects to achieve motor fuel quality compliance, the
license holder shall be responsible for payment of a percentage of the cost of
each laboratory analysis needed to verify compliance with
KRS
363.900 through
363.908
and this administrative regulation.
a. The
department shall pay the cost of the laboratory analysis associated with an
initial inspection of remediation.
b. The license holder shall pay fifty (50)
percent of the cost of the laboratory analysis for the first inspection of
remediation.
c. The license holder
shall pay one-hundred (100) percent of the cost of the laboratory analysis for
the second and any subsequent inspections of remediation.
d. Corrective action documentation shall be
received by the department prior to inspection of remediation. Except for the
initial inspection of remediation, laboratory analysis fees shall be received
by the department prior to the follow-up inspection.
e. Payment of costs shall be in the form of a
money order or cashier's check, made payable to Kentucky State Treasurer and
mailed to the Kentucky Department of Agriculture, Division of Regulation and
Inspection, 107 Corporate Drive, Frankfort, Kentucky 40601; or debit or credit
through the department's online portal.
f. If the department determines that a test,
not performed in a previous laboratory analysis, is necessary the department
shall pay the cost of the additional testing.
(11) If a license holder fails to
pay a fine stated in a Notice of Final Agency Action, within fifteen (15)
consecutive day's receipt of the Notice, the product that was the subject of
the violation shall be placed under an Administrative Stop-Sale Order and
subject to a Level 5 Civil Penalty.
(12) Offering for sale a motor fuel product
that has been placed under a Motor Fuel Quality Stop-Sale Order or that is
subject to a Declaration of Non-Sale, shall be subject to a Level 5 Civil
Penalty and fine.
(13) If a license
holder offers motor fuel for sale in violation of an Administrative Stop-Sale
Order pursuant to a Level 5 Civil Penalty, a fine shall be assessed for each
type, class, and grade of fuel offered for sale.
(14) Each violation of this administrative
regulation shall be deemed a separate occurrence for the purpose of the Civil
Penalty and Fine Assessment.
Section
10. Case Review and Appeal.
(1) A
Level 1 Civil Penalty shall not be subject to a case review. A Level 1 Civil
Penalty may be appealed to the Office of the Attorney General, in accordance
with Section 11 of this administrative regulation.
(2) A Level 6 Civil Penalty shall not be
subject to a case review. A Level 6 Civil Penalty may be appealed to the Office
of the Attorney General, in accordance with Section 11 of this administrative
regulation.
(3) A request for a
case review shall be made in writing, within ten (10) consecutive days receipt
of the department's Notice of Violation.
(4) A license holder may respond to a Notice
of Violation, within ten (10) consecutive days of receipt of the department's
Notice, by requesting a case review or paying the assessed civil penalty. If no
request for a case review is made within the ten (10) day period, then the
Notice of Violation shall be deemed to be a Final Order for the purposes of KRS
Chapter 13B.
(5) Upon receipt of a
request, the department shall notify the license holder of a case review date.
If the license holder is experiencing financial hardship and requests a
reduction in a fine amount, prior to the date of the case review, the license
holder shall submit three (3) most recent bank statements or other relevant
documentation. The license holder may also submit, prior to the case review
date, documentation detailing corrective action and cost incurred.
(6) Case reviews shall be heard by an
administrative panel consisting of five (5) members who shall be designated by
the department.
(a) Five (5) members present
shall constitute a quorum.
(b) The
panel shall include at least one (1) person who is not affiliated with the
motor fuel program.
(7)
The members of the administrative panel shall not be required to accept or
consider information or documents that were not received at least three (3)
business days prior to the case review date.
(8) A license holder may appear before the
administrative panel either in person or via telephonic conference. A case
review shall be requested and scheduled in advance.
(9) Using the notarized Notice for
Designation of Proxy for Case Review, Form KDA-OCEP-MF-03, a license holder may
designate a proxy to appear as its representative before the administrative
panel. Although it is not required, a license holder may designate legal
counsel. The form for proxy representation shall be notarized and submitted at
least three (3) business days prior to a case review. Nothing in this
subsection shall be construed as authorizing the unlicensed practice of
law.
(10) A license holder may
request to reschedule a case review for good cause.
(a) The request to reschedule shall be
submitted to the department in writing.
(b) The request to reschedule shall be
received at least seven (7) consecutive days prior to the case review
date.
(11) The
administrative panel may consider the degree and extent of harm caused by the
violation, the cost of rectifying the noncompliance, the amount of financial
benefit derived from the violation, whether the violation was committed
willfully, and the compliance record of the license holder for determining the
fine's recalculation. The administrative panel shall document its review using
the Motor Fuel Administrative Case Review Guidelines, Form
KDA-OCEP-MF-02.
(12) Failure of a
license holder to attend a scheduled case review shall result in a
determination by default and the department shall issue a Notice of Final
Agency Action stating that the violation and fine assessed remain as originally
issued.
(13) If a license holder
fails to pay a fine stated in a Notice of Final Agency Action, within fifteen
(15) consecutive days after the receipt of the Notice, the product that was the
subject of the violation shall be placed under an Administrative Stop-Sale
Order by the department.
(14)
Within ten (10) consecutive day's receipt of Notice of Final Agency Action a
Formal Administrative Hearing may be requested to appeal the decision of a
Final Agency Action.
Section
11. Formal Administrative Hearing.
(1) A Final Agency Action shall be subject to
a Formal Administrative Hearing to be conducted in accordance with KRS Chapter
13B.
(2) Upon receipt of a Notice
of Final Agency Action, an aggrieved party may, within ten (10) days, request
in writing to the department, a hearing to contest the validity of the
department's action.
(3) A request
for a Formal Administrative Hearing shall be in writing.
(4) A request for a Formal Administrative
Hearing shall state the reason the aggrieved party believes the departments'
action was erroneous.
(5) A request
for a Formal Administrative Hearing shall be submitted to the Department of
Agriculture, Office of Legal Services, 107 Corporate Drive, Second Floor,
Frankfort, Kentucky 40601, within ten (10) days after the Notice of Final
Agency Action is received.
Section
12. Civil Penalties. Failure to comply with this administrative
regulation may result in a combination of:
(1)
Issuance of a Notice of Violation;
(2) Assessment of a fine;
(3) Issuance of an Administrative Stop-Sale
Order;
(4) Issuance of a Motor Fuel
Quality Stop-Sale Order; or
(5)
Placement of an Administrative Stop-Sale Order on all motor fuel offered for
sale at the retail facility.
Section
13. Consumer Motor Fuel Quality Complaints.
(1) Any person wishing to make a complaint
about a deficiency in the quality of a motor fuel that was purchased within the
Commonwealth shall file, not later than fourteen (14) consecutive days after
the date of the complainant purchase of that motor fuel from the retail
facility, a written complaint to the department including:
(a) The name and contact information for the
complainant;
(b) The name and
street address of the retail facility where the motor fuel was purchased and
the dispenser number, if known;
(c)
The type of motor fuel that was purchased;
(d) The grade of the motor fuel that was
purchased; and
(e) A description of
the deficiency.
(2) The
department shall not be required to investigate complaints meeting one (1) or
more of the following:
(a) The complaint was
submitted to the department more than fourteen (14) consecutive days after the
date of the complainant purchase from the retail facility;
(b) The complainant is unable to specifically
identify the retail facility that is the source of the motor fuel that is the
subject of the complaint;
(c) The
department has reason to believe that repeated complaints regarding the same
retail facility are intended to unduly penalize the retail facility or to
disrupt the essential functions of the department;
(d) The complainant is not the owner of the
vehicle or equipment damaged, the person who purchased the motor fuel, or a
member of that person's immediate family;
(e) The complaint is determined by the
department to relate to a topic other than the quality of a motor fuel;
or
(f) The motor fuel referenced in
the complaint is no longer present when the department arrives to conduct an
investigation.
Section
14. Incorporated by Reference.
(1) The following material is incorporated by
reference:
(a) "API Recommended Practice"
1637; 4th Edition, (April 2020), Using the API Color-Symbol System to Identify
Equipment, Vehicles, and Transfer Points for Petroleum Fuels and Related
Products at Dispensing Facilities and Distribution Terminals;
(b) "ASTM Standard D4057-19, Standard
Practice for Manual Sampling of Petroleum and Petroleum Products",
(2019);
(c) "ASTM Standard
D4306-20, Standard Practice for Aviation Fuel Sample Containers for Test
Affected by Trace Contamination", (2020);
(d) "ASTM Standard D5842-19, Standard
Practice for Sampling and Handling of Fuels for Volatility Measurement",
(2019);
(e) "Form KDA-OCEP-MF-01,
Motor Fuel Inspection and Testing Civil Penalty Guidelines", (April 2021
Edition);
(f) "Form KDA-OCEP-MF-02,
Motor Fuel Administrative Case Review Guidelines", (April 2021
Edition);
(g) "Form KDA-OCEP-MF-03,
Notice of Designation of Proxy for Case Review", (April 2021
Edition);
(h) "Form KDA-OCEP-MF-04,
Declaration of Non-Sale", (April 2021 Edition); and
(i) "Form KDA-OCEP-MF-05, Application for
Motor Fuel License", April 2021.
(2) This material may be inspected, copied,
or obtained, subject to applicable copyright law, at the office of the
Department of Agriculture, Division of Regulation and Inspection, 107 Corporate
Drive, Frankfort, Kentucky 40601, Monday through Friday, 8:00 a.m. to 4:30
p.m.
STATUTORY AUTHORITY:
KRS
363.902,
363.908,
16 C.F.R. 306, 16 C.F.R. 309,
40 C.F.R.
80.27