ILLINOIS POLLUTION CONTROL BOARD
April
26, 1990
IN THE MATTER OF:
UST STATE FUND
)
R89-19
(Rulemaking)
ADOPTED
RULE.
FINAL ORDER.
OPINION AND ORDER OF THE BOARD
(by J.
Anderson):
*pursuant
to Section
22.4(d)
and 22.13(d)
of
the
Environmental Protection Act
(Act),
as amended by P.A.
86—0958,
the Board
is amending the underground storage
tank
(EJST)
regulations
in
35
Ill.
Adm.
Code 731
to provide
for
a State Fund
that
is
intended
to satisfy federal UST financial assurance
requirements.
Section
22.13 of the Act establishes
the “Underground
Storage Tank Fund”.
Section 22.13(d) requires
the Board
to
implement the Fund by adopting regulations pursuant
to Section
22.4(d), which provides
for quick adoption of
regulations which
are “identical
in substance”
to federal regulations.
Section
22.4(d) provides that Title VII of the Act and Section
5 of the
Administrative Procedure Act
(APA) shall
not apply.
Because
this
rulemaking
is not subject
to Section
5 of the
APA,
it
is not
subject
to first notice
or
to second notice review by the Joint
Committee on Administrative Rules
(JCAR).
The federal UST rules
are found at
40 CFR 280.
The rules governing State Funds are
40
CFR 280.100 and 280.101, adopted at
53
Fed.
Reg.
43378, October
26,
1988.
PUBLIC COMMENT
The Board adopted a Proposed Opinion and Order
on January
25,
1990.
The proposal appeared on February 23,
1990,
at
14
Ill.
Reg.
2791.
The Board has received the
following public comment,
which
is addressed
in the body of
this Opinion, below:
PC
1
Joint
comments of Illinois Environmental Protection
Agency
(Agency) and Office of the Illinois State Fire
Marshal
(Fire Marshal), March
15,
1990
PC
2
Illinois Petroleum Marketers Association and Illinois
Association of Convenience
Stores, March
26,
1990
*
The Board appreciates
the contributions of Morton Dorothy
in
drafting this Opinion and Order.
1lft-4~5
—2—
PC 3
Administrative Code Division,
technical comments,
March 29, 1990
PC
4
Joint Committee on Administrative Rules, March
12,
1990.
HISTORY OF
LIST RULES
The UST
rules are contained
in 35
Ill.
Adm.
Code
731.
They
were adopted and amended as follows:
R86—l
71 PCB 110, July
11,
1986;
10
Ill.
Reg.
13998,
August
22,
1986.
R86—28
75 PCB
306,
February
5,
1987;
and
76 PCB
195,
Match
5,
1987;
11
Ill. Req.
6017, April
3,
1987.
Correction at
77 PCB 235,
April
16,
1987;
11
Ill. Req.
8684,
May
1,
1987.
R88—27
April
27,
1989;
13
Ill.
Req.
9519,
effective
June
12,
1989.
R89—4
July
27,
1989;
13
Ill.
Req.
15010, effective
September
12,
1989.
R89—lO
Adopted March
1,
1990;
14
Ill.
Req.
5797,
effective April
10,
1990.
R89-l9
This Docket.
R90—3
Proposed March
8,
1990;
March
23,
1990;
14
Ill.
Req.
4406.
Until R88-27,
the
LIST rules were addressed
in the RCRA
update Dockets.
The Board separated
the September 23,
1988 rules
from the RCRA update process because of
the size and timing
of
the rulemaking,
and because
of the desirability
of developing
a
separate mailing
list
for persons interested only
in tanks.
The
Board will consider
recombining
toe RCRA and
LIST updates after
initial adoption of
the new program.
In R88-27,
the Board adopted regulations which are identical
in substance
to the major revisions
to
the USEPA
LIST rules which
appeared
at
53
Fed.
Req.
37194,
September
23,
1988.
The Board
separated
the financial responsibility
rules from the September
23 rules
in order
to avoid delaying adoption
of the latter.
The
financial responsibility
rules wete adopted
in R89—4.
HISTORY OF
THE
STATE FUND
The R89—4 regulations require that owners or
operators
obtain
‘private insurance”,
as defined below, and establish a
standby
trust
fund to receive
the proceeds of the financial
assurance.
40 CFR 280.100 and 280.101 allow the use of state
1 i0—41i6
—3—
funds under certain conditions.
The Board adopted
no equivalent
of
40 CFR 280.100 or
280.101 because, at
the
time R89—4 was under
consideration,
there appeared
to be
no State
fund
in Illinois
which met the conditions.
At about the same time R89-4 was adopted,
S.B.
64 was signed
into law as P.A.
86-125.
S.B.
64 created a State
fund.
However,
S.B.
64 did not state
that
it was intended
to create
a State Fund
meeting the USEPA recuirements;
did not provide that persons
qualifying under
the Fund met the federal financial assurance
requirement;
did not direct
the Board
to amend
its
rules
to
allow
the use of
the Fund in lieu of private insurance;
and, did
not permit the Board
to use the “identical
in substance”
rulemaking mechanism to so amend its rules.
To correct
the problem,
S.B.
752
(P.A.
86—0958) added
Section 22.13(d)
to the Act as follows:
The
Fund
is
intended
to
be
a
State
Fund
by
which
persons
who
qualify
for
access
to
the
Fund
in the event of
a
release may satisfy the
financial
responsibility
requirements
under
applicable
federal
law and
regulations.
The
Board shall
implement
this
intent by adopting
regulations
pursuant
to
subsection
(d)
of
Section 22.4
of this Act.
It is this mandate that
the Board
is implementing
in this
instant Docket R89—l9.
FIRE MARSHAL RULES
State statutes require
that the Office of the State Fire
Marshal also adopt equivalents of
some of the same USEPA
LIST
rules.
The Fire Marshal’s
rules are contained in
41
Ill. Adm.
Code 170, along with preexisting rules adopted prior
to the USEPA
equivalent
rules.
They include
the following actions:
13
Ill.
Reg.
5669,
effective April
21,
1989.
13
111.
Req.
7744,
effective May
9,
1989..
13
Ill.
Req.
8515,
effective May 19,
1989.
13
Ill.
Reg.
8875,
effective May 19,
1989.
13
Ill.
Req.
13288, August
18,
1989.
13
Ill.
Req.
13305, August 18,
1989.
13
Ill.
Req.
14992, effective September
11,
1989.
13
Ill.
Reg.
15126,
September
22,
1989.
14
Ill.
Reg.
5781,
effective April
10,
1990.
The technical standards were adopted at
13
Ill.
Req.
5669.
The financial assurance requirements incorporated the USEPA
rules
by reference at
13
Ill.
Req.
8515.
The other actions were
corrections and responses
to objections.
The April
10,
1990
amendments set new standards
for Tank Removal.
110—467
—4—
PUBLIC COMNENTS*
The Agency and Fire Marshal filed a joint public comment
objecting
to proposed Section 731.200(c)
through
(h).
(PC
1)
They state:
In
accordance
with
the
Memorandum
of
Understanding between the Agency
and the Fire
Marshal
of
1987,
and
in
accordance
with
the
division
of
program
responsibilities
for
the
RCRA
Subti:le
I
underground
storage
tank
program,
the
Fire
Marshal
has
sole
responsibility
for
the
administration
of
the
program
for
financial
responsibility
as
envisioned
in
40 CFR 280.90.
Consequently,
it
is
the Fire
Marshal
who has
the authority
to
issue
reaulations
pertaining
to
the
administration
of the financial responsibility
portion
of
the
underground
storage
tank
program.
The Board does
not accept the above arguments for the
reasons expressed below.
At the outset,
we note that the comment, whether
intended or
not,
inherently questions
the scope of Board’s
statutory mandate
for the regulations
it has already adopted in R89—4.
Those
regulations
implement the federal
financial assurance underground
storage tank program,
including the administration
portion;
this
instant proceeding,
R89—lY,
simply responds
to
a statutory
mandate
to implement an additional, optional,
provisions
contained in that
federal program, allowing for the
use of
an
identical
in substance state
fund.
The Board has been,
and continues
to be, under
a statutory
mandate to adopt
the
LIST regulations within tight
timeframes,
including the financial
assurance regulations,
regardless
of any
Memorandum of Agreement
or regulatory activity of
the Fire
Marshal.
Presumably
because
they cannot,
the Agency and the Fire
Marshal do not cite any statutory authority
for
their argument.
It
is axiomatic that State agencies derive their authority from
State statutes.
They cannot create authority
by
mutual
agreement,
or
by agreement with federal agencies.
In R88—27 and ~89—4
the Board ~determined
that Section
22.4(d)
of the Act required
it
to adopt
the entire text Qf the
USEPA
LIST
regulations.
These rulemakings
are
now
complete.
*
PC
3 and
4 contained no substantive comments,
and thus will not
be separately addressed here.
110—468
—5—
Both the Agency and the Fire Marshal were on the Board’s
mailing
list and were sent copies of the proposed Opinions and
Orders.
The Board had received positive comment from the Agency and
no comment from the Fire Marshal
as
to its interpretation.
The
Agency commented as follows
in R89—4:
The
financial
assurance
portion
of
the
LIST
program
in
Illinois
is
the
responsibility
of
the Office
of
the
State
Fire Marshal
(OSFM).
The PCB
is
required
to
promulgate
regulations
covering
financial
assurance
by
Sec.
22.4
of
the Illinois Environmental Protection Act even
though
the
OSFM
will
be
implementing
the
program.
(PC #1, R89—4, April
24,
1989)
The regulations and the accompanying opinions were adopted
without major revisions on the points now
in question.
The Board
then withheld filing of the adopted rules for one month, which
allowed the agencies a final opportunity
to
file comments.
The
Board received no final comments, and filed the rules.
The
rules
were not appealed.
The agencies have waived the arguments they
are now making as they pertain to those rules.
JCAR has reviewed the Board and Fire Marshal
LIST rules,
focusing on overlapping jurisdiction.
JCAR determined
that the
Board’s rules and underlying
interpretation
of the statutes were
appropriate.
~e note that P.A.
86-0958 was adopted after
the Board
adopted the financial responsibility requirements, and was
specifically aimed at fixing
a problem in them.
As such
it
represents legislative
ratification
of the mandate to the Board
to adopt
the financial responsibility requirements.
Indeed,
if
the Board failed to go forward with the proposed amendments,
the
LIST State Fund would not satisfy
the financial responsibility
requirements of the regulations.
The result of
this would be
that
LIST operators would be required
to obtain private insurance
in addition to
the State
Fund,
a result clearly at odds with
legislative intent.
~1enote that the Agency and Fire Marshal appear
to assume
that
rulemaking authority
is inherently
linked
to implementing
authority:
i.e.,
that the agency with authority
to implement a
program has the implied, exclusive authority
to adopt
regulations.
This assumption
is incc~rrect.
For
instance,
in
the
Environmental Protection Act,
the Board
is given express
rulemaking authority over programs which are almost always
implemented by other agencies.
Indeed,
Section
47(a)
of the Act
provides:
110—469
—6—
The
State
of
Illinois,
and all
its agencies,
institutions,
officers
and subdivisions
shall
comply
with
all
requirements,
prohibitions,
and
other
provisions
of
the
the
Act
and
of
regulations
adopted
thereunder.
(Ill.
Rev.
Stat.
1988,
ch.
111 1/2, par 1047(a)).
Furthermore, Section 7.2(a)(5)
of the Act,
which governs the
Board’s identical
in substance rulemaking, provides that,
in
adopting an identical in substance regulation:
The
Board
regulation
shall
specify
whether
a decision
is
to be made
by the Board,
the
Agency
or
some other
State
agency,
based
upon the general
division
of
functions within
this
Act
and
other
Illinois
statutes.
(Ill.
Rev.
Stat.
1988
Supp.,
oh.
111
1/2,
par.
1007.2(a)(5)).
In summary,
the Act clearly establishes
the Board as
a
State
agency with authority to adopt regulations which are
to be
applied by other State agencies.
Although the Fire Marshal has
independent regulatory authority,
it must comply with Board
regulations
in its administration
of
the program,
just as must
the Agency.
The Board
reaffirms its •prior holdings on
its statutory
authority,
and specifically makes reference to
P.
2—4
of
the R88—
27 Opinion and p.
2,3
of the R89-4 Opinion.
We note that
there are “practical” reasons why the Board
should adopt
the full
scope of
the requirements.
For example,
suppose a tank leaks,
and the cause
is a violation
of the basic
requirements other than those related
to corrective actions.
The
basic requirements must
be present
in Board
rules
for the Agency,
or any other person,
including
a member
of the public,
to bring
an enforcement action alleging violation
of
them.
Also,
the
repetition
of the
rules serves as
a check
on any modifications
which the Fire Marshal might make,
or waivers
it might
grant,
as
was discussed
in R88—27.
The Board
is given
the option of
adopting additional Fire Marshal requirements
so that the Board
can assess whether
the requirement
is an environmental protection
matter which ought
to be enforceable before the Board.
We agree
that
the statutory scheme has inherent potential
problems because
it
requires two agencies to adopt
similar
regulations governing the same subject matter.
The Board can
only assume from the statutory intent
that
the General Assembly
intended that the agencies maintain compatibility of the
regulations.
We note that problems
of compatibility may now exist.
110—47 (1
—7—
The Fire Marshal adopted financial
responsibility rules
at
13
Ill.
Reg.
8515,
effective May 19,
1989.
They are worded
in
full as follows:
Section 170.700
Incorporation by Reference
The Office of the State Fire Marshal adopts
by
incorporation by reference
40 CFR 280,
Subpart
H,
as
adopted
at
53
FR
43370,
October
26,
1988.
This
Section
incorporates
no
later
editions or
amendments.
This
rule fails
to effect
the tJSEPA financial responsibility
requirement
in Illinois
for several reasons.
First,
it
is merely
an
incorporation by reference.
The rule does not go on
to
require operators
to comply with the USEPA requirements.
Second,
the Fire Marshal
has not implemented
the USEPA directives
in 40
CFR 280.92
to define
the terms “bodily injury”,
“property damage”
and “substantial business relationship”.
As was discussed in the
R89—4 Opinion,
with these terms undefined
in State regulations,
the JSEPA
rules
fail
to state the scope of the financial
assurance requirement,
and allow guarantees which would violate
Department of Insurance regulations.
In addition,
the Fire
Marshal
rules, contrary
to USEPA directives,
allow the use of
instruments from financial institutions which have not qualified
to do business with the appropriate Illinois regulatory
agencies.
En the event of a release, the Agency would have
problems collecting on these instruments,
and,
in the absence of
Board regulations governing financial assurance,
could not file
an enforcement action alleging failure to have proper financial
assurance.
We fully recognize that
the complexity
of the
LIST regulatory
and program implementation provisions
in
the statutes can create
problems of compatibility,
but suggest
that these problems are
not necessarily insurmountable.
The Board believes
that
there are ways
to accomplish
the
same statutory purposes.
For example, once the Board adopts the
full set of
rules pursuant
to Section
7.2 of the Act,
the Fire
Marshal may elect
to adopt
the Board regulations,
and enforce
them along with the Agency.
In any event, we know that
the
Agency and Fire Marshal share our concern that any “kinks”
in the
system be worked out,
so that our environmental responsibilities
can be most efficiently exercized.
The Illinois Petroleum Marketers Association and Illinois
Association of Convenience Stores,
in
PC
2, questioned
the
“Board’s desire
to get involved in”
LIST
regulations,
and
recommend “that
the controls and rulemaking
be
left
in the hands
of the Office
•of
the Illinois State Fire Marshal and
the Illinois
Environmental Protection Agency”.
110—471
—8—
As discussed above,
the Board is required by statute to
adopt
these regulations.
These regulations anticipated ongoing
interactions with the Agency and the Fire Marshal.
Indeed,
the
agencies need the regulatory underpinning
to implement
the
programs.
As
is also discussed above,
the legislature intended that
the
LIST State Fund could be used
in lieu
of
the private financial
assurance mechanisms specified
in the federal rules and already
adopted by the Board.
Unless the Board amends its
rules
to allow
the use of the State Fund as an alternative,
tank operators will
have
to provide private
insurance meeting
federal
requirements,
in addition
to the State Fund.
This surely would
not benefit
the
tank operators.
“IDENTICAL
IN SUBSTANCE” MANDATE
The Board construes Section
22.13(d) as
a legislative pre-
determination that
the
LIST Fund provisions satisfy
the identical
in substance mandate.
However, pursuant
to
its Section
22.4(d)
mandate,
the Board has included
a few provisions
in the
requlatJons that
its beiieves are necessary
to accommodate the
legislation
to certain USEPA requirements.
Section 22.4(d)
requires the Board
to adopt
regulations
which are “identical
in substance”.
Section
7.2
of
the Act
prescribes how the Board
is
to implement
the mandate.
In 40 CFR 280.100
or 280.101,
the LISEPA rules prescribe the
form of a state fund which qualifies
under federal
law,
not
a
verbatim text.
In such situations Section 7.2(a)(3)
requires the
Board to “adopt
a
regulation as prescribed,
to the extent
possible consistent with other
relevant
LISEPA regulations and
existing State law.”
Our analysis of certain
issues follows.
PRIVATE INSURANCE REQUIREMENT
35 Ill.
Adm.
Code 731.195, and 40 CFR
280.95,
specify
certain methods by which
an operator demonstrates financial
responsibility.
Mechanisms
include private insurance,
bonds,
letters
of credit,
trust
funds,
self—insurance
for operators
which meet
a financial
test
and guarantees from related
corporations which meet the
financial
test.
Operators* are
alowed
to use these mechanisms
in combinations
to meet the total
amount of required financial assurance.
Operators must establish
a standby trust fund
to receive
the proceeds
of
any mechanism
in
toe event
of
a release.
In this Opinion the Board will use the term “private
insurance”
to refer
to the mechanisms under
the USEPA rules,
*
As used
in this Opinion,
“operators”, means “owners or
operators”, except where otherwise indicated.
110—47 2
—9—
exclusive of state
funds,
by which an operator can meet the
financial assurance
requirement.
It
is
to be understood that
this refers
to mechanisms other than insurance,
including self—
insurance and.guarantees.
40 CFR 280.100 AND 280.101
State
funds are governed by
40 CFR 280.100 and 280.101.
Section 280.100 applies
to
LIST’s
in states without an approved
program where the state requires
a
financial assurance
mechanism.
USEPA may accept the mechanism
if
it meets
a certain
standard.
Section 280.101 applies
to LIST’s located
in where
LISEPA
is
administering the financial
responsibility requirements
in a
state “which assures
that monies will be available from
a state
fund”.
USEPA will accept the state
fund
in lieu of private
insurance
if
a certain standard
is
met.
Which Section applies?
Clearly Section 280.101
is directed
at state
funds.
However,
in Illinois,
the
LIST fund
is also
a
“state—required mechanism”,
since its availability
is
mandatory.
Arguably the
LIST fund could be approvable under
either Section.
However,
the applicability question has deeper
levels.
Both Section 280.100 and 280.101 are “USEPA—only Sections”,
which apply only
to USEPA approval of alternative mechanisms and
state funds when USEPA is administering the program.
They are
silent as
to these mechanisms when the State
is administering the
program.
The Board has generally drafted the
LIST rules as
a set
of rules
to apply after the State
takes over the program.
This
approach
is required under
40 CFR 281,
which requires the State
to have
the final program in place before the application for
program approval
is submitted.
As
the Board understands
the
process, any State mechanisms
in the final program will
be
approved under
the general language on program approval
in
40 CFR
281.
The Board specifically requested comment
on
this,
but
received no response.
Sections 280.100 and 280.101 are silent, as
to the contents
of the State program;
however,
the Board notes
that Section
7.2(a)
of the Act defines “identical
in substance” regulations as
regulations “which require
the same actions
.
.
.
as would federal
regulations
if USEPA administered
the subject
program
in
Illinois”.
Therefore,
as a matter
of State
law,
the Board
believes that the State
fund must
be structured so as
to be
approvable
under Sections 280.100 or 280.101.
APPROVABILITY OF THE FUND
40 CFR 280.101 allows the use of
a
“state fund”
if the
Regional Administrator determines
that
it
is
“at
least equivalent
to the financial mechanisms
specified”
in
the regulations.
‘The
110—473
—10—
Regional Administrator
is
to evaluate equivalency principally
in
terms of:
Certainty of
the availability
of
funds
for
taking
corrective
action
and/or
for
compensating
third
parties;
the
amount
of
funds
which will
be
made
available;
and
the
types of costs covered.
40 CFR 280.101(b).
40 CFR 280.100(a)
and 280.101(a)
allow the use
of State
funds
to meet federal requirements only
if approved by the
Regional Administrator of USEPA.
Section
22.4(d)
of
the Act
requires the Board
to maintain an “identical
in substance”
program.
There
is arguably
a potential problem between
the
mandates
of Section
22.4(d)
and 22.13,
if
the Board were
to allow
the use of
the State
Fund,
but .LISEPA were
to fail
to approve the
Fund.
However,
in that the General Assembly has provided for
immediate use of
the Fund
to satisfy the financial assurance
requirement
in the Board
rules,
the Board will not condition use
of
the Fund on
LISEPA approval.
As
the Board understands
the process, approval
of
state
funds
will
be
a procedure separate
from the authorization
application process.
USEPA may be able
to approve
the use
of the
State fund prior
to authorization
of the Illinois UST program.
Since, under
40 CFR 280.101(b), approvability of the State
fund depends on:
the amount of coverage;
the types of costs
covered;
and,
the certainty of availability of funds, we will
discuss
these along with the issues addressed below.
AMOUNT OF COVERAGE
40 CFR 280.93,
and
35
Ill.
Adm. Code 731.193, specify
the
amounts of
required financial assurance.
For most operators
this
is
$1 million per occurrence, with an annual aggregate of
$1
million,
with alternative amounts specified
for small or
large
throughput
tanks.
TYPES OF COSTS COVERED
35
III. Adm. Code 731.193,
as adopted
in R89—4, and federal
law,
require owners
or operators
of UST’s
to:
demonstrate
financial
responsibility
for
taking
corrective
action and for
compensating
third
parties
for
bodily
injury
and property
damage
caused
by
accidental
releases
arising
from
operation
of
petroleum
underground
storage
tanks...
35
Ill.
Adm.
Code
731.193
and
40 CF~~280.93.
110—474
-11---
CERTAINTY OF AVAILABILITY OF FUNDS
Coverage under
the LIST State Fund
is subject to conditions,
including private insurance coverage
for the deductible,
registration of the tank,
compliance with Board
regulations,
adequacy of the Fund, prepayment by the operator of corrective
action costs and claims, and prepayment
of the deductible.
If
the operator fails
to meet
these conditions,
there
is
no coverage
from the Fund.
This
is
best illustrated by the requirement,
in
S.B.
64,
that
the operator pay a deductible before
the fund will pay his
corrective action expenses,
or third party claims.
On the other
hand,
the LISEPA requirements
for private insurance provide:
The
Insurerl
is liable for the payment of any
amounts
within
any
deductible
applicable
to
the
policy
to
the
provider
of
corrective
action
or
a
damaged third—party,
with a
right
of
reimbursement
by
the
insured
for
any such
payment
made
by
the
Insurer.
(40
CFR
280.97(b)(l), paragraph
(2)(b)
of the required
private
insurance
form.)
(Incorporated
by
reference in 35 Ill.
Adm.
Code 731.197)
ADDITIONAL REQUIREMENTS FOR APPROVABILITY
40 CFR 280.101 has some requirements for an approvable
fund
which do not appear
to be specifically addressed in the
legislation.
40 CFR 280.101(d)
requires the State
to
issue
“a
letter or certificate describing
the nature of the state’s
assumption of responsibility”.
The certificate must identify the
facility and the
“amount of funds
for corrective action and/or
for compensating third parties that
is assured by the State.
The
Board has included these requirements
in the adopted
rules.
The
USEPA rule requires
in addition that the operator keep the
certificate at
the facility.
However,
the Board has not required
this,
consistent with
the approach taken
in R89-4
in Section
731.206 and 731.207.
CERTIFICATE OF COVERAGE
40 CFR 280.101(d)
requires the State
to
issue, within 60
days after USEPA approval of the use of
a State
fund,
letters or
certificates
of
coverage to operators covered by the fund.
However, access
to the
LIST fund under
S.B.
64
is subject
to many
conditions which cannot be determined until after a release has
occurred.
If S.B.
64
is taken literally,
it ~culd
be impossible
for the Fire Marshal
to issue certificates
of coverage until
after
a release has occurred.
We do not construe SB
64
in this
manner.
If the Fire Marshal could
not
issue certificates
of
coverage
in advance,
the Bills may fail
in
their central purpose
of releasing
the operator from the requirement
to maintain
private insurance.
In the adopted
rules below,
the Board
has
I 10——475
—12—
reconciled this potential conflict by construing the conditions
of 5.B.
64 as conditions under which
the Fire Marshal issues the
certificate of coverage,
rather than as post—hoc conditions for
payment.
The Board specifically requested comment, but received no
response,
as
to whether there might
be an alternative way to
reconcile these provisions.
There
is a very real possibility that an operator will
qualify
for a certificate,
and later
fail
to meet the
conditions.
For example, one condition
is that
the operator have
private insurance
for the deductible.
The operator
could obtain
the certificate, and then allow the private insurance
to lapse
by
failing
to pay premiums when
due.
For this
reason the Board had
proposed
to limit certificates
of coverage
to one year.
Annual
renewal would have tended to limit the number
of operators with
certificates who subsequently
“fall
off the wagon”.
We are
removing these provisions, however, because
on further
review,
they do not appear
to be necessary under the federal program.
APPEALABILITY OF CERTIFICATE OF COVERAGE
The Board proposed
to allow operators
to appeal to the Board
the denial of
a certificate
of coverage by the Fire Marshal.
The
agencies objected to this
in PC
1.
They
state that
“No statutory
authority can be
found
in the
Act”.
The Board notes
that
Section
5(d)
of the Act provides that “The Board shall have
authority
to conduct hearings
...
upon other
petitions
for review
of final determinations which are made pursuant
to the Act
or
Board
rule and which involve a subject which the Board
is
authorized
to
regulate...”
Although the Board has authority to hear these appeals,
the
Board has nonetheless deleted
this from the proposal.
Although
the determination as
to
the certificate of coverage
is based on
the same considerations as the determination of actual coverage,
which
is appealable
to the Board by statute,
the Board notes
that
the determination occurs
in advance
of any environmental
impact,
at
a time when the operators would
be dealing solely with the
Fire Marshal.
The issues on a denial
of
a certificate are likely
to be remote from the environmental issues with which
the Board
is best equipped
to deal.
The Board
has therefore concluded that
these appeals are best left
to the Circuit Courts.
ROLE OF PRIVATE INSURANCE
S.B.
64 requires that the operator have private insurance
for the deductible
which
is not covered by the Fund.
The Bill
is
not otherwise more specific as
to the nature
of this
insurance.
The Board has included a provision
that allows the use
of any of
the private mechanisms allowed under Board rules, which are
derived from the LISEPA rules.
The mechanisms
include insurance,
bonds, letters of credit and trust
funds.
In addition,
they
110—47 6
—13—
include self insurance
for operators which meet a financial test,
and guarantees
from parent corporations which meet
the financial
test.
The Board specifically requested comment, but received no
response,
as
to whether
this
is consistent with the statutes, and
as
to whether use of
these mechanisms
to meet the deductible
ought to be compulsory.
STANDBY TRUST FUND
As noted above,
40 CFR 280.103 and
35
Ill. Adm.
Code 731.203
require the operator
to establish a standby
trust
fund
to receive
the proceeds of private insurance.
35
Ill.
Adm.
Code 731.208
(40
CFR 280.108)
governs the details
of how the Agency draws on the
standby
trust.
However,
these provisions are different
from the
provisions
in the Bills.
Therefore,
the Board has not directly
required operators to establish standby
trusts,
or to require
the
Fund proceeds to be paid into such a trust.
However, this
is
not
to say that the LISEPA private insurance
requirements would not
apply for the deductible,
as discussed above.
CONCLUSION
The Board will adopt
the Section set forth below.
The Board
will not file this Section with the Administrative Code Division
until May 22, 1990,
to allow time
for post adoption comment
particularly by the entities involved
in the authorization
process.
ORDER
The Board hereby adopts the following Section as
35
Ill.
Adm. Code 731.200:
Section 731.200
LIST State Fund
a)
Section 22.13 of
the Act creates
the Underground Storage
Tank Fund
(Fund).
THE FUND IS INTENDED TO BE A STATE
FUND BY WHICH PERSONS WHO QUALIFY FOR ACCESS TO THE FUND
IN THE EVENT OF A RELEASE MAY SATISFY THE FINANCIAL
RESPONSIBILITY REQUIREMENTS UNDER THIS PART.
(Section
22.13
of the Act.)
b)
An owner or operator may apply
to the Fire Marshal
for
a
certificate of coverage,
on forms provided by the Fire
Marshal.
c)
If the Fire Marshal determines
that the owner
or
operator would be entitled to
receive
funds from the
Fund
in the event
of
a release,
it shall
issue
a
certificate of coverage.
The certificate must specify:
1)
Name of
the owner or operator;
2)
Name and address of
the facility;
110—477
—14—
3)
The amount of funds
for corrective action or
compensating third parties which
is assured by the
Fund;
4)
The effective date of the certificate.
d)
An owner
or operator with a certificate is deemed
in
compliance with the requirements of
this Subpart with
respect
to the facility listed
in the certificate.
e)
Owners or operators may use any financial assurance
mechanism or
combination of mechanisms meeting
the
requirements
of the other Sections of
this Subpart
to
meet the Fund requirement
that they have insurance
for
the deductible.
f)
IF THE AGENCY REFUSES TO REIMBURSE OR AUTHORIZES ONLY A
PARTIAL REIMBURSEMENT, THE AFFECTED OWNER OR OPERATOR
MAY PETITION THE BOARD FOR A HEARING pursuant
to
35
Ill.
Adrn.
Code 105.
(Section 22.l8b(g)
of the Act).
(Source:
Added at
14
Ill.
Req.
effective
IT IS SO ORDERED.
I,
Dorothy M. Gunn, Clerk of
the Illinois Pollution Control
Board,
hereby certify
that the
abov,e Opinion and Order was
adopted on the~’~
Z~
day of
~/
~
‘~
,
1990,
by
a vote
of
~7’-
.
,.
/‘
‘~2
7
.
.
~,;
~
Dorothy
M. ~unn,
Clerk
Illinois P~6l1utionControl Board
110—478
