109—434

ILLINOIS POLLUTION CONTROL BOARD

March

8,

1990

IN

THE

 MATTER

OF:

UST UPDATE.

 USEPA REGULATIONS

)

 R90-3

(6/30/89 through 12/31/89)

)

 (RuJemaking)

PROPOSAL

FOR

PUBLIC

COMMENT

PROPOSED

 OPINION

AND

ORDER

OF

THE

BOARD

(by

J.

Anderson):

Pursuant

 to Section 22.4(d)

of

 the Environmental

 Protection Act

 (Act),

the Board

 is proposing to amend the

 UST underground storage tank regulations

in

 35 Ill. Adm. Code 731.

Section 22.4 of the

 Act governs adoption

of

 regulations establishing the

RCRA/UST

 p’-oyram

 in Illinois.

 Section 22.4(d) provides

for

 quick

 adoption of

regulations which are

 “identical

 in substance”

 to fede~al 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.

 This rulemaking

updates Illinois’ UST

 rules

to

 correspond with the following USEPA actions,

during the period June 30,

 1989,

 through December 31,

 1989:

54 Fed. Reg. 47081

 November

9,

1989

HISTORY

OF

 UST RULES

The

UST

 rules

 are contained

in

 Ill.

 Adm. Code 731.

 They were adopted

and

amended

follows:

R86—1

PCB

110,

July

11,

1986;

Ill.

Reg.

13998,

 August

22,

1986.

R86—28

75

PCB

306,

February

5,

 1987;

 and 76

PCB

195,

 March

5,

 1987;

Ill.

Reg.

6017.,

April

3,

 1987.

 Correction

at

 77 PCB 235,

April

16,

 1987;

Ill.

Reg.

 8684,

May

1,

 1987.

R88—27

 April

27,

 1989;

 13 Ill.

 Reg.

 9519, effective

June

12,

1989

(9/23/88 Technical

 Standards)

R89—4

 July 27,

 1989;

 13 Ill. Reg. 15010, effective September

12,

1989

(10/26/88 Financial Assurance Requirements)

R89—1O

 February

22,

 1990 (10/27/88

 6/30/89)

R89-19

Proposed

January

11,

 1990 (UST State Fund)

R90-3

This

Docket

(7/1/89

 12/31/89)

109—4

-2-

On April

 27, 1989 the Board adopted regulations which

are

 identical

in

substance to the major revisions to

 the USEPA UST rules

 which appeared

at

53

Fed.

 Reg.

 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

 (53 Fed.

 Reg.

 43370,

 10/26/88) were adopted

 in R89-4.

Until

 R88—27 the

UST

rules

were

 addressed

the

RCRA

update

Dockets.

Tne

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 the RCRA

 and UST updates

 after

initial

 adoption of the new program.

FIRE MARSHAL RULES

As

 is discussed

in

 greater detail

 below,

 the legislation requires that

both the Board and Office

 of the State Fire Ma~’shal adopt

 equivalents

 of much

of the USEPA UST rules.

 The Fire Marshal’s

 rules

 are contained

in

41

 Ill.

Adm. Code

 170,

 along

 with preexisting rules

 adopted p-ior

 to the USEPA

equivalent rules.

 They were adopted, amended, corrected and objected to

in

the following actions:

13 Ill. Reg.

 5669,

 effective April

21,

1989

 (Technical

 Standards)

13

 Ill. Reg.

 7744,

 effective May

9,

 1989.

13 Ill.

 Reg.

 8515,

 effective May

19,

1989

 (Financial

 Assurance)

13 Ill. Reg. 8875,

 effective May

19,

1989.

13 Ill. Reg.13288, August

18,

 1989.

13 Ill. Reg.133O5, August

18,

 1989.

13

 111. Reg.14992, effective September 11,

 1989.

13

 Ill. Reg.15126, September 22,

1989

STATUTORY AUTHORITY

The February

2,

 1989 Opinion

 in R88—27

 included

 a lengthy discussion

of

Section 22.4(d)

 of the Act,

 and other provisions

 of P.A. 85—861,

 the statutory

basis

of

 the UST

 program.

 The Board will reference that discussion here, and

will

 only summarize

it

in

 this Opinion.

Section

 22.4(d)

 of the Act requires

 the Board

to

 adopt regulations which

are “identical

in

 substance” with USEPA’s UST

 -egulations.

 Ill.

 Rev.

 Stat.

1987,

 ch. 127

 1/2,

 par. 154(b)(i)

 requires the Office

 of the Illinois

 State

Fire F1arsh~l to adopt

 regulations which are

 also to

 be “identical

in

substance”~to the same USEPA UST regulations.

 While the Fire Marshal

is

to

adopt

 regulations only through “corrective action”, the Board

is

to

 adopt the

entire

 set of rules.

 In R88—27 the Board adopted

 regulations which,

 among

other things,

 reflect the delineation between

 regulations

 before

 and after

“corrective action”.

The

 financial

 responsibility regulations

 bridge the corrective action

gap.

 Operators

 are required to provide financial

 assurance imediately or

in

the near future.

 This will mainly

 be for

 tanks whfth

are

 not known

or

suspected

to

 be leaking.

 However,,

if

a

 tank leaks,

 and the operatc’

 fails to

109—434

-3—

take sufficient corrective action, the financial

 institutions will

 pay funds

for corrective action which will

 be under the direction of the Agency.

 Thus

the

Fire

Marshal

will

responsible

for

receiving

the

financial

assurance

 documents, but the Agency will

 be the recipient of

 any funds.

Ill. Rev.

 Stat.

 1987,

ch.

127

 1/2, par.

 154(b)(ii) allows the Fire

Marshal

 to adopt

 “additional requirements”.

 Section 22.4(d)

 of the Act allows

the Board,

 upon receiving notice

of

 such requirement,

 to adopt

 further Board

requirements which

are

 “identical

in

 substance”

 to the additional

 Fire Marshal

requi rements.

 The R88-27 and R89—4

 rules

 followed the USEPA rules closely.

The Board will

 consider adopting “additional

 requirements” following notice

from the

 Fi’-e Marshal.

SUMMARY OF CHANGES

The amendments

 are all

 derived from 54 Fed.

 Reg.

 47081, November

9,

1989.

 They concern details

of

 termination

 of insurance coverage.

Section

 731.192

A definition of “termination”

has

 been added.

 This applies

in

 40 CFR

28O.97(b)(1)

and

 (2), which

is

 incorporated

by

 reference

in

35

 Ill.

 Adm. Code

731.197(b).

 Note

 that,

 because

 of the use

 of incorporation

 by reference, the

 cross

 references

 do not

 have precise counterparts

 in Board rules.

Section

731.197

The

 forms

 for insurance were also amended

at

 54 Fed. Reg.

 47081, November

9,

 1989.

 In R89—4,

 the Board incorporated these

 forms by

 reference,

 rather

than

setting

them

forth

 full.

 The Fire Marshal’s Office will promulgate

forms

based

the

USEPA

rules.

this

Section

the

Board

has

proposed

update the incorporation

reference

include

the

revisions.

Section 731.205

This

 Section

 is derived from 40 CFR

 280.105, which

was

 also amended

at

54

Fed.

Reg.

47081,

November

1989.

The

existing

rules

allow

insurer

terminate

policyori

days

notice.

The

amendnents

 allow termination

on

10

days

notice

the

case

non-payment

misrepresentation

the

insured.

The

amendments

also

make

the

day

notice

requirement

applicable

“state

funded

assurance”.

The

Board

has

proposal

pending,

Section

731.200

R89—19,

authorize

the

use

the

UST

State

Fund

meet

the

financial

assurance

requi’ements

this

Part.

The

Board

has

proposed

reference

that

proposed

Section

here,

and

hence

make

the

day

notice

requirement

applicable

the

UST

State

Fund.

However,

this

poses

other

questions similar to the

 issues

 raised

 in the P89—19

 Proposed Opinion.

The

Board

 soflcits coment

as

 to whether the

 60 day notice

 requirement

is

consistent with the statutes,

 cited

 in P89—19, which establish the UST State

 Fund.

ORDER

The Board

 proposes

 to amend

35

 Ill. Adm. Code 731

as

follows.

The

Board

109—435

-4—

will

 receive written public coment for a period

of

days

after

the

date

publication

the

proposal

the

Illinois

TITLE

35:

 ENVIRONMENTAL PROTECTION

SUBTITLE

G:

 WASTE DISPOSAL

CHAPTER

POLLUTION

CONTROL

BOARD

SUBCHAPTER

UNDERGROUND

INJECTION

CONTROL

AND UNDERGROUND STORAGE

 TANK PROGRAMS

PART

731

UNDERGROUND

STORAGE

TANKS

SUBPART

A:

 PROGRAM SCOPE AND INTERIM PROHIBITION

Section

731.101

 Definitions

 and exemptions

 (Repealed)

731.102

Interim

p”ohibitions

(Repealed)

731.103

 Notification Requirements

 (Repealed)

731.110

Applicability

731.111

 Interim Prohibition for Deferred Systems

731.112

 Definitions

731.113

 Incorporations by Reference

731.114

 Implementing Agency

SUBPART

8:

 UST SYSTEMS:

 DESIGN, CONSTRUCTION, INSTALLATION AND NOTIFiCATiON

Secti on

731.120

 Performance Standards

 for New Systems

731.121

 Upgrading of Existing Systems

731.122

Notification

Requirements

SUBPART

C:

 GENERAL OPERATING REQUIREMENTS

Secti on

731.130

 Spill

 and Overfill

 Control

731.131

Operation

and

Maintenance

Corrosion

Protection

731.132

Compatibility

731.133

 Repairs Allowed

731.134

 Reporting and Recordkeeping

SUBPART D:

 RELEASE DETECTION

Section

731.140

General

Requirements

for

all

Systems

731.141

Petroleum

Systems

731.142

 Hazardous Substance Systems

731.143

 Tanks

731.144

 Piping

731. 145

 Recordkeeping

SUBPART

E:

 RELEASE REPORTING,

 INVESTIGATION AND CONFIRMATION

Section

731.150

 Reporting of Suspected Releases

731.151

 Investigation due to Off-site Ir7acts

731.152

Release

Investigation

and

Confirmation

731.153

Reporting

and

 Cleanup of Spills

 and Overfills

109—436

-5—

SUBPART

RELEASE

RESPONSE

AND

CORRECTIVE

ACTION

Section

731.160

General

731.161

Initial

Response

731.162

Initial

Abatement

Measures

and

Site

Check

731.163

Initial

Site

Characterization

731.164

 Free Product

 Removal

731. 165

 Investigations

 for Soil

 and Groundwater Cleanup

731.166

 Corrective Action Plan

731.167

 Public Participation

SUBPART G:

 OUT-OF-SERVICE SYSTEMS AND CLOSURE

Section

731.170

Temporary

Closure

731.171

 Permanent Closure and Changes-in—Service

731.172

Assessing

Site

Closure

Change—in-Service

731.173

 Previously Closed Systems

731.174

 Closure Records

SUBPART

FINANCIAL

RESPONSIBILITY

Section

731.190

 Applicability

731.191

 Compliance Dates

731.192

Definitions

731.193

Amount

and

Scope

Required

Financial

Responsibility

731.194

 Allowable Mechanisms and Combinations

731.195

Financial

Test

Self-insurance

731.196

Guarantee

731.197

Insurance

Risk

Retention

Group

Coverage

731.198

 Surety Bond

731.199

 Letter of Credit

731.202

 Trust

 Fund

731.203

 Standby Trust Fund

731.204

Substitution

Mechanisms

731.205

Cancellation

 or Nonrenewal

 by Provider

731.206

 Reporting

731.207

 Recordkeeping

731.203

 Drawing

 on Financial Assurance

731.209

 Release from Financial Assurance Requirement

731.210

 Bankruptcy

 or other Incapacity

731.211

Replenishment

731.900

Incoporation

reference

(Repealed)

731.901

Compliance

Date

(Repealed)

Appendix A

 Notification Form

AUTHORITY:

Implementing

Section

22.4(d)

 and ~authorizéd

 by Section

27

 of the

Envi-onmental

Protection

Act

(Ill.

Rev.

Stat~1988Supp.

ch.

ill

1/2,

pars.

1022.4(d)

and

1027).

SOURCE:

 Adopted

 R86-1

at

 10 Ill. Reg.

 14175, effective August

12,

 1986;

amended

 in R86—28

at

11

 Ill.

 Reg.

 6220,

 effective March

24,

 1937;

 amended

in

R38-27

at

13

 Ill. Reg.

 9519,

 effective June

12,

 1989;

 amended

 in R89-4

at

13

Ill

 Reg.

 15010, effective September 12,

 1 989;

 amended

 in R89—1O

at

14

Ill

1

09.-!,

—6-

Reg.

effective

;

 amended

 in R89-19

at

 14 Ill.

Reg.

 effective

;

 amended

 in R90—3

at

 14 Ill.

Reg.

 effective

SUBPART

H:

 FINANCIAL RESPONSIBILITY

Section 731.192

 Definitions

When used

in

 this Subpart, the following terms

 have the meanings given below:

“Accidental

 release” means any

 sudden

or

 nons’jdden

 release of

petroleum from an underground storage tank that results

in

 a need for

corrective action

 or compensation for

 bodily injury

 or property

damage neither expected

 nor intended by the

 tank owner

or

 operator.

“Bodily injury” means

 bodily

 injury,

 sickness

 or disease sustained by

a person,

 including death

 resulting from any of these

 at any time.

However-, this term does

 not include those

 liabilities which,

consistent with standard

 insurance indust”y practices, are excluded

from cove~-age in

 liability insurance policies

 for bodily

 injury.

BOARD NOTE:

 Derived from 40 CFR

 280.92,

 as adopted

at

 53 Fed. Reg.

43370, October

26,

 1988, modified

 to inse~tthe Insurance Services

Office definition.

“Controlling interest” means

 direct owne~’ship of

 at least

 50 percent

of the

 voting stock

 of another entity.

“Director of the Implementing Agency”.

 See Section 731.114.

“Environmental damage” means the injurious presence

in

 or upon land,

the atmosphere

 or any watercourse

 or body of water

 of solid,

 liquid,

gaseous

 or thermal

 contaminants, ir~itantsor pollutants.

BOARD NOTE:

 This term is used

in

 the definition

of

 “pollution

incident”.

“Financial

 repo’-ting year” means:

The latest consecutive twelve—month period

 for which any of the

following reports used to

 support

 a financial test

is

 prepared:

10—K

report

submitted

the

Securities

Exchange

Comi ssi on;

annual

report

tangible

net

worth

submitted

Dun

and

Bradstreet;

or

Annual

reports

submitted

the

Energy

Information

Administration

the

Rural

Electrification

Administration.

“Financial

reporting

year”

may

thus

comprise

fiscal

calendar

year

period.

109—438

-7

“Legal

defense

cost”

any

expense

that

owner

operator

provider

financial

assurance

incurs

defending

against

claims

actions

brought,

USEPA

the

State

require

 corrective action

or

to

 recover

the costs

of

 corrective action;

behalf

third

party

for

bodily

injury

property

damage

caused

accidental

release;

By any person

 to enforce the terms

of

a

 financial

 assurance

mechaniSm.

“Occurrence”

means

accident,

 including continuous

or

 repeated

exposure

conditions,

which

results

release

from

underground storage tank.

BOARD

NOTE:

This

definition

intended

assist

the

understanding

these

regulations

and

not

intended

either

limit

the

meaning

“occurrence”

way

that

conflicts

with

 standard insurance usage or to

 prevent

 the use of other standard

insurance

terms

place

 “occurrence”.

“Owner

operator”,

when

the

owner

operator

are

separate

persons,

refers

the

person

that

obtaining

has

obtained

financial

assurance.

“Petroleum

marketing

facilities”

include

all

facilities

which

petroleum

 is produced or

 refined and

all

 facilities

 from which

petroleum

 is sold or transferred

 to other petroleum marketers

or

to

the

 public.

“Petroleum

marketing

firms”

are

all

firms

owning

petroleum

marketing

facilities.

Firms

owning

other

types

facilities

with

USTs

well

as petroleum marketing facilities are considered

to

 be petroleum

marketing

 firms.

“Pollution

incident”

means

emission,

 discharge,

 release

or

 escape

of

pollutants

 into or

 upon land,

 the atmosphere

or

 any watercourse

or

body

 of water, provided that such emission, discharge,

 “elease

or

escape

 results

in

 “environmental

 damage”.

 The entirety of any

 such

emission, discharge,

 release

 or escape

 shall

 be deemed

to

 be one

“pollution

 incident”.

 “Pollutants”

 means

any

 solid,

 liquid,

 gaseous

or

 thermal

 irritant

 or contaminant,

 including smoke,

 vapor,

 soot,

fumes,

acids,

alkalis,

chemicals

and

waste.

“Waste”

includes

materials

recycled,

‘-econditioned

reclaimed.

The

term

“pollution

incident”

includes

“accidental

~.release” or

“occurrence”.

BOARD NOTE:

 This definition

is

 used

in

 the definition

 of “property

damage.

“Property

damage”

means

109—439

-8-

Physical

 injury to, destruction

of

 or contamination of tangible

property,

including

all

resulting

loss

use

 that

property;

or

Loss

 of use of tangible property that is

 not physically

 injured,

destroyed or contaminated, but

 has been evacuated, withdrawn

from

use

or

 rendered inaccessible because

of

 a “pollution

i ncident”.

This

term

does

 not include those liabilities which,

 consistent with

standard insurance

 industry practices,

 are excluded from coverage in

liability insurance policies

 for property damage.

 However, such

exclusions for property damage

do

not

 include cor’-ective action

associated

with

releases

from

 tanks

which

are

covered

the

policy.

BOARD NOTE:

 Derived from 40 CFR 280.92,

 as adopted

at

 53 Fed. Reg.

43370, October

26,

 1988,

 modified to

 inse~’tthe Insurance Services

Office

definition.

“Provider of financial

 assurance” means

 an entity that provides

financial

 assuance to

 an owner

 or operator

of

 an underg’-ound storage

tank through one of the mechanisms

 listed

 Section 731.195 through

731.203,

including

 gua’-anto’-,

 insurer,

 risk retention

 g’-oup,.. surety

issuer

letter

credit.

“Substantial

 business

 relationship” means

 that one business entity

has

ownership

onterest

another.

“Termination” under Section

 731.197(b)

 means

 only those

 changes that

could

 result

in

 a gap

in

 coverage

as

 whe’-e the insu’ed has

not

obtained sustitute coverage

or

 has obtained

 substitute coverage with

a different

 retroactive date than the retroactive date of the

original

policy.

BOARD NOTE:

 Derived from 40 CFR 280.92(o),

as

 adopted

at

 54 Fed.

Reg.

47081,

November

 1989.

“Tangible net worth”

 means the tangible assets that remain after

deducting liabilities;

 such assets

do

 not include intangibles

 such

as

goodwill

 and rights

 to patents

or

 royalties.

 For purposes of this

definition,

 “assets”

 means

all

 existing

and

all

 probable future

economic benefits obtained or

 controlled

by

 a particular entity

as

a

result

 of past transactions.

“Unit of local

 government”

is

 as defined

in

 the Illinois Constitution

of

 1970, Art. VII, Section

1.

(Source:

 Amended at

 14 111. Reg.

effective

Section

731.197

Insurance

Risk

Retention

Group

Coverage

a)

An

 owner

 or operator may satisfy the requirements

 of Section

 731.193

by obtaining liability insurance that conforms to

 the requirements

of

this Section from

 a qualified insurer

or

 risk retention

 group.

 Such

i09—44n

—g

insurance

must

the

form

a

 separate insurance policy

or

an

endorsement

existing

insurance

policy.

Forms.

The

Board

incorporates

reference

CFR

280.97(b)

adopted

Fed.

Reg.

43370,

October

26,

1988,

amended

Fed.

Reg. 47081, November

9,

 1989.

 This Section incorporates

no

future

editions

amendments.

2)

 The Fire Marshal

 shall

 promulgate

 forms

 based

 on the forms

in

40

CFR

280.97(b),

 with such changes

 as are necessdry

 under Iflinois

1 aw.

3)

 Each insurance policy must be amended

by

an

 endorsement,

or

evidenced by

 a certificate

of

 insurance.

 The owner

 or operator

shall

use

 the forms

 specified

in

 subsection

 (b)(2),

if

available;

 otherwise,

 the owner

 or operator shall

 use the forms

CFR

280.97(b),

except

that

instructions

brackets

must

replaced

with

the

relevant

information

and

the

brackets

del eted.

Each

insurance

policy

must

issued

insurer

risk

retention

group

which

licensed

the

Illinois

Department

Insurance.

(Source:

Amended

Ill.

Reg.

effective

Section 731.205

 Cancellation or Nonrenewal

 by Provider

a)

 Except

as

 otherwise provided,

 a provider of

 financial

 assurance may

cancel

fail

renew

 assurance mechanism by

 sending

a

 notice

of

termination

certified

mail

the

owner

operator.

Termination

guarantee,

surety

bond

letter

credit

must

not

occur

until

120

days

after

the

date

which

the

owner

operator

receives

the

notice

termination

evidenced

the

return

receipt;

Termination

insurance

risk

retention

group

coverage,

except

 for non-payment

 or misrepresentation by the

 insured,

or

coverage by

 the UST State Fund under Section

 731.200, must

not

occur until

 60 days after

 the date on which the owner

or

operator receives

the

 notice of

 termination,

 as evidenced by

the

return

 receipt.

 Termination for non—payment

 of premium

or

misrepresentation

 by the

 insured must

 not occur until

 a minimum

of

 10 days after the

 date on which the dwner

 or operator

receives

the

notice

termination,

evidenced

the

return

receipt.

b)

if

a

 provider of

 financial

 responsibility cancels

or

 fails

to

 renew

for

 reasons other than incapacity of

 the provider

as

 specified

in

Section

 731.206,

 the owner

 or operator

 shall

 obtain alternate

 coverage

as

 specified

 in this Section within

 60 days after receipt

of

109—441

-10-

the

notice

termination.

the

owner

operator

fails

 obtain

alternate coverage within

 60 days after

 receipt

 of the notice of

termination,

the

owner

operator

shall

notify

the

Fire

Marshal

such failure and

 submit:

The

name

and

address

the

 provide” of financial

 assurance;

2)

 The effective date of

 termination;

and

3)

 The evidence of

 the financial

 assistance mechanism subject

to

the termination maintained

in

 acco’-dance with Section

731.207(b).

(Source:

 Amended

at

 14 Ill.

 Reg.

 effective

ORDERED

I,

 Dorothy M.

 Gunn, Clerk

 of the Illinois Pollution Control

 Board,

 hereby

certify that the

 above Opinion

and

Order

was

adopted

the

day

—

1990,

vote

__________

‘If,

Dorothy

Gunn,

Clerk

Illinois

Pollution

Control

Board

109—442