Federal Register: May 2, 1990, Part 8. 40 CFR Part 280. Underground Storage Tanks Containing Petroleum; Financial Responsibility Requirements; Interim Final Rule (UST #128)


Wednesday
May 2, 1990
- 90-100
                    IFR
Part VIII



Environmental

Protection Agency

40 CFR Part 280
Underground Storage Tanks Containing
Petroleum; Financial Responsibility
Requirements; Interim Final Rule

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18566 Federal Register / Vol. 55, No. 85 / Wednesday, May 2, 1990 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY

40 CFR Part 280

[FRL-3761-8]

Underground Storage Tanks
Containing Petroleum; Financial
Responsibility Requirements

AGENCY: Environmental Protection
Agency (EPA).
ACTION: Interim final rule with request
for comments.

SUMMARY: The Environmental Protection
Agency (EPA) is today publishing an
interim final rule amending the financial
responsibility requirements for
underground storage tanks (USTs)
containing petroleum that appeared in
the Federal Register on October 26,1988
(53 FR 43322). Specifically. EPA is
modifying the compliance dates under
40 CFR 280.91(c). Under the
modification, all petroleum marketing
firms owning 13-99 USTs at more than
one facility will be required to comply
with the requirements of 40 CFR part
280, subpart H—Financial
Responsibility—as of April 26,1991.
This modification extends the deadline
from the previous date of April 26,1990.
The amendments published today will
provide additional time for the
development of financial assurance
. mechanisms (especially, state assurance
funds) to enable this group to comply.-
DATES: The amendments to 40 CFR part
280 contained in this rulemaking are
effective May 2,1990. EPA will accept
comments on today's rulemaking on or
before June 1,1990. '
ADDRESSES: Comments may be mailed
to the Docket Clerk (Docket No. UST-3),
Office of Underground Storage Tanks
(OS-400), U.S. Environmental Protection
Agency, 401 M Street SW.. Washington,
DC 20460. Comments received by EPA
may be inspected in the public docket,
located in room 2427 (Mall), U.S.
Environmental Protection Agency, 401 M
Street SW., Washington, DC 20460, from
9 a.m. to 4 p.m., Monday through Friday,
excluding Federal holidays.
FOR FURTHER INFORMATION CONTACT:
The RCRA/Superfund Hotline at (800)
424-9346 (toll free) or (202) 382-3000 in
Washington, DC.
SUPPLEMENTARY INFORMATION: On
October zti, laaa, UFA promulgated
financial responsibility requirements
applicable to owners and operators of
underground storage tanks (USTs)
containing petroleum (53 FR 43322). In
the final 'rule, EPA 'established a phased
schedule of compliance for owners and
operators of petroleum USTs. Petroleum
marketing firms with 13-99 USTs at
more than one facility were required to
comply with the financial resppnsibility
requirements by April 26, 1990. The .
principal reason for adopting the phased
compliance approach was to allow
providers (including private insurance
companies and states intending to
establish state assurance funds) of
financial assurance mechanisms the
time necessary to develop new policies
and programs or to conform their
policies and programs with EPA
requirements. (See S3 FR 43324.)
Since October 1988, EPA has
monitored the development of financial
assurance markets, especially (1) ;
insurance for corrective action and third
party liability and (2) state assurance
funds, to determine whether financial
assurance mechanisms were -becoming
available to satisfy the needs of the
regulated community. Based on this on-
going review, EPA believes that tank
owners required to comply by April 26,
1990, need additional time to meet
insurers' 'standards for coverage. Also,
states need additional time to develop
state assurance funds, to submit them to
EPA for review and approval as
financial assurance mechanisms, and to '
make any modifications necessary for
approval. Therefore, EPA is now • ,
extending the compliance date for
owners and operators of 13-99 USTs at
more than one facility from April 26,
1990 to April 26, 1991. The Agency is
hopeful that this one year extension will
provide adequate time for tank owners
and operators to obtain assurance.
I. Authority
These regulations are issued under the
authority of sections 2002, 9001, 9002,
9003, 9004, 9005, 9006, 9007, 9009 of the
F.->liH Woota n: --- -jai Act as amended.
*i i._ ^-""-f "* amendments of this Act
have been under the Resource
Conservation and Recovery Act of 1976,
the Hazardous and Solid Waste
Amendments of 1984 (Pub. L 98-616)
and the Superfund Amendments and
Reauthorization Act of 1986 (Pub. L. 99-
499) (42 U.S.C. 6921. 6991. 6991(a),
6991(b), 6991(c), 6991(d), 6991(e), 6991(f),
and6991(h)).
IL Background
When devising the phased compliance
approach, thp Aopncy vyan'^d to.achieve
thp hp«st Hplanrp hpfwppn tK
ensure tinancial capability for
addressing UST releases and the
necessary time for owners and
operators to obtain assurance
mechanisms. The Agency attempted to
establish compliance dates which were
as early as possible, considering the
type of assurance different types of
facilities were likely to obtain.
Petroleum marketers owning or
operating 1,000 or more USTs and non-
marketers with more than $20 million in
tangible net worth were required to
comply by January 24,1989, based
primarily on their ability to qualify for
self-insurance. Petroleum marketers
with 100-999 USTs were required to
comply by October 26,1989.
These marketers were estimated to be
relatively more likely to be able to
obtain insurance; some of them were
also expected to qualify as self-insurers.
Petroleum marketers owning 13-99 USTs
at more than one facility were required
to comply by April 26,1990. These
marketers were estimated to be less
likely to be able to obtain insurance
than members of the October 26,1§89
compliance group. Petroleum marketers
owning or operating fewer than 13 USTs
(or owning or operating a single facility
with fewer than 100 USTs), and UST
owners and operators that were not
petroleum marketers (including local
government entities) were required to
comply by October 26,1990. This group
was expected to rely.primarily on state
assurance funds for compliance.
As EPA has been monitoring the
development of financial assurance
mechanisms, and as the Agency has
learned more.about the way insurers'
operate in the UST insurance market,
EPA believes that our original
compliance date for this group
(marketers owning 13-99 USTs at more
than one facility) has to be extended
based on new information. When
devising the original phased compliance
schedule, the Agency expected that
members of this compliance group
would rely primarily on insurance and
that 18 months from promulgation of the
final financial responsibility rule would
provide adequate time" for insurers to
process applications and for owners and
operators to upgrade their USTs to meet
insurers* requirements. Since
promulgation of the final rule, however,
we have learned that tank owners and
operators require additional time to
comply with conditions imposed by the
insurance industry. Some of these
conditions include having tanks, newer
than 15 years of age, a clean site, a
reliable method of leak detection, etc.
For example, some .insurers have
informed FPA. •h°«.fh
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insurance which indicated that, less
than 2% of fh'e USTs in the April 26,1990
compliance group were covered by UST
insurance as of March 1. 1990. Because
of the still limited availability of
insurance, EPA does not believe this low
compliance record is due to an
unwillingness to comply with EPA's
requirements. Rather, the Agency
believes that this low compliance rate is
a symptom of the problems of UST
owners and operators in obtaining the
requisite insurance.
In addition, the Agency believes that
many more members of this compliance
group must rely on state assurance
funds to demonstrate compliance with
the financial responsibility
requirements, and not on insurance,
than the Agency had originally '
projected. In order for owners and
operators to rely on state assurance
funds as compliance mechanisms, states
must submit their funds to EPA.
Although owners and operators are
deemed to be in compliance when the
state funds are submitted, the Agency
has not considered submitted funds
when determining availability, since the
funds ultimately could be disapproved.
To date, nine state assurance funds
have been approved by EPA to serve as
compliance mechanisms. Many more
states have submitted funds and are in
the process of making any modifications
necessary for approval. The remaining
states either have not submitted their
funds to EPA or are in the process of
developing assurance funds. Since many
of the members of this compliance group
must rely on state assurance funds to
comply with the requirements,
additional time is needed to allow states
to develop, submit, and receive approval
for the funds.
By extending the compliance date for
this group to April 26,1991, owners and
operators will have additional ti
meet insurers' standards and states will
have additional time to submit their
state assurance funds to EPA for
approval so that owners and operators
can use them to comply with the
financial responsibility requirements.
EPA is not soliciting comments prior
to the effective date of today's
rulemaking. Under section 3(b) of the
Administrative Procedures Act, 5 U.S.C.
553(b), the Agency may for good cause
omit notice and comment procedures. .
The Agency believes it has good cause
to omit notice and comment procedures.
•When the Agency developed the 'phased
schedule of compliance, it predicted that
18 months from promulgation of the final
financial responsibility rule would
provide adequate time for petroleum
marketers owning.13-99 tanks to comply
with the financial responsibility
requirements. Since that time, the
Agency has been monitoring the
development of financial assurance
mechanisms, particularly insurance and
state assurance funds.
Through monitoring the insurance
market, the Agency'has learned that the
UST insurance market is a volatile one,.
Because of this volatility, the Agency '
remained hopeful that it would not be
necessary to revise the phased
compliance schedule.
Recent developments in the UST
insurance market demonstrate the
volatility of this sector of the insurance
industry. When the final financial
responsibility regulation was
promulgated in 1988, there were
approximately three providers of UST
insurance. Since that time additional
insurers have entered the market while
some insurers have left the market. For
example, the Pollution Liability
Insurance Association was a major
provider of UST coverage, but withdrew
from the market in 1989. The
Environmental Protection Insurance
Company, a new entrant into the UST
insurance market also withdrew in
1989. In February 1990, Petromark, a ,
major provider of UST insurance,
experienced serious financial difficulties
and announced that it may not be able
to continue providing UST insurance.
In addition to monitoring the
development of the UST insurance
market, the Agency is also monitoring ,
/elopment of state assurance
funds. EPA is currently reviewing
numerous state assurance funds to
determine whether they are acceptable
compliance mechanisms for owners and
operators.
Because delays involved in proposing
the amendments for public comment
would prevent the promulgation prior to
the originally scheduled compliance
date, allowing the opportunity for public
comment would result in unnecessary
closure of ta.nks and economic distress
lo the regulated community w\\h no
additional benefits to the environment
. and public health. EPA believes,
therefore, that providing notice and ,
comment on these amendments is
impracticable and'contrary to the public
interest.
The Agency is, however, soliciting
comments on today's regulatory
amendments. Comments may be
submitted on or before June 1,1990.
Comments will be considered by the
Agency and, if necessary, the Agency
will issue a revised-final rule changing
today's amendments to respond to these
comments.

List of Subjects in 40 CFR Part 280

Administrative practice and
procedure. Environmental-protection,
Hazardous materials insurance. Oil
pollution. Penalties, Petroleum,.
Reporting and recordkeeping
requirements, State program approval.
Surety bonds. Underground storage
tanks, Water pollution control.
Dated: April 25,1990.
William Reilly,
Administrator. . .;

For the reasons set out in our
preamble, part 280 of title 40 of the Code
of Federal Regulations is amended as
set forth below.

PART 280—TECHNICAL STANDARDS
AND CORRECTIVE ACTION
REQUIREMENTS FOR OWNERS AND
OPERATORS OF UNDERGROUND
STORAGE TANKS (UST)

1. The authority citation for part 280
continues to read as follows:
Authority: 42 U.S.C. P912, 6991, 6991(a),
6991(b), 6991(c), 6991(e), 6991(f). and6991(h).

2. Section 280.91(c) is revised to read
as follows:

§ 280.91 Compliance dates.
* * * * *

[FR Doc. 90-10198 Filed 5-1-90: 8:45 amj
BILLING CODE 6S6O-SO-M
S-041999 0029(01)(01-MAY-90-11:06:44)
F4701.FMT...[16,30]...7-08-88
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