Claims for Cleanup Costs

PURPOSE: This rule describes who can make claims against the Petroleum Storage Tank Insurance Fund, when and how such claims must be made, requirements to seek preapproval of costs, what costs the fund considers eligible, and how to request payment from the fund. (1) A notice of claim must be submitted in writing to the board as soon as reasonably possible after a fund participant or beneficiary described in section (4) of this rule: (A) Knows or reasonably suspects that a release from a tank has occurred; (B) Receives notice of the assertion of an obligation to pay cleanup costs or damages as a result of a release from tanks on the property; or (C) Learns that petroleum contamination exists on or near a tank site at levels such that a cleanup is required by the Department of Natural Resources. (2) Except as described below, prior to the initiation of any work where cleanup costs will be incurred, whether within the deductible or in excess of the deductible, the cleanup costs must first be approved by the board. Failure to obtain approval of the cleanup costs may subject the fund participant or fund beneficiary to reduction or denial of benefits. (A) Fund participants or beneficiaries are not required to obtain prior approval of the board for the costs of necessary first aid or emergency response. (B) In cases where first aid or emergency response is provided, the fund participant or beneficiary must notify the board of such activities as soon as practical. (3) The board retains final authority to make a determination concerning all eligibility issues, including but not limited to, whether costs for products and services were reasonable, and whether the costs incurred were necessary to achieve the cleanup required by the Department of Natural Resources. (4) Fund participants or beneficiaries may request pre-approval and reimbursement of costs from the fund— (A) For a release that occurs or is discovered on a date that the participant is participating in the fund. 1. The fund participant must provide notice of claim to the board while the participant is insured and before expiration or cancellation of the participant’s coverage, or during an extended reporting period granted by the board under 10 CSR 100-4.010 or 10 CSR 100-4.020. 2. Fund participants must get cleanup costs approved in advance, as described in this rule. 3. A fund participant who has properly made a claim may request that the board assign his or her benefits for cleanup costs to another party, and the board may, with the consent of the other party and at the board’s sole discretion, agree to such assignment; (B) For a site where one (1) or more petroleum storage tank(s) was/were in use on December 31, 1997, the owner or operator applied to participate in the fund by December 31, 1997, that application was ultimately accepted by the board, there are ongoing costs of cleanup associated with a release from one (1) or more of those tanks which occurred prior to the date the application was accepted, and the cleanup began after August 28, 1989. 1. Fund participants must get cleanup costs approved in advance, as described in this rule. 2. In order to maintain its status as an eligible site, the owner or operator of any petroleum storage tanks at the site must maintain participation in the fund as long as such tanks are in use. Failure to do so shall result in the site becoming ineligible; costs incurred after the date of cancellation or nonrenewal of participation in the fund are not eligible. Should the owner or operator elect to participate in the fund again, he or she may become eligible under subsection (4)(A) for any new release; (C) For a site where a release occurred as a result of the operation of one (1) or more petroleum storage tanks, cleanup began or will begin after August 28, 1989, and the tank(s) from which the release occurred was/were taken out of use prior to December 31, 1997, provided such site was documented by or reported to the Department of Natural Resources prior to December 31, 1997. 1. For the purposes of this subsection, evidence of a site being documented by or reported to the Department of Natural Resources may include, but is not limited to: A. Completion of a tank registration form; B. Completion of the notification form circulated by the Department of Natural Resources in 1995–1997; C. A letter, sent via U.S. mail or overnight delivery service, identifying the location of the site and indicating the existence or prior existence of tanks on the site; D. A written message transmitted via facsimile, identifying the location of the site and indicating the existence or prior existence of tanks on the site; E. A Site Assessment Report or similar report, submitted to the department, identifying the site as one where tanks were previously operated; or F. Any other similar documentation which is determined by the board to provide reasonable evidence of such fact. 2. Fund beneficiaries may be required by the board to provide evidence that the site was documented by or reported to the Department of Natural Resources prior to December 31, 1997. 3. Fund beneficiaries must get cleanup costs approved in advance, as described in this rule; (D) For a site described in subsection (4)(B) or (4)(C), except the release occurred and was being remediated prior to August 28, 1989. 1. Fund participants and beneficiaries must get cleanup costs approved in advance, as described in this rule; and (E) For a site where underground storage tanks which contained petroleum were taken out of use prior to December 31, 1985, and the current owner purchased such site before December 31, 1985, provided such site was reported to the board on or before June 30, 2000. For the purposes of this subsection, current owner shall mean the person who owns a site at the time it is reported to the Petroleum Storage Tank Insurance Fund Board of Trustees or its designated representative. 1. Fund beneficiaries must get cleanup costs approved in advance, as described in this rule. (5) Fund participants or beneficiaries may not receive monies from the fund for the following sites: (A) Sites owned by a railroad corporation, as defined in section 388.010, RSMo, or airline company as defined in section 155.010, RSMo, at the time the release occurred; (B) Sites contaminated by a release from a tank that— 1. Is or was used to store hazardous substances when the release occurred; 2. Is a farm or residential tank of one thousand one hundred (1,100) gallons or less, which is used for storing motor fuel for noncommercial purposes; 3. Is or was used, at the time of the release, for storing heating oil for consumptive use on the premises; 4. Is a septic tank or part of a storm water or waste water collection system; 5. Is a flow-through process tank; 6. Is situated in an underground area, such as a basement, the tank is on or above the floor; or 7. Is part of a transformer, circuit breaker, or similar electrical equipment; and (C) Sites contaminated by a release of petroleum from a tank which is or was located at a refinery, pipeline terminal, or marine terminal. (6) The following persons may request preapproval of costs and reimbursement from the fund: (A) A fund participant; (B) A fund beneficiary; or (C) A creditor, or the creditor’s subsidiary, who is a successor in interest as defined in section 319.131.3, RSMo. (7) Persons who believe they have suffered property damage, bodily injury, or other damages, or have incurred costs to clean up petroleum contamination on their property resulting from the operation of tanks on an adjacent or nearby site, may not request payment directly from the fund. Such claims must be made directly to the fund participant. (8) Fund participants and beneficiaries who desire reimbursement from the fund are required to seek preapproval of cleanup costs by following the procedures outlined below: (A) Tank Removal—Prior to removal of a petroleum storage tank or other activity involving excavation of contaminated soil, a fund participant or beneficiary must— 1. Obtain an adequate number of bids or proposals from qualified contractors or consultants to demonstrate that a fair and reasonable price will be paid. The bids or cost estimates must include all tasks and services which may be necessary and an anticipated schedule for the tasks; and 2. Submit the bid(s) or proposal(s) to the board, including: A. A cost estimate for excavation and hauling of contaminated soil, expressed as a unit cost (e.g., per ton or per cubic yard); B. A cost estimate for disposal or treatment of contaminated soil; C. A cost estimate for backfill, expressed as a unit cost; D. A cost estimate for removal, treatment, and/or disposal of contaminated water which may be encountered during the excavation; E. A cost estimate for project management, supervision, and reporting; F. A cost estimate for collection and/or analysis of soil and water samples; G. A contingency cost estimate, expressed as unit costs, for any additional costs which may be incurred if field conditions warrant or necessitate more work than anticipated; and H. A cost estimate for any other anticipated cleanup costs; (B) Site Characterization—Prior to conducting a site characterization which is required in response to a release, a fund participant or beneficiary must— 1. Obtain an adequate number of bids or proposals from qualified contractors or consultants to demonstrate that a fair and reasonable price will be paid and submit the bid(s) or proposal(s) to the board. The bids or cost estimates must include: A. A description of all tasks and services which may be necessary; B. A site conceptual model; C. Clearly-presented conclusions regarding the current and reasonably anticipated future uses of potentially-impacted properties; D. The anticipated schedule of events; E. Estimated costs for all field activities, with drilling quoted on a per lineal foot basis; F. A cost estimate for laboratory analysis of soil and/or water samples, as appropriate; G. A cost estimate for project management, oversight, data analysis, reporting, and similar activities, as appropriate; H. A contingency cost estimate, expressed in unit costs, for additional costs which may be incurred if field data indicates the need for expanded field investigation; and I. A cost estimate for any other anticipated costs associated with the site characterization; (C) Risk Assessment. 1. Prior to preparing a risk assessment, a fund participant or beneficiary must submit one (1) or more cost estimate(s) to the board. A. The cost estimate(s) must include the anticipated schedule of events and/or tasks. B. The cost estimate(s) may be combined with a cost estimate for site characterization. C. The cost estimate(s) may include costs for both a Tier 1 and a Tier 2 risk assessment. D. The cost estimate(s) may include costs for preparation of a corrective action plan. 2. The board may require a fund participant or beneficiary to submit a cost estimate for a Tier 2 or Tier 3 risk assessment. (D) Corrective Action. 1. Prior to conducting corrective action in response to a release, a fund participant or beneficiary must obtain an adequate number of bids or proposals, each of which must include a schedule, from qualified contractors or consultants to adequately compare costs of alternatives for achieving the applicable corrective action standards. These proposals may include: A. Treatment, reduction of concentrations, removal, or remediation of chemicals of concern; B. Mitigation or elimination of complete exposure pathways; C. Preventing future receptors; or D. Any combination thereof. 2. Prior to conducting corrective action, a fund participant or beneficiary must submit the bid(s) or proposal(s) to the board. 3. When corrective action includes the lease or purchase and installation of equipment designed to clean up petroleum contamination, the fund participant or beneficiary is required to solicit competitive bids for such equipment and provide such bids to the board. A fund participant or beneficiary who is paid salvage value for remediation equipment after corrective action is completed shall report such to the board, which will reduce its reimbursement for decommissioning and removal of said remediation equipment by that amount. (E) The board will respond in writing to bid(s) or cost estimate(s) submitted by fund participants or beneficiaries, and will state whether the bid(s) or cost estimate(s) are eligible, reasonable, and necessary. This response will be based on information submitted for each project, as well as information available to the board from its review of other cost estimates and its processing of similar claims. To the extent possible, the board’s response will note which specific tasks, rates, or items are deemed to be ineligible, unreasonable or unnecessary, and will explain the reason for its decision. (F) If the bid(s) or cost estimate(s) submitted to the board are incomplete, or contain costs which are higher than the board determines to be reasonable, the board may— 1. Agree to pay a lesser cost; 2. Ask the fund participant or beneficiary to solicit additional cost estimates; or 3. Ask the fund participant or beneficiary to demonstrate how the estimate was prepared. (G) The board reserves the right to reject any proposed costs or estimates if, in the opinion of the board and at its sole discretion, such costs are ineligible, unreasonable, or Board of Trustees unnecessary. (9) The board will recognize eligible, reasonable, and necessary costs incurred for the following activities: (A) Costs incurred to characterize the extent of and assess risks posed by a release from a petroleum storage tank; and (B) Costs incurred for corrective actions taken in accordance with state or federal regulations in response to a release from a petroleum storage tank. (10) Costs not associated with cleanup of a release from a petroleum storage tank are not eligible. Such costs include, but are not limited to: (A) Costs of excavation solely necessary to remove a petroleum storage tank; (B) Costs of removal of tanks or piping, cleaning of the tank, transportation and disposal of the tank and piping; (C) Costs of demolition and removal of buildings, canopies, dispensers, etc.; (D) Costs of excavation, transport, treatment or disposal of soil which is not contaminated with petroleum at levels such that the Department of Natural Resources requires corrective action, except that— 1. The cost of removal of concrete or similar surface material, overburden, or fill material which is necessary to access contaminated soil for removal is eligible; and 2. Costs for transport and treatment or disposal of backfill which surrounds underground tanks or piping, which is removed during tank closure activities, and which is contaminated at a level such that the Department of Natural Resources prohibits placement of the material back into the excavated area, are eligible; (E) Costs for environmental site assessments, or similar work, the purpose of which is to determine whether a release has occurred; (F) Markup of costs charged by a treatment or disposal facility which is used for disposition of contaminated soil; (G) Markup of costs charged by a laboratory for analysis of water, soil, or vapor samples; (H) Markup by the environmental consultant or contractor of major subcontracted work, such as drilling, well installation, or pushprobe investigation; (I) Repairs and maintenance of tanks and lines; (J) Tank and line tightness tests; (K) Preparation of claim submittals; (L) Paving or resurfacing, except as required as a result of necessary cleanup activities. Claims for resurfacing shall be paid on a depreciated basis, or on the basis of the actual cash value of the surface which existed immediately prior to the cleanup; (M) Installation of new tanks, lines, spill/overfill prevention devices, etc.; or (N) Other costs excluded by the document issued by the board to fund participants (see 10 CSR 100-4.010(5) and 10 CSR 1004.020(5)). (11) The board shall have the authority to investigate as needed in response to the submission of a notice of claim or invoices. (A) The board shall have the right, but not the obligation, to— 1. Make inspections of sites for which the fund participant or beneficiary has given notice of claim; 2. Request and review records concerning the operation of tanks at the site, maintenance of the tank system, site characterization, or corrective actions; or 3. Take recorded statements from tank owners, operators, their employees, contractors, consultants, local officials, or other persons with pertinent knowledge or information about a claim. (B) Fund participants and beneficiaries must provide copies of records and reports which the board requests as part of its claim investigation. (C) Neither the fund participant or beneficiary nor the board shall waive any rights expressed in Missouri law or the coverage document issued by the board by virtue of the participant or beneficiary submitting notice of claim or invoices, or the board investigating the claim. (12) When a fund participant or beneficiary incurs costs for cleanup of petroleum contamination, he or she shall comply with the procedures set forth below to request reimbursement from the fund: (A) Persons requesting reimbursement from the fund must send invoices for the work done, along with a copy of any reports generated by consultants, contractors, or laboratories as part of the work, to the address specified by the board. 1. Such invoices must be submitted within two (2) years of the date the costs were incurred. Failure to submit invoices within that time frame shall waive the fund participant’s or beneficiary’s rights, and those of their successors and assigns, to any benefits which would have otherwise been paid by the Petroleum Storage Tank Insurance Fund Board of Trustees for such costs. 2. Original invoices are requested; if photocopies are submitted, they must be accompanied by a signed statement certifying that the copies are true and accurate. 3. Invoices must match the general format of the previously-submitted cost estimate; (B) If the person requesting reimbursement is not the owner of the land where the work is being or has been done, he or she must submit either proof of payment or lien waivers with the invoices; (C) To the extent possible, invoices should be accumulated and submitted as a batch when a project, or phase of a project, is complete. In cases where the size of a project would present a financial hardship, the fund will make periodic reimbursements as the project progresses; (D) The board may, for the purposes of standardizing claim submittals and assisting persons in preparing such submittals, require submission of a form along with invoices, summarizing the costs for which reimbursement is being sought, identifying the purposes of such costs, and providing such other information as may be needed to more efficiently process claims; (E) The board will respond in writing to every request for reimbursement. If the response indicates some or all costs are being disallowed or denied, the response will identify those costs and the reason for such disallowance or denial; and (F) For claims made under subsection (4)(A), the first reimbursement for eligible costs will be reduced by the applicable deductible. For claims made under subsections (4)(B), (C), (D), or (E), the first reimbursement for eligible costs will be reduced by ten thousand dollars ($10,000). AUTHORITY: sections 319.129 and 319.131, RSMo 2016.* Original rule filed April 1, 1999, effective Nov. 30, 1999. Amended: Filed March 31, 2000, effective Sept. 30, 2000. Amended: Filed Nov. 15, 2001, effective May 30, 2002. Amended: Filed Aug. 1, 2014, effective March 30, 2015. Amended: Filed Feb. 15, 2018, effective Sept. 30, 2018. *Original authority: 319.129, RSMo 1989, amended 1991, 1996, 1998, 2001, 2008 and 319.131, RSMo 1989, amended 1991, 1994, 1995, 1996, 1998, 1999, 2001, 2008.