Regulation of Underground Storage Tanks (1998)

Legislative Program Review and Investigations Committee

Regulation of Underground Storage Tanks (1998)

In 1998, the program review committee undertook a review of the regulation of underground storage tanks (UST) as carried out by the Department of Environmental Protection (DEP). Leaks from such tanks represent a significant source of groundwater contamination. The purpose of the committee's study was to: assess Connecticut's performance in regulating tanks; identify any obstacles or delays in obtaining regulatory compliance; and develop proposals to improve the regulatory system and promote compliance.

The committee review showed Connecticut had made better progress than most states in upgrading or closing underground storage tank facilities in accordance with federal requirements and deadlines. However, it was also clear stronger enforcement measures and additional enforcement staff were needed to promote regulatory compliance in the future. The committee additionally found the state underground storage tank Clean-up Account program should be continued, but was in need of improved management and clarified policies.

In total, the program review committee adopted 31 recommendations to improve state underground storage tank programs. A number were incorporated as provisions of Senate Bill 1217 of the 1999 regular legislative session, which was not enacted. One key recommendation -- to provide funding for site remediation to residential heating oil tank owners -- was included in other legislation (Public Act 99-269) that did become law, effective July 1, 1999. However, P.A.99-269 financed residential clean-ups with bond funds and not a portion of the tax on gross receipts of petroleum products, as the program review committee had recommended.

The program established under P.A. 99-269 provides for reimbursement of up to $50,000 after a homeowner has paid the first $500 for remediation of contamination found during the removal of a residential underground storage tank. Applications for reimbursement are submitted to the Clean-up Account Review Board on behalf of homeowners by registered contractors, who must meet minimum qualification and financial assurance requirements and pay a $500 registration fee to DEP. The program was expanded to above-ground tanks in 2000 under P.A. 00-201. Public Act 00-201 also: required DEP to inspect to confirm the reasonableness of remediation activities when the costs exceed $10,000; clarified the review board's authority to make payments for clean-ups; and established an appeal process.

Funding for the residential program, reliant on the bonding process, has been unpredictable. The 1999 legislation indicated no less than $2 million in bond funds should be set aside for the program. In its 1999 response, DEP indicated it had requested and been allocated $2 million in November 1999; it requested, but did not receive, another $1 million in May 2000. P.A. 00-201 required bond funds for FY 01 of not less than $4 million, subject to State Bond Commission approval. To meet the demand for reimbursement, the commissioner requested $15 million in June 2000, but was allocated just $2 million. Another request for $13 million was made in August and September, but was not considered by the bond commission in either month. However, in December the commission approved $5.04 million in bond funds for the residential program.

According to DEP, administration of the residential program has impeded corrective actions related to commercial tank regulation, enforcement efforts, and clean-up program operations. DEP reports in its 2000 compliance response (February 13, 2001 letter) that:

The implementation of the residential underground storage tank amnesty program without the provision of additional staff resources and the funding of this program through the use of bond funds continues to cause confusion, hinder the progress of the program and consume enormous amounts of department staff resources. The reassignment of staff resources has hindered implementation of existing programs and implementation of some of the committee's recommendations. The significant time commitment and effort by the department has contributed to the ever-increasing backlog of supplemental claims.

Residential tank program activities. The table below indicates the level of activity in the residential tank clean-up program since it began in July 1999 through December of 2000. The numbers have increased dramatically in all categories since December 1999, representing the tremendous demand for the program, and as DEP indicates, the concomitant demand on staff and program financing. (To address the financial demands, the governor's proposed FYs 01-03 budget requests $17 million from the FY 01 surplus to fund the residential UST program.) Despite the administrative and funding problems, DEP and the Clean-up Account Review Board have been successful in ensuring the remediation of a substantial number of residential tank sites -- almost 600 claims approved for slightly more than $4 million in cost reimbursements.


Residential Tank Program Activities: July 1999 - December 2000.
Activities	Reported 12/99	Cumulative 12/00
Number of Registered Contractors	144	152
Number of Reimbursement Applications Received	258	1,451
Number of Claims Approved by Board	84	591
Total Dollar Amount Awarded	$457,932	$4,035,227
Number of Pending Claims	174	815
Total Dollar Amount of Pending Claims	$1,323,733	$6,673,315
Source of Data: Department of Environmental Protection, Report to the Connecticut General Assembly Committee on the Environment as Required by Public Act 99-269, December 2000.

Other areas of compliance. Since the program review committee's report in December 1998, the Department of Environmental Protection and the Clean-up Account Review Board have made progress in areas that were the subject of committee findings and recommendations. Last year DEP reported full compliance with six recommendations, including adoption of a consent agenda and creation of orientation materials for new members. In other areas, performance has not improved, either due to expanded demands of the residential program or the agency's failure to pursue new avenues to fund staff needs (e.g., a fee inspection program to fund additional enforcement staff). The department's compliance status during 2000 in areas where improvements were still to be implemented is summarized below.


Summary of Compliance with Committee Recommendations
*Recommendations*	*Status*	*Comment*
Add three additional staff to the enforcement unit.	None	DEP indicates staffing remains essentially the same and is still inadequate. DEP expects no increased state or federal funding for additional positions.
DEP adopt regulations to establish a fee inspection program, and use the fees collected to pay for some of the recommended enforcement staffing.	None	DEP indicates its current staff are needed to perform inspections and enforcement. Development of a fee inspection program is not a priority, even if it has potential for funding additional staff.
DEP adopt a tougher enforcement strategy after the federal deadline (December 22, 1998), including red-tagging to prohibit deliveries to tagged tanks.	Partial	Legislation to implement red-tagging did not pass. During 2000, DEP reported 57 consent orders to correct violations of the deadline -- 33 tanks were closed with completed remediation and a financial penalty assessed; 24 remain open, but none have yet to be referred to the attorney general's office. Five of the 34 orders issued during 1999 remain open at DEP, and two have been referred to the attorney general's office and await court disposition.
Validate, update, and expand the information on the database for the Leaking Underground Storage Tank (LUST) program.	Partial	DEP continues to make progress. New data are now entered into the database within one month of receipt. DEP is working on a unique facility identifier so information from different DEP divisions can be linked. Once linked, the information can be maintained in a central database.
Accurately record the number of leaks from residential home heating oil tanks	Full	DEP reports 2,388 leaks from residential tanks in 2000 (up 56 percent over 1999).
Provide funding to residential tank owners for clean-up costs.	Full	Residential tank program established as part of Public Act 99-269. (See table above.)
Conduct an actuarial study to determine the future liability of the Clean-up Account.	Partial	DEP awarded a contract for an actuarial study of the Clean-up Account in October 2000; the final report is due in the spring of 2001.
Prepare an annual report on the Clean-up Account and update the Clean-up Account Review Board on the status of the account periodically.	Full	DEP issued the first annual report to the General Assembly in 1999 and another in December 2000. During 2000, 730 claims from commercial sites were received -- 53 initial responsible party, 32 initial third-party, 486 responsible party supplemental, and 159 third-party supplemental claims. DEP states it reviews all initial claims within the statutorily required 90 days, but review of supplemental claims has slowed due again to the residential program workload.
Use the Clean-up Account database as a management tool to generate statistics on workload, processing times, and claims outcomes, and to detect fraud and abuse.	Partial	DEP continues to use the database to produce monthly and annual status reports to the board and DEP management on workload, processing times, and claim outcomes; DEP also continues to use it to detect redundant reimbursement claims.
Promote consistent treatment of applications in terms of noncompliance reductions, and adopt a written policy to guide staff and applicants on reductions.	None	Legislation incorporating this recommendation did not pass in 1999; DEP continues to indicate it is not implementing this policy administratively
Simplify the application process, develop separate forms for responsible and third party claimants, and develop plain language guidance to assist claimants.	Partial	A separate supplemental application was developed by DEP and presented to the board in November 1999; the board approved it during 2000. DEP indicates reassignment of staff to the residential program has prevented development of other materials.
Require at least one field inspection at each site for which a claim application has been filed.	Partial	Account staff still includes only one field inspector because of the priority placed on getting more cases to the board for action -- the inspector continues to split time between claim reviews and site visits. DEP developed a new regionalized approach to inspections as planned and reports 402 of the 941 clean-up sites have been inspected under the new format.
Establish a policy promoting community responsibility for multiple-site clean-up.	None	Legislation requiring a policy did not pass in 1999; the board has established no policy administratively and continued to review sites individually during 2000.
Clarify eligibility issues related to third party applications and what constitutes property damage.	None	The board has not developed written policies clarifying these issues -- DEP reports staff reassignments to the residential program have not allowed time; property damage is still determined on a case-by-case basis.
Prioritize Clean-up Account expenditures for site remediation and limit payments from the account to clean-up measures needed to protect human health and the environment. Adopt a closure standard based on risk-based corrective action for Clean-up Account sites.	None	The board has not established priorities for account spending or risk-based closure criteria specifically for tank sites; it continues to rely on the agency's general Remediation Standard Regulations to determine the efficacy of site remediation.
Designate which sites have been cleaned up and can officially be declared "closed."	None	DEP still does not designate sites as "closed." None of the 941 sites that submitted claims to the account to date have been designated cleaned up and officially closed. At least 549 did not submit any new claims during 2000, and three sites have now reached the statutory reimbursement limit.
Establish a position of executive director/legal counsel for the board.	Partial	Legislation to establish the position did not pass in 1999. In January 2000, the Office of Attorney General indicated it could no longer provide legal services to the board; a Request for Proposals (RFP) for provision of legal services to the board was issued in January 2001.
New legal counsel should develop an index of board decisions.	None	Legislation establishing the executive director/attorney position for the board did not pass in 1999. DEP indicates when outside counsel (see above) is hired to serve the board, implementation of the index may be possible.

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