No. 28518 (Amendment): R311-207-5. Responsible Parties' Standard Liability and Customary, Reasonable and Legitimate Expenses

DAR File No.: 28518
Filed: 02/15/2006, 10:49
Received by: NL

 

RULE ANALYSIS

Purpose of the rule or reason for the change:

Occasionally, consultants who perform corrective action at leaking underground storage tank sites propose designing and manufacturing their own equipment for use in the corrective action and clean-up of the site. The purpose of the proposed amendment is to clarify the time and material reimbursement constraints for consultant designed and manufactured equipment used at sites utilizing a time and material reimbursement method. The proposed change does not apply at pay for performance based sites.

 

Summary of the rule or change:

This change adds Subsection R311-207-5(e). It also provides that the Petroleum Storage Tank Trust Fund may reimburse an eligible claimant for use of a consultant's originally designed and manufactured equipment used for corrective action. Reimbursement will be made in accordance with the following: 1) the consultant's actual direct labor hours for manufacturing the equipment; and 2) the actual costs (to the consultant) of the materials used to manufacture the equipment. No reimbursement will be made for labor hours and costs associated with patenting or marketing. The price paid for the equipment by the Petroleum Storage Tank Trust Fund shall not exceed the sales price for comparable equipment available to other customers through the consultant or through another source.

 

State statutory or constitutional authorization for this rule:

Sections 19-6-105, 19-6-403, and 19-6-419

 

Anticipated cost or savings to:

the state budget:

This rule change may result in savings to the Petroleum Storage Tank Trust Fund by allowing consultants who perform environmental cleanups to design and manufacture equipment for specific site conditions and projects. The aggregate savings to the Fund would depend on the equipment that might be developed in the future and how frequently it is employed on cleanup sites. Experience with one piece of equipment that has been developed indicates it could result in savings over time of $180,000 if used at 100 typical cleanup sites.

 

local governments:

This rule change may result in comparable savings to local governments that, as owners or operators of underground storage tanks, must pay for environmental cleanups.

 

other persons:

This rule change may result in comparable savings to private parties who, as owners or operators of underground storage tanks, must pay for environmental cleanups.

 

Compliance costs for affected persons:

There are no compliance costs associated with this rule change. The change only specifies how reimbursement will be made from the Petroleum Storage Tank Trust Fund when a consultant designs or manufactures, or both, equipment used in an environmental cleanup.

 

Comments by the department head on the fiscal impact the rule may have on businesses:

The rule change may encourage consultants to use their knowledge of specific site and project conditions to manufacture equipment that cleans up environmental problems in a more effective manner, resulting in cost savings to the individual or business that is paying for the cleanup. Dianne R. Nielson, Executive Director

 

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Environmental Quality
Environmental Response and Remediation
168 N 1950 W
SALT LAKE CITY UT 84116-3085

 

Direct questions regarding this rule to:

Gary Astin at the above address, by phone at 801-536-4103, by FAX at 801-359-8853, or by Internet E-mail at [e-mail]

 

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

03/31/2006

 

Interested persons may attend a public hearing regarding this rule:

3/28/2006 at 2:00 PM, Department of Environmental Quality, 168 N 1950 W, Room 201, Salt Lake City, UT

 

This rule may become effective on:

05/15/2006

 

Authorized by:

Dianne R. Nielson, Executive Director

 

 

RULE TEXT

R311. Environmental Quality, Environmental Response and Remediation.

R311-207. Accessing the Petroleum Storage Tank Trust Fund for Leaking Petroleum Storage Tanks.

R311-207-5. Responsible Parties' Standard Liability and Customary, Reasonable and Legitimate Expenses.

(a) Costs claimed by the responsible party in accordance with Section 19-6-419(1) must be customary, reasonable, and legitimate, and must be expended for customary, reasonable, and legitimate work, as determined by the Executive Secretary. The Executive Secretary may determine the amount of fund monies that will be reimbursed to an owner or operator for items including, but not limited to, labor, equipment, services, and tasks established according to the provisions of R311-207-7 or such other methods that are applicable to the item or task. As conditions require, costs of the following activities may be considered to be customary, reasonable, and legitimate: performing abatement, investigation, site assessment, monitoring, or corrective action activities; providing alternative drinking water supplies; and settling or otherwise resolving third party damage claims and settlements in accordance with Section 19-6-422.

(b) This rule incorporates by reference the TABLE OF UTAH PETROLEUM STORAGE TANK TRUST FUND TIME AND MATERIAL REIMBURSEMENT STANDARDS dated November 14, 2002. This document contains specific items that will and will not be reimbursed by the Fund.

(c) This rule incorporates by reference the UTAH PETROLEUM STORAGE TANK FUND, MAXIMUM ALLOWABLE RATE LIST FOR EQUIPMENT AND SUPPLIES as revised November 14, 2002. This document contains specific rates the Fund will reimburse the responsible party or consultant for the included items.

(d) If a claim that does not comply with the requirements of R311-207 is returned by the Executive Secretary to a responsible party or consultant for correction, the responsible party or consultant shall not claim for reimbursement the costs expended to correct and re-submit the claim.

(e) The Petroleum Storage Tank Trust Fund may reimburse an owner or operator or other eligible claimant for the use or purchase of his consultant's originally designed and manufactured equipment provided the cost is customary, reasonable, and legitimate as determined by the Executive Secretary. The rate of reimbursement shall not exceed the consultant's direct labor hours for manufacturing at specified fixed hourly rates in the rate schedule approved by the Executive Secretary and the materials at cost to the consultant. Material costs shall include adjustments for all available discounts, refunds, rebates and allowances which the consultant reasonably should take under the circumstances, and for credits for proceeds the consultant received or should have received from salvage and material returned to suppliers. In no event shall the price paid by the Petroleum Storage Tank Trust Fund exceed the sales price of comparable equipment available to other customers through the consultant or through another source. The consultant's claimed direct labor hours for manufacturing and costs shall be documented through time sheets, original invoices or other documents acceptable to the Executive Secretary. No reimbursement shall be made for undocumented labor hours and costs. No reimbursement shall be made for labor hours and costs associated with patenting or marketing.

 

KEY: financial responsibility, petroleum, underground storage tanks

Date of Enactment or Last Substantive Amendment: [February 4, 2003]2006

Notice of Continuation: March 6, 2002

Authorizing, and Implemented or Interpreted Law: 19-6-105; 19-6-403; 19-6-419