Petroleum Underground Storage Tank Remediation, Upgrade And Closure Fund Created

By: Loretta N. Hardman
Bureau of State Case Management

(Note: See article correction notice at the bottom of this document)

On August 30, 1997, Senate Bill No. 1756 was signed into law. The Act, known as the Underground Storage Tank Finance Act, makes an appropriation for loans and grants for the upgrade, remediation and closure of certain underground storage tanks.

Loans and/or grants are available to owners and operators of a facility who own or operate less than 10 petroleum underground storage tanks in New Jersey, have a net worth of less than $2 million and can demonstrate the inability to obtain a commercial loan for all or a portion of the eligible costs. Financial assistance is also available to owners of residential buildings which have heating oil tanks and public entities who own or operate underground storage tanks.

Owners and operators may apply for loans up to 100% of the eligible costs. Loans cannot exceed $1 million per facility. The interest rate will be determined by NJEDA and may range from 2% to the Prime Rate. Public entities will receive interest free loans. Loan terms may not exceed 10 years.

Hardship grants not to exceed $250,000 are available to owners/operators for 100% of the project costs. Grant amounts are based on the portion of costs NJEDA determines the applicant cannot reasonably expect to repay. To qualify, an applicant must have a taxable income of less than $100,000 or net worth, exclusive of applicant's primary residence, of less than $100,000.

"Eligible costs" means the reasonable costs for equipment, work or services required to effectuate a remediation, an upgrade, or a closure and may include the cost of the preliminary assessment (PA) and the site investigation (SI) if conducted after August 30, 1997 and the tank was not removed before December 1, 1996. Eligible costs may include Department oversight costs. In the case of an upgrade or closure of a regulated tank, eligible project costs shall be limited to the cost of the minimal effective system necessary to meet all the regulatory requirements of federal and state law. Financial assistance may combine loan and grant monies.

The law also provides for the imposition of an annual surcharge upon the owner or operator of a regulated facility which is required to maintain evidence of financial responsibility in accordance with either state or federal law and who does not maintain that evidence of financial responsibility. The annual surcharge shall be $1,500 for facilities with one or two petroleum underground storage tanks, $3,500 for facilities with three to six petroleum underground storage tanks and $6,000 for facilities with seven or more petroleum underground storage tanks. The owner or operator shall pay this surcharge for deposit into the Petroleum Underground Storage Tank Remediation, Upgrade, and Closure Fund.

Therefore, if you are the owner or operator of a regulated underground storage tank containing petroleum, and have not indicated on your Underground Storage Tank Facility Certification Questionnaire that you have a financial responsibility assurance mechanism which meets federal or state requirements, you will be assessed the appropriate surcharge. Acceptable mechanisms for demonstrating financial responsibility include self-insurance, fully-funded trust funds, guarantees, insurance, surety bonds and letters of credit. Requirements for financial responsibility assurance can be found at 40 CFR Part 280.

Assessment of the surcharge will be based on information currently on record with the Underground Storage Tank Registration and Billing Unit. If there have been any changes to a facility that are not on record with the Department of Environmental Protection they should be indicated on an UST Facility Certification Questionnaire and filed with the Department.

Regulations to implement the provisions of the Underground Storage Tank Finance Act became effective April 6, 1998 and can be found at N.J.A.C. 7:26C-11.

For more information contact:

 

Dominic Picardi, Bureau of State Case Management
Department of Environmental Protection
(609) 984-4464		email: dpicardi@dep.state.nj.us
Adam Mukerji, Director of Commercial Lending
New Jersey Economic Development Authority
(609) 292-0187		email: cld@njeda.com
JoAnn Petrizzo, Investment Banking Division Public Lending
New Jersey Economic Development Authority
(609) 292-0350		email: ibd@njeda.com

Correction:
(from the December 1998 issue of Site Remediation News)

The May 1998 issue of the Site Remediation News contained an article on the Petroleum Underground Storage Tank Remediation, Upgrade and Closure Fund. In this article it incorrectly stated that to qualify for a hardship grant an applicant must have a taxable income of less than $100,000 or net worth, exclusive of applicant's primary residence, of less than $100,000. In order to qualify, an applicant must have a taxable income of less than $100,000 and net worth, exclusive of applicant's primary residence, of less than $100,000. Please note this important distinction when applying for a hardship grant.