NO Certificate of Compliance = NO Reimbursement?
Massachusetts UST owners are often surprised when they receive whole or partial claim denials from the UST Cleanup Fund, especially when they are completing remedial activities at a property they no longer own. While they may be following all rules and regulations for cleanup, it may still not be enough to ensure timely reimbursement for otherwise eligible cleanup costs.
Whether you are the current tank owner responsible for maintaining compliance, or the former owner with costs you're hoping to pursue, to make sure you're not receiving unnecessary denials or waiting on reimbursement longer than you need to, pay attention to the timely renewal of the station's Certificate of Compliance (COC).
A COC is issued by the 21J Board, attesting to the full compliance of the UST system in accordance with 503 CMR 2.07 and can be revoked for the following reasons:
• Failure to pay fees
• Failure to renew
• Failure to maintain compliance
• Failure to repay monies owed to fund
A Certificate of Compliance revocation can lead to denials
If a COC has been revoked, cleanup costs associated with the release during the period of revocation will be deemed ineligible. No claim can be approved for reimbursement until the Board has received a current COC for the relevant UST system.
Note that even if you are not the current tank owner, who is responsible to maintain compliance, your reimbursement will be delayed or even denied for failure to renew until the reason for revocation is corrected.
Here is a recent case-in-point:
This case involves a gas station which has a historical release to the environment, is actively being remediated, and is currently eligible for reimbursement under the 21J program. The station was sold, including the USTs, but the former owner retains liability to clean up the historic release. The former owner continued to remediate the release since its discovery. While the release was still open, the current station owner had the Certificate of Compliance (COC) revoked for failure to renew it, putting the former owner's reimbursement success in jeopardy.
In fact, the former owner’s costs were denied during the period of COC noncompliance when submitting his next reimbursement claim for remediation expenses.
A year later, the current owner submitted a COC renewal application to the MA DOR, along with a request to have his case heard at conference (due to the late filing and revocation). At the next MA Board Meeting, the Board ruled that the station owner’s COC application would be processed and the COC reinstated--a happy outcome for the former owner since he could now appeal the denial of those previously denied costs, but ultimately one that could have been avoided had the COC never been revoked.
Ensure your COC is renewed to avoid unnecessary appeal costs
The Board ultimately ruled to reinstate the COC as of the date of that board meeting and no sooner, leaving all of the remediation work being conducted by the prior station owner as ineligible for reimbursement for the period in which the COC was not in place. While the former station owner did appeal those denied expenses, they did incur a lot of time and expense in preparing that appeal and going to conference.
In order to protect reimbursement, it is recommended that station owners, when selling their properties and tanks in MA, require the new tank owner to provide compliance documents to you on a regular basis. In addition, require that if they should sell the property and tanks that the new owners will comply with this provision.
Also, if you are a remediation consultant performing cleanup work and submitting for direct pay through the Fund, it’s important to ensure that your contracts (with the current tank owner) include a clause that states that if the site goes into noncompliance, that all remediation costs will then be billed back to the responsible party tank owner until the compliance issues are resolved.
Remember: Certificates of Compliance need to be renewed every 5 years!
➥Have a question about how this might affect you?
➥Looking for an ally to help you with your UST claims?
Contact Emily Mackenzie at (508) 754-8601 ext. 26 or emackenzie@pinnacleems.com.
