The Michigan Underground Storage Tank Cleanup Fund, also known as the MUSTA Fund, was signed into law on December of 2014. Michigan has not had an underground storage tank financial assurance fund since 1988 and many underground storage tank operators and owners have questions related to MUSTA, the MUSTA fund, and necessary steps for making a fund claim.
What is MUSTA?
MUSTA is an acronym for The Michigan Underground Storage Tank Authority, which was created within the Michigan Department of Environmental Quality (MDEQ). MUSTA was established to evaluate, manage and oversee the Michigan Underground Storage Tank Cleanup Fund, more commonly known as the MUSTA Fund, and thus serve the financial interests and requirements of petroleum underground storage tank owners and operators in the state of Michigan.
MUSTA operates independently from the MDEQ to carry out its defined financial duties, statutory power, and financial functions. Michigan is one of the top five US states with the highest number of leaking underground storage tanks, so there was a strong need to create a fund to help deal with the growing issue of leaking USTs in Michigan.
What is the MUSTA Fund?
Since being established in late 2014, the goal of the Michigan Underground Storage Tank Cleanup Fund has been to reimburse the owners or operators of underground storage tanks who take corrective actions on fixing releases from leaking UST systems. Owners or operators may achieve funding if their corrective actions are complaint with Part 213, the law passed by the Michigan Legislature that governs leaking USTs, as well as financial responsibility requirements set by the United States Environmental Protection Agency (EPA).
The MUSTA fund utilizes several private insurance concepts, including claim limits, deductibles and having an annual claims period. Owners or operators must demonstrate financial responsibility for both the EPA and MUSTA, which can include private insurance, self-insurance using a financial test, corporate guarantees, bonds, and state financial assurance funds.
MUSTA Laws and Rules
There are set laws and regulations associated with MUSTA established by the Michigan Legislature. They include
Part 211 – Underground Storage Tank Regulations (Michigan law regulating UST systems)
Part 213 – Leaking Underground Storage Tanks (Michigan law regulating leaking USTs)
Part 215 – Underground Storage Tank Corrective Action Funding (Michigan law regulating funding for leaking USTs)
Who Manages MUSTA
The Michigan Underground Storage Tank Authority is managed by a board of directors appointed by the Governor of Michigan. The board of directors and MUSTA as a whole have a number of primary responsibilities. These include but are not limited to:
- Hear and review appeals for funding
- Oversee activities of the fund administrator
- Establish a schedule of costs for corrective action
- Assess potential demand for payment of claims
- Provide recommendations to the Michigan legislature and Governor of Michigan to issue bonds or notes for additional financing
- Submit annual reports to the Michigan legislature on the sources of funding and the financial status of the fund
- Represent the general interests of the people of Michigan that the MUSTA statute envisions
Making a MUSTA Funding Claim
The Owner or operator of the site will file a claim with the MUSTA fund administrator, providing documentation on forms provided by the MUSTA fund administrator.
One of the most popular applications associated with filing a MUSTA funding claim is the Deductible Buy-Down application. By paying an annual fee of an additional $500 per underground storage tank, owners and operators with less than eight USTs have the ability to “buy down” the deductible amount from $50,000 per claim to $15,000. To prevent large UST owners from creating individual entities to own and operate individual sites in order to take advantage of the deductible buy down, all owned or operated tanks of the owner or operator and all affiliates are counted in order to determine the deductible amount.
Other optional and mandatory MUSTA fund forms include:
- Documentation of Financial Responsibility Form
- Request for Determination of Eligibility Form
- Competitive Bid Summary Form
- Invoice Submittal Form
- Claim Submittal Form
- Request for Indemnification Submittal Form
- Transfer of Claim Submittal Form
Currently an owner or operator has access to $1 Million for each claim submitted. There is no limit to the number of claims, so if an owner had four claims it would have $4 million in coverage. However the EPA requires that an owner or operator of 100 underground storage tanks or less have an aggregate of $1 Million coverage. For owners with more than 100 USTs it is $2 million per occurrence and $2 million in aggregate coverage.
Now is the time to get started on putting together documentation for filing a claim for MUSTA funding. Deductible Buy-Down applications for the 2017 calendar year will only be accepted between January 1st and March 31st of 2017.
What is the LRP (Legacy Release Program)?
House Bill 4583 (passed in October 2017) amended Part 215 and required the Department of Environmental Quality (DEQ) to create the Legacy Release Program (LRP), which will reimburse owners and operators for the costs of corrective action for releases from refined petroleum underground storage tank (UST) systems that occurred, but were not closed, before December 30, 2014.
The new LRP and MUSTA programs are designed to work together - LRP for releases prior to December 30, 2014, and MUSTA for new releases after December 30, 2014. LRP reimbursements to eligible storage tank O/O will cover 50 percent of the cleanup work, with costs not to exceed $50,000 for all releases on a single site. For example, if the cost of corrective action activities is $100,000, the LRP will reimburse the O/O up to $50,000.
Need MUSTA or LRP Fund Expertise? PM Can Help!
PM Environmental is a licensed environmental consultant specializing in underground storage tank removals and management throughout the state of Michigan. We have achieved closure on hundreds of sites with leaking underground storage tanks and our staff has expertise involving in utilizing the MUSTA fund for the benefit of our clients. PM Environmental’s team of UST specialists are familiar with new MUSTA legislation and can help you navigate the complexities of meeting MUSTA fund requirements and achieving reimbursement.
Give us a call toll free at 1-800-313-2966 or fill out our contact form.