49-1054

49-1054. Extent of coverage; insurance

(Conditionally Rpld.)

A. The department shall provide coverage from the assurance account for ninety per
cent of the reasonable and necessary costs of eligible activities pursuant to section
49-1052, subsection A. Effective retroactively to from and after December 31, 2002,
assurance account coverage up to five hundred thousand dollars constitutes a primary
financial assurance mechanism for all owners and operators for activities described in
section 49-1052, subsection A, but does not provide coverage for compensating third
parties for bodily injury or property damage as may be required by federal law or rule
and as may be evidenced by a statement of financial responsibility prescribed by section
49-1006. Ninety per cent of the reasonable and necessary costs shall be the extent of
coverage, except that owners and operators are eligible for coverage from the assurance
account for only fifty per cent of the reasonable and necessary costs of corrective
actions pertaining to soil and groundwater remediation for releases reported after June
30, 2000 from underground storage tanks that are not permanently closed, not temporarily
closed or not upgraded in accordance with the rules adopted pursuant to section 49-1014.
The owner or operator shall pay the remaining costs of the eligible activities pursuant
to section 49-1052, subsection A and shall submit certification that the owner or
operator has paid those remaining costs or has agreed to pay those remaining costs as
demonstrated in an existing agreement. Effective retroactively to from and after December
31, 2002 and notwithstanding section 49-1052, subsection F, paragraph 5, the maximum
amount that is subject to coverage is five hundred thousand dollars. Owners and operators
who file a claim against any applicable insurance coverage available to them may preserve
their eligibility for assurance account coverage for amounts above five hundred thousand
dollars up to the maximum of one million dollars as prescribed by this section. An owner
or operator is eligible for additional coverage from the assurance account up to a
maximum of one million dollars if the owner or operator has utilized to the maximum
extent possible any insurance or alternative financial assurance mechanisms required for
coverage pursuant to section 49-1052, subsection F, paragraph 5. The department may
compel the production of documents to determine the existence, amount and type of
insurance or alternative coverage available. An owner or operator shall report to the
department any payment of corrective actions costs through these alternative mechanisms.
The owner or operator shall remit to the department within thirty days any amounts that
were recovered by the owner or operator from the underground storage tank revolving fund
assurance account and that have also been recovered from any alternative mechanisms. For
the second five hundred thousand dollars in possible coverage, the owner or operator is
eligible for payment from the assurance account to the extent that the corrective action
costs have not been and will not be reimbursed by insurance or any alternative financial
assurance mechanism and are within the coverage limits prescribed by this section.

B. The department shall not disburse more than the maximum amounts prescribed by
subsection A of this section from the assurance account for corrective action costs
associated with an occurrence regardless of the number of persons who are eligible for
coverage.

C. The department shall pay eligible costs that are reasonable and were actually
incurred for corrective actions that were actually performed. The costs for the
corrective actions shall be documented in an application for payment from the assurance
account. The department shall pay only for those reports that are required in rules
adopted pursuant to this chapter and only on the department's receipt and approval of the
report. Reasonableness of corrective actions shall be determined based on the law and the
facts available to the owner, operator or person described in section 49-1052, subsection
I at the time the technical decision was made. Corrective action costs that are
preapproved by the department or corrective actions that are performed at the written
request or written instruction of the department are deemed reasonable, necessary and
reimbursable. At least every three years, the department shall establish schedules of
corrective action costs which the department considers reasonable. For those years that
the department does not establish a cost schedule, all costs shall be adjusted annually
in accordance with the percentage change in the bureau of labor statistics annual number
for the final producer price index for finished goods less food and energy not seasonally
adjusted. From and after June 30, 2005, payment from the assurance account shall be based
on the schedule of corrective action costs in effect when the application to the
assurance account is submitted to the department. Before July 1, 2005, payment from the
assurance account shall be based on the schedule of corrective action costs in effect on
the date a contract for corrective action work was entered into by the owner or operator,
or if that date cannot be determined, the date that work associated with the corrective
action was performed. These cost schedules shall be task-based costs relating to the
phases of corrective action. The department may establish additional cost schedules for
incremental costs that are necessary to supplement the task-based costs to reflect
limited site specific conditions. No other cost schedules shall be established and all
eligible work shall be reviewed and paid based on the task-based costs and incremental
costs when necessary. The department shall not require costs associated with a given task
to include details on time and materials if the total costs claimed for that task do not
exceed the amount for that task in the schedule of corrective action costs as established
pursuant to this section. The department shall pay the costs that are associated with a
given task and that do not exceed the amount for that task in the applicable cost
schedule. The cost schedules apply to all corrective action costs submitted for payment
from the assurance account, including any costs incurred by the department in taking
corrective actions after May 27, 1998 and to the recovery of those corrective action
costs by the department pursuant to sections 49-1017, 49-1017.01 and 49-1022. Beginning
from and after June 30, 2005, all prior established cost schedules are repealed. The
department shall pay for work item costs as if the work was specified within a
preapproved work plan if the work is within the work objectives of a preapproved work
plan, and if either of the following applies:

1. The cost is for a work item that is substituted for a work item that was set
forth in the preapproved work plan, if the cost does not exceed both of the following:

(a) The cost schedule for the work item submitted in substitution.

(b) The cost of the work item originally preapproved.

2. The cost is for reasonable and necessary work that is not specified within the
preapproved work plan as a work item, and is not a substituted work item, if the cost
does not result in both of the following:

(a) Payments under the preapproved work plan to exceed the total preapproved
amount.

(b) Payments to exceed the cost schedule for that work item.

If payment for the costs pursuant to paragraph 2 of this subsection would cause an
exceedance of the total preapproved amount in the work plan, that excess amount for the
work that is equal to or less than the applicable cost schedules shall be prioritized for
payment as prescribed by section 49-1052, subsection G.

D. The department shall allow upgrade and replacement costs incurred at the time of
corrective action for compliance with 40 Code of Federal Regulations section 280.21
regarding corrosion protection and spill and overfill prevention to be applied on a
dollar for dollar basis not to exceed ten per cent of the reasonable and necessary costs
of corrective actions as calculated pursuant to subsection A of this section.

E. Effective retroactively to from and after December 31, 2002, an owner or
operator shall not receive payment from the department until after the owner or operator
has submitted certification to the department of the amount of any benefits or
reimbursement that the owner or operator has received from any insurance coverage that
has been applied to the costs of the corrective action for the occurrence. The owner or
operator is eligible for payment from the department to the extent that the corrective
action costs have not been reimbursed to the owner or operator, or its consultant,
representative or agent, by insurance and within the coverage limits prescribed by this
section. A provider of insurance or an alternative financial assurance mechanism who is
not an owner or operator with respect to the occurrence is not eligible for payment from
the assurance account. An owner or operator shall report to the department whether it
has insurance coverage available and shall comply with all applicable financial
responsibility requirements. If the director has reason to believe that an owner or
operator, or its consultant, representative or agent, has received or may receive any
payment for corrective actions from insurance, the department may compel the production
of documents to determine the existence, amount and type of insurance coverage available
and to whom payment was made or may be made. An owner or operator shall report to the
department any subsequent payment or reimbursement from insurance to the owner or
operator or its consultant, representative or agent for corrective actions costs. The
owner or operator shall remit to the department within thirty days any amounts that were
previously paid to the owner or operator or its consultant, representative or agent from
the underground storage tank revolving fund assurance account and that have also been
recovered from insurance.

F. Appeals fees and costs payable pursuant to section 49-1091.01 shall be paid in
the next regular round of payment without being subject to ranking and in the order
received by the department.