Program Evaluation Division North Carolina General Assembly
North Carolina Underground Storage Tanks: Where Doin Right by Mother Nature (the EPA) Doesn t Always Jive with Getting Reelected 2011 NLPES Professional Development Seminar A Presentation for the Environment/Natural Resource Issues Panel September 19, 2011 Sean Hamel Program Evaluation Division North Carolina General Assembly
Overview Federal regulation of USTs How it works in North Carolina Diagnosing the problem How what we proposed was far different than what they chose; observations from a re-election year Program Evaluation Division North Carolina General Assembly 3
Federal Regulation In 1984 the federal government mandated states regulate USTs over 1,100 gallons Operation, technical standards, and oversight Financial responsibility $500,000-$1 million per incident Financial assurance mechanisms allow owner to demonstrate financial responsibility Seven federally approved financial assurance mechanisms Report Page 4 Program Evaluation Division North Carolina General Assembly 4
North Carolina s Response North Carolina responded with creation of the Underground Storage Tank Program Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund Noncommercial Leaking Petroleum Underground Storage Tank Cleanup Fund Program Evaluation Division North Carolina General Assembly 5
Commercial USTs A commercial UST is a federally regulated underground storage tank system, with underground piping connected to a tank that has at least 10% of its combined volume underground 29,084 in North Carolina 54% installed over 20 years ago Report Page 6-7 Program Evaluation Division North Carolina General Assembly 6
NC s Commercial Fund Report Page 6 Program Evaluation Division North Carolina General Assembly 7
Problem Diagnosis Changing Regulatory Environment Overreliance on a Financial Assurance mechanism that is not risk-based Funds available for cleanup are insufficient to address the problem Administrative deficiencies Program Evaluation Division North Carolina General Assembly 8
Number of Incidents Meeting New Federal Regulations Created a Large Cleanup Backlog 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 7,392 Active Incidents Fiscal Year Closed Incidents New Incidents Cumulative Incident Backlog Program Evaluation Division North Carolina General Assembly 9
Number of Incidents Progress Addressing the Backlog Has Been Slow 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Fiscal Year Closed Incidents New Incidents Cumulative Incident Backlog Report Page 11 Program Evaluation Division North Carolina General Assembly 10
We needed to show that North Carolina s State Assurance Funds is not the only option Six other federally permissible assurance mechanisms exist North Carolina chose a state assurance fund Many states do not have assurance funds Report Page 14-15 Program Evaluation Division North Carolina General Assembly 11
Highlighting a system that is risk based Insurance policies are risk based Transfer financial responsibility for spill and leak prevention directly to UST owners Research suggests a relationship between risk-based pricing and incident reduction Report Page 15-16 Program Evaluation Division North Carolina General Assembly 12
How did we demonstrate funding inadequacies? National Average $3,033 Per Tank Assurance Fund Revenue per 1,000 Population Louisiana $1,789 Mississippi $1,204 North Carolina $955 Report Page 13 Program Evaluation Division North Carolina General Assembly 13
Two major administrative deficiencies needed to be highlighted Reliance on a non-integrated information system hinders UST Section operations 17 different databases Daily activities rely on paper-based system Timely access to information is a challenge No authority to require tank owners to participate in education and training Report Page 17 Program Evaluation Division North Carolina General Assembly 14
How did we propose to fix this mess? Bring more revenue into the fund to increase the rate at which cleanups can occur Transition to a system that is more risk based Direct the program administrators to address identified deficiencies Program Evaluation Division North Carolina General Assembly 15
Report Available Online www.ncleg.net/ped/reports/topics/ EnvironmentandNaturalResources.html Sean P. Hamel sean.hamel@ncleg.net Program Evaluation Division North Carolina General Assembly
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