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Legislative Update – Leaking Underground Storage Tank Act

As we reported last summer, a package of bills are being reviewed by the State Legislature that will impact all parties addressing Leaking Underground Storage Tanks (“LUST”).

On January 24, 2012, the Michigan Senate passed a bill to amend Michigan’s Part 213 by revising procedures for the cleanup and management of environmental contamination at LUST sites.

Significant points of the bills:

(1)     A requirement that LUST be remediated pursuant to Standard Guide for Risk Based Corrective Action Applied at the Petroleum Release Sites (“RBCA”) which were developed by ASTM.  The MDEQ would not develop its own classification system. The MDEQ is prohibited from implementing additional rules for Part 213 of the Act.

(2)     The consultants shall submit an initial assessment report within 180 days following a release.  The MDEQ would audit the closure report and final assessment and not other submittals or aspects of the corrective action;

(3)     With respect to timing, the MDEQ would have 90 days after receipt of the closure report to determine whether it would audit and then have 180 days to complete the audit.  The MDEQ would only have an opportunity to audit the report;

(4)     If the MDEQ does not perform an audit and a written response, it will be deemed approved.  If a report is denied, the owner and operator can revise the report and resubmit it for review.  The owner and operator in the alternative, upon receipt of a denial, can seek review by the Response Activity Review Panel (which was established under Part 201), or petition the MDEQ’ s Office of Administrative Hearings for a contested case hearing;

(5)     A person may be an innocent purchaser within the meaning of Part 213 if they conducted a BEA, making the UST program consistent with Part 201.  It is the MDEQ’s burden of proof to establish liability under Part 213.  Liable parties can seek contribution from other liabilities in a civil action.

(6)     Parties that are liable could be at risk for up to $50 Million in damages for the destruction of natural resources.  The penalty scheme has been revised so that the Attorney General, on behalf of the MDEQ, can commence a civil action against liable parties.  The State may pursue a lien to recover costs and damages incurred as a result of a UST.  The State’s lien would have priority over other liens;

(7)     The State has the authority to enter into covenants not to sue with liable parties under certain circumstances;

The bill package as passed by the Senate has been referred to the House.  The House has referred this bill to its Committee on Natural Resources, Tourism and Outdoor Recreation.  The Committee will review the Senate Bill to determine whether to recommend approval by the House.  We will continue to monitor the passing of these bills.

 

About Susan J. Sadler

Susan J. Sadler is a founding Member of Dawda, Mann, Mulcahy & Sadler, PLC. She is the head of the Environmental, Energy and Sustainability practice group. She concentrates her legal practice on a broad spectrum of environmental issues.

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