WSR 97-03-113

PROPOSED RULES

POLLUTION LIABILITY

INSURANCE AGENCY

[Filed January 21, 1997, 11:20 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 96-23-060.

Title of Rule: Amendments to sections of chapter 374-70 WAC, Heating oil pollution liability insurance program.

Purpose: These amendments are needed to ensure fairness in the distribution of services and the solvency of the heating oil pollution liability insurance program.

Other Identifying Information: To protect the trust fund from future pollution liability insurance claims based on suspected heating oil releases from active heating oil tanks.

Statutory Authority for Adoption: Chapter 70.149 RCW.

Statute Being Implemented: Chapter 70.149 RCW.

Summary: This rule is being adopted to amend existing language in chapter 374-70 WAC. RCW 70.149.070 directs disbursement from the trust fund established by RCW 70.149.080. The Pollution Liability Insurance Agency is amending sections of chapter 374-70 WAC to protect the trust fund from future pollution liability insurance claims based on suspected heating oil releases from active heating oil tanks. This rule change will ensure that the purpose of the program is satisfied, but that program funds will not be expended to discover whether or not contamination actually exists. The burden of proof that a release has occurred is the responsibility of the tank owner/operator. Excavation of an underground heating oil tank is the responsibility of the tank owner/operator. These amendments will ensure fairness in the distribution of services and solvency of the heating oil pollution liability insurance program.

The heating oil pollution liability insurance program was established to address a solution to the threat posed to human health and the environment by accidental releases of heating oil from active heating oil tanks. The Pollution Liability Insurance Agency believes it is in the best interest of the citizens of Washington state that in order to protect the trust fund established by chapter 70.149 RCW, it is imperative that the burden of proof that a release from an active heating oil tank has occurred is the responsibility of owners/operators of active heating oil tanks. These amendments will ensure fairness in the distribution of services and solvency of the heating oil pollution liability insurance program.

Reasons Supporting Proposal: See Summary above.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: James Sims, Olympia, Washington 98504, (360) 586-5997.

Name of Proponent: Pollution Liability Insurance Agency, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: See Summary above.

Proposal Changes the Following Existing Rules: WAC 374-70-020: Subsection (7)(b) and (11) amends definition of "corrective action" to reflect that tank removal is no longer paid for under the heating oil pollution liability insurance program; and subsection (12) adds definition of "insurer."

WAC 374-70-030: Subsection (4) adds clarification that the Pollution Liability Insurance Agency acts as the designated representative of the insurer.

WAC 374-70-060: Subsection (1) adds additional clarification that corrective action for accidental releases occurring prior to the effective date of coverage will not be covered under the heating oil pollution liability insurance program; subsections (3)(g) and (4)(e) amends sections to reflect that tank removal is no longer paid for under the heating oil pollution liability insurance program; and subsection (6) adds clarification that a claim is accepted only after an investigation has confirmed the existence of an accidental release which is eligible for coverage under the heating oil pollution liability insurance program.

WAC 374-70-070: Subsection (1) amends section to further clarify and expand the responsibilities of the heating oil tank owner or operator; subsection (4) amends the responsibilities and involvement of the Pollution Liability Insurance Agency; subsection (5) amends the involvement of the third-party administrator; and subsection (7) amends section to reflect that tank removal is no longer paid for under the heating oil pollution liability insurance program and to clarify the responsibilities of the heating oil tank service provider.

WAC 374-70-080: Amends section to further clarify that coverage under the heating oil pollution liability insurance program is in excess of other valid insurance and warranties and that the most cost effective method of corrective action must be utilized; subsection (3) changes time for notification to the Pollution Liability Insurance Agency of accidental release from within seven to within ten days of discovery of the accidental release; subsection (4) amends section to indicate that the list of heating oil tank service providers, supplied by the Pollution Liability Insurance Agency, are insurer approved rather than prequalified; subsection (6) amends section to place the responsibility of determining the source and extent of a suspected accidental release on the heating oil tank owner. The heating oil tank owner must also contact the homeowners' insurance company to determine if coverage is provided; subsection (7) amends to clarify that if claim is valid, corrective action shall be performed by an insurer approved heating oil tank service provider; subsections (8) and (9) removes "prequalified"; subsection (10) removes "incompliance with MTCA independent remedial action"; subsection (12) amends to reduce the information that the heating oil tank service provider must provide on the project field report; and subsection (13) amends to reduce the information that the heating oil tank service provider must provide upon completion of corrective action.

WAC 374-70-090: Amends section to further clarify that coverage under the heating oil pollution liability insurance program is in excess of other valid insurance and warranties and that the most cost effective method of corrective action must be utilized; subsection (3) changes time for notification to the Pollution Liability Insurance Agency, by a third-party claimant, from within ten days to within fifteen days; subsection (5) amends and clarifies procedures to be followed for a third-party claim; subsection (6) amends section to clarify that if third-party claim is valid, third-party claimant will be instructed to contact a heating oil tank service provider, approved by the insurer, to perform corrective action; subsections (7) and (8) removes "prequalified"; subsection (9) removes "incompliance with MTCA independent remedial action"; subsection (10) clarifies that work is performed by the heating oil tank service provider on behalf of the third-party claimant and the insured; subsection (11) amends to reduce the information that the heating oil tank service provider must provide on the project field report; and (13) amends to reduce the information that the heating oil tank service provider must provide upon completion of corrective action.

WAC 374-70-100: Subsection (1) amends section to clarify that heating oil tank service providers are insurer approved rather than prequalified. Amends the responsibilities of the heating oil tank service provider to reflect that tank removal is no longer paid for under the heating oil pollution liability insurance program; subsection (2) removes the requirements for a heating oil tank service provider to be prequalified. Clarifies that the heating oil tank service provider works with the insurer and the Pollution Liability Insurance Agency, as the insurer's designated representative; subsection (3) removes "prequalified"; and subsection (4) adds "Whenever possible."

WAC 374-70-120: Subsection (1)(f)(g) removed to reflect that heating oil tank service providers are insurer approved rather than prequalified.

WAC 374-70-130: Subsection (1) amends to clarify that information obtained during heating oil tank registration can not be subject to public disclosure under chapter 42.17 RCW.

WAC 374-70-110, entire section repealed.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The amendments proposed do not involve any impact on small business.

Section 201, chapter 403, Laws of 1995, does not apply to this rule adoption. The Pollution Liability Insurance Agency is not one of the major agencies addressed in section 20, chapter 403, Laws of 1995.

Hearing Location: Pollution Liability Insurance Agency, 1015 10th Avenue S.E., Olympia, WA 98501, on February 25, 1997, at 3:00 p.m.

Assistance for Persons with Disabilities: Contact Washington Relay Number, TDD (800) 833-6388.

Submit Written Comments to: Pollution Liability Insurance Agency, P.O. Box 40930, Olympia, WA 98504, FAX (360) 586-7187.

Date of Intended Adoption: March 3, 1997.

January 21, 1997

James M. Sims

Director

AMENDATORY SECTION (Amending WSR 96-01-101, filed 12/19/95, effective 1/19/96)

WAC 374-70-020 Definitions. Unless the context requires otherwise, the definitions in this section shall apply throughout this chapter.

(1) "Abandoned heating oil tank" means a heating oil tank system that has been abandoned or decommissioned and is no longer active and in use.

(2) "Accidental release" means a sudden or nonsudden release of heating oil from an active heating oil tank that results in bodily injury, property damage, or a need for corrective action, neither expected nor intended by the owner or operator.

(3) "Active" heating oil tank means a heating oil tank that:

(a) Is in use at the time of registration for the heating oil pollution liability insurance program;

(b) Has been in continuous use for a period of eighteen months prior to registration; and

(c) Has been continuously in use between registration and submission of a notice of claim.

(4) "Agency" means the Washington state pollution liability insurance agency established pursuant to chapter 70.148 RCW. For purposes of chapter 70.149 RCW, agency shall also mean staff or employees of the pollution liability insurance agency.

(5) "Bodily injury" means bodily injury, sickness, or disease sustained by a person, including death at any time, resulting from the injury, sickness, or disease.

(6) "Claim" means a demand made by a named insured, or the insured's representative, for payment of the benefits provided under the heating oil pollution liability insurance program.

(7)(a) "Corrective action" means those actions reasonably required to be undertaken by the insured to remove, treat, neutralize, contain, or clean up an accidental release in order to comply with a statute, ordinance, rule, regulation, directive, order, or similar legal requirement, in effect at the time of an accidental release, of the United States, the state of Washington, or a political subdivision of the United States or the state of Washington. "Corrective action" includes, where agreed to in writing, in advance by the insurer, action to remove, treat, neutralize, contain, or clean up an accidental release to avert, reduce, or eliminate the liability of the insured for corrective action, bodily injury, or property damage. "Corrective action" also includes actions reasonably necessary to monitor, assess, and evaluate an accidental release.

(b) "Corrective action" does not include:

(i) Removal, replacement or repair of heating oil tanks or other receptacles; ((or))

(ii) Replacement or repair of piping, connections, and valves of tanks or other receptacles; or

(iii) Costs directly associated with tank removal.

(8) "Director" means the director of the Washington state pollution liability insurance agency or the director's appointed representative.

(9) "Heating oil" means any petroleum product used for space heating in oil-fired furnaces, heaters, and boilers, including stove oil, diesel fuel, or kerosene. "Heating oil" does not include petroleum products used as fuels in motor vehicles, marine vessels, trains, buses, aircraft, or any off-highway equipment not used for space heating, or for industrial processing or the generation of electrical energy.

(10) "Heating oil tank" means an active tank and its connecting pipes, whether above or below ground, or in a basement, with pipes connected to the tank for space heating of human living or working space on the premises where the tank is located. "Heating oil tank" does not include a decommissioned or abandoned heating oil tank, or a tank used solely for industrial process heating purposes or generation of electrical energy.

(11) "Heating oil tank service provider" is an independent contractor responsible for ((all aspects of)) corrective action including ((excavation, tank/line removal,)) sampling and testing, remedial actions, site restoration, and submittal of required reports to PLIA.

(12) "Insurer" means the commercial insurance company providing pollution liability insurance to registered owners of heating oil tanks under the heating oil pollution liability insurance program. PLIA is the reinsurer of the commercial insurance company and acts as the designated representative of the insurer for the heating oil pollution liability insurance program.

(13) "MTCA" means the Model Toxics Control Act (chapter 70.105D RCW).

(((13))) (14) "Named insured" means the individual insureds who are heating oil tank owners registered for coverage under the heating oil pollution liability insurance program.

(((14))) (15) "Occurrence" means an accident, including continuous or repeated exposure to conditions, that results in an accidental release from an active heating oil tank.

(((15))) (16) "Owner" means the person, or his or her authorized representative, legally responsible for a heating oil tank, its contents, and the premises upon which the heating oil tank is located.

(((16))) (17) "Owner or operator" means a person in control of, or having responsibility for, the daily operation of a heating oil tank.

(((17))) (18) "Per occurrence, per site, per year" means one accidental release per site, per year.

(((18))) (19) "Pollution liability insurance agency" (PLIA) means the Washington state pollution liability insurance agency established pursuant to chapter 70.148 RCW. For purposes of chapter 70.149 RCW, pollution liability insurance agency shall also mean staff or employees of the pollution liability insurance agency.

(((19))) (20) "Pollution liability insurance agency trust account" means the pollution liability insurance agency trust account established under chapter 70.148 RCW and established in the custody of the state treasurer. Expenditures from the account are used for the purposes of chapter 70.148 RCW including the payment of costs of administering the pollution liability insurance program, and payment of reinsurance claims.

(((20))) (21) "Property damage" means:

(a) Physical injury to, destruction of, or contamination of tangible property, including the loss of use of the property resulting from the injury, destruction, or contamination; or

(b) Loss of use of tangible property that has not been physically injured, destroyed, or contaminated but has been evacuated, withdrawn from use, or rendered inaccessible because of an accidental release.

(((21))) (22) "Property damage restoration" means the restoration of property to a similar condition to that of the property prior to the accidental release. Restoration includes the replacement of sod, plants or concrete driveway or walkway, or the cleaning or replacement of carpet in the case of a basement tank.

(((22))) (23) "Release" means a spill, leak, emission, escape, or leaching into the environment.

(((23))) (24) "Third-party claimant" means a person alleged to have suffered property damage requiring corrective action or bodily injury as a direct result of a leak or spill from the heating oil tank of a named insured.

(((24))) (25) "Third-party liability" means the liability of a heating oil tank owner to another person due to property damage requiring corrective action or bodily injury that results from a leak or spill from an active heating oil tank.

[Statutory Authority: Chapter 70.149 RCW. 96-01-101, 374-70-020, filed 12/19/95, effective 1/19/96.]

AMENDATORY SECTION (Amending WSR 96-01-101, filed 12/19/95, effective 1/19/96)

WAC 374-70-030 Responsibility. (1) The director of the pollution liability insurance agency is directed by chapter 70.149 RCW to establish the heating oil pollution liability insurance program to assist owners and operators of active heating oil tanks. The agency implements and administers the pollution liability insurance program established by chapter 70.148 RCW and the heating oil pollution liability insurance program established by chapter 70.149 RCW.

(2) The location of the principal office and the mailing address of the agency is:

Pollution Liability Insurance Agency

State of Washington

1015 10th Avenue, S.E.

P.O. Box 40930

Olympia, WA 98504-0930

(3) The principal administrative and appointing officer of the agency is the director. The director may designate other employees of the agency to act in his or her behalf in the director's absence or with respect to those matters in which so doing would enhance the efficiency of the agency's operations.

(4) In administering the heating oil pollution liability insurance program, PLIA acts as the designated representative of the insurer providing pollution liability insurance to registered owners of heating oil tanks.

[Statutory Authority: Chapter 70.149 RCW. 96-01-101, 374-70-030, filed 12/19/95, effective 1/19/96.]

AMENDATORY SECTION (Amending WSR 96-01-101, filed 12/19/95, effective 1/19/96)

WAC 374-70-060 Coverage. (1) The effective date of coverage under the heating oil pollution liability insurance program is January 1, 1996. Thereafter, individual heating oil tank coverage shall become effective upon receipt, by PLIA, of the completed registration form. Corrective action for an accidental release occurring prior to the effective date of coverage will not be covered under the program.

(2) The heating oil pollution liability insurance program provides coverage for corrective action costs up to sixty thousand dollars per occurrence, per site, per year, exclusive of other valid insurance or warranties.

(3) Corrective action costs covered under the heating oil pollution liability insurance program include:

(a) Corrective action if the accidental release occurs after the registration of an active heating oil tank;

(b) Actions necessary to determine the extent and severity of an accidental release;

(c) Costs, not to exceed sixty thousand dollars per occurrence, per site, per year;

(d) Costs in excess of other valid insurance or warranties;

(e) First-party property damage restoration, including landscaping, limited to one thousand five hundred dollars per occurrence, per site, per year;

(f) Third-party property damage restoration, including landscaping, limited to one thousand five hundred dollars for each third-party claimant per occurrence, per site, per year;

(g) Excavation, treatment and/or removal and proper disposal of any soil or water contaminated by the accidental release and ((removal and)) proper disposal of nonrepairable heating oil tank or tanks; and

(h) Required soil and water sampling and testing to determine if corrective action standards have been met.

(4) Corrective action costs not covered under the heating oil pollution liability insurance program include:

(a) Corrective action if the accidental release occurred prior to the registration of an active heating oil tank;

(b) Costs covered by other valid insurance or warranties;

(c) Costs in excess of sixty thousand dollars per occurrence, per site, per year, exclusive of other valid insurance or warranties;

(d) Cleanup of contamination from other sources;

(e) Removal, repair or replacement of the heating oil tank, lines, or furnace;

(f) Emergency heat restoration procedures;

(g) Cleanup of a site beyond the MTCA cleanup levels;

(h) Corrective action associated with an abandoned or decommissioned heating oil tank or site;

(i) First-party property damage restoration, including landscaping, in excess of one thousand five hundred dollars per occurrence, per site, per year;

(j) Third-party property damage restoration, including landscaping, in excess of one thousand five hundred dollars for each third-party claimant per occurrence, per site, per year; and

(k) Defense costs, including the costs of legal representation, expert fees, and related costs and expenses incurred in defending against claims or actions brought by or on behalf of:

(i) The United States, the state of Washington, or a political subdivision of the United States or state of Washington to require corrective action or to recover costs of corrective action; or

(ii) A third party for bodily injury or property damage caused by an accidental release.

(5) If a claim exceeds sixty thousand dollars in total damages, coverage within the sixty thousand dollar policy limit shall be on a pro rata basis between the insured heating oil tank owner and third-party claimant(s).

(6) A claim will be accepted for coverage only after an investigation has confirmed the existence of an accidental release which is eligible for coverage under these rules.

[Statutory Authority: Chapter 70.149 RCW. 96-01-101, 374-70-060, filed 12/19/95, effective 1/19/96.]

AMENDATORY SECTION (Amending WSR 96-01-101, filed 12/19/95, effective 1/19/96)

WAC 374-70-070 Parties involved with an accidental release and corrective action. Among the potential parties involved when an accidental release is suspected from a heating oil tank or line are the heating oil tank owner or operator, adjacent property owners, heating oil supplier, PLIA, third-party administrator, department of ecology, and heating oil tank service providers.

(1) Heating oil tank owner or operator. All liabilities caused by an accidental release originating from a heating oil tank are the sole responsibility of the heating oil tank owner. The pollution liability insurance agency and/or the state of Washington accepts no liability, nor portion of the liability, from the heating oil tank owner. The heating oil tank operator may submit forms to PLIA on behalf of the owner, however, no corrective action may be performed without the specific written consent of the heating oil tank owner. The heating oil tank owner or operator is responsible for ((selecting a heating oil tank service provider from the prequalified list supplied by PLIA, working with that service provider to file the appropriate forms and reports with PLIA, and for)) notifying the heating oil supplier in the case of a suspected accidental release and investigating the source and extent of the suspected accidental release. The heating oil tank owner is responsible for notification of homeowner's insurer and determination of whether coverage will be provided. If corrective action is implemented, the heating oil tank owner is responsible for selecting a service provider approved by the insurer and approving the completed corrective action.

(2) Adjacent property owners. If an accidental release migrates off-site, or is suspected to have migrated, the adjacent property owner may be involved in the corrective action. In this situation, the heating oil tank owner or operator shall notify PLIA of the occurrence and provide the adjacent property owner's name, address and telephone number.

(3) Heating oil supplier. Some heating oil suppliers provide customer services which may be a resource to evaluate a suspected accidental release to the environment. If after investigating a heating system malfunction, a heating oil supplier determines that an accidental release may have occurred, the heating oil supplier should inform the owner or operator of the accidental release.

(4) ((PLIA. PLIA registers heating oil tanks, purchases insurance and provides reinsurance, provides a list of prequalified heating oil tank service providers, manages claims, investigates sites and provides certification that a claim is closed.

(5) Third-party administrator. PLIA will appoint a third-party administrator to perform all initial investigations and site assessments. Investigation will include, but not necessarily be limited to, verification that the accidental release is from an active, registered heating oil tank, investigation of the existence of any other valid insurance or warranties providing coverage for the heating oil tank and/or property, and determination of the extent and severity of the accidental release. The heating oil tank owner or operator shall cooperate fully with the third-party administrator and supply any information necessary for the third-party administrator to complete the initial investigation and site assessment, including, but not limited to, a copy of any homeowner, pollution liability, or environmental impairment insurance policy(ies). A report of the investigation will be submitted to PLIA. If no contamination requiring corrective action is discovered during the investigation, all costs associated with the investigation will be the responsibility of the heating oil tank owner.)) PLIA acts as the designated representative of the insurer for purposes of the heating oil pollution liability insurance program. PLIA provides informal advice and assistance to heating oil tank owners and operators, registers heating oil tanks for insurance coverage, provides listings of service providers approved by the insurer, manages claims for the insurer and provides certification that a claim is closed.

(5) Third-party administrator. PLIA may appoint a third-party administrator to assist in monitoring, investigation and corrective action.

(6) Department of ecology. The department of ecology administers state-wide laws and rules detailing MTCA cleanup standards for both soil and ground water. To be eligible for coverage under the heating oil pollution liability insurance program, corrective action must satisfy MTCA and pertinent local government requirements.

(7) Heating oil tank service provider. A heating oil tank service provider is an independent contractor ((responsible for all aspects of corrective action including excavation, tank/line removal, sampling and testing, remedial actions, site restoration, and submittal of required reports to PLIA)) who contracts with an owner or operator to perform corrective action, including submitting reports to PLIA on behalf of the owner or operator.

[Statutory Authority: Chapter 70.149 RCW. 96-01-101, 374-70-070, filed 12/19/95, effective 1/19/96.]

AMENDATORY SECTION (Amending WSR 96-01-101, filed 12/19/95, effective 1/19/96)

WAC 374-70-080 Claims ((procedures)). Coverage under the heating oil pollution liability insurance program shall be in excess of other valid insurance and warranties. Payment of a claim will be made only if the cleanup of contamination resulting from an accidental release is not covered by other valid insurance and warranties. Corrective action will be accomplished by the most cost-effective method available. To receive payment from the heating oil pollution liability insurance program for covered corrective action costs, the following actions are required:

(1) The claim must be for corrective action resulting from an accidental release from an active heating oil tank which has been registered with PLIA prior to the accidental release;

(2) The claim must satisfy all requirements and restrictions established by chapter 70.149 RCW and this chapter. Any failure to satisfy all requirements and restrictions may be a basis for denial of claim;

(3) The heating oil tank owner or operator must provide notice to PLIA that a potential claim exists within ((seven)) ten days of discovery that an accidental release may have occurred;

(4) Upon receipt of notice of a potential claim, PLIA will commence completion of the notice of claim, and will provide the heating oil tank owner or operator with a list of ((prequalified)) insurer approved heating oil tank service providers;

(5) The heating oil tank operator may submit reports and forms on behalf of the heating oil tank owner; however, no corrective action will be initiated or performed without the specific written consent of the heating oil tank owner;

(6) ((Initial investigation and site assessment will be performed by a third-party administrator appointed by PLIA. Investigation will include, but not necessarily be limited to, verification that the accidental release is from an active, registered heating oil tank, investigation of the existence of any other valid insurance or warranties providing coverage for the heating oil tank and/or property, and determination of the extent and severity of the accidental release. The heating oil tank owner or operator shall cooperate fully with the third-party administrator and supply any information necessary for the third-party administrator to complete the initial investigation and site assessment, including, but not limited to, a copy of any homeowner, pollution liability, or environmental impairment insurance policy(ies). A report of the investigation will be submitted to PLIA. If no contamination requiring corrective action is discovered during the investigation, all costs associated with the investigation will be the responsibility of the heating oil tank owner;)) The heating oil tank owner is responsible for investigation to determine the source and extent of a suspected accidental release. The heating oil tank owner is also responsible for notification of the homeowner's insurer and determination of whether coverage will be provided;

(7) If the claim is determined by PLIA to be valid, PLIA will so notify the heating oil tank owner or operator ((will be notified by PLIA to select)). The corrective action shall be performed by a heating oil tank service provider((, from the list of prequalified heating oil tank service providers, to perform corrective action. PLIA's list of prequalified heating oil tank service providers will be updated quarterly. The heating oil tank owner or operator must contact PLIA, prior to selecting a heating oil tank service provider, to confirm that the heating oil tank service provider is still included on the agency's list of prequalified heating oil tank service providers)) approved by the insurer;

(8) The ((prequalified)) heating oil tank service provider will notify PLIA of selection by the heating oil tank owner or operator. PLIA will then forward to the heating oil tank service provider the following forms:

(a) Scope of work proposal. This form will provide the heating oil tank owner or operator and PLIA a proposal of the extent and elements of corrective action, as well as a specific cost proposal;

(b) Change order. This form provides a proposal for change or deviation from the scope of work proposal;

(c) Project field report. This form provides a record of all corrective action and work elements, as well as a record of detailed costs. The project field report must include color photographs of the project at commencement, completion, and any significant steps in between, as well as appropriate project sketches and/or plans; and

(d) Claim report. This form will include a project closeout report, final cleanup report, and corrective action cost claim;

(9) The ((prequalified)) heating oil tank service provider will submit for approval to the heating oil tank owner or operator and to PLIA a scope of work proposal for corrective action at the heating oil tank site;

(10) Upon receipt of approval by the heating oil tank owner or operator and PLIA of the scope of work proposal, the heating oil tank service provider may commence work to accomplish corrective action ((in compliance with MTCA independent remedial action));

(11) All work performed by the heating oil tank service provider on behalf of the heating oil tank owner or operator and PLIA must be within the terms of the contract and the approved scope of work proposal and shall not exceed costs included in the scope of work proposal. Any change(s) or deviation(s) from the approved scope of work proposal must be accomplished through a change order request which must be approved in advance by the heating oil tank owner or operator and PLIA. Any work performed by the heating oil tank service provider that has not been approved, prior to performance, by the heating oil tank owner or operator and PLIA, or is beyond the terms of the scope of work proposal or change order(s), or is in excess of costs approved in the scope of work proposal or change order(s), will not be paid or reimbursed under the heating oil pollution liability insurance program. Such work or excess costs will be the responsibility of the heating oil tank owner and/or heating oil tank service provider;

(12) Corrective action activities and costs must be recorded by the heating oil tank service provider on the project field report form provided by PLIA((. The project field report must include color photographs of the project at commencement, completion and any significant steps between, as well as appropriate project sketches and/or plans));

(13) Upon completion of all corrective action, the heating oil tank owner or operator must sign the project closeout report indicating approval of and satisfaction with all work performed by the heating oil tank service provider;

(14) Upon completion of ((all)) corrective action and approval by the heating oil tank owner or operator, the heating oil tank service provider must submit to PLIA a complete claim report((. The claim report will include the project closeout report, project field report, final cleanup report and corrective action cost claim. After review and approval of the claim report by PLIA, the heating oil tank service provider will receive payment));

(15) Upon completion of corrective action that appears to satisfy the requirements of all applicable state and local statutes, the director will certify that the claim has been closed;

(16) Approval of claims and payment of covered costs are contingent upon the availability of revenue. The director reserves the right to defer payment at any time that claim demands exceed the revenue available for the heating oil pollution liability insurance program. Payment will commence with sufficient revenue;

(17) PLIA will maintain all records associated with a claim for a period of ten years; and

(18) In the case of an emergency, the director may authorize deviation from this procedure to the extent necessary to adequately respond to the emergency.

[Statutory Authority: Chapter 70.149 RCW. 96-01-101, 374-70-080, filed 12/19/95, effective 1/19/96.]

AMENDATORY SECTION (Amending WSR 96-01-101, filed 12/19/95, effective 1/19/96)

WAC 374-70-090 Third-party claims ((procedures)). Coverage under the heating oil pollution liability insurance program shall be in excess of other valid insurance and warranties. Payment of a claim will be made only if the cleanup of contamination resulting from an accidental release is not covered by other valid insurance and warranties. Corrective action will be accomplished by the most cost-effective method available. For a third party to receive payment from the heating oil pollution liability insurance program for covered corrective action costs, the following actions are required:

(1) The claim must be for corrective action resulting from a leak or spill from an active heating oil tank which has been registered with PLIA prior to the leak or spill;

(2) The claim must satisfy all requirements and restrictions established for third-party claims by chapter 70.149 RCW and this chapter. Any failure to satisfy all requirements and restrictions may be a basis for denial of claim;

(3) The third-party claimant must provide notice to PLIA that a potential third-party claim may exist within ((ten)) fifteen days of discovery that damage may have occurred from a leak or spill from a named insured's active heating oil tank;

(4) Upon receipt of notice of a potential claim, PLIA will commence completion of the notice of claim;

(5) ((Initial investigation and site assessment will be performed by a third-party administrator appointed by PLIA. Investigation will include, but not necessarily be limited to, verification that the leak or spill is from an active, registered heating oil tank, investigation of the existence of any other valid insurance or warranties providing coverage for the heating oil tank and/or property, and determination of the extent and severity of the leak or spill. The third-party claimant shall cooperate fully with the third-party administrator and supply any information necessary for the third-party administrator to complete the initial investigation and site assessment. A report of the investigation will be submitted to PLIA. If no contamination requiring corrective action is discovered during the investigation, all costs associated with the investigation will be the responsibility of the heating oil tank owner;)) If an accidental release from a named insured's heating oil tank has been confirmed, PLIA, as designated representative of the insurer will initiate an investigation to determine the extent and source of the contamination. Investigation will be performed by PLIA or a designated representative approved by the insurer. PLIA may also assist the named insured heating oil tank owner in determining if the insured's homeowner's insurance provides coverage for third-party damage. The third-party claimant shall cooperate fully with the investigator and provide any information or access necessary to complete the investigation;

(6) If the claim is determined by PLIA to be valid, the third-party claimant will be notified by PLIA to select a heating oil tank service provider, ((from the list of prequalified heating oil tank service providers)) approved by the insurer, to perform corrective action((. PLIA's list of prequalified heating oil tank service providers will be updated quarterly. The third-party claimant must contact PLIA, prior to selecting a heating oil tank service provider, to confirm that the heating oil tank service provider is still included on the agency's list of prequalified heating oil tank service providers));

(7) The ((prequalified)) heating oil tank service provider will notify PLIA of selection by the third-party claimant. PLIA will then forward to the heating oil tank service provider the following forms:

(a) Scope of work proposal. This form will provide the third-party claimant and PLIA a proposal of the extent and elements of corrective action, as well as a specific cost proposal;

(b) Change order. This form provides a proposal for change or deviation from the scope of work proposal;

(c) Project field report. This form provides a record of all corrective action and work elements, as well as a record of detailed costs. The project field report must include color photographs of the project at commencement, completion, and any significant steps in between, as well as appropriate project sketches and/or plans; and

(d) Claim report. This form will include a project closeout report, final cleanup report, and corrective action cost claim;

(8) The ((prequalified)) heating oil tank service provider will submit for approval to the third-party claimant and to PLIA a scope of work proposal for corrective action;

(9) Upon receipt of approval by the third-party claimant and PLIA of the scope of work proposal, the heating oil tank service provider may commence work to accomplish corrective action ((in compliance with MTCA independent remedial action));

(10) All work performed by the heating oil tank service provider on behalf of the third-party claimant and ((PLIA)) the insurer must be within the terms of the contract and the approved scope of work proposal and shall not exceed costs included in the scope of work proposal. Any change(s) or deviation(s) from the approved scope of work proposal must be accomplished through a change order request which must be approved in advance by the third-party claimant and PLIA. Any work performed by the heating oil tank service provider that has not been approved, prior to performance, by the third-party claimant and PLIA, or is beyond the terms of the scope of work proposal or change order(s), or is in excess of costs approved in the scope of work proposal or change order(s), will not be paid or reimbursed under the heating oil pollution liability insurance program. Such work or excess costs will be the responsibility of the third-party claimant and/or heating oil tank service provider;

(11) Corrective action activities and costs must be recorded by the heating oil tank service provider on the project field report form provided by PLIA((. The project field report must include color photographs of the project at commencement, completion and any significant steps between, as well as appropriate project sketches and/or plans));

(12) Upon completion of all corrective action, the third-party claimant must sign the project closeout report indicating approval of and satisfaction with all work performed by the heating oil tank service provider;

(13) Upon completion of ((all)) corrective action and approval by the third-party claimant, the heating oil tank service provider must submit to PLIA a complete claim report. ((The claim report will include the project closeout report, project field report, final cleanup report and corrective action cost claim.)) After review and approval of the claim report by PLIA, the heating oil tank service provider will receive payment;

(14) Upon completion of corrective action that appears to satisfy the requirements of all applicable state and local statutes, the director will certify that the claim has been closed;

(15) Approval of claims and payment of covered costs are contingent upon the availability of revenue. The director reserves the right to defer payment at any time that claim demands exceed the revenue available for the heating oil pollution liability insurance program. Payment will commence with sufficient revenue;

(16) PLIA will maintain all records associated with a claim for a period of ten years; and

(17) In the case of an emergency, the director may authorize deviation from this procedure to the extent necessary to adequately respond to the emergency.

[Statutory Authority: Chapter 70.149 RCW. 96-01-101, 374-70-090, filed 12/19/95, effective 1/19/96.]

AMENDATORY SECTION (Amending WSR 96-01-101, filed 12/19/95, effective 1/19/96)

WAC 374-70-100 Service provider requirements and procedures. (1) All corrective action shall be performed by ((prequalified)) insurer approved heating oil tank service providers. A heating oil tank service provider is an independent contractor responsible for ((all aspects of)) corrective action including excavation, ((tank/line removal,)) sampling and testing, remedial actions, site restoration, and submittal of required reports to PLIA. ((PLIA will maintain a list of prequalified heating oil tank service providers. This list will be made available to heating oil tank owners and operators. PLIA will continually monitor the performance of the prequalified heating oil tank service providers.

(2) To qualify as a prequalified heating oil tank service provider, a contractor must submit to PLIA the following documents:

(a) Certificates of insurance covering general liability, vehicles, and workers' compensation, including limits of coverage;

(b) Copy of state general contractor's license; and

(c) A signed agreement to terms and conditions, established by PLIA, for prequalified heating oil tank service providers.

(3))) (2) Once retained, the heating oil tank service provider works with the insurer, PLIA, as the insurer's designated representative, the heating oil tank owner or operator and/or the third-party claimant to perform the following:

(a) Perform the corrective action;

(b) Document the costs of the corrective action; and

(c) File the forms required to receive payment from the heating oil pollution liability insurance program.

(((4))) (3) All ((prequalified)) heating oil tank service providers must follow claims procedures as outlined in WAC 374-70-070.

(((5))) (4) Whenever possible, all corrective action activities must meet the criteria established by MTCA and any pertinent local ordinances or requirements.

[Statutory Authority: Chapter 70.149 RCW. 96-01-101, 374-70-100, filed 12/19/95, effective 1/19/96.]

AMENDATORY SECTION (Amending WSR 96-01-101, filed 12/19/95, effective 1/19/96)

WAC 374-70-120 Appeals. (1) A person may appeal any of the following decisions made under the heating oil pollution liability insurance program to the director:

(a) A denial of eligibility for coverage;

(b) Amount of payment allowed for corrective action;

(c) Amount of payment allowed for property damage;

(d) Amount of payment allowed for a third-party claim; and

(e) A determination that cleanup does not meet MTCA standards((;

(f) A denial of inclusion on the agency's list of prequalified heating oil tank service providers; and

(g) Removal of a heating oil tank service provider from the agency's list of prequalified heating oil tank service providers)).

(2) A person has forty-five days after the decision to file a written request for a hearing.

(3) If the written request for a hearing is received within forty-five days, the director shall conduct an adjudicative hearing proceeding under chapter 34.05 RCW.

(4) If the written request for a hearing is not received within forty-five days after the decision, no further consideration will be given to the appeal.

[Statutory Authority: Chapter 70.149 RCW. 96-01-101, 374-70-120, filed 12/19/95, effective 1/19/96.]

AMENDATORY SECTION (Amending WSR 96-01-101, filed 12/19/95, effective 1/19/96)

WAC 374-70-130 Confidentiality of information. (1) All information obtained during heating oil tank registration shall be confidential and may not be ((made)) subject to public ((or otherwise disclosed to any person, firm, corporation, agency, association, government body, or other entity)) disclosure under chapter 42.17 RCW.

(2) All examination and proprietary reports and information obtained in soliciting bids from insurers and in monitoring the selected insurer shall be confidential and may not be made public or otherwise disclosed to any person, firm, corporation, agency, association, government body, or other entity.

[Statutory Authority: Chapter 70.149 RCW. 96-01-101, 374-70-130, filed 12/19/95, effective 1/19/96.]

REPEALER

The following section of the Washington Administrative Code is repealed:

WAC 374-70-110 Quality assurance.

© Washington State Code Reviser's Office