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1. Reasonable Cost Guidelines September 19, 2008
2. Colorado’s Reimbursement Program Number of Facilities Covered: 4,441
Number of Tanks Covered: 11,647
Deductible: $10,000 ($25,000 for Third Party Claims)
Significant Decrease in the Environmental Response Surcharge in 2012 (major source of fund revenue)
3. Claims Received: 17,429
Processed: 16,128
Annual Amount Paid: $33.4 million
Total Paid: $325 million
Estimated Processing Time (CO): 1.9 months
Average Processing Time (US): 3.25 months
4. Comparison to Other States 8 States have no State Fund. All costs paid through insurance or by Owner/Operator
24 States have sunset dates for their funds before 2010
Several states (AZ, FL, MN, NV) have deductibles of 10-25% of total costs
5. Other States Flat Rate Deductibles California – up to $20,000
Florida – up to $30,000
Idaho – up to $100,000
Illinois – $10,000 to $100,000
Indiana - $20,000 to $35,000
Maine – up to $97,500
Montana – up to $17,500
North Carolina - $20,000 to $75,000
New Hampshire – up to $30,000
Ohio – $11,000 to $55,000
Rhode Island - $20,000
South Carolina - $25,000
Tennessee - $20,000
Texas – up to $80,000
Virginia – up to $1,000,000
6. New Releases No Longer Eligible Alaska (6/30/1993)
Arizona (6/30/2006)
Florida (12/31/1998)
Iowa (10/26/1990)
Maryland (12/1998)
Maine (10/1/1998 non-conforming sites)
Michigan (6/29/1995)
Texas (12/23/1998)
West Virginia (9/30/2000)
7. New Releases Losing Eligibility Kansas (7/1/2014)
Maine {10/1/1998 (12/31/2010)}
Minnesota (6/30/2012)
Missouri (12/31/2010)
North Dakota (7/31/2011)
Nebraska (6/30/2012)
New Jersey (6/30/2010)
South Carolina (12/31/2026)
Vermont (7/1/2009)
8. RCG Philosophy/Rationale Section 1, 2, and 3: Obtained quotes from 4-5 vendors
Section 4: Identified activities and estimated labor and equipment costs to complete. Allows 1-hour per well (initially allowed 45 minutes per well)
Section 5: Looked at both increases to other State’s reimbursement rates and CPI data. Blended results. Added 1% for office supplies.
Section 6: Obtained quotes from 14 labs
Sections 8, 11, 13, 14: developed from quotes but most RCGs not set (obtain bids/submit backup) due to extreme variability between season, location, and other factors.
Section 9: Tie mileage to IRS mileage rate for dates of travel. Tie lodging and meals to GSA rate for date and location.
Section 10: Eliminate most of section (include in labor rates) – Historically office expenses account for 0.86% of labor cost. Increased labor costs by 1% over rates developed from CPI and other state rates
Section 12: Developed from daily rental rates and other state’s reimbursement rates
9. Issues Related to Increasing RCGs May Cause Delays in Reimbursement
May Drive the Fund Into Insolvency
10. Source of Revenue for State Fund Tank Registration And Annual Renewal Fees
Civil Penalties
Penalties On Delinquent Registration And Renewal Fees
Environmental Response Surcharge
Reimbursement Of Emergency Response Charges Once A Responsible Party Has Been Identified
Moneys Appropriated To The Fund By The General Assembly
Moneys Granted To The Department For Administration Of The UST Program By Federal Agencies
Money From Bonds
11. Environmental Response Surcharge (Based on Fund Balance)
12. Current Environmental Surcharge Environmental Response Surcharge Has Been $100 since July 1, 2005
Fund Balance was $2.8 million as of 6/30/2008 (There were unpaid claims of $3.8 million for companies that were over the $3 million aggregate amount paid per State Fiscal Year 2007-2008)
13. July 1, 2012 If Fund Balance > $8 million, no surcharge will be imposed
If Fund Balance < $8 million, surcharge of $25 per tank truckload
Result: 0-25% of current revenue stream would pay the same percentage of cleanups
14. Possible Solutions To Funding Issues No Change to Reasonable Costs guidelines
Set new Reasonable Cost Guidelines that do not cover all the increase in costs (salary, fuel, etc.) since 2002
Industry led change to Statute to allow higher Environmental Response Surcharge based on State Fund balance
Industry led change to increase deductible and/or increase tank registration fees
Limit time allowed to request reimbursement to ensure all relevant costs are properly encumbered in an appropriate timeframe.
15. Comments/Questions All comments/questions should be provided in writing to the following email address:
RCG.Comments@state.co.us