Section 0400-15-03-.08 - ADMINISTRATIVE GUIDELINES FOR THE TENNESSEE DRYCLEANER ENVIRONMENTAL RESPONSE FUND(1) DCERF Obligations(a) The Commissioner shall obligate money from the DCERF based on the following procedures: 1. Available monies in the DCERF shall be obligated for response activities based on the priority ranking system and statutory limitations. For sites that have equivalent ranking status, funds from the DCERF will be obligated according to the chronological order in which the complete application for entry into the DCERP was received.2. Available monies in the DCERF shall be specifically designated for response activities as such activities are approved and authorized for implementation by the Commissioner.(b) The Commissioner will make payments from the DCERF when:1. The applicant has petitioned the Commissioner for entry into the DCERP, has complied with all requirements for entry into the DCERP, and has been accepted into the DCERP by the Commissioner.2. A reimbursement request is received, according to a schedule and format determined by the Commissioner, for response costs associated with a release of drycleaning solvent for which the Commissioner has authorized the work related to such response costs, subject to a determination by the Commissioner that the costs are reasonable and consistent with the related work plan and cost proposal authorized by the Commissioner.(c) Clean-Up Before the Designation of DCERF Monies1. In the event that an applicant, with Commissioner approval, undertakes actions that are reimbursable under the Act after entry into the DCERP but before DCERF money is designated for investigation or remediation of the site under the priority ranking system, the applicant may perform approved actions in accordance with this chapter. Funds from the DCERF shall be obligated for and reimbursed to the applicant for eligible expenses when funds become available pursuant to the priority ranking system.2. An applicant that performs approved actions in accordance with this chapter shall be eligible for reimbursement according to the law, this chapter, and guidance in effect at the time the activities were performed. Applicants performing activities under this subparagraph must meet all requirements for DCERF eligibility applicable at the time the activities are performed to receive future reimbursement.3. Only work plans and cost estimates approved in writing by the Commissioner after October 15, 1997, are eligible for reimbursement.(d) All claims against the DCERF are obligations of the DCERF and not of the state, and any amounts to be paid under this rule are subject to the availability of sufficient monies in the DCERF. The full faith and credit of the state shall not in any way be pledged or considered to be available to guarantee payment from such DCERF.(2) Scope of Fund Coverage(a) The DCERF will reimburse applicants accepted into the DCERP for the reasonable cost of Commissioner-authorized inspection, investigation, and remediation, exclusive of interest, at the applicants' sites. All costs consistent with cost estimates approved by the Commissioner shall be considered reasonable costs.(b) The following deductibles shall apply per site for active drycleaning facilities, abandoned drycleaning facilities, and in-state wholesale distribution facilities when an applicant accepted into the DCERP requests reimbursement from the Commissioner: 1. The deductible shall be 10% per reimbursement with a maximum deductible of $50,000.2. An impacted third party's deductible is the same as the facility for which DCERF coverage is sought.3. If an applicant reenters facilities or sites into the DCERP for any reason, the applicant is required to pay a new deductible.(3) Authorized Disbursements from the DCERF (a) Whenever the Commissioner determines a release has occurred at an eligible site, the Commissioner shall, subject to the provisions of this chapter including site prioritization, disburse monies available in the DCERF to provide for reimbursement of the reasonable cost of: 1. Commissioner-authorized inspection, investigation, assessment, and cleanup of sites contaminated by a release of drycleaning solvents, which may consist of clean-up of affected soils, groundwater, sediment, surface water, air, or other environmental media using cost-effective alternatives that are technically feasible and reasonable, and that provide adequate protection of the public health, safety, and welfare and minimize environmental damage.2. The interim replacement of and permanent restoration of potable water supplies.(b) Where the Commissioner has determined that an immediate response to an eligible site was necessary as a result of an imminent and substantial danger, the response may be funded by either the DCERF or the Hazardous Waste Remedial Action Fund, as defined in paragraph (1) of Rule 0400-15-01-.02, at the Commissioner's discretion. Costs of any such response actions from the Hazardous Waste Remedial Action Fund may be reimbursed from the DCERF with the Commissioner's approval.(c) The costs for reasonable initial abatement and site stabilization activities are DCERF eligible, up to $5,000 and subject to applicable deductibles, without submission and prior Commissioner approval of a cost proposal. The costs must be directly associated with containing or addressing a release of solvent or material containing solvent. Normal operating practices, including but not limited to the proper disposal of solvent or material containing solvent, are not considered initial abatement or site stabilization activities.(d) The costs for implementing an initial facility inspection required by the Commissioner pursuant to paragraph (3) of Rule 0400-15-03-.05 are eligible for reimbursement, regardless of whether the facility inspection determines that the site is eligible or ineligible for further reimbursement.(e) Costs incurred by the Commissioner in the administration of the Act and this chapter shall be charged to the DCERF.(f) The DCERF shall be available to the Commissioner for expenditures for the purposes of providing for the investigation, identification, and for the reasonable and safe cleanup, including monitoring and maintenance of sites as provided in the Act.(g) The Commissioner may enter into contracts and use the DCERF for: 1. Hiring consultants and personnel;2. Purchasing, leasing, or renting necessary equipment;3. Conducting interim actions; and,4. Other necessary expenses.(4) DCERF Ineligible Costs (a) The Commissioner shall not authorize distribution of monies from the DCERF that would result in a diminution of the DCERF below a balance of $100,000 unless an emergency exists at a facility or site that constitutes an imminent and substantial threat to human health or the environment.(b) The Commissioner shall not authorize distribution of DCERF monies as specified in T.C.A. § 68-217-107(c).(c) The Commissioner shall not authorize distribution of DCERF monies for response actions not undertaken in accordance with this chapter and guidance established by the Commissioner.(d) Monies held in the DCERF shall not be used to reimburse costs incurred by owners or operators of facilities in conducting repairs, retrofits, building or equipment improvements, building renovations or remodels, or the implementation of BMPs.(e) The DCERF shall not be obligated and shall not pay out any funds for any non-response type of damages, losses, costs, or expenses of any kind, including but not limited to stigma damages or diminution of value to real or personal property caused for any reason, including but not limited to a release of solvents or any activities approved under the Act or this chapter; the restoration or repair (other than response actions) of any real and personal property for any reason, including but not limited to damages resulting from the release of solvents or any activities approved under the Act or this chapter, or injury or death caused for any reason, including but not limited to a release of solvents or any activities approved under the Act or this chapter. In addition, the DCERF shall not be used for the landscaping of sites but shall only be used to restore those portions of the site affected by DCERF-approved activities to a safe condition. Finally, the DCERF shall not be obligated and shall not pay any penalties or fines, or other punitive expenses levied or incurred for any reason, including but not limited to a release of solvents or any activities approved under the Act or this chapter.(f) The DCERF shall not be obligated and shall not pay out any funds for costs in which there was no prior written Commissioner authorization or that were incurred prior to October 15, 1997.(g) Monies held in the DCERF shall not be used to reimburse owners or operators of facilities conducting investigative or remedial activities under paragraph (12) of Rule 0400-15-03-.05.(5) Maintaining DCERF Eligibility All applicants must meet the following requirements to maintain DCERF eligibility:
(a) The owner or operator manages the facility in compliance with the Act and the requirements of this chapter, including but not limited to applicable BMPs.(b) All required fees, surcharges, penalties, and interest are paid and current.(c) The following records are maintained on-site or at a readily available alternative site and made available to the Commissioner upon request:1. Drycleaning facilities:(i) Documentation of solvent purchases or transfers;(ii) Waste disposal manifests;(iii) Documentation of equipment maintenance, repairs, or retrofits, including BMPs;(iv) Documentation of all site investigation and cleanup plans and expenses; and2. In-state wholesale distribution facilities:(i) Documentation of solvent sales or transfers; (ii) Waste disposal manifests;(iii) Documentation of equipment maintenance, repairs, or retrofits, including BMPs;(iv) Documentation of all site investigation and cleanup plans and expenses.(d) Unless the Commissioner instructs otherwise, all records required to be maintained by subparagraph (c) of this paragraph shall be retained for five years after: 1. The Commissioner issues a letter that states all necessary investigation and remedial work has been completed or that no investigation and remediation is necessary with respect to a site (a Response Complete Summary Letter); or2. Ownership and all records pertaining thereto are transferred to a new owner.(e) After being accepted into the DCERP, the applicant shall promptly notify the Commissioner of any solvent releases that may impact the investigation or remediation of the site.(6) Requirements for DCERF Reimbursement of Response Costs An applicant who is DCERF eligible is entitled to reimbursement of response costs for approved investigation and cleanup costs from the DCERF subject to the following provisions:(a) Applicants must:1. Perform initial response actions in accordance with paragraphs (5) and (7) of Rule 0400-15-03-.05 including initial abatement measures and free product removal necessary to properly stabilize a site and to prevent significant continuing damage to the environment or risk to human health;2. Select a person from the Department's DCAC list and notify the Commissioner in writing of such a selection within 30 days or other time specified by the Commissioner; and3. Within 30 days of selection, establish a contractual agreement with the DCAC and provide a letter signed by both parties confirming that a contractual relationship exists for environmental response actions.(b) Following completion of necessary site stabilization actions, the cost estimates for subsequent inspections, investigations, and corrective actions must be approved by the Commissioner in accordance with Rule 0400-15-03-.05, and the work performed by DCACs must be approved in accordance with the requirements of Rule 0400-15-03-.09. Response actions, other than those identified in subparagraph (a) of this paragraph, performed prior to the approval of the cost estimates shall not be eligible for reimbursement from the DCERF, unless they were undertaken at the specific direction of the DCERP.(c) Upon review of cost estimates for DCERF eligible activities, the Commissioner may: 1. Accept the cost proposal and authorize work to be initiated; or2. Request a modification to or clarification of the cost proposal if projected costs are determined not to be reasonable.(d) In addition to the requirements of subparagraph (b) of this paragraph, the Commissioner may request, and, upon that request, the applicant shall submit an estimate of the total cost of remediation for the site, which will be used by the Commissioner in projecting future funding requirements for the DCERF. The estimate shall be updated by the applicant as more complete information regarding the site becomes available.(e) Upon approval of a cost estimate by the Commissioner, sufficient monies will be obligated from the DCERF for completion of the approved phase of work along with authorization for the initiation of the proposed action. Payments from the DCERF shall be subject to the availability of funds in the DCERF at the time of approval by the Commissioner.(f) The cost of completing any task in an approved work plan that exceeds the amount in the approved cost estimate may be denied by the Commissioner unless: 1. An amended written cost estimate is submitted and approved before the initially approved cost estimate is exceeded; or2. Informal written approval is given by the Commissioner, and within two working days, a written amended cost estimate consistent with such informal written approval is submitted to the Commissioner.(7) Reimbursement Requests (a) Reimbursement requests for response costs shall be submitted in a format established by the Commissioner and shall, at a minimum, include an itemization of all labor charges (individual name, DCERP personnel category, date, rate, and number of hours worked), analytical charges, equipment charges, and other categories identified by the Commissioner, or that the applicant may wish to provide.(b) The reimbursement request shall contain the following statement, which shall be signed by the applicant and the project manager of the DCAC: "I certify to the best of my knowledge and belief: that a release of drycleaning solvent has occurred from the operation of the subject active or abandoned drycleaning facility or in-state wholesale distribution facility; that the costs presented herein represent actual costs incurred in the performance of response actions at this site during the period of time indicated on this reimbursement request; and that no charges are presented as part of this reimbursement request that do not directly relate to the performance of response actions related to the release of solvent at this site. I understand that any misrepresentation or omission regarding the reimbursement request may be considered willful noncompliance with Chapter 0400-15-03 and may serve as a sufficient basis for the Commissioner's denial of the reimbursement request and future access to DCERF reimbursement."
(c) If a site has previously been the subject of a reimbursement request for DCERF eligibility that was denied, and where the reasons for denial have been properly cured or are subject to cure as set forth in this chapter, the burden shall be on the applicant to demonstrate by substantial and material evidence in the reimbursement request that the request does not include actions or expenses for releases that were the subject of reimbursement requests that have been previously denied.(d) Reimbursement requests for the implementation of response actions may be submitted 60 days following initiation of work to implement the work plan and at 60-day intervals thereafter until completion of the authorized activities. For work phases that will be completed within three months or less, the Commissioner recommends that a reimbursement request be submitted following the completion of the pre-approved work. Interim billings for phases of work that will not be completed in three months or less shall include the expenses for a specified period of time (e.g., January-March) and shall, to the extent practicable, not have overlapping dates with prior or subsequent interim billings. The Commissioner may request a status report to be submitted with each reimbursement request. Upon request, the Commissioner may approve interim payments at more frequent intervals.(e) All payments shall be subject to review for compliance with this chapter by the Commissioner. Should a site inspection or other information reveal a discrepancy between work performed and the work addressed by a reimbursement request, the Commissioner may deny payment or may require the DCERF to be reimbursed for money already disbursed. Denied payments may be appealed to the Commissioner; however, the appeal must be filed within 30 days of the applicant's receipt of the Commissioner's certified letter of the denial.(f) Notwithstanding the provision of subparagraph (d) of this paragraph, to be eligible for payment from the DCERF, a reimbursement request must be received by the DCERP within one year from the date expenses were incurred regardless of the duration of the work phase. For example: the personnel expenses of a geologist performing work activities, related to a specific site, on May 10 of the prior year would not be reimbursable by the DCERP if the reimbursement request was received on or after May 11 of the current year.(g) If the DCERF reimburses a party for response costs under this chapter for which the owner or operator of a facility has insurance coverage, the DCERF is subrogated to the rights of the owner or operator with respect to that insurance coverage to the extent of the reimbursement. Acceptance of reimbursement under this subparagraph constitutes an assignment by the party with respect to any insurance coverage applicable to the costs that are reimbursed. If the owner or operator of a facility has insurance coverage that may cover response costs, the owner or operator must provide written notification to the DCERP within 30 days. The DCERP will not reimburse costs for which the owner or operator received payment from an insurance carrier or other third-party payer.(8) DCERF Payment Procedures (a) Payments from the DCERF will be made directly to the PEP in cases where the PEP submits documentation verifying it has paid authorized costs in excess of the applicable deductible.(b) The PEP is responsible for final payments to the DCAC(s) performing the work including DCERP deductibles. The PEP is responsible for making timely payments to the DCAC(s) in accordance with the contract between the parties.(c) The Commissioner shall issue either a letter of reimbursement approval or a status review letter within 90 days of receipt of a properly completed reimbursement request. A status review letter from the Commissioner to the PEP shall note such items as: what clarifications or additional information, if any, are needed to complete the review and what problems were encountered, if any, in interpreting or evaluating the reimbursement request. If the Commissioner determines that all costs are reasonable and eligible for reimbursement, payment will be issued within 45 days of approval. If the Commissioner determines that certain costs are unreasonable or ineligible for reimbursement, the Commissioner shall issue a check for the amount determined to be reasonable and eligible, give an initial notice by mailing a certified letter to the PEP of those costs denied reimbursement and the reasons for denial, and provide a 45-day period from receipt of the certified letter in which the PEP or DCAC may present such information as is necessary to justify the disallowed costs. Following review of such information, the Commissioner may agree to pay the previously disallowed costs, or any portion thereof, or may again disallow the costs for payment based on material non-compliance with this chapter or administrative guidance issued thereunder. A denial by the Commissioner following the initial notice of denial under this subparagraph shall be considered a final agency action interpreting the applicability of these rules that is subject to review under T.C.A. § 4-5-223. To secure review, the PEP must file the petition for declaratory order under T.C.A. § 4-5-223 within 30 days of issuance of this denial.
Tenn. Comp. R. & Regs. 0400-15-03-.08
Original rule filed June 19, 2012; effective September 17, 2012. Rule was renumbered from 1200-01-17 which was repealed. Amendments filed February 28, 2024; effective 5/28/2024.Authority: T.C.A. §§ 4-5-201, et seq., and 68-217-101, et seq.