Know Your UST Program: Michigan

If you are a fuel retailer who owns or operates petroleum underground storage tanks (USTs), state-administered UST trust funds are a great way of mitigating your environmental liability. By following various state-specific UST guidelines and requirements, tank owners and operators (O/Os) can rely on leaking UST trust funds to reimburse eligible costs spent on agency-directed or required cleanup activities. Recovery of remediation fees can go a long way in offsetting expenses, but for O/Os of tanks in Michigan, there are a few aspects of how the funds function to note if you are looking to minimize the financial and administrative burden to your business.

Most states have a single UST Fund program to address UST leaks and cleanups; however, Michigan is unique and has two UST Fund programs. Michigan’s two program system was prompted by the closure of the Temporary Reimbursement Program (TRP) in 2009. To combat the need to cover releases discovered before Dec. 30, 2014, the Michigan Department of Environment, Great Lakes, and Energy (EGLE) created the Legacy Release Program (LRP) in 2017.

In addition to the LRP, Michigan’s other UST program is the Michigan Underground Storage Tank Authority (MUSTA) fund. The MUSTA program began in 2014 and covers UST releases that have been discovered and reported on or after Dec. 30, 2014. For MUSTA, there is a $10 thousand deductible and a $1 million cap for all eligible releases. Unlike MUSTA, LRP was specifically created for releases that were discovered, reported, and not closed before Dec. 30, 2014. There is no deductible in the LRP; however, there is a 50% copay on all approved costs, as well as a $50 thousand cap per release.

Eligibility Requirements to Receive Funding

For both MUSTA and LRP, requirements for eligibility are relatively simple. Facility O/Os’ information must match the current UST registration form on file, and for MUSTA eligibility, the O/Os must be able to show proof of meeting the financial responsibility for the deductible amount. The USTs must be and have been at the time of the release, in compliance with the state’s UST regulations. Additionally, O/Os must register the UST before bringing it to use, renew UST registration annually, and maintain documented leak detection tests and methods.

Reimbursement Trends and Insights

Michigan’s claims department has historically operated a smooth process. Due to internal statutory deadlines to pay out claims, claimants can expect payment within about 2 months of submitting their invoice(s) for reimbursement.  There are no regulatory deadlines for submitting a claim; however, there is a minimum dollar amount requirement. Claims must contain at least $5,000 of invoices.

MUSTA and LRP utilize a Schedule of Costs (SOC) guideline that details maximum allowed rates and costs, and attention must be paid to the specifics, or else denial of costs are common. For example, certain labor rates are allowed a certain number of hours per month. Typically, Pinnacle doesn’t see the denial of exceeding hours; however, they may just reduce those hours to a lower rate classification. Despite the reduction in reimbursement potential, continue to ensure your staff conducts the work they need to do, as some of the total fees billed will still get reimbursed. For claimants looking to maximize their reimbursement potential, keep in mind that labor rate exceedance is one of the most common reimbursement losses and a high potential area to secure higher recovery by working with a skilled reimbursement specialist.

Available State Resources

State fund websites have different types of public resources. The EGLE website has a newly published resource available to the public called Remedial Information Data Exchange (RIDE). It allows the user to search by facility, and view the reported releases for that facility, as well as information about the releases such as the corrective action status. In 2021, EGLE plans on adding a feature to RIDE for the user to search by company (station owner). Together, these resources can be helpful for getting pictures of existing environmental liability at a property as well as important information for potential property divestments and acquisitions in the state.

Michigan also has the SIGMA Vendor Self Service (VSS) portal, where vendors can register and update all their payee information in order to receive payments from the state. It is important for claimants to be up to date in SIGMA VSS, as to not delay claim reimbursement, and if further assistance is needed an environmental management support firm like Pinnacle can help.

Maximizing Recovery with an Experienced Firm

Like many programs, an efficient claim filing process and experience with various rules and guidelines is the key to ensuring that you stand to be reimbursed for all eligible costs, avoid costly denials and deductibles, and reduce the time spent waiting for your money. If you’re a claimant looking to start recovering or looking to increase the dollars you see paid to you on existing claims, consider Pinnacle to learn more about the difference we can make on your bottom line.

While many were already active in the MUSTA program, with the assistance of Pinnacle, several clients enrolled in the newly enacted LRP in 2018 to help them begin to recover on many more releases. Because of the limit on how much money the Fund would obligate to potential participants, our diligent efforts to quickly get our clients’ sites eligible resulting in some of the first approvals in the state. Pinnacle’s expertise in Michigan’s two UST reimbursement programs has helped our clients recover over $2 million over the past few years alone.