THE OHIO FINANCIAL ASSURANCE FUND

Fund Facts

Overview Of The Financial Assurance Fund

The Petroleum Underground Storage Tank Release Compensation Board (Board) was created by and exists under the provisions of Sub. H.B. 421 enacted in 1989 by the Ohio General Assembly. The creation of the Board, and the Financial Assurance Fund (Fund) it manages, was in response to federal regulations mandating that all owners and operators of petroleum underground storage tanks (USTs) demonstrate the financial capability to pay for potential damages caused by releases from their USTs. Ohio’s Fund has been approved by the U.S. EPA as a mechanism that meets this federal requirement.

The Fund’s assets are generated solely from annual per tank fees paid by tank owners and/or operators, the proceeds from revenue bonds issued by the Board, and interest income. Moneys in the Fund are used solely to pay claims for reimbursement of corrective action or third-party liability costs (bodily injury or property damage), to pay for principal and interest on revenue bonds, and to pay the costs of administering the Fund.

On or before May 1 of each year, the Board notifies Ohio petroleum UST owners of the assessment fee. The fees are due no later than July 1 of each year. The annual fee is assessed to either the owner or the operator of each UST. However, in the event of non-payment both the owner and operator are liable for the fee payment.

Ohio law requires owners to pay a deductible amount before Fund coverage begins. The standard deductible is $55,000. After meeting the deductible, the owner will be reimbursed for the actual clean-up costs which are documented and eligible in accordance with the Board’s rules. The Fund will reimburse an owner a maximum amount of $1 million per release minus the deductible amount.

Owners of six or fewer tanks are eligible for a reduced deductible amount for Fund coverage by paying an additional per-tank fee. If this option is chosen, the deductible amount is reduced to $11,000. This deductible will apply until the next annual fee assessment, at which time the tank owner again has the option of choosing the lower deductible and paying the additional per-tank fee.

The Board has the authority to assess a supplemental fee should the Fund balance drop below $15 million in any fiscal year. Since July 1, 1991, the Board has established annual fees and deductible amounts by rule and has not assessed a supplemental fee.

Owners must demonstrate financial responsibility for the deductible amount of coverage. An owner must select one of six mechanisms approved by the Fire Marshal. Political subdivision owners have an additional four mechanisms from which to choose. These mechanisms are explained in the Bureau of Underground Storage Tank Regulation’s Financial Responsibility Guide.

Before the fee payment can be accepted, the Board requires the tank owner or operator to certify that the USTs are assurable. To be assurable, USTs must be in compliance with State Fire Marshal rules including tank performance standards, leak detection and registration. 

The Board annually issues a Certificate of Coverage to each tank owner or operator who has submitted payment to the Board, has demonstrated financial responsibility, and has certified that the USTs are assurable. The Certificate of Coverage states the amount of coverage, the number of USTs covered, the deductible amount of coverage, and the effective and expiration dates of coverage. 

Reimbursement is a two step process. The first step is a determination of eligibility to claim against the Fund. Responsible persons must possess a valid Certificate of Coverage to be eligible to make a claim against the Fund. In addition, the corrective action performed or to be performed must be authorized by the rules of the Fire Marshal and the costs of performing corrective action must be necessary to comply with those rules. Responsible persons also must be in compliance with all rules of the Fire Marshal when the release was first suspected or confirmed. An Application for Eligibility must be filed within one year of the date the release was required to be reported to the Fire Marshal or a delegated authority and can be obtained by contacting the Board’s office.

Once determined eligible, responsible persons may submit Claim Reimbursement Applications. Only costs which are directly related to corrective action or third-party property damage or bodily injury and which are typical based upon the Board’s experience for similar work are reimbursable.

This explanation is only a brief summary of the Financial Assurance Fund. Other “FundFacts” regarding the Board’s programs are available. If you have any questions or need information, please contact the Board at 614-752-8963 or 1-800-224-4659 (in Ohio only).


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