Environmental/Mar 18, 2014

Underground Storage Tank Cleanup Funding Bill Introduced in the Michigan Senate

A bill intended to revitalize the cleanup of leaking underground storage tanks (LUSTs) in the State of Michigan was introduced to the Senate on February 18, 2014. The bill, sponsored by Senator Michael Green, is intended to assist owners and operators of underground storage tanks (USTs) containing refined petroleum products in meeting their financial responsibility requirements under Part 211 of the Natural Resources and Environmental Protection Act (NREPA), as well as to fund the cleanup of releases from LUSTs in accordance with Part 213 of NREPA. Money for the fund is provided by the imposition of a regulatory fee of 7/8 cent per gallon on all refined petroleum products sold for resale or consumed in Michigan.

Previous iterations of Michigan’s UST fund (Michigan Underground Storage Tank Financial Assurance Fund or MUSTFA, Refined Petroleum Fund or RPF) were also funded by a 7/8 cent per gallon regulatory fee on refined petroleum products, however much of the money was not used as originally intended. Instead, money was used to fill budget shortfalls in other areas, such as air quality programs, debt service for bonds not related to USTs, and Department of Agriculture programs. Senate Bill 791 requires that all money remaining in the fund at the close of each fiscal year remain in the fund and not lapse to the general fund.

A UST owner or operator will be eligible to receive money from the fund for cleanup of a release from a refined petroleum UST if all of the following requirements are met:

  • The UST release was discovered and reported after the effective date of SB 791, if it becomes law;
  • The UST from which the release occurred is in compliance with the registration and fee requirements and associated administrative rules;
  • The UST owner or operator reported the release within 24 hours of discovery;
  • The UST owner or operator is not the U.S. government;
  • The claim is not for a release from an UST closed prior to January 1, 1974;
  • The UST owner or operator has maintained financial responsibility for the deductible amount ($50,000 per claim; for owners and operators of less than eight (8) USTs where an annual fee of $500 per UST is paid – $15,000 per claim);
  • The UST owner or operator has paid the deductible amount; and
  • The total amount of expenditures (including deductible) does not exceed the claim limit ($1,000,000 for an owner or operator with 100 or less USTs; $2,000,000 for an owner or operator with more than 100 USTs).

Senate Bill 791 has been referred to the Committee on Natural Resources, Environment, and Great Lakes. We will provide further updates on the progress of this bill, as appropriate.

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