The House passed a bill Monday designed to fix a state-administered fund for cleaning up leaks from underground petroleum tanks that is at risk of insolvency.
The House passed HB138, sponsored by Rep. Steve Eliason, R-Sandy, and sent it to the Senate.
Service stations with safer, new tanks, typically made of double-walled fiberglass, have pulled out of the Petroleum Storage Tank Fund, leaving the fund on the hook for mostly older, corrodible steel tanks.
The bill would adjust the premiums participants pay so that fees reflect the risks their tanks actually pose, and attract more service stations. The bill is endorsed by the industries participating in the fund.
An analysis commissioned by the Utah Department of Environmental Quality has found the tank fund has a current $12 million balance, which is insufficient to cover the $27 million in payouts the fund is expected to face.
The state established the fund in 1989 to help gas stations and other tank operators meet federal financial requirements. It is sustained by a half-cent fee levied on every gallon of fuel passing through the tanks.
Since participation became voluntary in 1997, one-fourth of the state’s 3,700 tanks opted to pursue private coverage, according to the state study.
Eliason’s bill would correct the adverse selection by increasing the per-gallon fee slightly and rebating some of this revenue to the less-risky tank operators. It would also impose an additional fee on tanks that distribute a low number of gallons.
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