Federal law requires commercial underground storage tank owners and operators to demonstrate the financial ability to assess petroleum releases, take corrective action and cover third party liability. In 1991, the state Connecticut set up the Petroleum UST Reimbursement Fund to demonstrate financial ability for in-state UST owner/operators. The financing mechanism used by the fund (and approved by the USEPA) is based a tax on motor fuel sales. However, this program is now in trouble because the costs of UST cleanups has exceeded the income coming into the fund.
The UST Fund is staffed by 13 Department of Energy and Environmental Protection (DEEP) employees, who review and process claims, and then make payment recommendations to the UST Review Board. The UST Fund board provides checks and balances on disbursements to keep the system honest. With current annual revenues from the motor fuel sales tax amounting to about $340 million, it seems there should be enough financing to support a robust cleanup program. As anyone waiting for reimbursement from the fund can affirm, payments have dragged out to the point where the reimbursement program has lost any shred of credibility.
The sad reality is that the State Legislature has decreased UST Fund allocations to insufficient levels. For 2012 and 2013, just $500,000 has been allocated to the UST Fund, the remaining $679.5M that should have been available to the Fund has been diverted to the General State Fund. Currently there is a backlog of $14M in approved claims and $70M of submitted claims awaiting approval. Small wonder then that in July EPA put the state of Connecticut on notice that it may withdraw its approval of the UST Reimbursement Fund as a viable financial responsibility mechanism.
Not one to back away from a challenge, new DEEP Commissioner Daniel Esty held a public meeting on September 2 in Hartford to begin a dialogue on repairing to the UST Reimbursement Fund. While the meeting was short on details, it was comforting to know that DEEP has heard the message from the regulated community and the EPA. DEEP is expected to call a second public forum during the last week of September and is planning to seek about thirty volunteers from business, industry and government to staff three focus groups. Each focus group will be assigned the task of assessing one of these issues: 1) Looking Backward – how to pay $84M backlog of approved or submitted claims in a challenging economy; 2) Looking Forward – how to address new spill claims and the on-going budget problem; and 3) introducing incentives and efficiencies in the process. You can be sure the Commisioner will impose a tight schedule for the focus group reports.
From first-hand experience we believe Commissioner Esty means business. In this new initiative, thirty smart people will tackle a long-standing problem of developing a successful management approach for this important environmental protection program. We are optimistic that the renewed attention will lead to positive changes that will resolve the payment backlog and help protect Connecticut’s environment.