A Way to Pay the Cleanup Bill

There are hundreds of thousands of underground gasoline storage tanks in California and some of them are leaking. The cleanups will be messy. They will also be costly.

Last year, the Environmental Protection Agency mandated that every tank owner who sells fuel must furnish proof of financial responsibility up to $1 million. One million dollars can be a lot of money for the average gas station owner.

At the time the federal regulations were enacted, the expectation was that insurance companies would see the market and offer affordable policies to cover tank operators in case of a leak. That has not happened. Instead, states across the country have had to form their own schemes to pay the cleanup bill.

The standard approach has been to license underground tanks and use the licensing fees to form a statewide cleanup fund. California’s proposal, SB 299 sponsored by Sen. Barry Keene (D-Benicia), follows this pattern, charging $200 per license to create a cleanup fund of $24 million. What makes this proposal especially attractive is that the bill mandates that small proprietors have priority over larger companies, ensuring that the bulk of the fund will go to help out the people who need it most.

Last year a similar bill was passed by the Legislature only to be vetoed by the governor. The EPA deadline is now only a year away. If the bill fails this year, hundreds of convenience stores and mom-and-pop gas stations will miss the deadline and may go out of business.

Licensing underground storage tanks may not be a guaranteed vote-getter, but it is good public policy.