Michigan Creates a New Underground Storage Tank Cleanup Fund
Effective as of December 30, 2014, Michigan has a new Underground Storage Tank Cleanup Fund to help pay for the cleanup of contamination caused by releases from refined petroleum underground storage tanks (Act 416 of the Michigan Public Acts of 2014). Each year, the first $20 Million of the 7/8 cents-per-gallon tax on refined petroleum sold for resale in Michigan is deposited in the Fund. Claims may be made against the Fund for any release that is discovered and reported on or after December 30, 2014, provided that the tank was in compliance with all registration and fee requirements, and provided that the release was reported within 24 hours after its discovery.
Claims are subject to a $15,000 deductible (applicable to persons who own or operate fewer than 8 tanks), or a $50,000 deductible (applicable to persons who own or operate 8 or more tanks). For purposes of calculating the number of tanks a person owns or operates, each compartment of a multi-compartment tank counts as a separate tank. The limit on the amount of all claims during any claim period (October 1 to September 30) is $1 Million for owners or operators of 1 to 100 tanks, and $2 Million for owners or operators of more than 100 tanks.
Although the Fund is primarily concerned with releases from tanks and underground piping connected to tanks, claims may also be made with respect to releases from dispensers and aboveground piping under limited circumstances.
The new law establishes an underground storage tank authority to review and process claims. The authority is required to establish a schedule of cleanup costs that will be reimbursed by the Fund. The Fund is required to reimburse costs only if monies are available in the Fund. If the Fund runs out of money during any claim period, pending requests for reimbursement are held for payment as monies become available in subsequent years, and may be prioritized for payment by the authority.
Certain costs are not eligible for reimbursement from the Fund, including costs arising from releases that are caused by an owner or operator’s intentional, knowing, willful, or deliberate noncompliance with applicable laws; costs incurred to investigate or verify that a release has taken place; costs arising out of the reconstruction, repair, replacement, or upgrading of a tank system, site improvements or enhancements, or routine maintenance costs. In addition, other costs that arise from a covered release, but do not constitute cleanup costs, are not eligible for reimbursement from the Fund.
In some circumstances, multiple releases from the same tank are treated as a single claim, and in other circumstances, multiple releases from the same tank are treated as separate claims. However, if an owner of a tank is a different entity than the operator of the tank, they cannot each make separate claims arising out of the same release. Finally, claims may be assigned or sold to third parties in connection with the sale of the property where the tank is located.
Overall, the creation of the Fund should eventually help to reduce the cost of maintaining financial assurance for refined petroleum underground storage tank systems. Please call your Miller Johnson environmental law attorney if you have any questions regarding this new legislation.